What is Medical Billing?

The process of creating medical claims, submitting them to the proper payors, and following up on them to insure the proper payment is made to the healthcare provider for the services rendered is commonly known as medical billing. Many physician practices and healthcare organizations employ certified coders and medical billers who handle all of their medical billing and accounts receivable management. Others choose to only employ clinical staff, and instead outsource their medical billing to a third-party medical billing service.

The medical billing process begins with the patient encounter. After examining the patient and reviewing their history, the healthcare provider will create a clinical note to be added to the patient’s record, as well as filling out an encounter form which designates the correct level of service that should be billed (note: PracticeAdmin customers who utilize the PCM electronic health record system are able to create clinical notes and encounter forms electronically). This information is then used to create a medical claim.

A medical claim describes the level of service provided by a healthcare provider, and is made up of a CPT code and an ICD9 code, whereas the ICD9 code describes the patient’s condition, and the CPT code describes how the provider treated the patient’s condition.

After creating the claim, it must be submitted to the payer. Today, about 70% of medical claims are sent to the payor electronically. Electronic medical billing allows healthcare providers to get paid quicker and easier by cutting down on unnecessary procedural steps and paperwork. Both UB-04 and HCFA-1500 forms can be sent electronically by formatting them as an ANSI 837 files, and sending them via electronic data interchange (EDI).

Many companies now offer traditional and web-based software, of varying quality, to aid medical billers in the process of creating medical claims, and electronically submitting them to payors in such a fashion as to ensure their acceptance and timely payment (note: PA customers enjoy clean claims submission rates greater than 95% due to PA’s built-in clean claims scrubbers and other tools for accurate filing).

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