RCM Foundation Series · Continuity Practice Partners
Module 6 of 9
Module 6 · Claims Management
What this module covers
Once a charge is built, it becomes a claim. Claims management is the process of getting that claim to the payer correctly, on time, and tracking it until you receive payment or a decision. This is where most of the billing office's daily operational work happens — and where timely filing risk becomes real.
Rejections vs. denials — a critical distinction
These two words are often used interchangeably in billing conversations, but they are not the same thing and they require different responses.
Rejection
A rejection means the claim never reached the payer. It was returned by the clearinghouse — the intermediary that routes claims to payers — because of a data or format error. A wrong NPI format, a missing required field, an invalid code. The payer has not seen it. The timely filing clock is still running. Rejections must be corrected and resubmitted immediately. They are almost always fixable.
Denial
A denial means the claim reached the payer, was reviewed, and the payer decided not to pay it. Denials come with reason codes that explain why. Some are correctable — a missing modifier, a coding error. Some require an appeal with supporting documentation. Some are final — timely filing expired, service not covered. The response depends entirely on the reason code. Module 7 covers denial management in depth.
Timely filing — a hard deadline
Every payer sets a deadline for how long after the date of service you have to submit a claim. Missing that deadline results in a timely filing denial — and those denials are almost never reversible, regardless of how valid the service was or how well it was documented.
Common timely filing windows: Medicare is 12 months from the date of service. Most commercial payers are 90 to 180 days. Some are as short as 60 days. Your contracted deadlines are in your payer agreements — know them before you need them.
A timely filing denial on a $300 claim is $300 gone permanently — with no appeal and no argument to make. The only defense is a documented submission date. This is why billing teams document the date every claim is released.
First-pass acceptance rate
First-pass acceptance rate (FPAR) is the percentage of claims accepted by the payer on the first submission — without correction or resubmission. It is one of the most important indicators of claim quality coming out of your practice.
The MGMA benchmark is 95% or higher. If your FPAR is below 95%, one in twenty claims or more is being returned for a preventable error — adding cost, delay, and timely filing risk to every one of them.
If you cannot tell someone your FPAR right now, that metric is not being tracked. It should be. It is the single most direct measure of whether your pre-submission process is working.
The claim scrub
A claim scrub is a review of the claim for common errors before it is released to the payer. Most practice management systems have a built-in scrubber that checks for format issues, missing modifiers, invalid codes, and date conflicts. This step catches a significant portion of preventable rejections before they happen.
Submitting claims without scrubbing is the equivalent of sending a document without proofreading — except the errors cost approximately $14.92 each to fix and carry timely filing risk while they sit in a correction queue.
What breaks — and what it costs
X
Claims released without scrubbing: Preventable errors reach the payer. Denial and rejection rates increase. Rework volume increases. Cash flow slows. Every error that a scrub would have caught becomes a task in the correction queue.
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Rejections not worked promptly: Every day a rejected claim sits uncorrected is a day of cash flow delay and a day closer to the timely filing deadline. Rejected claims must be corrected and resubmitted the same day they are identified.
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No documentation of release date: If the payer denies for timely filing and you cannot prove when the claim was submitted, the denial will stand regardless of the merits. Every claim release should be documented with a date and batch confirmation.
Before the next module
Ask your billing lead two questions: what is our first-pass acceptance rate, and what are our top three rejection reasons from last month? If they cannot answer the first question, that metric is not being tracked — and that is the first gap to close. Write down what you hear.
Knowledge Check
3 questions · pass all 3 to unlock the next module
1. A claim is submitted and the clearinghouse returns it with an error code before it reaches the payer. This is called:
2. A claim for a January visit is submitted 14 months later. Medicare's timely filing deadline is 12 months. What happens?
3. Your first-pass acceptance rate is 87%. What does this tell you?
Module 6 Complete
Module 7 is unlocked →
Denial Management — how to read a denial, trace it to its root cause, and know whether it is fixable.