Medical billers and coders have flexible options for working, with many employers letting them work remotely or in the office.
With healthcare continuing to have a high demand for qualified workers, many people are choosing medical billing and coding as a career.
Medical billers and coders are a vital part of the healthcare system, as they record the story of a patient visit for medical offices and the insurance system.
One of the things that you may be curious about is how medical billing works, and how a claim moves through the medical system, the healthcare facility, and the insurance system. Understanding the intricacies of the medical billing process is essential for efficient healthcare administration.
What are the steps and concept of the medical billing process? The steps include: patient registration, establishing financial responsibility for the visit, patient check-in and check-out, medical coding and transcription, billing compliance, preparing and transmitting claims, monitoring payer adjudication, generating patient statements or bills, and oversight on patient payments and arranging payment collections.
1. Patient Registration
Efficient patient registration lays the foundation for a smooth medical billing process. When a patient arrives for a first appointment, they are greeted by staff, and asked to fill out a registration form. This form contains questions about demographics, background information, family health history, and insurance information. The information collected on the initial visit is saved for subsequent visits, where the information is again confirmed.
Patients will sign off on a HIPAA privacy form and submit insurance information. The medical office staff will make a copy of their Insurance Card to get their information in the system.
2. Verify Patient Insurance and Fiscal Responsibility
Before the patient sees the doctor, the office staff will verify their information. Verifying patient insurance and fiscal responsibility ensures accurate billing and smooth claim processing. On the patient’s insurance card, their name, insurer, insurance number, group number, and insurance phone number will be listed. Some insurance cards will list the co-pay or deductibles and co-insurance. The medical administrative staff will contact the insurance company to confirm the patient is covered for the visit.
Some procedures may require pre-authorization from the insurance company. If the patient has secondary insurance, the medical office should contact the second insurer to see if they will cover the remainder of the bill. The patient might be responsible for any billing that is not covered by their insurance. If the procedure has out-of-pocket expenses, the patient will be alerted, so they can determine whether the visit is in their best interest.
3. Patient-Provider Encounter
During the patient-provider encounter, meticulous documentation is crucial for precise medical coding. When the patient meets with the healthcare provider, this is known as an encounter. An encounter can be an in-person office visit or by phone or video chat. A form known as an encounter form is filled out by the medical office staff, which records all the details of the patient encounter. This encounter form documents the patient’s name, date, place of service, amount paid, and procedural and diagnostic codes for the patient condition, treatment, and prescriptions.
The physician will take notes of the patient visit, either through voice recording, or written notes. These will be turned into a transcript.
4. Medical Transcription
Accurate medical transcription is pivotal for translating patient encounters into billing-ready documentation. The notes from the physician are converted into a medical transcript, either by the in-house team, or a third party that specializes in medical transcription; voice recognition software is often used. The medical transcript is used to create proper billing and coding, as well as creating a medical history for the patient. The transcript should be free from errors; any error can create a claim rejection by the insurer.
5. Medical Coding
Precise medical coding transforms clinical encounters into universally recognized billing codes. The medical transcript is converted into medical codes for claims processing. Medical coding takes the transcript of a patient-provider visit and encodes the information in universal codes for procedures, diagnoses, treatment, and prescriptions. These are usually CPT (Current Procedural Terminology) and ICD-10 (International classification of Diseases) standards. Instead of having the insurer read the entire medical history of the patient, these codes save time and help the insurer determine whether they will accept or reject a claim. These codes will go into a medical claim alongside the medical office charges and the patient’s demographic information. The detailed report created during this process is also known as a “superbill”.
Why is medical coding so important for billing? Medical coding is important to healthcare providers because it turns each patient encounter into a series of universally recognized codes. This encoded information can be understood by all insurance companies and medical providers, and is used to generate bills and track payments.
6. Charge Entry / Claim Generation
Medical services have standardized medical codes, but medical offices do not have standard rates. In this step, the medical biller enters the medical office charges alongside each CPT code. This sheet will be submitted as a claim to the patient’s insurer in the next step.
