Medical billing can be challenging, as transferring patient records into claims often leads to errors. Insurance companies have strict rules on how claims should be formatted, making the process more complex. Even when claims are accepted, insurers may delay payments, which creates frustrations for healthcare providers.

Medical billing can be overwhelming, but we’re here to make it easy. Follow along as we break it down for you.

What is the Medical Billing Process? 

Medical billing is the process of creating and submitting claims to insurance companies for reimbursement of healthcare services. This process includes registering patient details, assigning medical codes, verifying insurance coverage, and submitting accurate claims. Medical billers play a vital role in ensuring healthcare providers receive appropriate compensation for their services. 

Now that you have an understanding of medical billing, let’s look at the process in more detail.

Key Stages of Medical Billing Process

Step 1: Patient Registration

The billing process starts with patient registration, collecting essential information such as contact details, insurance coverage, and medical history. For returning patients, it is important to update their records with the latest visit reason and any changes since their last appointment.

Step 2: Insurance Verification

Once registration is complete, it’s time to check the patient's insurance coverage. Each insurance plan has unique rules that can change annually. Staying informed about these changes is crucial for your practice.

Step 3: Capturing Code

Medical billing relies on two main coding systems to track patient interactions. These standardized systems are the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT).

Once the medical codes are assigned, claims are prepared using the collected patient information and coding data. These claims are submitted to the appropriate insurance payer for reimbursement.

Step 4: Creating the Superbill

After the patient visits, compile the codes and details into a document called the Superbill. This document is essential for your claim. It should include:

Provider Information: 

• Name

• National Provider Identifier (NPI) number

• Location

• Contact info

Patient Information: 

• Name

• Date of birth 

• Contact information

• Insurance details.

Visit Information: 

• Date of visit

• Relevant CPT and ICD codes

• Fees charged

• Duration of the visit

Step 5: Preparing and Submitting Claims

Your medical biller will use the Superbill to create and submit a claim to the insurance company. Accurate and complete information increases the chance of a successful first submission, known as a “clean claim.” The best practices can achieve a clean claims rate of 99%. This can significantly increase your revenue. 

At this stage, choosing the right software for your practice can simplify claim submission. For more guidance, read How to Choose a Medical Billing Software for Your Practice.

Step 6: Monitoring Payer Adjudication

Once the insurer receives the claim, they evaluate it to decide if it’s accepted, denied, or rejected.

Accepted: 

This is the ideal outcome. The claim will be processed for payment. However, it may not cover the full amount, depending on the insurance plan specifics.

Denied: 

A denied claim means it didn’t meet payment criteria. This usually happens when a service isn’t covered. 

Rejected: 

A rejected claim cannot be processed due to errors in the filing. Many rejected claims go unsubmitted, leading to lost revenue. You should have a system to instantly address and resubmit rejected claims.

Understanding Types of Rejection in Medical Billing & How to Avoid Them can help practices implement strategies to reduce rejections.

Step 7: Creating Patient Statements

After the payer has settled their part, you send the remaining balance to the patient. Ideally, the patient pays promptly, closing the billing cycle. However, be proactive in following up to ensure timely payment.

Step 8: Following Up

Following up on claims is important for recovering revenue. After patients receive their statements, simplify the payment process to encourage on-time payments. Consider offering a patient portal with online payment options. This convenience helps patients pay their bills easily, reducing the chance of them going to collections.

Benefits of the Medical Billing Process

Some key benefits of an effective billing process are: 

• It helps healthcare providers get fair payment for their services.

• It speeds up reimbursements, which improves the practice’s cash flow.

• It reduces mistakes in coding and claim submissions, which lowers the number of denied claims.

• It increases patient satisfaction by providing clear and accurate bills.

• Offers valuable data for financial planning and budgeting.

• Ensures compliance with healthcare laws and payer rules.

• It saves time and resources, allowing providers to focus more on patient care.

• Supports quality healthcare by enabling proper reimbursement.

• The process generates data to improve practice operations and decision-making.

• It strengthens revenue cycle management, leading to a healthier financial outlook.

How Medical Billing Works

Look at the infographic below, which illustrates the basic medical billing workflow, to better understand how these steps fit together.

