Medical Billing

Understanding Medical Billing

Medical billing is an important part of the healthcare system, filling the gap between providers and payers, like insurance companies and patients. It consists series of processes that make sure healthcare services are accurately documented as patient medical records, coded, and reimbursed. In this article we will discuss what medical billing is, why it is important, what are the processes, and challenges.

 

What is Medical Billing?

Medical billing is the process of creating, submitting, and following up on claims with health insurance companies to collect payment for healthcare services provided to the patient. It includes everything from patient scheduling and initial documentation of the patient to the final step of receiving payments from health insurance companies. These are a few steps: 1) Patient Scheduling, 2) Eligibility Verification, 3) Authorization, 4) Medical Coding, 5) Claim Creation & Submission, 6) AR & Denial Management, and 7) Payment Posting.

 

This process is important and helpful for healthcare providers such as hospitals, clinics, and individual providers—who rely completely on accurate and timely billing to maintain their practices financially. It confirms that medical providers are getting paid for the medical services they deliver to patients.

 

Key Components of Medical Billing:

1. Patient Scheduling: The billing process starts with the first step which is patient scheduling it’s important to collect complete patient information from the patient at the time of scheduling a patient such as personal details like Name, DOB, Address, SSN, insurance information like Insurance Name, Insurance ID/Member ID, Plan Type, Coverage, and medical history of a patient with family history as well. If any of this information is missing the claims will be denied.

 

2. Encounter / Superbill: Medical Specialists or Medical Scribers document the services provided during patient evaluation. These documents include details of ICD-10 codes, procedures performed “CPT codes, and length of visit “E/M” codes, which are important for coding and billing. Modifiers are also important in medical billing but medical billers add modifiers according to their knowledge and requirements of billing

 

3. Medical Coding: This step includes arranging CPT codes (Procedures performed during check-ups, ICD-10 codes (Diagnosis codes), and applying modifiers according to requirements. The two primary terms used in the United States are the (ICD-10) – (International Classification of Diseases) for diagnoses, the number “10” describes the series of ICD codes and the (CPT) – (Current Procedural Terminology) for procedures performed during visits. Accurate coding is important to ensure maximum reimbursement and compliance with regulations.

 

4. Claim Submission: Once the process of arranging CPT, ICD-10 codes, and modifiers is complete, the next step is to submit the claim to the insurance. This can be done electronically or via paper billing forms, depending on the provider’s preference or insurance acceptance capability. The first one is paper billing which we can submit via mail and the second way is to submit via Payer-ID which is the process of submitting claims electronically.

 

5. Follow-Up: After submitting the claims to insurance, medical billers do follow up with insurance to check that submitted claims are going to be processed timely. Sometimes they ask medical billers to provide additional information or to clarify coding discrepancies. This step is also important for resolving denials and ensuring that providers are getting paid for their services timely.

 

6. Patient Responsibility: Once the insurance company processes the claim and clarifies the amount covered under patient plan, the remaining balance is billed to the patient which is called (PR) – Patient Responsibility. This step involves creating invoices, explaining patient responsibilities in detail with EOBs or ERA’s, and setting up payment options.

 

7. Payment Posting:When the payment is received from the insurance company and the patient, it is recorded in the provider’s accounting system which is called EMR (Electronic Medical Records). Proper payment posting ensures that the service provider’s (which is also called specialist) financial records are accurate.

 

8. Denied Claims:Medical billing also includes managing accounts receivable (AR), following up on denied claims, and pursuing collections when necessary. Some of the claims get denied because of some technical or coding errors so AR department re-submit those claims to patient insurance after correction. This ongoing process is crucial for maintaining the financial health of a healthcare practice.

 

For Billing and Coding information: https://www.cms.gov/medicare/payment/prospective-payment-systems/home-health/coding-and-billing-information

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