Medical billing acts as a bridge between medical providers, patients, and insurance providers. It involves a complex and detailed process that needs to be accurate enough to comply with all the requirements to be processed further. However, the question often arises, what is medical billing and coding and why it is important and healthcare industry. To comprehend the process, it is essential to understand the difference between medical billing and coding, the use of medical terminologies, and medical codes to process medical claims.
To understand the whole function, we break down the topic into detailed sections with a critical evaluation of medical billing that is not normally highlighted.
What is the Process of Medical Billing?
The process of medical billing involves the following key steps;
- Patient Registration
- Insurance Verification
- Superbill Creation
- Charge Entry or Claim Generation
- Claim Audit
- Claim Submission
- Denial Management
- Patient Statement Preparation
- Payment Posting
1. Patient Registration
Patient registration is an important process in medical billing and coding. Before providing the services, it needs to be determined by the physician or the healthcare facility that if the patient has a history of visiting for the same treatment or not. If the patient visits for the first time, here’s a list of first-hand information that needs to be collected:
- Name
- Date of Birth
- Address
- The reason to visit
Other important information includes:
- The insurance provider’s details
- Policy number
The front desk of the facility must take all the information to register a patient. It is essential to gather all the details prior for a smooth financial management and execution of a patient registration.
2. Insurance verification
The next step is required to ensure the financial responsibility of the healthcare services. Whether it is the insurer, the patient, or a guardian. Before providing any services, making these necessary checks are non-negligible. At this step, these key aspects are required to determine the financial liability;
- To check the status of the patient’s insurance policy (active/inactive).
- Determine whether the insurer covers the expected treatment.
- Evaluate if any authorization is required from the patient’s side that is connected to the insurance coverage.
3. Super Bill creation
Upon patient check out, the medical reports and documents undergo medical billing codes. An experienced medical coder use some medical billing and coding examples like procedural and diagnostic codes to translate the treatments during the stay. These details of codes are combined to form a document known as Superbill, also referred to as encounter report. This document comprises the information such as;
- Physicians and providers details
- Demographics or the involved physicians
- Services and treatment provided
- Medical history
- Associated diagnostic and procedural codes
4. Claim generation
Claim generation or charge entry is one of the crucial steps in the medical billing process. Before the claim submission, recording accurate charges for services is essential. This step involves evaluating medical data and assigning the correct code for every service.
Once the data is accurately recorded, the biller then creates a medical claim. While preparing the claim, the biller is responsible to review whether the bill is generated according to the guidelines provided by HIPPA and the insurance provider. A single or common mistakes in medical billing, non-compliance, or coding error can lead to a claim denial or rejection. Hence, complying with the format and process is crucial in claim generation.
5. Claim Audit
Once the claim is submitted to the insurer, it undergoes three-level analysis before the final approval. These levels verify the claim’s accuracy and compliance to process the claim further. This step involves
- Scrubbing: An EHR software goes through the claim and checks the completeness and the accuracy of the claim.
- Clearing House: A third-party contractor conducts the deep check on the patient history and information and verifies the coding errors. This is the main step where healthcare organizations consider outsourcing medical billing to ease the process.
- Insurance Validation: Insurance validates both steps are done comprehensively and identifies the policy according to the services.
Any error in the claim or in these steps can result in claim rejection. To enhance the possibility of claim acceptance, it is important to know why medical billing and coding matters, which will be discussed later.
6. Claim Submission
Once the claims are evaluated, the claim is sent to insurer and patient to ensure legality and determining the liability of both parties. This is usually done through an electronic device to maintain the privacy and reduce errors in billing. It also ensures streamlined reimbursements. Based on the compliance and accuracy, medical claims get rejected or accepted.
7. Denial Management
Managing denied claims is equally important in medical billing. It accelerates or slows down the revenue cycle in both approval and denial cases. With experts in place, a practice can easily cater to the issues commonly faced in medical billing. Steps involved in claim denial management include;
- Adapting solutions to enhance revenue by minimizing billing errors.
- Reducing claim denials.
- Evaluating reasons for claim denials and ensuring avoiding them in the future.
- Reviewing denied claims.
8. Patient Statement Preparation
This is another important step in medical billing; it enables patients to pay the fees of the services rendered that are not covered under the insurance policy. It includes;
- Detailed breakdown of the services and treatments received during the hospital visit.
- A clear understanding of the price for each service to promote billing transparency.
- The amount covered by the insurer (optional).
- Specified patient liability on the service charges.
Patient statement carries transparent financial responsibilities for the service incurred by the patient.
9. Payment posting
The last and important step in medical billing is payment posting. Once the insurance company approves medical claims, it distributes the approved funds via electronic funds transfer or through checks. These funds are accompanied by EOB (explanation of benefits). Experts record these payments in EHR systems accurately to maintain the transparency and enhance the efficiency of the revenue management.
