What is Medical Billing?

Have you been considering a career in medical billing? If so, it's helpful to understand exactly what medical billing is and how it impacts the overall process of healthcare. According to the AAPC, medical billing is the practice of reviewing a patient’s medical records and using information about their diagnoses and procedures to determine which procedures are billed, and who they are billed to.

Because the United States has a private healthcare system, as opposed to public healthcare systems found in countries like Canada or the U.K., insurance plays a pivotal role in how procedures are billed, making medical billing a vital part of the health system. In the medical billing process, a medical biller's responsibilities include everything from patient registration to the submission of claims and posting of payments.

In this article, we've provided a high-level outline of the medical billing process, a list of the medical biller's responsibilities and a short explanation of how medical billing differs from medical coding. You'll have the opportunity to learn about all of these topics and more as we explore the following sections:

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Medical Billing Process

While the name medical billing implies that it only involves the billing process, medical billing actually begins as soon as a patient checks into a care facility. To help you understand the medical billing process, this step-by-step guide explains how it is often performed along with a brief explanation of what happens at each step:

  1. Patient registration/check-in: During patient registration, also known as check-in, a medical biller collects basic information about the patient, such as their name and address, and asks the patient for their insurance information. This insurance information is collected up front in order to be verified.

  2. Insurance verification and eligibility: After checking the patient into the care facility, the medical biller ensures that the insurance information is correct. Then, they determine whether or not the patient’s procedure is eligible to be covered by their insurance.

  3. Patient demographics are entered into PMS: During the intake process, demographic information is also collected from the patient. This includes information about the patient's age, sex, race and any other relevant factors. Some of this information may be relevant to the procedure in question, or it may be collected for statistical analysis by insurance or government entities or the care facility itself.

  4. Get medical records for CPT and ICD-10 coding: After gathering demographic information, the medical biller works with a medical coder to obtain medical records. These medical records are passed on to relevant parties who need to know specific medical information about the patient.

  5. Medical coding documents sent for charge entry: Once all the information about the patient has been gathered, the charge entry process begins. Charge entry involves assigning a dollar amount to the patient account based on the procedures performed during their stay at the care facility. This results in a claim that will be sent to the insurance company.

  6. Claims submission to insurance: After being scrubbed of any errors, the claim is sent to the insurer to determine what will be covered by each party. If the claim is rejected for any reason, the medical biller will update the record and note the reason for the rejection.

  7. Payment posting: Once the claim has been submitted and paid, the payment is posted by the medical biller. The payment is logged within medical billing software in order to provide a view of the care facility’s finances. This process also helps catch medical errors by adding another step where the payment amount must be viewed by additional parties for greater accuracy.

  8. Accounts receivable follow-up: To ensure timely payment, medical billers reach out to paying parties in order to collect any owed payments (also referred to as accounts receivable). This may involve contacting a patient for payment or reaching out to an insurance company to confirm receipt.

  9. Denial management: In the event that a payer – whether they be a patient or an insurance company – refuses to pay, the process enters a denial management phase. During this portion of the process, the biller performs root cause analysis to determine whether the denial of payment is valid and file an appeal of the denial.

  10. Reporting sent to client: Finally, once the billing process is complete, the biller creates a report that provides key metrics to the care facility. These metrics will likely include elements such as the payment received, procedure performed and the total number of adjustments in the claims process.

Medical Billing vs. Medical Coding

Medical billing and coding often overlap and both are essential to one another, but the two practices are also distinct in several ways. Medical coding is the process of identifying the procedures being performed by gathering billable information from the patient’s medical record and assigning a code to each.

Medical codes, once assigned to a procedure, carry a specific cost and are also easily identifiable by insurance agencies as a covered or uncovered procedure. This is where the process transitions over to the medical biller for final billing.

The medical billing process uses codes provided by a medical coder in order to create an insurance claim or bill the patient. Put into simpler terms, the medical coder builds a list of what needs to be paid, then the medical biller determines who will pay for which procedures and submits the bill accordingly. A medical biller's responsibilities also include any follow-up needed for payment and correcting any rejected claims.

What are the Responsibilities of Medical Billers?

Medical billers are responsible for gathering insurance and demographic information from a patient, filing medical billing insurance claims and patient bills, following up on those items if necessary and creating a report on the overall billing process for the care facility managers to analyze.

Medical billers are also responsible for correcting rejected claims, which are claims that an insurance company sends back to the care facility because of one or more errors on the document itself. This differs from a denied claim ─ though the terms are sometimes used interchangeably ─ which is a claim that the insurance company or patient refuses to pay based on certain grounds. These denied claims can be appealed, which often falls into the list of medical biller responsibilities.

Benefits of Being a Medical Biller

Being a medical biller can provide benefits to people who are interested in the profession. According to the Bureau of Labor Statistics’ projections for medical records and health information specialists, a category that includes medical billers, this field is expected to grow on a national level by 9% between 2020 and 20301.

Beyond these projected career growth stats, being a medical biller can put you near the heart of the action within the world of healthcare. Working in this essential role may be a rewarding career choice for those who wish to help people receive the best possible care.

Interested in Pursuing a Medical Billing Career?

If a career in medical billing interests you, we can help you develop industry-relevant skills with our Undergraduate Certificates in Medical Billing and Coding. You’ll also have the opportunity to prepare to pursue select industry certifications.

Find out how we can help you work toward a career in medical billing.

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1 Growth projected on a national level. Local growth will vary by location. https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm