Medical billing and coding transform a patient visit into a claim that insurance payer companies can understand. Although they are two different processes, billing and coding are both required for healthcare practitioners to be paid for their services.
This guide will discuss medical billing and coding in detail. Besides, we will look into how the processes differ, the responsibilities of billers and coders, how software helps streamline the processes, and much more.
If you are struggling to grasp the concept of medical billing and coding, this guide will make things easier for you.
What Is Medical Billing?
Medical billing is the process of creating healthcare claims to be submitted to insurance companies and getting payment for medical services offered by providers and provider groups.
The medical biller converts a healthcare service into a billing claim and then monitors the claim to ensure the healthcare facility receives reimbursement for its rendered care services. An experienced medical biller can help healthcare facilities to maximize revenue performance.
What Is Medical Coding?
A patient’s visit to a physician’s office, hospital, or other healthcare setting is where medical coding begins. When a patient encounter takes place, healthcare professionals document the visit or procedure in the patient’s medical file and provide an explanation for the particular goods, services, or operations rendered.
“Precise and comprehensive clinical documentation during the patient visit is essential for medical billing and coding.”
AHIMA
Thus, the golden rule is to avoid coding or billing if the service is not documented in the medical record.
When an issue with a claim emerges, providers use clinical documentation as proof for payment collection from payers. If a provider fails to adequately document a service in the medical record, the organization may be subject to a write-off or claim denial.
Therefore, if you try to charge patients or payers for services that are either completely absent from the patient’s data or inaccurately recorded in the medical record, you may be subject to a healthcare fraud or liability inquiry.
A qualified medical coder examines and evaluates clinical paperwork after a patient departs from the hospital to link services to billing codes associated with a diagnosis, treatment, fee, and/or facility code.
Difference Between Medical Billing and Medical Coding
Despite their close relationship, medical billing and coding are two separate aspects of the healthcare revenue cycle. Below is a summary of the main differences:
| Medical Billing | Medical Coding |
|---|---|
| It involves submitting claims based on the given codes to insurance companies and patients for reimbursement. | It involves converting medical records (diagnoses, treatments) into standardized codes so that government, insurance, and healthcare organizations can communicate with each other. |
| It requires frequent interaction with patients via email, call, or in-person to address billing issues and collect payments. | It does not require direct patient interaction. |
| It focuses on efficient claim creation, submission, tracking, and ensuring proper financial reimbursement. | It focuses on accuracy and specificity in translating medical services into standardized codes. |
Benefits of Outsourcing Medical Billing and Coding
Dealing with insurance providers after claim rejection due to incorrect or missing data is also mandatory. Insurance companies frequently have complicated processes for reprocessing claims.
Besides, they provide unclear explanations for claim rejections and denials. Therefore, a single claim’s reprocessing might take months, affecting your revenue health.
When you outsource your medical billing and coding activities, you overcome all these challenges and get access to the following benefits:
Expertise and Experience
Professional medical billing firms have highly skilled medical billing and coding teams that possess an in-depth understanding of payer specifications, medical coding laws, and billing practices. They maintain current knowledge of industry developments, guaranteeing accurate and law-abiding coding and invoicing procedures.
Reduced Administrative Burden
Your staff can concentrate on providing quality care and improving provider-patient relationships by outsourcing medical billing and coding. It lowers overhead costs related to administration, improving the overall efficiency of the medical practice.
Healthier Revenue Cycle
With their streamlined procedures and cutting-edge software, specialized medical billing and coding teams lower billing errors and claim denials. As a result, practices experience better collections, quicker reimbursements, and seamless cash flow.
Cost Savings
Outsourcing medical billing and coding eliminates the need to hire in-house billing specialists and certified coders. Besides, there is no need to invest in infrastructure, software, or training medical billers and coders. This lowers administrative expenses and enables healthcare providers to use their financial assets for scalability.
What Do Medical Billers and Coders Do?
Since medical billing and coding are two distinct processes, in this section, we will discuss the roles and responsibilities of both billers and coders separately.
Role of A Medical Coder
A medical coder’s common responsibilities include:
- Examining clinical statements and medical records.
- Checking to see if medical records support diagnosis, course of therapy, and outcome of procedures.
- Converting medical records from healthcare providers into standard alphanumeric codes, incorporating any relevant diagnosis, treatments, procedures, and complications.
