7 Steps in the Life Cycle of a Medical Insurance Claim | Career Training | The Salter School
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7 Steps in the Life Cycle of a Medical Insurance Claim

Category(ies): Health Claims Specialist / Medical Billing and Coding

7 steps life cycle medical billing and coding training programMedical Billers and Coders play an important role

Have you ever wondered how your medical insurance works? What goes on behind the scenes that makes your insurance company pay the bill? How does your doctor get paid? How do Medicare and Medicaid work? All of this may sound a little mysterious to you, but it’s all in a day’s work for a Medical Biller or Medical Coder.

At the Salter School, we train our students with the medical billing and coding skills they need to become Health Claims Specialists. With our training, they are prepared to work in the billing or coding departments of hospitals, doctors’ offices, and other medical facilities.

Health Claims Specialists are responsible for starting off the process that results in medical claims being paid. To understand how the claims are processed, it helps to look at the full “life cycle” of just one medical claim. Here’s what one medical claim might go through in a medical billing office.

Step 1: Pre-registration

The medical biller or medical coder inputs the patient’s insurance information into the database and makes a copy the patient’s insurance card.

Step 2: Verify insurance information

If it’s a new patient or a new insurance policy, the health claims specialist talks with the patient to be sure the medical practice takes the insurance, and to be sure the patient understands his or her coverage.

Step 3: Record the services the patient received

Next, the doctor, nurse, or other healthcare provider examines the patient, provides a diagnosis, and performs any necessary services. The healthcare provider then records this information in the patient’s Electronic Health Record (EHR).

Step 4: Collect patient payment

At time of check-in or check-out, the patient will pay a co-pay, co-insurance, deductible, or other out-of-pocket expenses, depending on their insurer’s policy. This money goes to the medical practice.

Step 5: Assign medical codes

The medical coder reviews the patient’s Electronic Health Record and assigns diagnosis codes from the International Classification of Diseases (ICD-10). If procedures were performed, the coder assigns procedure codes from the Current Procedural Terminology list. This has to be done accurately to ensure that the provider is paid correctly.

Step 6: Submit a claim

After the codes and patient payments have been documented, the medical biller or coder can generate the insurance claim. It is then submitted to the insurance company, Medicaid, or Medicare, depending on how the patient is covered.

Step 7: Receive and post payment

If the claim has been submitted correctly, the payer will send payment to the medical practice, and the medical biller will post the payment to the practice’s account. Medical billers and coders are sometimes responsible for tracking down payments that are late, or fixing claims that may have been submitted with errors.

One of the chief concerns of the medical biller and coder is accuracy. Inaccurate coding can lead to unpaid claims and late revenue for the medical service provider. Medical coders need to be detail-oriented, organized, and analytical, so that they can use a critical eye toward the procedures, diagnoses, coding, and insurance claims.

If you are interested in pursuing medical billing and coding as a career, read more about it on the Salter School’s program page.


The Salter School provides medical billing and coding training in its Health Claims Specialist program, offered at three campuses in Fall River, Tewksbury, and Malden, Massachusetts.

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