Claim Adjudication in Health Insurance

Posted on: Jul 28, 2025 | 3 mins | Written by: HDFC ERGO Team

Claim Adjudication in Health Insurance

When you submit your medical claims to your insurance company, the company verifies your bills and expenses to ensure your claims are within your coverage limit. Claim adjudication refers to the process of claim verification. After reviewing the submitted documents, the insurer decides whether to approve the claim in full, settle it partially, or reject it based on the policy terms and eligibility.

Claim Adjudication in Health Insurance

Claim adjudication in health insurance involves the following steps:

• Initial Review

Here, the payer (insurance company) does a quick check on the claims submitted by an insurer to check the basic details like name of the patient, name of the hospital, insurance ID, date of receiving the medical service, procedures and specific diagnosis codes.

• Automated Review

After checking the authenticity of the details, the insured moves to the next step, which is the automated review or mass adjudication. Here, information is checked against the policy details on the insurer’s system.

• Manual Review

If errors are spotted in mass adjudication, those claims are separately checked by a manual review. A professional checks the claims manually to spot the exact error.

• Payout Decision

After a detailed and thorough review of the claims, the insurance company picks one of the following three options:

• Paying the claim fully:

All the details are correct, and the insurance company is satisfied with the details you have submitted in your claim.

• Paying the claim in part:

The insurance company pays only a part of the claim and rejects the remaining part for which the insured is not eligible.

• Denial of the claim:

If the details mentioned in the claims document are not correct and if the insurance company is not satisfied with the details furnished, it can deny the claim and reject the insured’s application.

• Successful payment

If the insurance company decides to pay the claims (wholly or partially), it sends the payment directly to the healthcare provider, along with the EOB (Explanation of Benefits) document. The EOB contains a detailed explanation of why only a part of the claims were settled or why the claims were rejected.

Conclusion

Even with a detailed adjudication process in place, investing in health insurance remains crucial. It offers financial protection against rising medical costs and ensures timely access to quality care. While the process verifies every claim carefully, having a good policy in place gives you the confidence that your medical needs are backed by reliable support when it matters most.

FAQs

1. Why is claim adjudication necessary?

The claim adjudication process ensures that all claims submitted by policyholders are correct, valid and within the coverage limits.

2. How can claim adjudication help healthcare providers?

By ensuring the validity and authenticity of the claims submitted, the claims adjudication process helps healthcare providers understand the regular patterns in patient care.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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