• Insurance Verification

• Patient Registration

• Medical Coding

• Charge Capture

• Claim Submission

• Payment Entry

• Denial Management

• Follow-Up

• Reporting

To get detailed information, check out How Medical Billing Works: A Detailed Explanation.

Front-End vs Back-End 

The medical billing process consists of two key stages: front-end and back-end. Front-end billing occurs before the patient visits the doctor, while back-end billing takes place after the patient has seen the provider. These two stages work together to make sure the billing process is efficient from start to end.

Front-End

The front-end processes involve interactions with patients before their appointments. This stage includes the front office staff at a physician's office or outpatient facility. When a patient arrives, they check in, register, or pre-register for their visit. The billing process starts when the patient contacts the provider to schedule an appointment. During this time, front-end staff collect essential demographic and insurance information. They may confirm existing details or ask the patient to complete a registration form. Following this, an encounter form, also known as a superbill, is created to detail the services rendered during the visit.

Back-End

After the patient visit, the billing process shifts to the back office. Here, staff manage claims and ensure timely reimbursement. Charge entry personnel input charges for services into the practice management system, referencing the superbill and adjusting for any payments made upfront.

Back-end billing includes claim scrubbing, where billers verify the accuracy of diagnosis and procedure codes. This step ensures all required information is included to prevent claim denials. Once verified, the claim is electronically submitted to the payer.

How to Improve Your Medical Billing Process

A clear and accurate billing process is very important for any healthcare practice. Making your billing better helps you work faster, reduces mistakes, and gets you paid on time.

Here are some simple ways to improve your medical billing:

Track Denials Regularly

Keep an eye on denied claims. Unresolved denials can lead to late payments and lost revenue. By tracking and analyzing denials, you can:

• Spot trends in the types of denials.

• Find out what causes these denials and fix them.

Train Your Staff

Provide regular training for your billing team. Teach them about the latest coding rules and compliance standards. Ongoing education helps keep your team updated, reducing the chances of audits and penalties.

Update Patient Information Regularly

Make sure patient details are correct. Check insurance coverage, addresses, and contact numbers. This practice helps ensure bills reach the right people on time.

Implement a Denial Management System

Create a system to quickly handle denied claims. By understanding why claims are denied, you can take steps to prevent the same problems from happening again.

Conduct Regular Audits

Do regular checks to find billing mistakes and compliance issues. Fixing problems quickly prevents them from coming back. Audits give insights into coding accuracy and adherence to regulations. They also support staff training, keeping your team informed about updates and compliance needs.

A Comprehensive Overview of Medical Billing Compliance Regulations

Medical billing is governed by strict compliance regulations. It can be difficult for healthcare teams to submit claims on time and accurately. Errors in billing can lead to extra charges, which may make your practice liable for problems. Therefore, staying alert about billing is vital for several reasons:

• It protects your practice from liability.

• It helps prevent abuse, waste, and fraud within the system.

• It protects your brand's reputation.

• Improves patient's experience

• It ensures patients are not charged too much or for unnecessary services.

Now, let's explore the regulations that govern medical billing.

Office of Inspector General (OIG)

The Office of Inspector General (OIG) supervises programs under the U.S. Department of Health and Human Services (HHS). This regulation helps to protect patient privacy and prevent fraud.

Health Insurance Portability and Accountability Act (HIPAA)

In the Health Insurance Portability and Accountability Act (HIPAA), there are important rules for keeping patient data safe. HIPAA sets industry-wide standards that healthcare providers must follow to protect sensitive patient data. This regulation is crucial for protecting sensitive information.

Affordable Care Act (ACA)

The Affordable Care Act (ACA) also plays a significant role in healthcare compliance. It requires healthcare providers to implement ethics and compliance programs to receive reimbursement for patients under government-funded programs. The ACA specifies important steps organizations must follow to stay compliant, with guidance from the OIG on best practices. 

Future Trends in Medical Billing

Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML are becoming key players in medical billing. They can speed up claim processing. AI can identify billing mistakes and inefficiencies, and ML can help predict and prevent future problems.

