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Medical billing for dummies

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Here are some frequently asked questions about medical billing and their answers that will serve as your first lesson on the field of medical billing.

What is medical billing?

Medical billing is the process of submitting and following up on health insurance claims with the insurance company. This process is undertaken by a medical billing specialist with the support of the insurance desk team of the hospital or healthcare provider.

It is the responsibility of the medical biller to ensure that the service provided to the patient (who is insured with the insurance company) receives reimbursement. As part of this process, the medical biller sends an invoice detailing the treatment and the health services provided to the health insurance company on behalf of the healthcare provider. Therefore, when done efficiently, medical billing can optimise revenue performance for the healthcare provider. Today, most medical billers make use of specialised software which help in automating and improving the speed and efficiency of the process.

How is medical billing different from medical coding?

Both medical coding and medical billing are processes that are largely responsible for the smooth progress of the healthcare provider’s revenue cycle. Medical coding, carried out by a medical coder, is the process of assigning specific codes to the different health services rendered to the patient.

Medical billing, carried out by a medical biller, utilises the diagnosis and procedure codes derived from the medical record documentation to assemble all data concerning the medical bill or claim accurately and efficiently. Therefore, medical billing is a process that is dependent on medical coding.

What are the steps involved involved in medical billing?

The basic steps involved in medical billing are:

  1. Charge Entry
    • The medical biller, in this step, enters the charges for services provided to the patient. The charge entry also includes the appropriate linking of medical codes to services and procedures rendered during the patient’s visit.
  2. Claims Transmission
    • Once the claim has been properly completed, it must be submitted to the insurance company for payment. This step is called claims transmission or claims submission and is done electronically in formats specifically required by the insurance companies. Sometimes, clearing houses are used to reformat the claims in the format that matches the need of the insurance company.
  3. Monitoring of Adjudication
    • Once a claim is submitted to the insurance company, it undergoes a process called claims adjudication wherein the insurance company evaluates the claim and decides whether or not the claim is eligible for reimbursement based on factors including validity and compliance.
    • At the end of the adjudication, the insurance company sends a report to the healthcare provider. It is the medical biller’s responsibility to review this report and ensure that all procedures listed on the claim are accounted for. If there are any discrepancies, the biller will enter into an appeal process with the insurance company.
  4. Payment Posting
    • This step marks the end of the billing cycle and involves posting and deposit functions. Payment or settlement is received from the insurance company at this point, and the payment records of every patient are recorded in the billing management software.
  5. Patient follow-up
    • Medical billers follow up with patients whose bills are delinquent, rejected or partially paid to make sure that the payment due for the healthcare service, which has not been settled by the health insurance company, is received. This may involve contacting the patient directly, sending follow-up bills, or, enlisting a collection agency.

In conclusion, it can be said that the medical biller is the bridge between the healthcare provider and the health insurance company. Additionally, the medical biller may also be involved in supporting the insurance desk, communicating with the physician for clarifications and many such tasks that are related to the claims process.

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