Medical Billing 101

Medical Billing

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.

Professional Medical Billing focuses on Michigan medical billing.  As rules vary from state to state and are constantly changing, Pro Med focuses on the state of Michigan to provide the best service possible.

Medical Billing Clients

Professional Medical Billing receives a variety of clients and this list contains a few different “types” that have Pro Med has received over the years.  Some doctors may be able to relate with these client “types”.

The “new” Doctor

The “new” doctor is excited about opening his or her own practice but they went to medical school, not business school, and do not really know where to get started.

  • Professional Medical Billing gives the “new” doctor the benefit of an experienced medical biller at a part-time rate.  Since charges are based on the amount the doctor collects, the doctor only has to pay for the amount of billing service that is used.
  • Professional Medical Billing will automatically enroll the “new” doctor with the insurance companies that he or she chooses to participate with.
  • This doctor did not have to worry about the billing aspect of his new practice and was able to focus on his patients.

The “ripped off” Doctor

The “ripped off” doctor has had employees embezzle money from him in the past and does not trust anybody to handle his finances.

  • A large portion of Professional Medical Billing’s business comes by word-of-mouth.  Pro Med maintains the highest of business ethics as that is the only way to run a business.
  • This doctor is fully comfortable with Pro Med handling his reimbursements and has one less thing to worry about.

The “Why is my reimbursement so low” Doctor

The “Why is my reimbursement so low” Doctor had a medical biller that was either overworked or lazy.  He found it quicker and easier to “write-off” rejected claims and to accept downwardly adjusted payments than to pursue the full reimbursement.

  • If the doctor is not getting paid, Pro Med is not getting paid.  It is in both parties interests to collect the full reimbursement for services rendered.
  • This doctor had his best financial year ever after the first year of using Pro Med’s services.  The doctor was even able to take more vacation time and still had his best year ever.

The “I don’t want to mess with a computer” Doctor

The “I don’t want to mess with a computer” doctor went to school to become a doctor, not a computer scientist.  The doctor wants to focus on his patients, not on learning how to use his computer.

  • This doctor was able to get the benefit of rapid reimbursement of electronic claims without having to learn anything about a computer.

The “The medical biller I had for X years is retiring and I will never be able to replace them” Doctor

  • With Professional Medical Billing working on this doctors account, the doctor has the luxury of having a team of professionals with more experience than any single biller would have.
  • The doctor no longer had to worry about finding a replacement and training them all over again.