For a healthcare system to be efficient, it has to have clean processes to ensure that medical health providers, staff, medicines and drugs, medical equipment, insurance companies, and many others are well taken care of.
For beginners, processing medical bills can surely get a little confusing. With forms, fees, and back-and-forth filing that can go on for days (or even months), it’s important to keep yourself guided on the basics. Here’s an easy guide to medical billing and coding for dummies.
Medical billing explained
Simply put, medical billing involves filing and generating claims and submitting them to insurance companies for processing. This is done to provide payment or financial coverage for medical procedures and treatments for eligible patients.
Smoothing out medical billing processes helps keep medical treatments and procedures carry on without delays. It also keeps patients on track of their medical fees, and provides assistance to insurance companies to process claims faster.
Proper medical billing transactions can also help medical institutions and practitioners stay transparent and ethical to the market they serve.
Steps to follow in processing medical billing and coding (for dummies)
Still don’t know how to start your medical billing and coding process? Don’t worry, we’ve got you covered. Follow these ten steps for easy and hassle-free processing.
Step 1 – Registering the patient
Collecting the patient’s basic information and reason of visit happens at the start of the medical billing process. Knowing the demographic details such as age, gender, address, and mobile number are the common things a patient is asked. For insurance companies, patients may also be asked to provide the following information:
- Insurance company and plan
- Policy ID/ number
- Name of policy owner/ insurance holder
These details give medical billers the authority to verify a patient’s details to support their claim submission. These details will be recorded so that patients won’t have to provide them again on their next visit. However, all details must be updated accordingly to avoid future problems.
Related: 5 Common Medical Billing & Coding Errors
Step 2 – Verifying insurance coverages and other fees
Next is determining the patient’s financial responsibility through insurance coverages. In this step, medical billers verify if certain medical procedures, illness and treatments can be covered by the patient’s insurance plan.
This stage also includes checking the terms of the patient’s eligibility and insurance plan coverage, which is most commonly referred to as the ‘superbill’. If there are procedures, treatments and other billings that can’t be covered by the insurance claim, including other accumulated expenses, the patient will be told to handle them financially.
Step 3 – Meeting with the healthcare provider
Most commonly known as the term ‘Encounter’, this stage is where the patient will be told to explain his/her medical conditions, symptoms and other medical problems. This is recorded via video or audio to ensure that all details are accurate during the processing of the claims.
Step 4 – Medical transcription and detailed verification
The recorded video or audio will then be listened to by a qualified personnel and verify if the information is accurate with the medical script. This is one of the most crucial parts of the medical billing process, inconsistencies are meticulously studied and verified to ensure everything is error-free.
Details will then be transferred into a transcripted and editable file version of the recorded audio or video. Any mistake during this step can affect the patient’s medical records, history and decision-making which can sometimes result in rejection of claims.
Step 5 – Coding and claims generation
Medical coding is done by converting all the transcripted information into medical codes. This makes the patient’s diagnosis, procedures and treatments easily understood by medical practitioners without having to read through the whole transcript.
Diagnosis and treatments are converted into medical terms and jargons unknown to non-medical practitioners. Coders use CPT (Current Procedural Terminology) or HCPCS (Healthcare Common Procedure Coding System) codes to be transferred to the insurance service for payment.
Step 6 – Charge entry
The medical coder would calculate all the expenses included in the service. In this stage, all records are monitored with accuracy and charged according to its proper value. These charges will be claimed by the medical billing company to the insurance company for fund reimbursement.
The medical practitioner will come up with a claim sheet and check if the values and the amount of all expenses incurred are correct. This sheet is commonly composed of the following details:
- Patient’s details and basic information
- Patient’s medical history
- Codes of procedures done
- NPI (National Provider Index) number and insurance provider
- Place of service code
Step 7 – Submitting claims or ‘adjudication’
After ensuring that everything in the claim sheet is factual and accurate, it’s now ready for submission. Files and data will be electronically transmitted through EDI (Electronic Data Interchange) to the insurance provider, which is also referred to as ‘Charge Transmission’.
EDI can only allow clean claims to be transmitted. These claims must be free from errors which may include:
- Scrubbing- this happens when there are mistakes in the mandatory fields
- Invalid information- EDI will reject the claim if there are inconsistencies in the patient’s record
- Payer-related problems- happens when the insurance guidelines aren’t met, or there are problems in the payer’s details
Step 8 – Managing claim denials
Since claims submission is a very meticulous process, there are many instances that claims get denied or just partly accepted. This is why this step is a key factor in reducing denials with insurance providers. This stage involves constant follow-up and taking immediate and appropriate actions to ensure that all factors that resulted in claim denial are determined and analyzed.
Prioritizing the study of denied claims hastens the reprocessing to ensure maximum reimbursements. The team or medical practitioner assigned to this step will have to list down rejection issues so they can be prevented in the future.
Step 9 – Statement preparation and posting
If the claims were approved, the biller will then receive a report from the payer. In this step, a statement is done for the patient. If there are other charges that were not covered by the insurance provider, costs will be included in the statement.
Sometimes, the biller includes an EOB (Explanation Of Benefits) upon the issuance of the statement. This is helpful for the patient to know what benefits are included in their insurance plan, and can explain why certain costs were not included.
Step 10 – Collections and payments follow-up
The last and final step is ensuring that the bills are completely paid. Statements and billing should be mailed out to patients in a timely manner. It should also follow that once the statement is paid, it should accurately reflect in the patient’s records.
There will be chances of statements going overdue, or patients not settling their bills in full. In this situation, billers should be able to contact the patients or follow them up consistently.
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Processing medical billings is understandably tricky and time-consuming to keep up with. Knowing how to breeze through these processes is a sure-fire way to beat the hassles and stress of medical billing transactions.
This detailed guide to medical billing and coding for dummies is helpful for both medical practitioners and patients. However, if you’re a medical practitioner struggling to process your medical bills, or simply don’t have the time for it, allow us at MedCal to do the heavy lifting for you. Talk to us to know more.
References:
https://www.medicalbillingandcoding.org/billing-process/
https://www.bryantstratton.edu/blog/2018/january/medical-billing-process
https://www.pettigrewmedical.com/the-key-steps-to-know-for-successful-medical-billing/
Last updated on 2022/06/21 | Posted on 2022/05/04