What is the primary function of adjudication in the billing process?

Adjudication plays a central role in the billing process as it involves the systematic review and evaluation of insurance claims submitted by healthcare providers. Its primary function is to assess these claims for their validity, accuracy, and adherence to the coverage policies of the patient's insurance plan. Through adjudication, the insurance company determines the payment amount based on the provided services, including what is allowed under the policy, portions that are the patient's responsibility, and any other relevant factors.

By correctly adjudicating claims, the insurer can ensure that they are processing payments in accordance with the agreed-upon terms with providers while also adhering to regulatory requirements. This process ultimately ensures that healthcare providers receive appropriate compensation for their services rendered, which is crucial for maintaining the financial health of medical practices.