How to File Medical Claims

What are medical claims?

Medical claims are invoices that a medical services provider submits to insurers so they’ll be reimbursed for their patients’ services and procedures. The invoice usually includes the following details:

• Patient’s name and insurance policy information
• Provider’s name and billing information
• Date of service
• Description of services or procedures performed
• Diagnosis codes (ICD-10-CM)
• Procedure codes (CPT/HCPCS)
• Charges for each service

A medical claim may also detail medical devices or supplies used, as well as any follow-up treatments, medical transportation and special assistance needed.

Parts of a medical claim

Each medical claim has two parts: the claim header and the claim details.

• The claim header contains administrative information about the patient, provider and billing details. This includes patient demographics, insurance information, provider identification numbers and billing addresses.
• The claim details section contains the specific medical information about the services provided. This includes diagnosis codes, procedure codes, service dates and charges for each line item.

If an insurance company or clearinghouse denies your claim, the medical services provider will need to gather more information and begin an appeals process, potentially revising the claim with supporting evidence or rewriting it.

How do you file a medical claim?

Filing a medical claim and receiving payment involves these steps:

1. Provider submits an invoice. A medical provider, such as a physician, submits an invoice to their billing department.
2. A superbill is created. A billing specialist documents summaries of a patient’s visit with applicable ICD-10 diagnosis and CPT treatment codes (and code modifiers, if necessary) on a superbill — a detailed invoice outlining the services the patient received. Some physicians will check or circle the diagnosis and treatment codes directly on the superbill.
3. The invoice is checked for errors. Medical billing specialists typically use high-quality medical billing software to check the superbill and insurance information for flaws, such as code mistakes or formatting errors.
4. An electronic claim is created. Billing personnel generate an electronic claim and submit it to a third-party medical claims clearinghouse or directly to an insurance provider.
5. Denials are investigated. If there are problems with the bill and the claim is denied, the medical billing specialist follows up to find out what went wrong. If they find an obvious error, they may correct and resubmit the claim. If there is no apparent mistake, they can submit an appeal with supporting evidence to the payer.
6. The payer sends remittance. Once the claim is approved, the payer sends remittance to the medical provider; a remittance advice statement from the insurer usually accompanies the remittance and serves as a receipt. In cases of patient responsibility, such as copays and coinsurance, the supplier sends the patient a statement.
7. Unpaid claims are investigated. Unpaid delinquent accounts are turned over to a collections agency, or other debt collection measures may begin. 

What is a medical claims clearinghouse?

A medical claims clearinghouse is a third-party intermediary between a doctor’s billing department and the insurance company. After the provider’s billing team submits a claim, the clearinghouse uses special software to scrub, standardize and screen it before sending it to the payer.

A medical claims clearinghouse checks a submitted claim for medical billing and coding errors, proper formatting, HIPAA standards and more. It may correct the claim, ask the medical services provider for more information or return the claim for revisions.

>> Read Next: What is Claim Scrubbing?

What forms are used for medical claims?

While filing medical claims, you’ll encounter the following forms:

CMS-1500 (Professional Claims Form)

The CMS-1500 is the standard form for billing professional medical services. According to U.S. Centers for Medicare & Medicaid Services (CMS) guidelines, this form must be used for claims submitted to Medicare carriers, DME MACs or A/B MACs. The form contains 33 numbered boxes (form locators) for entering patient, provider and service information.

Key requirements for CMS-1500 forms include:

• Accurate patient demographics and insurance information.
• Valid National Provider Identifier (NPI) numbers.
• Appropriate ICD-10-CM diagnosis codes (up to 12 on current form).
• Correct CPT/HCPCS procedure codes with modifiers when applicable.
• Proper place of service codes.

UB-04 (Institutional Claims Form)

The UB-04 (CMS-1450) is used by hospitals, skilled nursing facilities and other institutional providers. The form contains 81 form locators, each with a unique purpose.

