What is Medical Billing?

When it comes to running a successful healthcare practice, medical billing is the backbone that keeps everything financially stable. So, what exactly is medical billing? 

Simply put, it is the process of translating your medical services into financial claims that are sent to patient’s insurance companies. It's essentially the bridge between the care you deliver and the compensation you receive. 

Without effective medical billing, getting paid for your work and expertise would be a significant challenge, potentially impacting your practice's financial health.

Even though it sounds complex, medical billing follows a pretty straightforward process. Here is a step-by-step overview of how it works.

Every patient visit starts with registration, where their personal details and insurance information are collected. This step is crucial because accurate patient data helps determine eligibility for coverage.

You’ll also need this information to obtain prior authorization from the insurance payer, if required. Making sure you get the correct details upfront saves you from headaches later on when it’s time to issue the bill.

Before any treatment can begin, it’s important to verify that the patient's insurance is active and to understand what services are covered by their plan. This step helps prevent any surprises when it’s time to bill.

You can verify insurance by calling the insurer or using electronic eligibility verification tools. This allows you to confirm eligibility dates and understand the patient’s coinsurance, co-pay, and deductible amounts.

Some procedures may require preauthorization from the insurance company, especially for treatments performed outside the primary care setting. For instance, you might need authorization before a surgery or imaging test. This step is essential to reduce the risk of denied claims later.

Charge capture is about accurately documenting the services provided to the patient. This involves recording everything you did during the visit - whether it's a consultation, a test, or a procedure - along with the associated charges.

Accurate documentation is key here. It ensures that your practice is reimbursed correctly for the work done.

After a patient checks out, their medical report goes to a medical coder, who translates the services provided into standardized codes. These codes help the insurance company understand what procedures were performed and why.

Once coding is complete, a superbill is created. This document includes all relevant codes, provider details, and patient information. It serves as the basis for the claim that will be sent to the insurance company for reimbursement.

The superbill is then used to create and submit the claim to the insurance company. It is important that the claim is complete and accurate to avoid delays.

The goal is to submit a ‘clean claim,’ meaning it is accepted on the first pass without errors. Clean claims lead to quicker payments and fewer delays.

After submission, the insurance company reviews the claim in a process known as payer adjudication. This is where they decide whether the claim is accepted, denied, or rejected and how much they will pay. 

Here is what could happen to the claim:

• Accepted: The claim is deemed valid and will be processed for payment.
• Denied: The claim was filed correctly but does not meet payment criteria.
• Rejected: There are errors in the claim that prevent it from being processed.

Understanding these outcomes is key to knowing how to follow up on claims and get paid promptly.

Once the insurance company has paid its share, the remaining amount includes co-pays, coinsurance, or deductibles, which is billed directly to the patient. At this point, a patient statement is generated to explain what’s owed and why.

If all goes well, the patient will pay the balance, and the billing cycle will come to an end. However, that may not always be the case. Following up on outstanding balances is an important part of the process to ensure timely payment for rendered services.

Medical billing is not always a straightforward process. Here are a few common challenges that you may face during the billing process:

• Denied or rejected claims: Insurance companies might reject claims due to missing information or incorrect coding.
• Coding mistakes: Billing relies heavily on coding accuracy, and even small errors can lead to claim rejections or payment delays.
• Constant policy changes: Insurance regulations and coding requirements are always evolving, and it can be difficult to keep up with them.
• Processing delays: Even with a smooth billing process, payments can sometimes take longer than expected to come through.

Medical billing might not be the most exciting part of running a healthcare practice, but it’s essential. Without an efficient billing system, it would be difficult to keep your practice financially stable. 

A streamlined billing process ensures that your hard work translates into timely and accurate payments. If you’re looking for help to make your billing process more efficient and error-free, Priority Medical Billing is here to assist. 

To find out how we can help your practice, please call 708-362-6080 or fill out our online form. Let us handle the complexities of medical billing so you can focus on providing top-quality care.