What is the difference between adjudication and reimbursement?

Adjudication is a key process in the healthcare billing cycle that specifically focuses on the evaluation of claims submitted by providers, such as pharmacies. This process determines whether a claim will be approved or denied based on various factors, including the accuracy of the information provided, coverage policies, and other guidelines set by insurance payers.

When a claim goes through adjudication, the insurance company assesses the details against its criteria to make a decision. This stage is crucial as it sets the groundwork for the potential reimbursement that follows, which relates to the actual payment of the claim to the provider.

Reimbursement occurs later in the cycle and refers to the payment that providers receive for services rendered after the adjudication process has validated the claim. The distinction is important because adjudication is specifically about the determination of claim approval, while reimbursement deals with the financial transfer that happens as a result of that approval.