Adjudication

Adjudication is the payer's process of deciding how much to pay on a claim — applying the plan's benefits, contract, edits, and policies to produce the remit.

Adjudication is what happens inside the payer between when you submit a claim and when you get a remit. The payer checks eligibility, applies the plan's benefits and your contract, runs its edits (NCCI bundling, MUE frequency limits, medical-policy rules), calculates the allowed amount, subtracts patient responsibility, and produces a payment decision with reason codes attached. The output of adjudication is the 835/EOB. The important thing for a practice to understand is that adjudication is automated and rules-driven, which means it makes systematic errors: an outdated fee schedule, a mis-loaded contract rate, an aggressive edit, or a policy applied to the wrong claim all produce reductions that look final but aren't. 'The claim was adjudicated' does not mean 'the claim was paid correctly' — it means a machine applied a set of rules, and those rules can be wrong or misapplied. First-pass adjudication (a clean 'paid on first submission') is the goal, but re-adjudication after a corrected claim or a successful appeal is where recovered money comes from. Reading the reason codes tells you whether the adjudication reflects your contract or a fixable error.

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