Medical billing is the backbone of any healthcare organization, regardless of its size, specialty, or type. But why is it so? If your medical billing operations are not seamless, you will have higher denials, unsteady cash flow, aging accounts receivable, and a strained revenue cycle. Ultimately, unnecessary write-offs will become inevitable, and eventually, it will become hard to keep your practice’s doors open.
However, an efficient billing system can change all that! It can help you streamline your billing workflow and ensure timely reimbursements.
Now, the question is, what are the different types of billing systems in healthcare, and how to choose the right one?
This guide will answer it, so continue reading!
What are the 3 Different Types of Billing Systems in Healthcare?
The 3 main types of billing systems include closed, open, and isolated systems. This section will discuss each system in detail and provide a comparison.
Closed Medical Billing Systems
This type of medical billing system is best for standalone practices. That is, an individual physician handles all billing-related operations in-house, and medical records do not need to be shared with other entities.
Electronic medical records (EMR) are a commonly used tool for closed medical billing operations. It enables the small and private practices to manage everything from patient registration to claims submission and payment collection in a closed system.
Note that EMRs can be integrated with other EMR systems within the same practice. Thus, the physician in a single practice has complete control of the billing process. However, you cannot involve any third party, such as a clearinghouse, to ensure clean claim submission and quick reimbursements.
Some key features of an EMR include:
- Tracking of patients’ preventive screenings/visits due dates.
- Monitoring of vital parameters of patients.
- Offers a detailed view of the treatment plan by connecting with other EMRs in the same practice.
- Vaccination program tracking.
Open Medical Billing Systems
Open medical billing systems are the most widely used in healthcare today. An open system offers higher data interoperability. That is, it serves as an easy access for information to be shared among all stakeholders. These may include patients, physicians, payers, the billing team, and third-party vendors.
But how did it become possible? With the help of electronic health records (EHR) systems. In comparison to EMR, these provide a more comprehensive information chart, and the data is accessible to multiple entities and systems.
With its use, you can also submit medical claims to third parties, such as clearinghouses or insurance payers. This directly translates into reduced administrative burden, faster claim processing, and improved patient experience.
Some key features offered by EHR systems include:
- Storage of critical patient information, including demographics, previous test results, allergic reactions, past diagnoses, and medication history.
- A holistic view of the patient’s health and treatment plan, which is accessible to different departments and specialists.
- Radiology and imaging centers can also access the EHR system when the patient is referred to them.
Isolated or Standalone Medical Billing Systems
It is a medical billing system that the patient personally maintains. Besides, it is a standalone process that is separate from other healthcare management systems. Simply put, isolated medical billing systems are designed solely for patients.
Personal Health Records (PHRs) are designed for patients to maintain records and communicate openly. On these systems, patients can input, edit, and access their health information anytime.
A PHR has the following features:
- Allows patients to maintain their health information effectively.
- Offers a comprehensive view of prior and existing medical treatments and conditions.
- The patient can use the information stored in the software for transmission and open communication.
Closed vs. Open vs. Isolated Medical Billing Systems
The table below offers an at-a-glance view of how the 3 different types of billing systems in healthcare vary in their core functionality:
| Features | Closed Billing System | Open Billing System | Isolated Billing System |
|---|---|---|---|
| Primary Data Record | EMR | EHR | PHR |
| Interoperability | Low. Data is contained strictly within a single practice. | High. Designed for data exchange across different stakeholders. | None. The patient operates it independently. |
| Data Sharing | Limited to internal staff. | Data can be shared extensively with external specialists, hospitals, labs, and insurance payers. | Typically patient-maintained. |
| Data Control | High. Practice has complete control over data and customization. | Moderate. Shared control and adherence to healthcare information exchange (HIE) standards. | High. Minimal external security risk due to lack of connections. |
| Benefits | Better security, compliance, and custom workflow control. | Enhanced continuity of care, improved accuracy, and faster claims processing. | Simplicity, lower initial cost, and maximum data privacy. |
Partner with MediBillMD for Streamlined Billing
While working with a closed billing system may sound like a good idea initially, it may exhaust you in the long run. But, how? For starters, you will not be able to detect errors before submitting claims. This will result in a slower revenue cycle, due to payment delays and denials.
However, when you outsource medical billing services to MediBillMD, you sign up for accuracy, speed, and a guaranteed healthier revenue cycle. Our billing experts are well-trained on all leading EHR systems, making it easier to handle claim requests regardless of the system your team prefers using.
