Medical billing is simply the process of sending claims, on a form called the CMS 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.
Medical Billing Process
Medical Billing is comprised of eight simple steps.
1. Patient registration
The process starts with registration of a patient when he/she calls for an appointment with a healthcare provider. If the patient visiting for the first time, then they must provide their personal data and insurance information to the provider as it will enables them to ensure whether the patient is eligible to receive the services. If the patient has seen the provider before then their records will be in a file and they just need to explain the reason for the visit.
2. Financial responsibility confirmation
Biller gathers all the information about the patient and then determines which services are applicable as per the patient’s insurance plan.
However, insurance coverage changes with companies, plans and individuals. Biller checks the patient’s coverage for insurance as some plans do not cover certain type of medications. So, the biller makes the patient aware of these things before assigning the bill.
3. Super Bill
During the patients check in and check out from hospital they will be asked to provide identification cards along with their valid insurance card. Provider’s office collects copayments at the point of service during the patients visit to the hospital.
The medical report collected by the provider during the check-out will be sent to the medical coder, who translates the information into the accurate and in medical code. The collected medical history of the patient is called as super bill.
4. Prepare Claim
The super bill will be given to medical coder, who keeps the bill into billing software or a claim form. It contains the cost of the procedures. After the claim has been created, it is the responsibility of the patient to ensure the claim meets the standards of compliance.
5. Electronically transmission of claims
As per Health Insurance Portability and Accountability Act of 1996 (HIPAA), it is necessary to submit the claims through electronically. It saves time and decreases the errors and takes less time to get from providers to payers.
6. Adjudication Process
Adjudication is a process that undergoes when the claim reaches a payer. The payer evaluates the claim and takes decision whether the claim is valid or not.
Accepted claim: It is validated by the payer. It does not mean they will pay the entire amount of the bill. They will process the claim as per the rules of the insurance.
Rejected claim: It contains some mistakes with the claim. It may be rejected due to missing of some important patient’s information or miscoded information. There is a chance to correct the errors and resubmit the claim.
Denied claim: In this case the payer refuses to process the payment for the medical services. This occurs if the provider bills for the plan that does not exist in the procedure.
7. Generate Statements Process
The most important part of medical Billing is generating statements. After the acceptance of the claim by the payer, the biller receives a report. Then it’s time to make a statement which contains the procedures the patient received from the health provider.
If the payer agrees to pay the provider a portion of the services on the claim then the remaining amount from the bill is passed to the patient.
8. Follow up on patients
The last phase in the medical billing is following up the bills to get them well paid. Billers make sure to send timely mails and accurate medical bills and keeping up-to-date information of the patients.
When to Outsource Your Medical Billing
Determining whether you should outsource your medical billing process or to keep it in-house is a major decision and requires a lot of thought, analysis and reflection on your business, your current status, and your future direction and growth. It is a decision that cannot be taken lightly.
Outsourcing is one option that many providers are opting for, considering its successful track record among other industries such as customer service and manufacturing. But the decision is never easy to make, and it goes against the grain for some to veer away from the traditional. So how does one really decide on outsourcing their medical billing?
Well, one can decide to outsource their billing when:
You never seem to get paid what you are due – Rejections, denials and overpayments can all affect your bottom line. Finding that you are missing on a lot of claims is usually a sign that you do not have sufficient resources such as time, money and the workforce to dedicate to your billing.
Your staff turnover rate is high – Having a high turnover is detrimental to a company. You would not want too many novices handling your billing as this contributes to errors and efficiency in your billing process.
You can hardly keep track of your billers and what they are doing (or not doing) – A disorganized billing process and lack of supervision are the common culprits. Not knowing whether claims are coming or going highlights an inefficient system that affects your bottom line as well.
Your budget has become much too restrictive – Having an in-house medical billing process requires an investment in time and money for training, supervision, and quality controls. With today’s economy, it is difficult to maintain your process while having all these in place as well, not to mention overhead costs.
As a healthcare institution in our day and age, there are a lot more factors to contend with than what institutions had to face ten years ago, and the landscape of healthcare is ever changing. With new legislation, regulations and requirements now in place; increasing strains on budget and employment; as well as growing competition among other providers; these have all become hurdles in your road to success. Providers now need to broaden their horizons and consider options beyond traditional methods such as outsourcing in order to stay competitive.