Adjudication

Adjudication is the payer-side process of reviewing a submitted medical claim against the patient's coverage, the provider's contract, and the payer's medical policies — and deciding how much to pay. It happens entirely inside the payer's claims system after submission. The adjudication path applies a sequence of edits: first format and demographic checks (does the claim parse, is the patient covered, is the provider in-network?), then medical-policy edits (is the diagnosis covered for this procedure under the patient's plan, does it meet medical necessity, does it require prior authorization?), then bundling and frequency edits (NCCI PTP edits, MUE limits, global period overlap), and finally the payment calculation against the contracted fee schedule or UCR rate. Each edit can produce a CARC (Claim Adjustment Reason Code) and one or more RARCs that explain the result. The output of adjudication arrives back at the provider as an EOB (Explanation of Benefits) for paper or an ERA (Electronic Remittance Advice) for electronic. Clean claims complete adjudication in 14-21 days for most commercial payers and 14 days for Medicare fee-for-service. Claims that hit edits return for additional information, are partially paid, or are denied — and route into the practice's denial management workflow.