Blockchain Technology

Blockchain can increase the transparency and security of medical billing. It ensures that medical claims are accurate and protects sensitive information shared between healthcare providers, payers, and patients.

Cloud Computing

Cloud computing is important for modern medical billing. It allows teams to store and analyze data flexibly and efficiently. With cloud access, billing teams can work from anywhere and gather insights in real-time.

Robotic Process Automation (RPA)

RPA automates repetitive tasks in medical billing, like submitting claims and verifying insurance. By speeding up these processes, RPA improves accuracy and lets billing teams focus on more important tasks that benefit patients.

Telemedicine and Virtual Care

With the rise of telemedicine, new billing solutions are needed to ensure accurate reimbursement for virtual services. It includes creating new codes and payment models, as well as integrating telemedicine platforms with existing billing systems.

Before we wrap things up, let’s explore the differences between medical billing and medical coding. Each plays a distinct role in the healthcare revenue cycle.

Medical Billing Vs. Medical Coding 

Medical coding translates a patient's diagnoses and treatments into specific codes, while medical billing uses those codes to prepare claims for payment.

Medical coders assign these codes based on a doctor’s notes about the services provided. These codes are essential for insurance claims, reimbursement, and health research. Medical billers then take these codes to create accurate claims and submit them to insurance companies or other payers, ensuring everything aligns with payer guidelines.

Today, many healthcare facilities use technology to simplify these steps. Some systems automatically generate codes from patient records and feed them into billing, which saves time and allows medical teams to focus more on patient care.

Optimize Your Revenue Cycle with Innovative Billing Software

Medical billing can be challenging with so many steps to manage. What if managing medical billing could be simpler? With the right software, it can be!

The right software can make patient registration easier with electronic forms and automatic data entry. It also determines financial responsibilities by accessing the latest information from insurance providers. Moreover, it simplifies medical coding by suggesting appropriate CPT and ICD codes by directly linking that data to the Superbill for quicker claims processing.

At DilijentSystems, our software is designed to make your billing process easier. Ready to see how it can benefit your practice? Reach out to us today!

Partner with Experts in Medical Billing

We hope this guide has provided helpful insights into the complexities of medical billing. We know that billing can be time-consuming and prone to errors, which may impact your practice’s revenue and efficiency.

That’s where we come in. With our range of Revenue Cycle Management services, including billing, coding, and credentialing, we handle the process for you.

Dilijent Systems is a trusted partner for meeting your practice's needs. With our proven track record, commitment to data security, and team of experienced professionals, we can improve your operations, manage your revenue cycle better, and improve the financial health of your practice.

Trust us with your billing, so you can concentrate on what matters most—your patients. Contact us today!

Conclusion: 

Managing medical billing can feel daunting, but it doesn’t have to be. With the right software, you can simplify the entire process, from patient registration to claim processing. At Dilijent Systems, we understand the challenges you face and we're here to help. Our services improve workflow and increase the revenue of your practice.

Get in Touch for a Free Consultation! Let our experts guide you through your medical billing challenges with a no-obligation consultation!

FAQs 

What are the types of medical billing systems?

The main types of medical billing systems are:

• Closed System

• Open System

• Isolated System

How many types of medical billing are there?

The two main types of medical billing are: 

• Professional Billing

• Institutional Billing

What are the most common denial codes in medical billing?

Some common denial codes are:

• CO-50: Services not seen as medically necessary

• CO-29: The filing time limit has passed

• CO-109: Claim/service not covered by the insurance

What is the difference between Out-of-Network and In-Network billing?

In-Network Billing: This involves providers who have contracts with insurance companies, leading to lower costs for patients.

Out-of-Network Billing: This occurs when services are provided by non-contracted providers, usually resulting in higher out-of-pocket costs for patients.

Why is preauthorization important in medical billing?

Preauthorization means getting approval from an insurance company before a service is given. It ensures coverage and helps reduce denied claims, making it a key part of the medical billing process.

How do you read an Explanation of Benefits?

An Explanation of Benefits (EOB) shows what services were provided, how much was billed, what the insurance covers, and what the patient needs to pay. Understanding your EOB helps you know the billing details.