Medical billing is the
process of submitting and following up on claims to insurance companies
in order to receive payment for services rendered by a healthcare
provider. The same process is used for most insurance companies,
whether they are private companies or government-owned.
Billing Process
The billing process is an interaction between the provider and the
insurance company (payer). It begins with the office visit. After the
provider sees the patient, depending on the service provided and the
examination, the doctor creates or updates the patient's medical
record. This record contains a summary of treatment and demographic
information related to the patient. Upon the first visit, the provider
will usually give the patient a diagnosis (or possibly several
diagnoses), in order to better coordinate and streamline his/her care.
The treatment, diagnosis, and duration of service combine to
determine the procedure code that will be used to bill the insurance.
The doctor then either provides this information to a medical coder or
other billing specialist. From this, a billing record, either paper
(usually on a standardized form called an HCFA) or electronic, is
generated. This form includes the various diagnoses identified by
numbers from the current ICD-9 manual.
This billing record or claim is then submitted either to a
clearinghouse that acts as an intermediary for the information (this is
typical for electronic billing) or directly to the insurance company.
The insurance company (payer) processes the claim. The insurance
side of the process begins with testing the validity of the claim for
payment. The tests cover patient eligibility for payment, provider
credentials, and medical necessity. Upon passing successfully the
tests, the payer pays the claim. If a claim fails the tests, the payer
rejects the claim and communicates the rejection message to the claim
submission source.
Upon receiving the rejection message, the provider must decipher the
message, reconcile it with the original claim, make required
corrections, and resubmit the claim again. This exchange of claims and
messages may repeat multiple times until the claim is paid in full.
The frequency of rejections, denials, and underpayments is high
(often reaching 50%), mainly because of high complexity of claims and
data entry errors. Straight Through Billing technology, procedures, and
training help manage the billing process to receive all payments on
time.
Billing Process
The billing process is an interaction between the provider and the
insurance company (payer). It begins with the office visit. After the
provider sees the patient, depending on the service provided and the
examination, the doctor creates or updates the patient's medical
record. This record contains a summary of treatment and demographic
information related to the patient. Upon the first visit, the provider
will usually give the patient a diagnosis (or possibly several
diagnoses), in order to better coordinate and streamline his/her care.
The treatment, diagnosis, and duration of service combine to
determine the procedure code that will be used to bill the insurance.
The doctor then either provides this information to a medical coder or
other billing specialist. From this, a billing record, either paper
(usually on a standardized form called an HCFA) or electronic, is
generated. This form includes the various diagnoses identified by
numbers from the current ICD-9 manual.
This billing record or claim is then submitted either to a
clearinghouse that acts as an intermediary for the information (this is
typical for electronic billing) or directly to the insurance company.
The insurance company (payer) processes the claim. The insurance
side of the process begins with testing the validity of the claim for
payment. The tests cover patient eligibility for payment, provider
credentials, and medical necessity. Upon passing successfully the
tests, the payer pays the claim. If a claim fails the tests, the payer
rejects the claim and communicates the rejection message to the claim
submission source.
Upon receiving the rejection message, the provider must decipher the
message, reconcile it with the original claim, make required
corrections, and resubmit the claim again. This exchange of claims and
messages may repeat multiple times until the claim is paid in full.
The frequency of rejections, denials, and underpayments is high
(often reaching 50%), mainly because of high complexity of claims and
data entry errors. Straight Through Billing technology, procedures, and
training help manage the billing process to receive all payments on
time.
Billing Quality
Billing Quality is measured in terms of timeliness and completeness
of payment. The shape of the distribution curve of Accounts Receivable
illustrates billing quality. Specific measures include median and
percent of accounts receivable beyond 30 days, 60 days, and 120 days. A
good quality billing process has relatively small median, e.g., half of
the claims must be paid within 30 days, and a steep drop in terms of
percents of accounts receivable, e.g., reaching less than 10% of A/R
beyond 120 days. The actual amount of Accounts Receivable beyond 120
days is considered uncollectable and labeled as a provider's loss for
write off.
Billing Transparency
Billing Transparency allows every participant in the billing process
to see continuously both its big picture and the minute detail. The big
picture consists of total cash flow in a given time period, current
submitted and failed claims, and Billing Quality. The minute detail
pertains to individual claims making up the big picture, including
complete history from the moment of creating the claim, testing its
validity, corrections, submissions, and reconciliations, until payment.
Straight Through Billing
Straight Through Billing integrates billing process within the
practice management workflow, connecting patient scheduling, care
delivery, and medical record management. Every participant of the
practice management workflow receives a unified and coherent picture of
practice workload, patient and provider location, resource
availability, and cashflow. Straight Through Billing requires
integrated technologies for Electronic Medical Records (EMR) and
Straight Through Billing.
Straight Through Billing Technology
Straight Through Billing technology streamlines and expedites
billing process by automating claim validation, payer message
reconciliation, and billing workflow management. First, automated claim
validation eliminates errors downstream and reduces processing time
because it flags errors before submitting the claim to payer. Next,
automated claim-message reconciliation eliminates costly search for the
original claim and standardizes message communication, further
eliminating the need to decipher the (often cryptic) payer's message.
Finally, billing workflow management drives the followup discipline
required for resolution of claim denial and underpayment incidents and
establishes high degree of process transparency for all billing process
participants, resulting in full and timely payments.
History
For several decades, medical billing
was done almost entirely on paper. However, with the advent of
computers it has become possible to efficiently manage large amounts of
claims. Many software companies have arisen to provide medical billing
software to this particularly lucrative segment of the market.
The billing field has been challenged in recent years due to the
introduction of the HIPAA act. Due to the many restrictions that were
enacted as a result of this new law, many software companies and
medical offices spent thousands of dollars on new technology and were
forced to redesign and rebuild their business processes and software in
order to become compliant with this new act.
Terms and Codes
Knowing common abbreviations and terms is the key to deciphering a medical bill. A partial list follows:
- ANES: Anesthesia service administered by anesthesiologist.
- DESFLURANE: A breathable anesthesic.
- GROUNDING PAD or PATIENT PLATE or RETURN ELECTRODE: A
Dispersive Electrode which can safely direct electrical charges out of
the patient's body to prevent burn.
- STERI STRIPS: Sterilized strips of bandaging.
- PACU: Post Anaesthesia Care Unit. The area one is placed after surgery is complete.
Syndication