Understand Medical Billing

What is Medical Billing?
Medical billing is simply the process of sending invoices, on a form called the HCFA 1500, to insurance companies. The forms include the diagnosis and procedure codes for a patient’s visit. The medical biller sends out the invoice, usually through an electronic system, and awaits the insurance company’s response. In most cases, the insurance company makes the expected payment and assigns the patient’s portion of his or her deductible or co-insurance. The medical biller then bills the customer for any remaining balance.

When the insurance claim does not go through, the medical biller must work to track down the problem. Some medical billing errors are simple to fix. Perhaps the biller recorded the patient’s name or date of birth wrong, or the policy number could be incorrect. For these errors, the medical biller corrects the mistake and re-sends the claim. Other claims may require more research into the correct diagnostic and procedure codes or may require appeals to the insurance company. While entry-level billers may do this work, many office managers assign complicated claims to experienced medical billers.

What is the overall billing process?

The physician doesn’t get paid for his services immediately after they are rendered. Majority of the patients have insurance coverage and details of such coverage are provided to the physician before treatment. It is the responsibility of the physician to submit claims to the insurance company and get paid for his services. Submitting Claims and getting paid is a lengthy process and involves a lot of rules and regulatory systems and is very complicated. The physician needs to adhere to all these rules before submitting claims. This is the concept of Medical Billing. Sometimes the physician cannot provide his entire attention to this activity. He entrusts this activity to Billing Companies. This is a process of the physician providing rights to Billing Companies to bill Medical Insurance claims in order to save his time energy, and money.

After the provider renders services to the patient, the billing company will submit bills to the insurance company/ payer, using the insurance information that was last provided, as well as information about the reason for the examination, and the exact type of procedure performed.

Medical coding is the process of converting Medical terms to numeric code and it required Medical knowledge skills.

Medical billing is the process of submitting the claims and get paid behalf of provider.

Here is the video for explaining basic process of Medical billing and explaining what is Medical billing.



I have listed the important process in Medical billing. Each process is very important.

1. Insurance verification.
2. Demo and Charge entry process.
3. Claim submission.
4. Payment posting.
5. Action on denials or Denial management or Account receivables.

Insurance verification

Process started from here and usually front desk people are doing this process. Its a process of verifying the patients insurance details by calling insurance or through online verification. If this department works well, we could resolve more problem. We have to do this even before patient appointment.

Demo and Charge entry process

Demographic entry is nothing but capturing all the information of patients. It should be error free.

Charge-entry is one of the key departments in Medical Billing. Key department?? Yes, that's true. It is the keying-in department in Medical Billing. After receiving the super bills from the Doctor's office, it gets passed through the coding department, and then comes to the charge-entry department.

A Charge-entry person also has one other vital role to perform. That is, to look-up the codes entered in the claim, and to assign the relevant charges for those codes.

Claim submission process

The next step after demographics and charge entry is claim generation. Claims may be paper claims or electronic claims. There are various types of forms for paper claims. The most widely used form is Health Care Finance Admin-1500 designed by the Health Care Financing Administration.

Electronic transmission of claims is the modern way of sending claims with less paper work. The most common means of transmission are through internet . The claim information is directly loaded into the insurance company's computer system or to the clearing house.

Payment posting process

Once the claims reach the carriers and they complete processing, they issue a check and prepare an Explanation of Benefits . The checks and the Explanation of Benefits would be sent to the pay-to address with the carrier or in the Health Care Finance Administrators.

In this processing we have accounted the money into the account as per the Explanation of Benefits. Now a days we are using Electronic payment posting also.

Action on denials or Denial management or Account receivables
This is a most important function in the process flow of data. Unless this is taken care of, insurance balance will only be on an upward trend.                   

Problem in Medical billing

•Inaccurate or lack of coding

• Incomplete claims

• Lack of supporting documentation

• Poor communication with the payer

• Not billing for services rendered

* Not being follow up AR balance claims

The person who is doing this process will be called Medical billing specialist.


Who is Medical billing specialist.

Medical billing specialist is the one who is handling the below process and having well knowledge in each and every process.

* Insurance verification process

* Patient demographic and charge entry process.

* Submitting the claims by electronic as well as paper method. Tracking various claim submission report.

* Payments posting process for insurance as well as patient.

* Denial management.

* Insurance followup management.

* Insurance appeal process.

* Handling patient billing inquiries.

* Patient statement process.

* Preparing monthly reports such as revenue report and account receivable report and as per the provider requirement.

Medical Billing Specialists are in charge of reviewing patient charts and documents. They prepare and review all medical insurance claims based on the rules and regulations of insurance companies. Medical Billing Specialists also review insurance communications, payment and rejection notices to properly track all claims and payments.


Medical Billing Professional

If a person is computer literate he is a fit enough candidate to take up the profession of medical billing and medical coding. However he will need to be trained and be aware of a lot of new information before he can start working effectively. He has to learn about the medical billing software and must be familiar with and master the various commands used while working with it.

Who are medical coders and how is it related to medical billing? Medical billing is a subspecialty of medical coding. Medical coding is the first step in the billing process. All patient records are maintained using the ICD-9 index system so that it is compliant with the federal rules.


A medical biller’s most important skill includes filling up of the various medical forms correctly without any mistakes what so ever. All information required should be complete without any mistake at all. And the work will be include the following


Patient demographic entry
Insurance enrollment
Charge entry
Insurance verification
Billing and reconciling of accounts
Payment posting
Insurance authorization
Medical coding
Scheduling and rescheduling
Account receivable follow-ups and collections


Is it worth taking a medical billing program?

Usually don't spend too much cost on Medical billing program because the program will not do anything with real experience. What you learn from these kind of program will not be going to match with when you are working in the real environment. Hence just use as the start kind of program and get the real time experience even in small salary and later you can come up with more demanding one.


Problem of In House Processing of Medical Claims


Medical claims are generally very complex and have long extended details. While processing medical claims, one has to be highly critical and do efficient follow-up in order to get results. The process requires a lot of time and effort. And even after all this, there can be cases where files get lost or a small error can ruin the entire lot and everything has to be re-submitted again. Usually practice staff can be held up with lot of current work rather than submitting the claim and resubmitting the corrected claim hence it will lead to time delay on payment flow and it will affect all the relationship with in the practice. Even cost wise is also not effective when compare to outsourcing.

Also Read how to improve the overall collection of Medial billing.


2 comments:

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Ryan Mirabito said...

I have always worked on the Business development side of the healthcare/treatment industry. I have a large knowledge of the business in all areas except for insurance mainly verifications, reimbursements, and billing. It is not an area I'm looking to make a career of but in order to be as efficient as possible at my job I am looking to take a class or some sort of training on the subject. Any recommendations as to where I may find such a service

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