What is Medical Billing?

Medical billing is submitting and following up on claims with health insurance companies to receive payment for services rendered by healthcare providers. It involves translating a patient’s medical records into billing codes, which are then used to create insurance claims and patient bills. Medical billing is critical to the healthcare revenue cycle, ensuring that providers are reimbursed for their services.

Medical billing begins when a patient receives medical services from a healthcare provider, such as a physician, nurse practitioner, or specialist. The provider documents the patient’s diagnosis, treatment, and any procedures performed in their medical record. This information is then passed on to a medical coder, who assigns specific codes to each diagnosis and procedure using standardized coding systems like ICD-10 (International Classification of Diseases, 10th revision) and CPT (Current Procedural Terminology).

The medical biller takes over once the medical coder has completed their work. They review the coded medical records and create claims to submit to the patient’s insurance company. The biller must ensure the claims are accurate, complete, and compliant with insurance company requirements. They also follow up on unpaid claims, appeal denied claims, and work with patients to collect any outstanding balances not covered by insurance.

Difference Between Medical Billing and Medical Coding

While medical billing and medical coding are closely related and often used interchangeably, they are two distinct functions within the healthcare revenue cycle. Medical coding involves reviewing patient medical records and assigning standardized codes to diagnoses, procedures, and services provided by healthcare professionals. These codes are used to create insurance claims and bills for patients. On the other hand, medical billing focuses on submitting these claims to insurance companies, following up on unpaid claims, and collecting payments from patients.

Medical coders and billers work together to ensure that healthcare providers are accurately reimbursed for the services they provide. Coders translate medical documentation into a language that insurance companies can understand, while billers use this information to create and submit claims and follow up on payment. Although some professionals may perform both roles, many healthcare organizations have separate teams for coding and billing to ensure accuracy and efficiency in the revenue cycle process.

What do Medical Billers Do?

Medical billers play a crucial role in the healthcare revenue cycle by:

• Reviewing coded medical records to ensure accuracy and completeness
• Creating and submitting claims to insurance companies electronically or on paper
• Following up on unpaid or denied claims and appealing when necessary
• Communicating with insurance companies to resolve any issues or discrepancies
• Generating patient statements for outstanding balances not covered by insurance
• Collecting payments from patients and posting them to their accounts
• Maintaining accurate financial records and generating reports for healthcare providers
• Staying up-to-date with changes in insurance policies and regulations to ensure compliance

Medical billers must have a strong understanding of medical terminology, coding systems, and insurance policies to effectively navigate the complex world of healthcare reimbursement. They also need excellent communication and problem-solving skills to interact with patients, insurance companies, and healthcare providers.

What do Medical Coders Do?

Medical coders are responsible for translating patient medical records into standardized codes used for billing purposes. Their main duties include:

• Reviewing patient medical records, including physician notes, lab results, and diagnostic images
• Assigning appropriate diagnostic and procedural codes using ICD-10, CPT, and HCPCS coding systems
• Ensuring that assigned codes accurately reflect the services provided and comply with insurance company requirements
• Communicating with healthcare providers to clarify any ambiguous or missing information in the medical record
• Staying current with updates to coding systems and guidelines
• Maintaining patient confidentiality and adhering to HIPAA regulations

Medical coders must have a deep understanding of anatomy, physiology, and medical terminology to accurately interpret medical records. They also need to be detail-oriented and able to work independently to meet deadlines. Many coders choose to pursue certification, such as the Certified Professional Coder (CPC) credential, to demonstrate their expertise and commitment to the field.

The Two Types in Medical Billing

In the United States healthcare system, there are two main types of medical billing: professional billing and institutional billing. These categories are based on the type of healthcare provider or facility submitting the claim and the services provided. Understanding the differences between these two types of billing is crucial for medical billers, as each has its own set of forms, codes, and guidelines.

Professional Billing

Professional billing involves submitting claims for services provided by individual healthcare professionals, such as physicians, nurse practitioners, and therapists. These services can be performed in various settings, including physician offices, clinics, and outpatient facilities. Professional billing typically uses the CMS-1500 form (or its electronic equivalent, the 837P) to submit claims to insurance companies.

Key aspects of professional billing include:

• Using CPT (Current Procedural Terminology) and HCPCS (Healthcare Common Procedure Coding System) codes to describe the services provided
• Indicating the place of service (e.g., office, outpatient facility, or telehealth)
• Reporting the provider’s NPI (National Provider Identifier) and taxonomy code
• Submitting claims to commercial insurance companies, Medicare, or Medicaid

Professional billers must stay up-to-date with coding guidelines, payer policies, and reimbursement rules to ensure accurate and timely payment for healthcare professionals.

Institutional Billing

Institutional billing, also known as facility billing, involves submitting claims for services provided in hospitals, skilled nursing facilities, and other institutional settings. These claims cover the costs associated with the facility itself, such as room and board, supplies, and equipment, as well as any services provided by healthcare professionals employed by the facility. Institutional billing uses the UB-04 form (or its electronic equivalent, the 837I) to submit claims.

