Step 7 in the Medical Billing Cycle: Prepare1-16
and Transmit Claims
• Medical practices produce insurance claims to
receive payment
• PMPs generate health care claims for electronic
transmittal
© 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Step 8 in the Medical Billing Cycle: Monitor1-17
Payer Adjudication
• When a claim is received by a payer, it is
reviewed following a process known as
adjudication—a series of steps designed to
judge whether it should be paid
• The document explaining the results of the
adjudication process is called a remittance
advice (RA) or explanation of benefits (EOB)
© 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Step 9 in the Medical Billing Cycle: Generate
1-18
Patient Statements
• A statement lists all services performed, along
with the charges for each service
• Statements list the amount paid by the health
plan and the remaining balance that is the
responsibility of the patient
© 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Step 10 in the Medical Billing Cycle: Follow Up 1-19
Patient Payments and Handle Collections
• The accounting cycle is the flow of financial
transactions in a business
• PMPs are used to track accounts receivable
(AR)—monies that are coming into the practice
• PMPs are also used to create day sheets,
monthly reports, and outstanding balances
reports
© 2011 The McGraw-Hill Companies, Inc. All rights reserved.