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What is Medical Billing ?
Medical billing is the process
wherein the services provided by the healthcare provider is
billed and the payment is submitted to the insurance companies
and the claims to insurance companies is followed up.
Process of medical billing
The process of billing includes various stages:
• The provider visits the patient and gives diagnosis to
coordinate better with the patient.
• Depending on the service provided and treatment given a
medical report is prepared by the doctor.
• It is verified either through clearing house or sent directly
to the insurance company.
• The patient can claim the payment.
• Once the verification is done at the insurance office, if the
patient is eligible for the claim then the bills will be cleared
or it is sent back for corrections to the provider.
• After the provider corrects it is sent back to the insurance
company.
The whole process is explained in
detail as follows
The process of billing is done with an interaction between two
people. One is the provider and the other is the insurance
company who is also called the payer. The provider visits the
patient and gives him/her several diagnoses in order to make
his/her care more efficient. After provider visiting the
patient, the doctor creates a medical record for the patient
depending upon the service provided and the examinations done.
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This record which is called as
medical record contains a list of treatments done and
prescriptions given related to the patient. The procedure code
which includes the treatment, diagnosis, duration of service
combined together will be billed and claimed for insurance. Once
the record is ready the doctor provides it to the billing
division or to the medical coder. Using this information a
billing record is prepared on a standardized form which is
called HCFA. The diagnoses in this form are recognized by
numbers from the current ICD-9 manual. This billing record or
the form or the claim is submitted directly to the insurance
company or to a cleaning house which acts as an intermediary for
the information. The insurance company will begin to process the
claim. The process is done by doing various tests i.e. to check
the validity of the claim for payment. The tests include
checking for patient’s eligibility for the payment, medical
necessity and the provider’s official documents. If the tests
done are clear then the insurance company pays the |
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claim or it rejects the claim and
contacts the claim submission source to tell the details
regarding the rejection. Once the claim submission source
receives the rejection message, the provider must recheck it,
reconcile it with the original claim, make the required
corrections and resubmit the claim again. This procedure may
repeat several times till the test in the insurance company is
cleared and the claim is paid full. The rejections are mainly
high due to complexity in claims and as well as data entry
errors. Some technologies like straight through billing
technology and training help will help the billing process to be
faster and receive payments in time.
Billing
quality
The time taken for the bill to be prepared and completed is
refered as the billing quality. In other words the shape of the
distribution curve of accounts receivable defines the quality of
the bill. Certain specific measures include the percent of
accounts receivable beyond 30 days, 60 days and 120 days. Good
quality billing has small median for example half of the claims
must be paid within a month.
Payment made by the insurance
company
The amount that is paid or the payment that is made by the
insurance company is known as the allowable. The doctor and the
insurance company communicates and based on the amount that is
negotiated the original charge will be charged. For example even
if a physician charges $100 for his treatment or medication, the
insurance company is liable to pay may be only $70. So the
reduction of $30 will be assessed or otherwise called provider
write off. The amount is further reduced if the patient has a
coinsurance, deductible or a co pay. A coinsurance is nothing
but the percentage of the amount that the patient must pay which
is allowed to surgical and diagnostic procedures like scan etc.
If the patient has a co pay of about $10 then the doctor would
be paid $60 by the insurance with reference to the above
example. The doctor is further responsible for collecting the
out of pocket expense from the patient. Moreover, if the patient
has a deductible of about $600 then he/she has to pay the
contracted rate of $60 ten times until the deductible is met
during which the insurance company will begin to cover a portion
of the amount.
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Advancement in medical billing
Medical billing was done on paper for these many decades.
However, with the advent of computers it is become more
challenging, easy and more efficient to manage large amounts of
claims. Many companies like software companies have come forward
to provide medical billing software to make the process more
efficient. Most of the companies are offering courses on medical
billing and solutions through their own web interfaces which
counteracts the cost of individually licensed software packages.
With the introduction of HIPAA (Health Insurance Portability and
Accountability Act) the health insurance coverage for workers
and their families are protected when they change or lose their
jobs. Initially the providers and the insurance companies were
affected with law due to certain restrictions. Due to this the
patients thought that their insurance companies and health care
providers required extra paper work to process their claims. As
per these confusions the software companies and medical offices |
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spent thousands of dollars on a new
technology. They were forced to redesign business processes and
software in order to protest the new act. Some technologies like
straight through billing technology and training help will help the
billing process to be faster and receive payments in time. These
technologies accelerate the billing process by automating claim
validation and billing workflow management. The automated claim
validation eliminates the error and reduces the processing time
before the claim is submitted to the insurance company. Lastly,
thebilling workflow management creates a high degree of process
transparency for all billing participants for full and timely
payments. Straight through billing requires integrated technologies
for Electronic Medical Records (EMR).
Medical billing software
Medical billing software is so helpful these days in medical offices
in that they are responsible for the financial success or failure of
many medical practices. In most of the medical offices and with most
of the health care providers inefficiency is the major problem. Such
problems can be sorted out by implementing, purchasing and
installing the right medical billing software. It increases the
medical practice office revenues by 20-30%, increases productivity,
reduces the cost and improves cash flow. These medical billing
software's are capable of handling every important aspect of the
modern medical office i.e. apart from just billing they can handle
claims processing, auditing, patient scheduling, collections and
accounting.
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Article Contributed By: Shilpa V
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