What is Medical Billing?
Medical Billing is familiar to healthcare facilities. It is one of the core areas of their financial management. Billing relates to managing reimbursements from insurance providers against healthcare services rendered. Usually, professionals called medical billers carry out billing. Their primary job is translating the rendered healthcare services into claims. Subsequently, they submit them to insurance providers for receiving the corresponding payments. That way, billing acts as a connecting channel between healthcare and insurance providers. Simultaneously, it streamlines revenue generation for healthcare facilities and lessens the financial burden on patients. There are more merits in medical billing, such as allowing compliance regulations and freeing them from the risk of legal penalties.
The Anatomy of Medical Billing
Medical billing is a structured process. It consists of the following functions:
1. Patient Registration
It is the first task in medical billing. Usually, front desk executives collect the essential details of patients before confirming an appointment with the doctor. The details could be:
Name
Address
Date of birth
Insurance information
Contact details.
However, ensuring the correctness of the information is a must. Otherwise, erroneous information will be entered into electronic records. Notably, such information can lead to claim denials.
If an insurer denies a claim due to wrong patient information, medical billers need to source the correct information. Subsequently, they need to resubmit the claim with the updated details.
2. Insurance Verification
Next is the verification of the patient’s insurance. The biller confirms the validity of the insurance policy and coverage. For that, the professional:
Verifies the validity of the insurance policy
Determines the patient’s benefits and deductibles
Confirming whether or not prior authorization is essential for specific treatment procedures
These ensure verification of the claim. Remember, nil or faulty verification can lead to claim denials or unpaid bills. As a result, healthcare facilities could suffer revenue erosion and patients could feel financial pressure.
3. Medical Coding
Medical coding imparts accuracy to documentation of diagnoses, treatments, and procedures. It involves specifying medical services with standard codes, such as:
International Classification of Diseases (ICD) for diagnosis
Current Procedural Terminology (CPT) for procedures and services
Healthcare Common Procedure Coding System (HCPCS) for equipment and supplies
These codes are universal. They allow insurance companies to process claims quickly. Due to the accuracy of the codes, claim denials lessen. As such, healthcare facilities can keep away from financial losses.
4. Charge Entry
Charge entry feeds all billable services and their costs into the billing system. Billers should ensure correct entry to avoid the corresponding consequences. Wrong values can lead to overbilling or underbilling. They can negatively impact revenues and patient trust.
During a charge entry, billers:
Review medical codes to ensure they are the appropriate ones for the provided services
Feeds the charges in the billing system
Associate the charges with the patient’s account
5. Claim Submission
Once billers complete all verifications and charge entries, the professionals carry out claim submissions. These involve sending the claims to insurance companies through the electronic medium. Thorough checks are essential in a claim submission. They help prevent errors, which might result in claim denials. The tasks in this step are transmitting the following to the insurer:
Details of the patient and insurance provider
Medical codes
Details of the provided medical services
Charges
6. Adjudication
The first task of an insurance company after receiving a claim is to assess it properly to determine validity and coverage. It could approve the claim, deny it, or partially pay the amount based on its assessment. The insurer will communicate to the healthcare provider the reasons for denial or underpayment. Due to this, the healthcare facility can actuate corrective measures.
The key points of assessment are:
The accuracy of the submitted claims
The insurance policy terms
7. Payment Posting
Billers post the payments after receiving the claim amounts from insurance companies to patient accounts. The posting reflects the financial health of the healthcare provider. It makes visible payment trends, denials, and underpayments. This is called payment posting that comprises:
Documenting claim payments by insurance providers
Posting claim amounts to patient accounts
Documenting remaining payments
8. Denial Management
Insurance service providers can deny claims if they find errors, lack of coverage, or missing information. Usually, the following issues cause denies in claims:
Erroneous patient or insurance information
Incorrect medical codes
Absence of preauthorization for certain treatments
In such a case, insurance providers will communicate their denial with the reasons to the healthcare provider. Subsequently, billers need to rectify the errors and resubmit the claim submission. The process is called denial management.
