Medical billing is a critical part of operating a healthcare practice. It involves receiving records from patients and then coding them using either International Classification of Diseases (ICD-10) codes for diagnoses or Current Procedural Terminology (CPT) codes for procedures.
This information is then submitted to the insurance company for reimbursement. This is a lengthy process that can be improved by taking proactive steps to improve first-pass claims acceptance and adopting software to streamline the overall billing cycle.
1. What is Medical Billing?
Medical billing is the process of submitting healthcare claims to insurance providers. It involves coding procedures and diagnoses, verifying patient insurance information, generating patient statements, and following up on unpaid claims. Medical billing is an essential part of the revenue cycle in healthcare facilities and doctors’ offices.
It also includes ensuring that all the relevant data is included in the claim form before it is submitted to payers. Medical billers must be familiar with a variety of medical codes, including CPT (Current Procedural Terminology), HCPCS (Handy-Person Codes), and ICD-10-CM (International Classification of Diseases, 10th Edition). They must also know the various types of insurance that can be used for reimbursement, such as workers’ compensation, automobile insurance, personal injury, and private health insurance.
Once a claim has been processed and paid by the insurance company, the medical biller must send the payment to the patient or medical facility. This may be in the form of an Explanation of Benefits statement or Electronic Remittance Advice. Then, the medical biller must track the payments and adjust any remaining balances.
Medical billing and coding are two distinct processes, but they work together to provide accurate and timely healthcare claims processing. Medical coding converts the clinical documentation of a patient encounter into the languages insurers understand for reimbursement. Medical billing then takes that data and creates a bill for the patient or healthcare facility. Both of these processes are critical in enabling healthcare facilities to receive the funding they need to deliver quality care. In fact, without medical coding and billing, the entire healthcare revenue cycle would break down.
2. How Does Medical Billing Work?
Medical Billing involves submitting and following up on claims with health insurance companies or government healthcare programs in order to receive payment for healthcare services provided by hospitals, doctors, clinics, and other healthcare providers. Billers must be familiar with a wide range of health insurance plans, as well as laws and regulations that govern them. In addition, they must be able to accurately verify patient insurance and code procedures and diagnoses. Medical billing specialists also generate and send patient bills, as well as follow up on delinquent accounts.
The medical coding process turns the information documented in a physician encounter into standardized alphanumeric codes that represent the healthcare service and its cost, as well as the patient’s identifying information. These codes are then used by the medical billing team to create an insurance claim that the payer will pay. Billers take the superbill or claim form and enter the corresponding standardized code into practice management or billing software to create the healthcare claim. They also calculate the patient’s co-pay amount and any outstanding balance due, and determine whether insurance has paid their portion of the bill.
If the claim is denied, the medical billing specialist must file a denial appeal with the payer and refile the claim. They also communicate with patients, determining the reason for the denial and offering options to resolve the issue.
Medical billers are also in charge of tracking payments received from payers and ensuring that direct deposit amounts match the remittance advice (ERA). They must also balance the patient statement and send it to the customer, as well as follow up with delinquent accounts. Providing conveniences such as online payment methods and flexible payment schedules can help speed up collections and lessen bad debt.
3. What is Medical Billing Compliance?
Medical billing compliance is the practice of adhering to healthcare regulations and policies. It includes staying up-to-date on coding rules, ensuring that all documents are properly dated and signed, conducting routine audits of records, and keeping patient information private. It also includes ensuring that insurance claims are submitted and processed correctly. Compliance is an essential part of the medical billing process, and healthcare providers must adhere to all federal guidelines in order to receive reimbursement for services rendered.
One of the most common reasons that healthcare practices get into trouble is because of improper medical coding and billing procedures. Incorrect coding and billing can result in Medicare and private insurance companies denying payments or conducting fraud investigations. This can have severe consequences for the healthcare business, including fines and even jail time.
A successful medical billing process requires a skilled team of healthcare professionals. This team should be composed of certified healthcare coders with proper credentials and training, who are able to identify and correct errors. The team should also be able to understand and manage different payer rules and guidelines, as well as utilizing the appropriate technology to streamline and automate workflows.
The medical coding process involves translating clinical diagnoses, equipment, services provided, and procedures into standardized alphanumeric codes that can be transmitted electronically. These codes are then used by healthcare payers to determine how much they will pay for a particular service. However, these codes are often misinterpreted or misused, resulting in unpaid claims or overpayments. This is why it is important to keep up with coding changes, and to train staff in the proper coding methods and procedures. In addition, healthcare providers should implement a system of checks and balances to ensure that their claims are submitted accurately and in a timely manner.
4. What is Revenue Cycle Management?
Revenue cycle management (RCM) is the process of managing a healthcare facility’s financial operations, including patient billing and insurance reimbursement. It is a vital part of the healthcare industry and ensures that medical facilities are properly reimbursed for their services. Without a well-functioning revenue cycle, medical facilities may not be able to operate and provide care to patients.
The revenue cycle begins with patient intake, which involves collecting demographic and insurance information at the time of service. This data is used to verify insurance eligibility and create a patient account. Having this step in place helps to improve collection rates and eliminates errors that can delay payment processing. It also enables organizations to follow price transparency guidelines and make patients aware of out-of-pocket costs.
Once the eligibility verification and patient account are set up, medical coding is performed. This step transcribes the healthcare encounter into billable codes, which are then submitted to insurance companies. Revenue cycle management software can help automate this process and reduce human error. The revenue cycle also includes analyzing claims, managing denials and rejections, and tracking payments.
In addition to improving collections, RCM can help improve a healthcare organization’s bottom line by reducing expenses and overhead costs. This can free up money that can be invested back into clinical and operational initiatives. It can also allow practices to expand their patient base and improve the overall quality of care.
As the healthcare industry moves toward value-based care, it is increasingly important for practices and hospitals to have a strong revenue cycle management process in place. This will ensure that they are being reimbursed for the services they provide and that they have enough money to maintain their operations and provide quality care to patients.