Critical elements for UB-04 completion include:

• Correct diagnosis codes (ICD-10-CM) and procedure codes (ICD-10-PCS for inpatient procedures, CPT/HCPCS for outpatient services), using modifiers when required.
• National Provider Identifier (NPI) information where indicated.
• Proper revenue codes for each service line.
• Appropriate condition codes (Form Locators 18-28).
• Accurate present on admission (POA) indicators for diagnoses.

835 & 837 Forms

Form 837 or EDI (the claim’s electronic record) is the health insurance claim prepared for reimbursement. Form 835 is the Electronic Remittance Advice (ERA), which is the payer’s detailed response showing how each claim was processed, including payment amounts, adjustments and denial reasons. It may take weeks, if not months, for the billing department to receive the reimbursement in its bank account.

Coding requirements for health insurance claims

ICD-10-CM Diagnosis Codes

The ICD-10-CM code set is updated annually by the CDC’s National Center for Health Statistics (NCHS), usually with an October 1 effective date. While those codes are typically valid through September 30 of the following year, there can also be mid-year updates on April 1 that address typographical errors or add urgent new codes.

Recent updates include:

• 42 new diagnosis codes implemented April 1, 2023, to help collect health-related social needs (HRSNs).
• Enhanced specificity for documenting social determinants of health.
• Continued expansion of codes for emerging medical conditions.

CPT Procedure Codes

The American Medical Association (AMA) maintains the Current Procedural Terminology (CPT) code set. These are also updated annually, but with a January 1 effective date. Some specific categories of codes (vaccines and emerging technology codes) can have mid-year updates on July 1 as well.

The CPT 2025 code set includes:

•  420 overall updates, including 270 new codes, 112 deletions and 38 revisions.
• Proprietary laboratory analyses assigned to the largest proportion of new codes (37 percent), mostly for novel genetic testing.
• New codes for augmented/artificial intelligence (AI) analysis, including AI-powered analysis in medical chest imaging, AI-augmented electrocardiogram data analysis and AI-augmented image-guided prostate biopsies.

Regulatory compliance requirements for medical claims

The HIPAA Security Rule covers healthcare providers who electronically transmit transactions such as claims, benefit eligibility inquiries and referral authorization requests. Key compliance requirements include:

• Administrative safeguards: Policies and procedures must clearly outline how the entity will comply with the act. Covered entities are required to adopt written privacy procedures and designate a privacy officer.
• Physical safeguards: Healthcare organizations must protect physical access to electronic systems and workstations containing electronic protected health information (ePHI).
• Technical safeguards: Providers must implement access controls, audit controls and transmission security for electronic health information.

When outsourcing billing functions, medical services providers must ensure that business associates comply with HIPAA. Business associates include companies that help doctors get paid for providing health care, such as billing companies and companies that process health care claims.

Best practices for successful medical claims submission

Most medical claims are accepted the first time they’re submitted. However, current industry data shows challenges with denial rates. According to a 2025 KFF analysis of federal data, HealthCare.gov insurers denied nearly 1 in 5 in-network claims in 2023, with denial rates ranging from as low as 1 percent to as high as 54 percent in some states.

You can increase your chances of acceptance with these medical billing tips and best practices:

1. Verify patient eligibility and benefits.

Before providing services, always verify the patient’s insurance coverage, eligibility status and benefit details. This includes checking:

• Active coverage dates
• Copayment and deductible amounts
• Prior authorization requirements
• In-network provider status

Often, claims are rejected because the patient’s identifiers are incomplete or misspelled.

2. Ensure accurate coding.

Use the most current ICD-10-CM and CPT codes that precisely describe the services provided. The CPT Editorial Panel meets three times a year to review applications for new codes or revisions to existing codes, ensuring the code set reflects current medical practice.

Key coding best practices:

• Match diagnosis codes to the documented medical necessity.
• Use appropriate procedure codes with required modifiers.
• Follow official coding guidelines from CMS and AMA.
• Ensure proper linking between diagnosis and procedure codes.
• Use medical records management software to ensure accuracy.