9. Patient Billing
Billers in healthcare facilities bill the remaining balance after insurance providers approve and process their claims. The process is called patient billing. Billers should ensure transparency in the billing to prevent confusion. Patient billing includes:
Generating bills concerning the outstanding balance
Providing multiple payment methods to facilitate payments
10. Follow-Up and Collections
Billers need to follow up with patients to collect the outstanding payments. Successful follow-ups and collections reduce the risk of bad debt. The function includes:
Monitoring unpaid patient bills
Communicate with patients for payments
11. Compliance and Reporting
Compliance and reporting are the last tasks of the billing procedure. As per legal mandates, compliance with the essential regulations is mandatory for healthcare facilities, such as:
Health Insurance Portability and Accountability Act(HIPAA) to ensure confidentiality and security of patient information
Office of Inspector General (OIG) Guidelines to prevent fraudulent billing practices
Reporting is the generation of detailed financial reports, which show revenue trends, and claim denial rates. As such, healthcare providers get insights into their performances, allowing them to make informed decisions.
Best Practices of Medical Billing
Medical billing is prone to errors and inefficiencies akin to all functions. If these occur, healthcare facilities could erode their finances and lose patient trust. That means, healthcare facilities can achieve the full benefits of medical billing if they run it correctly and efficiently. For that, they need to follow the best practices of medical billing, which are:
Verify Patient Information Accurately
Ensure patient information is free of errors. That is why, verify patient details, such as name, address, date of birth, insurance details, and insurance coverage, during the registration process. Ensure no errors, as they can result in claim denials.
Stay Updated on the Latest Medical Billing Codes
Medical codes can change periodically. That is why healthcare facilities should learn about the latest codes. If they neglect that, they could suffer the results of erroneous claim submissions which could be denials.
Train Billers Periodically
Periodic training for billers is essential, as insurance policies, billing rules, and compliance requirements change often. Training can help them understand the latest trends. As a result, they can perform their tasks efficiently.
Use Advanced Software
Use advanced software that reduces errors, and automates claim submissions, follow-ups, and tracking. Such software ensures compliance with regulations and raises efficiency.
Track KPIs Regularly
Monitoring the important KPIs is essential to identify errors and shortcomings in medical billing. As such, healthcare facilities should not fail to monitor rejection rates, days in accounts receivable, and collection rates. That can help to identify areas for improvement. As a result, billing efficiency, hence revenue generation, can become more efficient.
Ensure Error-Free Claim Submissions
Make efforts to submit claims without errors and timely. Also, ensure they comply with regulations. Review claim submissions thoroughly before submitting. Such initiatives can deliver timely reimbursements.
Rectify Denied Claims
Healthcare facilities should rectify the reasons behind denied claims, as denials can lead to revenue losses. Subsequently, they should resubmit the claims to ensure reimbursements. Also, billers should understand the reasons behind denials. That can help to fine-tune their claim submissions in the future.
Ensure Compliance With Regulations
Healthcare providers should not fail to comply with the regulatory mandates. If they do, they could suffer legal penalties. As such, they should ensure compliance. Moreover, the facilities should remain updated with the latest regulatory trends.
Ease Payment for Patients
Provide patients with simplified payment options. A good method is to allow multiple payment options, such as online transfer, credit/debit cards, and installment plans. That way, healthcare facilities can receive quick payments.
Delegate the Function to Third Party
Delegating the responsibility of medical billing to an external service provider is a proven method for efficiency. The outsourcing service provider’s expertise helps to run medical billings smoothly. As a result, healthcare providers can focus on their core operations to derive improved patient satisfaction.
However, choosing a trusted and reputed outsourcing service provider is essential. If they fail to do so, they could bear the brunt of low-quality services. Due to this, healthcare providers could suffer the consequences of revenue loss and patient dissatisfaction.
Conclusion
Medical billing streamlines revenue generation for healthcare facilities. Due to billing, the facilities can achieve timely reimbursements against their claim submissions, reduce claim denials, and promptly handle denials. Also, transparency due to medical billing inculcates trust in patients.
However, healthcare providers can consider outsourcing medical billing to a competent third party. Usually, outsourcing companies possess trained and experienced billing professionals. They can execute the billing task efficiently. That way, healthcare providers can free themselves to concentrate on the core areas of patient treatment and care. In addition, outsourcing can relieve them from bearing the cost of maintaining an in-house medical billing team. Therefore, healthcare facilities can operate with peace of mind.
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