Claims editing software is a set of rules that a health plan runs on every claim before paying it, to check that the medical codes billed are consistent with each other and allowed. Each rule is called an edit. It is sold mainly to health plans in the United States, where every claim lists medical codes for the diagnoses and the treatments. Some of these rule sets are built by companies with engineers in Hyderabad.
Why are the codes checked separately? A claim can be correct in format and still be wrong in substance. A doctor's office may bill two codes when one code already includes the other. It may bill a treatment more times than is possible in one day. It may bill a code that does not fit the patient, such as a pregnancy test for a man. Edits catch these problems automatically, across millions of claims.
Consider an urgent-care clinic in Denver, Colorado, in the United States. It sends a claim for a patient who came in with dizziness. The claim lists four codes: a visit, an ECG, a comprehensive blood chemistry panel and a basic blood chemistry panel. The claims editing software applies its rules. One rule says that the comprehensive panel already contains all the tests in the basic panel. So the basic panel must not be paid as well. Billing a group of services in separate pieces, so that the total is higher, is called unbundling. The software removes the basic panel from the claim, with a reason code that explains why. The other three codes pass. The claim then goes on to claims adjudication, which decides the amount to pay.
The rules come from several sources. Medicare, the American government's health insurance for people over 65, publishes national edits. Medical societies publish guidelines on which codes may be billed together. Each health plan also adds rules from its own policies. The software company keeps all these rules up to date, which matters, because the code sets change every year.
The edit is reported back to the clinic. Its revenue cycle management (RCM) system shows the removed code and the reason, so that the billing team can correct its coding, or appeal if the edit was wrong.
Claims editing is a narrow check of the codes. Payment integrity is wider. It checks whether the amount paid is right, and it looks for overpayments after the money has gone out. Clinics also run similar edits on their own claims before sending them. This step is often called claim scrubbing.