What is Medical Billing?
Providing healthcare services requires providers to obtain compensation for the work they do in evaluating, treating and following up with patients. If you’ve been focusing your attention more on the healthcare side of your practice, rather than the business side. Now would be the time for you to familiarize yourself with medical billing. It will give you a better understanding of how the system of payments fits into the art of medicine.
Simply put medical billing, is the process that practitioners use to create and submit invoices in order to receive payment for their services. In the past medical practices and organizations took care of billing by using antiquated paper systems. Now, these transactions can be taken care of through electronic solutions. Billing services and software help to automate these processes to speed up the cash flow in your business.
Medical Billing and Coding
You should know that medical billing and medical coding are not the same things. Both practices are immensely important in the reimbursement process, and ensure that providers are paid for the services they’ve provided.
Let’s split the two at the moment and look at them as individual pieces of the puzzle.
There are hundreds of thousands of codes for medical procedures, medication and diagnoses. Let’s start with a quick example of medical coding in action.
A patient walks into a GP’s office with a hacking, wet cough and a fever. The nurse or GP asks the patients about their symptoms. They may run a few tests and then examines the patients and diagnoses bronchitis. The GP then writes a prescription for medication that needs to be filled by the pharmacist.
Every part of the visit is recorded by the doctor. It is then translated into numeric and alphanumeric codes, which are then used for the billing process. There’s a specific code for what kind of visit this is, the symptoms that the patient is showing, what tests were done and finally what the patient was diagnosed with. Every code has its own set of guidelines and rules and needs to be placed in a very particular order. Coding accurately and within the specific guidelines for each code will affect the status of a claim. The coding process ends when the appropriate codes have been entered into the patient file or software program. The information is then passed onto the billing process.
There are a number of sets and subsets of codes that a healthcare practitioner or medical coder must be familiar with. We will focus on the two most important: the International Classification of Diseases AKA ICD codes, which represent the patient’s illness or injury. The Board of Healthcare Funders AKA BHF tariff codes relate to the functions and procedures that the healthcare provider performed on or for the patient. These codes are the universal language between the providers, hospitals and the medical aid schemes.
Medical billing is as simple as it sounds. The billing department takes the information from the coding and creates an invoice for the patient or the medical aid scheme. But, as with everything related to the healthcare system, this process may not be as simple as it seems.
Let’s take a closer look at this using our previous example. Our patient has a cough and a fever, they call the doctor’s room and set up an appointment. It is there that the medical billing process begins.
The person doing the billing (medical biller) takes the codes, which show what kind of visit this is, what symptoms the patient shows, the diagnosis and in some cases the medication prescribed. They then create a claim or invoice out of these using a template or software. Then they send the claim to the medical aid for processing. The claim is evaluated by the scheme and then returned via a remittance to the provider. The person doing the billing now has to evaluate the remittance for any shortfalls. And bill the patient for the shortfall.
In some cases, the person doing the billing may have to hire a collections agency to collect on delinquent accounts.
The medical biller, therefore, acts as a waypoint between the patient, the provider and the medical aids. The coder translates medical procedures into codes and the biller translates those codes into an invoice.
Direct Medical Billing
Direct medical billing is an arrangement between the medical aid and a healthcare provider. Where the provider sends the claim for services directly to the medical aid. This appears to be the norm for most practitioners. And while it works it is important to remember that you need to send a copy of the bill to the patient for their records.
Direct medical billing means that you are relying on payment from a third party. Normally after the service has been rendered and the patient has left your practice.
Medical Billing Companies.
Medical practices contend with a convoluted billing process, unlike any other business. Which can often mean that payment is received weeks or months after the fact. Medical billing companies are often the perfect solution to ease your billing concerns. Allowing you to focus on the medical side of your business.
As with any service, a firm knowledge of your practice and how it works is key. In-house billing staff is often less expensive, but the benefits of outsourcing may be well worth the expense. Medical billing companies take the burden of managing billing off of medical practices’ staff. Offering billing, coding, claim management, rejection management and more. They can also follow up on unpaid claims, contacting payers and patients who are late on their payments.
Most medical billing companies provide access to their medical software as well. Medical software automates and streamlines many key functions in the front office, clinical environment, and back office.
Medical Billing Sofware?
A recent report from the Huffington Post, states that medical billing serves as a bridge between a healthcare provider, the patient and the patient’s medical aid. Using software instead of trying to manage most or all of the details by hand with paper documents drastically speeds up the billing process.
Medical billing software is designed to assist with all aspects of your patient management and billing. When it comes to record-keeping software helps you track the details of each claim that has yet to be paid. Speaking of payments, the software should also include the ability to process payment reminders to assist with overdue accounts. Having the ability to verify patient information before claims submissions also reduces billing or payment delays due to rejected claims.
If you are doing your billing yourself with medical billing software, here are some tips to help boost your efficiency.
- Make the billing terms clear inside your office, perhaps a notice on the wall in reception.
- Make the payment methods accepted at the practice visible to your clients.
- Verify patient information to avoid billing delays due to inaccurate details.
- Ensure that your software allows for direct medical claim submissions (EDI).
- Incorporate appointment scheduling software with your billing software.
Medical billing software helps to ensure a smoother, more professional experience for your patients.
Medical billing and Collection.
While medical billing is vital for the success of any healthcare practice, we cannot discount the importance of medical collections. Billing ensures that the patient or the medical scheme is aware of the funds due for a service provided. Whereas collections is the process that follows when an account is in arrears.
A healthy revenue cycle is vital to sustaining a successful medical practice. But it’s not always easy to make sure that your practice is paid for the services it has rendered. This is made even more challenging because healthcare practitioners are often reimbursed by third-party payers (medical aids) after the patient has already come and gone. There is a lag between providing the services and receiving payment.
Moreover, claims might be rejected or denied for various reasons. Human error plays a major role in many of these claims. As up to 50% of claims are coded incorrectly or have missing information. Claim rejections can be on a single line item. Or the whole invoice and needs to be amended or followed up on. These follow-ups are time-consuming and costly. Often resulting in practices writing off smaller amounts to spare the hassle of following up. These smaller amounts though add up in the long run and can become costly.
A healthy practice needs to have a reliable billing process as well as a reliable collections process. The collections process is as simple as sending payment reminders and overdue notices to private patients and ensuring that all medical aid claims are followed up on. For more information on the medical collections process click here