- Examining patient medical data to find billing problems and documentation errors.
- Ensuring veracity by routinely verifying clinical paperwork and coded data.
- Carrying out studies and analyzing patient data to get paid by health insurance companies.
- Serving as a resource, consultant, and subject matter expert on matters related to medical coding.
- Supporting regulatory bodies’ compliance by adhering to rules.
Health insurance companies and researchers use these codes to ascertain:
- The state of a patient’s diagnosis
- Motivations for using medical supplies, services, or treatments
- Unusual events that influence the medical care and services patients receive
- Utilization of healthcare resources
- Risk management
Besides, these codes serve as guidelines for public health and policymakers to create actuarial tables.
Role of A Medical Biller
A medical biller acts as a point of contact for patients, insurance companies, and healthcare providers. They handle numerous medical services and health insurance claims regularly, much like medical coders. They occasionally bill health insurance companies more than once after making changes to the bill to ensure the patient receives coverage amount their policy permits.
Additionally, they can support healthcare organizations in maximizing their revenue generation.
Typical responsibilities of medical billers consist of:
- Gathering pertinent patient data, including insurance coverage, medical history, demographics, and procedures and services the patient receives.
- Checking that all patient data is accurate, filling in gaps, and requesting missing data.
- Validating treatment and referral authorizations.
- Sending all patient data, required paperwork, and claims to insurance companies.
- Eligibility verification for patient benefits.
- Preparing patient bills by adding unpaid amounts, accounting for deductibles and copays, and subtracting the amount insurance will pay from the treatment or procedure’s total cost.
- Importing health insurance claims and billing information into billing software.
- Collaborating with medical coders to amend invoices as needed.
- Updating billing software to account for rate adjustments.
- Ensuring prompt payment to healthcare organizations and providers for the medical services they provide to patients.
- Preserving paper and electronic records of documentation.
- Sending patients statements for the remaining amount due after insurance claims are paid.
- Preserving patient data confidentiality.
- Resolving billing and claim conflicts.
- Monitoring received and overdue payments.
- Follow up with health insurance companies again if there is a payment delay or nonpayment.
- Responding to questions from patients, payers, and providers.
Medical Billing and Coding Software
Manually handling the entire medical billing and coding process is daunting and prone to costly human errors. Therefore, healthcare facilities use software that streamlines business management procedures and automates medical billing and coding activities in the software.
These programs automate tasks, formerly done by hand, like coding, claims processing, and billing.
If we see medical billing and coding software as separate entities then coding software comes with built-in code libraries and compliance checks. Contrarily, medical billing software comes with options for claim creation, submission, tracking, and generating patient statements.
Average Charges for Medical Billing Services
The type of organization you choose and the range of services your medical practice needs will determine how much medical billing services will cost. We will go into further detail regarding typical medical billing service rates below:
One-Time Fee
For every claim submitted, many medical billing businesses charge one-time fees. It can be a percentage of the total amount billed or a fixed rate. In other cases, a billing firm will take a cut of the total reimbursed amount or the revenue coming to your practice.
Recurring Fee
There may be recurrent expenses associated with many medical billing services, such as monthly provider subscription fees. These can run into the multiple hundred dollar range each month. Depending on the kinds of services the provider needs, certain businesses offer packages with various options.
Setting a price for outsourced medical billing and coding services might be challenging. Aside from superbill, you might be wondering how much medical billing costs. What is the typical cost of services related to medical billing?
The sum is mostly determined by the service you use, the type of assistance you receive, the number of claims you file, and whether you operate as a solo practitioner or a group practice. However, medical billing agencies often take a 2-6% cut of the overall amount that the physician collects. Most medical billing providers offer quotes on their websites.
Final Thoughts
Let’s do a quick recap! This guide walked you through the concept of medical billing and coding, how they differ, what billers and coders do, how software can help streamline the billing and coding workflow, and the average cost of outsourcing these services to professionals.
Besides, we discussed some benefits of outsourcing your billing and coding operations. Medical billing and coding are essential parts of the healthcare revenue cycle management. For healthcare providers, its precise and effective implementation guarantees maximum reimbursement, regulatory compliance, and optimized operations.
Healthcare providers can concentrate on patient care by outsourcing these activities to seasoned medical billing companies like MedilBill MD to get access to medical billing and coding specialists, cost savings, and enhanced revenue collection.
