What is Medical Billing?
Medical billing is the process of submitting and following up on claims to insurance companies, patients, or the United States government, in order to receive payment for services rendered by a medical doctor or other licensed healthcare provider.
How does Medical Billing work?
The billing process is started by an office visit from a patient. When a patient is seen by a physician all his medical information is collected. The doctor’s assessment of the patient, the complexity of the medical decision making and the patients history are all used to determine a correct level of service that will be used to bill the insurance company. The level of service is translated into a five digit CPT code from the Current Procedural Terminology. The verbal diagnosis is translated into a numerical ICD-9-CM code. Both of these codes are used for claim processing.
Once these two codes have been established and all the patient information has been filled out, the medical biller generate a file, that is in the ANSI 837 file format, and transmit the claims to the insurance company electronically using EDI, or Electronic Data Interchange, to submit the file to one of many clearinghouses or directly to the insurance company. The insurance company or clearinghouse will respond with an X12 997 file that lets the medical biller know the claims were received and if the batch was accepted or rejected.
After the claims have been processed by the insurance company, a X12 835 file will be sent to the medical biller which explains in detail what is being paid or denied, how much is being paid, and for what reasons. This 835 file can then be imported into many medical billing software programs to make posting quicker.
What is HIPAA?
Medical Billing has been made more difficult in recent years in part by the Health Insurance Portability and Accountability Act (HIPAA).
HIPAA is a set of rules and regulations which doctors, healthcare providers, hospitals, and health plans must follow in order to keep a patients information private. In recent years HIPAA compliance has encouraged medical providers to submit claims electronically if they want to receive payment for services rendered.
Medical billers and insurance companies were not the only individuals affected by the introduction of HIPAA. Many insurance companies and providers have required additional waivers and paperwork that every patient is required to fill out and sign.