Are you a healthcare professional with day-to-day headaches dealing with patient care while attempting to stay financially healthy in your practice?
Whether you are a physician, pharmacist, mental health provider, or similar, there are behind-the-scenes procedures that help your practice thrive, i.e., medical billing.
Think about it!!
Every time you provide care, a complex process works quietly in the background to make sure you get paid.
This is known as medical billing, which keeps your revenue flowing by verifying insurance, coding procedures correctly, submitting claims, and following up on delayed payments. Without it, even the most well-run practice can face financial strain.
But how does medical billing work? Is it important for the healthcare providers to understand each and every step?
In this blog, you will explore medical billing and how it begins when a patient checks in and continues long after the visit ends.
About Medical Billing Services
According to the AAPC, medical billing is the process of preparing and submitting healthcare claims for insurance company reimbursement. It is translating medical procedures, services, and diagnoses into standardized codes and submitting them as claims to payers. A medical billing service makes sure that the claims are processed correctly and providers receive reimbursement accurately for care provided.
Beyond preparing claims, medical billers must also follow up on claim status, process denials, post payments, and maintain compliance with healthcare regulations. Medical billing essentially fills the financial gap between patients, providers, and payers to ensure that the revenue cycle of healthcare continues uninterrupted.
How does the Medical Billing Services Process work?
The medical billing process is a step-by-step system that guarantees timely and correct reimbursement to medical providers for the services they provide. Every step has a vital role to play in preventing errors, avoiding delays, and providing support for the financial well-being of medical practices, as listed below:
1. Patient Registration
The process starts with patient registration, an important initial step of the billing process. During this stage, demographic and insurance data, such as the patient’s name, contact information, insurance company, and policy number, are collected. The information is mainly collected through digital forms or electronic health records (EHRs) for accuracy and easy retrieval. Also, verification of the data is crucial as it facilitates the creation of a complete patient profile that serves as the basis for claim processing. It is necessary to verify and update this information on subsequent visits to avoid delay or billing errors.
2. Insurance Verification
After registration is completed, insurance coverage has to be verified. This includes validating the patient’s eligibility, policy status, deductibles, co-pays, and coverage for specific procedures. The process may also include verification for any secondary or gap insurance the employer provides. This process assists in identifying the patient’s out-of-pocket payment and verifies that claims will not be denied based on ineligible services. Additionally, preauthorization expectations (where applicable) should be determined to prevent delays in treatment or reimbursement.
3. Patient Encounter Documentation
Proper documentation of the patient encounter is essential. Providers must document all necessary information, such as diagnoses, treatments, medications, and procedures performed during the visit. This information should be retained in the EHR system, providing the coding and billing foundation. Adequate documentation ensures medical necessity and continuity of care and prevents claim denials due to insufficient information.
4. Transmitting Encounter Notes
After the patient visit, the provider’s notes are converted into a readable medical script. These handwritten or voice-recorded notes must be transcribed and formatted for clarity. Based on the set-up, they are either transferred to an in-house billing staff or outsourced to a medical billing service. Proper transmission of encounter notes is imperative for coding accuracy.
5. Medical Coding
Medical coders apply standardized coding systems like ICD-10 for diagnosis, CPT for procedures, and HCPCS for additional services to translate clinical documentation into billable codes. The codes enable insurers to determine claims and decide on reimbursement eligibility. It is crucial that coding takes place accurately and with high attention to detail, as incorrect codes can result in denials, compliance problems, or underpayment. The coding process also assists in separating non-physician services from physician services through distinct sets of codes.
6. Charge Entry
Once coding is completed, charge entry takes place. Each medical service rendered is associated with a specific fee that must be accurately recorded. Furthermore, charges are linked to corresponding codes, and the payer’s and patient’s payment responsibilities are indicated. This step ensures that claims are complete and billing reflects the actual cost of care provided.
7. Claim Scrubbing and Submission
Before claims are submitted to insurers, they are reviewed or “scrubbed” for errors. Claim scrubbers, either automated tools or part of billing platforms, help catch coding or data entry inaccuracies. Once scrubbed, claims are submitted electronically either directly to payers or through a clearinghouse that formats claims to meet individual payer requirements. This prevents rejections due to incorrect formatting or missing information.
8. Payer Adjudication
After submission, claims undergo adjudication by the insurance company. The payer evaluates the claim based on the policy terms and determines the reimbursement amount. The result could be an approval, partial payment, or denial. In fact, Explanations of Benefits (EOBs) or Electronic Remittance Advice (ERAs) accompany the decision and include details on coverage, rejections, or reasons for denial. Therefore, understanding and analyzing these responses is critical to identify underpayments or errors.
9. Patient Billing
If the insurer covers only a portion of the billed services, the remaining balance is billed to the patient. A detailed statement is sent to the patient, explaining their charges, the insurance coverage, and any out-of-pocket responsibilities. It includes payment instructions, due dates, and contact details for any queries. Therefore, providing clarity in patient billing reduces confusion and increases the likelihood of timely payments.
10. Payment Posting and Collections
The final stage involves posting received payments to patient accounts and managing collections. Once payments from payers and patients are received, they are recorded to reflect updated balances. Not only this but monitoring accounts receivable (AR) helps track unpaid claims and support timely follow-up. As a result, appeals can be filed for denied claims, and reminders or collections procedures can be initiated for unpaid patient balances. Accurate payment posting ensures financial records are current and supports revenue integrity.
Conclusion
Undoubtedly, medical billing guarantees timely and proper payments for the services provided to healthcare professionals. It also minimizes issues such as undercoding, overcoding, and lost claims, which may result in loss of revenue or fines. As far as patients are concerned, medical billing contributes to transparency through clear and accurate statements. This improves patient satisfaction and helps in building trust.
However, medical billing is a complex process that relies on multiple factors like the nature of the health organization, the insurance payer, the type of service, and the patient’s information. Medical billers must continually update their skills to match the constant changes in coding systems, regulations, and forms. Billing errors, such as missing or inaccurate information, lead to denials of claims and delayed payments.
With these issues in mind, outsourcing to a trusted medical billing and coding service such as 24/7 Medical Billing Services can minimize stress, remove expensive mistakes, and maximize cash flow. With their expertise, the billing professionals can offer an efficient, accurate, and streamlined process that ultimately increases financial performance and enhances patient satisfaction.
FAQs
Q1. What is balance billing?
Balance billing occurs when an out-of-network provider charges a patient the difference between the provider’s fee and the insurance paid.
Q2.What is the point of a service (POS) in medical billing?
Point of Service refers to the location where healthcare is provided and determines how an insurance plan processes and pays the claim.
Q3. What is a superbill?
A superbill is an itemized form created by providers that details services rendered, diagnoses, and procedure codes, used to generate insurance claims.
Q4. What is coordination of benefits (COB)?
Coordination of benefits is the process used when a patient has multiple insurance policies to determine which payer is responsible for covering services first.
Q5. What is PPO vs. POS?
A PPO (Preferred Provider Organization) offers flexibility to see in- and out-of-network providers (usually at higher cost). In contrast, a POS plan generally costs less but requires referrals and often limits you to in-network care.