Understanding The Medical Billing Process

By Author: DeeAnn
Total Articles: 6
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Before a medical bill is submitted to an insurance company for payment, it must be coded. During coding, each service or procedure must be given an alphanumeric code based on the United States' standardized system. These codes are taken from the Current Procedural Terminology (CPT) manual and the International Classification of Diseases (ICD-9) manual.
Electronic medical billing software can assign these codes automatically, by pulling information directly from the medical record. However, to ensure accuracy the bill is often checked manually by authorized personnel. After finalizing the coding process, the bill is then transmitted to the insurance company.
Then the information is reviewed to determine whether the patient was covered at the time of service, and whether the treatment is appropriate for the diagnosis submitted. The bill is approved for payment if the procedure or treatment given falls within standard and customary treatment for that condition and is considered medically necessary.
Next, the insurance company will either send the appropriate payment electronically to the medical billing service ...
... provider, or send a notice of denial if the claim has not met the standards for payment. In either case, the patient will also be notified of the result of the claim via letter, which details the amount that was paid and the portion of the bill that is the patient's responsibility. The letter will also give a reason for denial if payment was not made.
Medical insurance billing and coding is a very complex process and data entry errors are fairly common. If the medical bill is found to be erroneous a claim may be resubmitted to the insurance company several times before it is finally paid.
After the insurance company makes the payment, the health care provider will then send a bill to the patient for any remaining balance, such as deductible or unpaid, if and when applicable. Each medical billing service provider has their own policies about collecting payments from patients. If necessary, the task of collecting overdue payments from patients is handed over to debt collection agencies, so that the billing clerks employed by the health care providers can turn their attention to more current collections.