Healthcare providers in the USA submit millions of insurance claims every day. Each of them can be a potential denial. In fact, the denial rates are increasing, and the cost of reworking these claims is also quite high. So, the pressure on billing teams to submit accurate claims the first time has never been greater.
Claim scrubbing is a process that helps reduce denials. Here’s what claims scrubbing in medical billing actually means:
“The pre-submission review process in which medical claims are checked for coding errors, missing information, eligibility issues, and payer-specific compliance problems before being transmitted to an insurance payer.”
You can think of it as a last checkpoint before a claim is submitted to the payer. Let’s understand this process in detail.
Impact of Claims Scrubbing on Denial Rates & RCM
Poor claim management costs healthcare providers a significant portion of their revenue. According to Fierce Healthcare, the average denied inpatient and outpatient claim amounts for hospitals rose 12% and 14%, respectively, from 2024 to 2025. To rework each claim costs about $181. This is huge, considering that the original reimbursement amount itself for many claims is under $100.
Claim scrubbing done right directly solves this problem. It is simple logic: if you can find errors before submitting the claim, the claims are far more likely to pass payer scrutiny on their first attempt. This metric is known as the first-pass acceptance rate. Anything above 95% is considered a good first-pass rate. Only those practices can achieve this whose scrubbing process is strong.
Reducing denials is just one benefit of scrubbing. In reality, the medical claim scrubbing process improves the entire revenue cycle. Wondering how? Well, when your claims are clean from the start, they move faster through adjudication. This means faster reimbursements for the practice and uninterrupted cash flow.
Claims Scrubbing Process in Medical Billing
Here is how claim scrubbing works:
Step 1: Patient Demographics and Insurance Verification
In the first step, all the basic information about the patients and their insurance is checked. For example, name, date of birth, gender, insurance policy, ID, and other similar things are thoroughly verified.
It won’t be wrong to say that this is the most crucial step of the entire process. Because if anything goes wrong at this step, the mistake is forwarded to the next steps, and all the steps will carry the same issue. So getting them right at the beginning is essential. It is important to ensure that the details exactly match the payer’s file.
Step 2: Eligibility Verification
Once the details are verified, the next step is to check whether or not the patient has active insurance coverage. All this is done by an automated claim scrubbing software. The insurance coverage status changes quickly, so if a claim is submitted after coverage expiry, it will be denied.
To make sure there are no errors in this step, you should perform eligibility verification once at the time of appointment scheduling and again on the date of service.
Step 3: Coding Accuracy Review
The next step is related to medical billing and coding.
In this step, CPT codes, ICD-10 codes, modifiers, and other indicators are checked. Accuracy and specificity are essential here. If there are any retired, outdated, or mismatched codes, they are flagged here and corrected.
Step 4: Regulatory and Payer-Specific Compliance Checks
As you might already know, different payers have different requirements and guidelines for the same service. Many of them differ greatly from Medicare. That’s why it is important to verify that the claim meets the requirements of the specific payer to whom the claim will be submitted. So, in this step, the claims are checked based on the rulebook of that payer.
Things like prior authorizations, National Correct Coding Initiative (NCCI) edits, documentation, and medical necessity criteria are checked here.
Step 5: Final Review and Clean Claim Submission
Once all the steps are completed, the claim is then processed one last time. All the fields on the CMS-1500 or UB-04 form are checked, and the staff makes sure that everything is properly filled.
Any claim that fails this review is returned to the billing team with specific error flags before it is transmitted to the payer.
Here is the entire claim scrubbing process in a nutshell:
| Scrubbing Stage | What Is Checked |
|---|---|
| Patient Demographics | Name, date of birth, gender, and insurance ID match payer records. |
| Eligibility Verification | Active coverage confirmed on the date of service. |
| Coding Accuracy | CPT/ICD-10 match, modifier use, place of service alignment. |
| Payer-Specific Compliance | NCCI edits, prior authorization, and contract requirements. |
| Final Submission Review | All required fields on CMS-1500/UB-04 are complete. |
Common Issues Identified During the Claim Scrubbing Process
Claims are now scrubbed using automated scrubbing software. These scrubbers are designed to catch a wide range of errors. The following are the most commonly flagged errors:
Incorrect or Outdated Codes
Code errors are the most common. Both CPT and ICD-10 codes are updated every year. Bodies like the American Medical Association (AMA) and Centers for Medicare & Medicaid Services (CMS) release hundreds of new and revised codes annually. Using a retired or modified code will result in an immediate rejection.
Diagnosis-to-Procedure Mismatches
Another issue that arises during claim scrubbing in medical billing is that every procedure code must be paired with a diagnosis that supports medical necessity. When the diagnosis does not align with the service billed, payers will deny the claim outright.
Missing or Incorrect Modifiers
Modifier errors are also quite common. Modifiers are 2-digit indicators that provide information about the circumstances in which a service was performed. When modifiers are missing, misapplied, or used without supporting documentation, claims are routinely denied.
Prior Authorization Errors
A significant share of denials involves services that required pre-authorization and were billed without it on file. Claim scrubbing tools alert billing teams when a procedure requires authorization before submission, giving the team time to obtain it.
Claim Scrubbing Challenges & Best Practices to Overcome Them
Although claim scrubbing in medical billing helps a lot, it does not mean that it is free from its share of challenges. Here are the most common challenges and the best practices to overcome them:
| Claim Scrubbing Challenges | Best Practices |
|---|---|
| Keeping Pace with Regulatory Updates | Utilize clearinghouses or scrubbing software that pulls automatic daily or weekly updates for ICD-10, CPT, and HCPCS codes. |
| Managing Payer Variation | Configure your claim scrubber to apply distinct rule sets based on the specific payer ID (e.g., separate rules for Medicare vs. local commercial payers). |
| Staff Turnover and Training Gaps | Build a centralized, visual knowledge base detailing your billing workflows so new hires aren’t relying on word-of-mouth training. Or, outsource claim scrubbing. |
| Incomplete EHR Integration | Ensure your Electronic Health Record (EHR) and Practice Management (PM) systems use live, two-way data syncing to eliminate manual double entry. |
Final Thoughts
Claim scrubbing in medical billing is one of the most important processes. If done right, it can reduce preventable denials, speed up reimbursements, and eliminate the administrative cost of repeated rework. Here’s a quick recap of what we discussed in this guide:
- Scrubbing catches errors before claim submission.
- The scrubbing process runs through five key stages: demographic verification, eligibility confirmation, coding accuracy review, payer-specific compliance checks, and final submission readiness.
- Commonly flagged issues include outdated codes, diagnosis-to-procedure mismatches, missing modifiers, duplicate claims, and prior authorization gaps.
If you are facing denial even after following all the guidelines, the problem might be with your billing process. In this case, it is better to get professional medical billing and coding services from expert companies like NeuraBill.