With a smooth medical billing process, physicians can reap the advantages of efficient medical billing. A high efficiency and claim acceptance rate can drastically enhance the overall credibility of the practice or facility. However, managing everything in-house can be challenging for practices and hospital facilities due to extensive workload and patient visits. Physicians often prefer to outsource the billing process to keep their focus on patient care. However, there are pros and cons of outsourcing medical billing and coding for providers. Let’s discuss them in detail.
Comparing In-House and Outsourced Medical Billing
Is medical billing coding hard for inhouse billers? Well, medical billing and coding is complex but having an inhouse team of medical billers and coders can be hard. Finding a key contributor to your success who is equally skilled and affordable is n challenging. This is because keeping a close eye with the coding updates of healthcare industry in today’s landscape is crucial for the financial health of your practice.
Many inhouse staff handling billing service may get overwhelmed with the burden of procedural and diagnostic code updates, data handling for patients, which may result in billing errors and claim denials and overall resulting in delayed payments. These obstacles may affect the productivity of inhouse billers.
On the other hand, outsourcing these responsibilities to medical billing and coding-provider companies can reduce the burden of providers allocating extra resources for billing. Outsourcing medical billing can not only reduce the financial burden of hiring in-house billers, which sometimes are out of budget but ease the stress on staff to serve the practice better. This is why providers prefer outsourcing medical billing and coding services to third-party service providers. A grand view research study shows that the outsourcing medical billing percentage will rise up to 19.7% by 2026, with a growth of 11.8% annually.
Inhouse Billing VS Outsource Billing Comparison
Inhouse Billing
Pros:
- Ease of trust and communication
- More control on medical and billing process
Cons:
- Burdened staff
- Prone to errors
- Expensive
- Delayed reimbursements
Outsource Billing
Pros:
- Reduced errors
- Experts in industry updates
- Lower costs
- Easy EHR integration
- Enhanced Transparency
Cons:
- Takes time to build trust
- Reliability on the outsourced team
Other than outsourcing medical billing to service providers, AI is helping providers in many ways. Once if the debate between outsourcing or inhouse billing models, AI is reshaping the healthcare landscape by bringing innovations and efficiencies to both intricate cases.
How AI is transforming medical billing
AI is also revolutionizing how clinics handle patient billing and insurance follow-ups, which are critical components of both in-house and outsourced systems. Advanced algorithms can scan huge amounts of data to detect patterns and forecast claim outcomes, allowing practices to fix any concerns before submission. This lowers claim denials and shortens reimbursement timelines, which are crucial for sustaining healthy income streams.
For in-house billing, AI technologies coupled with Electronic Health Records (EHR) systems provide real-time coding recommendations and compliance checks, assuring conformity to constantly changing insurance rules. This reduces the likelihood of costly errors or audits. In outsourced billing, AI improves scalability by allowing service providers to handle large volumes of claims with precision and speed, giving their clients a competitive advantage.
Furthermore, AI-powered chatbots and virtual assistants boost patient engagement by answering billing questions, creating payment plans, and explaining insurance rules. These tools offer a streamlined, user-friendly experience that promotes improved communication and patient satisfaction. Whether practices select in-house or outsourced billing, AI is accelerating the transition to more efficient, transparent, and patient-centered billing systems.
Conclusion
With healthcare practices evolving rapidly across the world, it has become inevitable to keep the administration and billing costs minimal to manage the revenue cycle effectively. For an efficient medical billing process, providers prefer to outsource the medical billing process to release the burden from providers. Undoubtedly, medical billing and coding is a complex process in the healthcare landscape. Medical billing involves a range of steps and compliance for a complete and accurate reimbursement. To ease the process, AI and electronic software help providers expedite the process and reduce billing errors. Also, with experts in place and adapting the right technology, practices can enhance the possibility of claim approvals and reduce claim denials.
FAQs
1. What is the purpose of medical billing?
Medical billing is essential for healthcare professionals and hospital facilities as it ensures that they are paid timely for the services rendered. It also works to reduce the possibility of overcoding, undercoding, missing payments, and claims.
2. Is medical coding a lot of math?
Medical coding involves a lot of medical terminologies with procedural and diagnostic coding. This require basic calculating skills to prepare a comprehensive bill with accurate amounts. Medical billers often verify the correct copays, amounts and adds the total amount that reflects the overall rejection and approval of finances.
3. How to start medical billing and coding?
To start working as a medical biller and coder, a high school diploma or equivalent medical degree is required. Many professional billers and coders pursue an associate degree to enhance the related field.
4. What is requirement in medical billing?
Medical bills require complete information about the patient and insurance provider, along with the patient history. It also requires the status of the patient’s insurance policy and coverage information to satisfy the reason for the patient’s visit.