3. Complete thorough documentation.

Maintain comprehensive medical records that support the services billed. Documentation should clearly establish:

• Medical necessity for services provided.
• Complexity of decision-making for emergency services.
• Detailed procedure notes for surgical services.
• Progress notes supporting ongoing treatment.

4. Submit clean claims promptly.

Review all claims for completeness and accuracy before submission. This includes:

• Verifying that all required fields are completed.
• Checking for typographical errors.
• Confirming accurate patient and provider information.
• Ensuring compliance with payer-specific requirements.

Common medical claim denial reasons and appeals

Understanding the current challenges facing claims processing is critical for medical providers. Nearly 15 percent of medical claims submitted to private payers for reimbursement are initially denied, according to a 2024-2025 survey of hospitals, health systems and post-acute care providers conducted by Premier, Inc. The rate was similar for Medicare Advantage (15.7 percent) and Managed Medicaid (15.1 percent), while Medicare had the lowest percentage (8.4 percent) of initially denied claims, and Medicaid had the highest rate (16.7 percent).

This denial rate has significant financial implications, with the administrative costs associated with fighting denials increasing dramatically — from $43.84 per claim in 2022 to $57.23 in 2023, representing a $25.7 billion annual burden on providers. 

Most common denial reasons

Even if health insurance claims undergo multiple checks for formatting, coding or other errors, the payer may still reject them or ask for adjustments. Based on current industry reports, the most common reasons for claim denials include:

• Missing or inaccurate information: Nearly 50 percent of respondents in Experian’s 2024 “State of Claims” report “identified missing or inaccurate information as the primary cause for denial.”
• Lack of medical necessity: Services are deemed not medically necessary by the payer.
• Prior authorization issues: Premier found that “an average of 10.4 percent of claims denied included those that were pre-approved via the prior authorization process — up from 3.2 percent in 2022.”
• Coverage exclusions: Services are not covered under the patient’s benefit plan.
• Coding errors: The claim contains incorrect or outdated diagnosis or procedure codes.

Some medical claims errors, usually administrative, are found during the clearinghouse check. Others, especially documentation errors, are detected in the last stage when inspected by the insurer. 

Thorsten Wirkes, managing director of healthcare at Bertelsmann Next, told us that claims processing success involves more than just processing claims from point A to point B. 

“[It’s about] accuracy (did we pay the right price for the right services?), timeliness (did we process claims quickly?) and cost efficiency (did we process claims automatically?),” Wirkes said. “If any of these goals aren’t met, it can cause headaches for all parties.”

Appeals process

Each insurance company has its own appeals process. Some ask that the provider complete and sign a form. Others may accept a letter of appeal with supporting evidence and provide further instructions. Some providers may direct you to their online appeal process, where you’ll likely upload additional information. Medicare and government payers typically direct you to standard appeal forms, such as the CMS-20027 Medicare Redetermination Request Form.

Providers have a better chance of getting an overturned denial from private payers in the commercial space. Premier found that private payers overturned over 60 percent of initial denials. Medicare and Managed Medicaid overturned about 50 percent of initial denials, while Medicare Advantage overturned nearly 53 percent and Medicaid about 46 percent.

Optimizing the medical claims process

Successful medical claims filing requires attention to detail, current knowledge of coding and regulatory requirements, and systematic processes for quality assurance. With denial rates averaging 15 percent across private payers and appeal costs reaching over $57 per claim, providers must prioritize accuracy and efficiency in their billing operations.

By following HIPAA compliance requirements, using current ICD-10-CM and CPT codes, completing thorough documentation and implementing robust quality assurance processes, healthcare organizations can improve their claims acceptance rates and reduce administrative burdens. The investment in proper claims processing not only improves cash flow but also supports the broader goal of efficient, compliant healthcare delivery that serves both providers and patients effectively.