The Claim Submission Process in Medical Billing, Step by Step

Every dollar a practice earns from insurance has to go through the same pipeline: the claim is built, checked, sent, accepted, judged, and paid. A problem at any step shows up later as a rejection, a denial, or a payment that never arrives. This guide walks through the claim submission process in medical billing step by step, explains how electronic claims submission works, and covers the errors that most often stop a claim along the way.

What Claim Submission Means in Medical Billing

Claim submission is the process of sending a completed claim for a patient’s services to the insurance payer so the practice can be paid. A claim lists who the patient is, who provided the care, what was done, why it was medically necessary, and what was charged. Most claims are submitted electronically through a clearinghouse, and the payer processes them under the plan’s rules and the practice’s contract.

The goal is a clean claim: one that has no errors or missing information and can be processed without the payer asking for anything more. Clean claims are paid faster, and most prompt pay laws only start the payment clock once a payer receives one.

The Claim Submission Process, Step by Step

1. Patient registration. Demographics and insurance details are collected: name, date of birth, address, member ID, group number, and the policyholder’s information. A single wrong digit in a member ID is enough to stop a claim.
2. Eligibility and benefits verification. Before the visit, coverage is confirmed with the payer, along with copays, deductibles, referral requirements, and prior authorizations. Problems found here can be fixed while the patient is still in the office. Our insurance verification services page explains what a full check covers.
3. Coding. After the visit, the services are coded from the clinical documentation: CPT or HCPCS codes for procedures, ICD-10-CM codes for diagnoses, and modifiers where they apply. Dental claims use CDT codes instead. Our guide to CDT codes covers the dental code set.
4. Charge entry. The coded services, units, charges, place of service, rendering and billing providers, and any authorization numbers are entered in the practice management system.
5. Claim scrubbing. Before the claim goes out, software checks it for missing fields, invalid codes, code combinations that are not allowed, and payer-specific rules. This is the cheapest place to catch an error.
6. Submission to the clearinghouse. The claim is sent electronically to a clearinghouse, which checks it again against format and payer edits and routes it to the right payer.
7. Acknowledgment. The clearinghouse and payer send back reports showing whether the claim was received and accepted for processing, or rejected. A claim that was rejected never entered the payer’s system and must be corrected and sent again.
8. Adjudication. The payer reviews the claim against the patient’s coverage, the plan’s policies, and the provider’s contract, then decides to pay it in full, pay part of it, or deny it.
9. Payment and remittance. The payer sends payment, usually by electronic funds transfer, along with an electronic remittance advice (ERA) that explains how each line was paid, adjusted, or denied.
10. Payment posting and follow-up. Payments and adjustments are posted to the patient’s account, underpayments are flagged against the contract, denials are worked, and any remaining balance is billed to secondary insurance or the patient.

How Electronic Claims Submission Works

Electronic claims use standard HIPAA transaction formats, so every payer can read them the same way:

• 837P for professional claims, the electronic version of the CMS-1500 form used by physicians, therapists, and other individual providers.
• 837I for institutional claims, the electronic version of the UB-04 form used by hospitals and facilities.
• 837D for dental claims.

After submission, the practice receives acknowledgment reports. A 999 confirms whether the file was readable. A 277CA reports whether each claim was accepted for processing or rejected. After adjudication, the payer’s response comes back as an 835 electronic remittance advice. Claim status can be checked electronically at any point with a 276/277 inquiry.

Electronic submission is faster, cheaper, and easier to track than paper. Medicare requires electronic claims from most providers. Only small providers that meet the Administrative Simplification Compliance Act’s size limits, or that qualify for another exception, may submit paper claims. Many commercial and Medicaid plans strongly prefer electronic claims, and some require them.

Paper Claims: When They Are Still Used

Paper claims are still sent on the CMS-1500 for professional services and the UB-04 for institutional services. They are mostly used for payers that do not accept electronic claims, some secondary claims that need attachments, and practices exempt from electronic filing. Paper claims take longer to process, cannot be tracked as precisely, and are more likely to be returned for a missing or unreadable field.

Timely Filing Limits

Every payer sets a deadline for submitting a claim, counted from the date of service. Original Medicare allows 12 months. Commercial plans and Medicaid programs set their own limits, often much shorter, and the limit can also be set in the provider’s contract. A claim filed after the deadline is usually denied, and the practice generally cannot bill the patient for it. Rejected claims do not stop the clock, so a claim that was rejected and never resubmitted can run out of time without anyone noticing.

Rejected Claims vs. Denied Claims

• A rejected claim failed an edit before adjudication, usually for a formatting problem, missing information, or an invalid ID. It was never processed. It is fixed and resubmitted as a new claim.
• A denied claim was processed, and the payer decided not to pay it. It is either corrected and sent as a replacement claim, using the claim frequency code that identifies it as a corrected claim, or appealed with documentation.

Treating a denial like a rejection, by sending the same claim again, usually produces a duplicate claim denial. Our claims denial management page explains how denials are worked.

The Most Common Claim Submission Errors

• Patient name, date of birth, or member ID that does not match the payer’s records.
• Coverage that ended, or a different primary payer than the one billed.
• Missing or expired prior authorization or referral numbers.
• Codes that do not match the documentation, or a diagnosis that does not support the procedure.
• Missing or incorrect modifiers.
• Wrong place of service code, especially for telehealth.
• Rendering provider not credentialed with the payer, or a wrong NPI or tax ID.
• Duplicate claims sent while the original was still processing.
• Claims filed after the payer’s timely filing limit.

How to Measure Claim Submission

• Clean claim rate: the share of claims accepted and paid on the first submission.
• Rejection rate: the share of claims rejected by the clearinghouse or payer before processing.
• Denial rate: the share of processed claims that were denied.
• Days to submit: how long it takes from the date of service until the claim is sent.
• Days in accounts receivable: how long, on average, it takes to collect what was billed.

As of 2026, Maximum Billing’s clients’ claims reach a 91% clean claim rate, and their accounts receivable average 34 days. See our accounts receivable management page for how unpaid claims are followed up.

Frequently Asked Questions

What are the steps in the claim submission process?

Patient registration, eligibility verification, coding, charge entry, claim scrubbing, submission to the clearinghouse, acknowledgment, payer adjudication, payment and remittance, and payment posting with follow-up.

What is a clean claim?

A claim with no errors or missing information that the payer can process without asking for anything more.

What form is used for medical claims?

The CMS-1500, or its electronic version, the 837P, for professional services. The UB-04, or the 837I, for institutional services.

How long does a payer take to pay a clean claim?

It depends on the payer and the state. Many states have prompt pay laws that require payment of clean claims within a set number of days, commonly 30 to 45, and some states set shorter limits for electronic claims.

Let Us Handle Claim Submission

Maximum Billing handles claim submission, rejections, denials, and follow-up for medical, behavioral health, and dental practices in twelve states, working inside the software you already use. See our claim submission services and medical billing services, or contact us to talk about your practice.