Efficient charge entry and claim generation facilitate timely reimbursement for medical services. If the patient is responsible for any portion of the medical services, the medical biller indicates how much the insurer will be responsible for reimbursement. The charge entry sheet must be inspected carefully for accuracy, so the claim is not rejected by the insurance company.
7. Claim Scrubbing and Transmission
Thorough claim scrubbing and secure transmission ensure error-free claims submission. Scrubbing is done by Electronic Health Software (EHS) that checks for errors, making sure each required field is filled out correctly, so the transmission software does not reject the claim. The claims are transmitted to the insurer through a secure and encrypted service known as EDI (Electronic Data Interchange). This step is known as charge transmission. If there is invalid data in the patient’s records, the claim may be rejected. Claims may also be rejected by insurance guidelines and payer details.
8. Claims Adjudication
Claims adjudication determines the extent of reimbursement and ensures alignment with payer guidelines. When the insurer (payer) receives a claim, the adjudication process begins. Claim adjudication is when the payer determines how much of the claim they will reimburse the medical provider for, and whether the claim will be accepted, rejected, or denied.
“Accepted” means they will process the claim under the agreement they have with the patient (plan subscriber). It does not necessarily mean they will pay the entire amount of charges. “Rejected” means the claim has an error, and usually means the medical billing team can refile. “Denied” indicates the insurer refuses to reimburse the medical provider. This may be due to a procedure not covered by the patient’s insurance policy.
Once payer adjudication is complete, a report is sent to the medical provider. This report details how much of the bill they are reimbursing and why. Each procedure is listed, with the amount the insuring payer will cover, and how much they allocate for each procedure. Many insurance providers and medical providers have agreements with how much each procedure will cost.
The medical biller reviews the adjudication report, making sure each code lines up correctly with the services provided in the initial claim. Any discrepancies may be appealed by the medical provider. The appeal process can be complicated and is regulated differently from state to state. This highlights the importance of creating an accurate claim with the correct codes from the beginning.
How does denial management impact the revenue cycle?
Denial management is an aspect of medical billing dealing with investigating, analyzing, correcting, and preventing claim denials. When insurance companies deny claims, it causes medical providers to not be properly reimbursed for medical care. Claims may be denied for a variety of reasons, including incorrect patient information, medical coding errors, coverage denials, missed claim deadlines, or dual coverage.
9. Patient Statement
After the claim has been processed by the payer, any outstanding charges are billed to the patient. A comprehensive statement is sent to the patient, detailing the procedures provided to them, the associated costs, what was covered by insurance, and their remaining balance. The statement should also include a due date for payment, and ways they can settle their bill. Issuing clear and comprehensive patient statements fosters transparency in billing practices.
10. Statement Follow-Up and Payment
The final step in the medical billing process is the making sure the patient bill is paid. Diligent follow-up on patient statements ensures timely settlement of outstanding balances. If the insurance payer has paid their share, and that amount has been recorded, the patient must pay the remaining balance. The medical billing team follows up with the patient to make sure they get their balance paid. If the patient does not pay or make payment arrangements, the account may be sent to collection.
Start Your Medical Billing Career with Training and Certification
If becoming a professional medical biller and coder sounds like a career you’d like to pursue, Campus, formerly known as MTI College, in Sacramento offers a comprehensive training program to help you get certified.
Our Medical Billing and Coding Professional program can help you become a certified medical biller and coder in 36 to 42 weeks. This program prepares students for certification in the Certified Medical Reimbursement Specialist (CMRS) exam.
This class is offered in our Online format, where all of the coursework is completed online, with faculty teaching remotely from our Sacramento campus.
If you have questions, our Admissions team can help you get answers about financial aid, class start dates, curriculum, and attending class. Contact us today via our online form, or give us a call at (916) 339-1500.