Key aspects of institutional billing include:

• Using ICD-10 (International Classification of Diseases, 10th revision) codes to report diagnoses
• Applying revenue codes to describe the specific accommodations and services provided
• Reporting the facility’s NPI and provider taxonomy codes
• Submitting claims to commercial insurance companies, Medicare, or Medicaid

Institutional billers must be familiar with the specific billing requirements for each type of facility, as well as the payer policies and reimbursement rules that apply to institutional services.

The Process of Medical Billing

The medical billing process is a complex series of steps that begins when a patient seeks healthcare services and ends when the provider receives payment for those services. Understanding this process is essential for medical billers, as it helps them ensure that claims are submitted accurately and promptly, minimizing delays in payment and reducing the risk of denied claims. The following is a high-level overview of the key steps involved in the medical billing process.

• Patient registration: When a patient arrives for an appointment or procedure, the front office staff collects their personal and insurance information, verifying eligibility and benefits.
• Encounter documentation: During the visit, healthcare providers document the patient’s diagnoses, treatments, and procedures in the medical record.
• Medical coding: A medical coder reviews the medical record and assigns appropriate ICD-10, CPT, and HCPCS codes to describe the patient’s diagnoses and the services provided.
• Charge entry: The coded information is entered into the practice management system, along with any applicable modifiers and charges.
• Claim generation: The medical biller creates an insurance claim using the coded information and patient demographics. The claim is typically generated on a CMS-1500 or UB-04 form, depending on the type of provider and services.
• Claim scrubbing: The biller reviews the claim for accuracy, completeness, and compliance with payer requirements. Any errors or omissions are corrected before submission.
• Claim submission: The claim is submitted electronically or on paper to the appropriate insurance company or payer.
• Payer adjudication: The insurance company processes the claim and determines the amount to be paid based on the patient’s benefits and the terms of the provider’s contract.
• Payment posting: When payment is received from the insurance company, the medical biller posts it to the patient’s account and reconciles any discrepancies.
• Patient billing: If there is a remaining balance after insurance payment, the biller generates a patient statement and sends it to the patient for payment.
• Follow-up: The biller follows up on any unpaid or denied claims, appeals denials when appropriate, and works with patients to collect outstanding balances.

Front End & Back End Medical Billing

Medical billing is typically divided into two main stages: front-end billing and back-end billing. Each stage involves a series of tasks and responsibilities that contribute to the overall goal of ensuring accurate and timely reimbursement for healthcare services provided. Understanding the differences between front-end and back-end billing is crucial for medical billers to effectively manage the revenue cycle process.

Front End Medical Billing

Front-end medical billing encompasses all the tasks and responsibilities that occur before a patient receives healthcare services. This stage focuses on patient registration, insurance verification, and eligibility checks. The main goal of front-end billing is to ensure that patient demographic and insurance information is accurate and up-to-date, minimizing the risk of denied claims and delays in payment.

Key tasks involved in front-end medical billing include:

• Patient registration: Collecting and verifying patient demographic information, such as name, date of birth, address, and phone number.
• Insurance verification: Confirming the patient’s insurance coverage, including plan details, co-payments, deductibles, and any prior authorization requirements.
• Eligibility checks: Determining whether the patient is eligible for the specific services they are seeking based on their insurance plan’s coverage and benefits.
• Point-of-service collections: Collecting any applicable co-payments, coinsurance, or deductibles from the patient at the time of service.
• Referral and prior authorization management: Obtaining any necessary referrals or prior authorizations from the patient’s insurance company before services are provided.

Back End Medical Billing

Back-end medical billing involves all the tasks and responsibilities that occur after a patient receives healthcare services. This stage focuses on coding, claim submission, payment posting, and follow-up. The main goal of back-end billing is to ensure that claims are submitted accurately and promptly, maximizing reimbursement for the healthcare provider.

Key tasks involved in back-end medical billing include:

• Charge entry: Entering the healthcare provider’s charges for services rendered into the practice management system, including any applicable modifiers and diagnoses.
• Medical coding: Reviewing the patient’s medical record and assigning appropriate ICD-10, CPT, and HCPCS codes to describe the diagnoses and services provided.
• Claim generation: Creating insurance claims using the coded information and patient demographics, typically on a CMS-1500 or UB-04 form.
• Claim scrubbing: Reviewing claims for accuracy, completeness, and compliance with payer requirements before submission.
• Claim submission: Submitting claims electronically or on paper to the appropriate insurance companies or payers.
• Payment posting: Applying payments received from insurance companies and patients to the corresponding accounts and reconciling any discrepancies.
• Denial management: Investigating denied claims, correcting errors, and resubmitting appeals when appropriate.
• Patient billing: Generating and sending patient statements for any outstanding balances after insurance payments have been applied.
• Collections: Following up on unpaid patient balances and working with patients to establish payment plans or resolve billing disputes.

Hire Us For the Medical Billing Services

At Medsolutions360, we understand the complexities of medical billing and are dedicated to helping healthcare organizations streamline their revenue cycle management. Our team of experienced professionals provides comprehensive billing services, customized solutions, and exceptional customer support to maximize your reimbursement and improve your financial performance. To learn more about how Medsolutions360 can support your organization’s success. Contact us today.