Medical billing and coding professional

A Step-by-Step Guide to Medical Billing

What is medical billing? Learn about the procedures, steps, risks, and requirements for medical billing.

Medical billing and coding professional

Although you may not know it, medical billing is an essential component of any doctor’s visit. Medical Billing is the process of creating healthcare claims to submit to insurance companies so that payment can be obtained for medical services. The medical biller then follows the claim to ensure their employer is reimbursed for the work they performed. An experienced medical biller can boost revenue performance for the physician’s practice or the entire healthcare organization.

As you can see, medical billing is a constant practice in the healthcare field. This fundamental skill may not sound like an exciting prospect for new healthcare professionals, but it is a vital task they will need to learn.  In fact, many Medical Assistants are trained to fulfill medical billing tasks in various environments.

This article provides an in-depth guide on the art and science of medical billing, one of the most important healthcare procedures for medical staff.

(Click here to see our complete list of the most common Medical Assisting duties and responsibilities).

Medical Billing Definition

What Does It Mean to Perform Medical Billing Tasks?

Medical billing is the process of obtaining insurance information from a patient, filing a claim, and following up or appealing claims with health insurance companies. The goal is to receive payment for services rendered at a medical office. It features medical coding reports that list the diagnosis, treatment, and prices.

What is the Purpose of Medical Billing?

The goal of medical billing is to prepare claims and submit them to insurance providers. As a result of this process, the healthcare organization is reimbursed for the services they provided to their patients. Without this key step, a hospital or medical office may not be able to function or continue serving their communities.

How Long Does it Take to Perform Medical Billing Tasks?

It’s important to remember that the medical billing cycle consists of many steps that can take anywhere from days to months to complete. Accurate billing and timely follow-up are of the highest priority throughout this process. In most states, insurance companies are required to pay claims within 30 to 45 days.

Who Can Perform Medical Billing Tasks?

While several healthcare professionals may be qualified to perform billing tasks, it’s typically a job that’s designated for Medical Billers or Medical Office Administrators (MOAs). The MOA is a multi-competent health professional who plays a crucial role in organizing and managing data in a medical office. They are also referred to as medical records and health information technicians. Medical Office Administrators utilize several systems to code and categorize patient information for insurance reimbursement, databases, and registries.

(Click here to learn how to become a Medical Office Administrator).

Medical Assistants can also play an important role in billing tasks. Since they perform clinical as well as administrative job functions, MAs learn basic coding techniques in most training programs. Medical Assistants may also obtain certification in medical coding. For instance, they can pursue certification with the American Academy of Professional Coders (AAPC) or Board of Medical Specialty Coding (BMSC). An MA’s background and education can be incredibly helpful in pursuing certification or even a medical coding career.

(Click here to learn how to become a Medical Assistant).

Training Requirements for Medical Billing

Requirements for medical billing can vary and depend on your location or profession. Aspiring healthcare professionals will usually receive this training through their educational programs. For instance, most aspiring MOAs in the United States will require a postsecondary certificate. Some employers may require an associate degree as well. Formal training may generally take anywhere from nine months to two years to complete.

At Unitek College, we offer a Medical Assisting program that could give you a strong advantage in the field or when applying to healthcare positions. Our courses include taking vital signs, medical office administration, medical law, pharmacology, diagnostic imaging, etc.

Medical Billing Procedure

With these steps, you can start to learn more about the process of medical billing. Of course, like most skills, medical billing requires time and practice to get it right. Remember to follow your facility’s rules and ask for help whenever necessary.

Medical Billing Steps

Here are some of the general guidelines that healthcare professionals should follow when performing medical billing tasks:

Front-End Medical Billing

  1. Registration: The first step to processing an insurance claim starts when patients contact their provider’s office to schedule an appointment.
  2. Eligibility Verification: Before they can receive payment for services rendered, you must verify that these services are included in the patient’s health plan.
  3. Point of Service Collections: Now that you learned about the benefit information during the verification process, you will be informed of the patient’s financial responsibility. This will enable you to collect the copay, deductible, coinsurance, or full balance due when the patient approaches the front desk.
  4. Encounter Form: An encounter form, which is also known as a superbill or fee ticket, is created for each patient encounter. This form contains a number of common services, medical codes, patient demographics, and any clinician notes.
  5. Checkout: At this point in the process, you can schedule a follow-up appointment as required and confirm that the doctor completed the encounter form.

Back-End Medical Billing

  1. Charge Entry: Use the encounter form to verify which procedures were performed and why they were performed. The charge entry staff will then enter these charges into what’s called the practice management system. They’ll also include any payments made by the patient at that time.
  2. Claim Generation: Once the charges and payments have been entered, you can generate the claim. This process may include compiling charges, revenue codes, and more.
  3. Claim Scrubbing: While you prepare the claim, you will “scrub” it to ensure that each procedure, diagnosis, and modifier code is both present and accurate. Claim scrubbing also necessitates that the patient, provider, and visit information has been completed.
  4. Claim Forms: As a medical biller, you will generally use one of two claim forms to receive payment from insurers. These forms are the CMS-1500 claim form and the UB-04 claim form.
  5. Claim Submission: The provider organization (i.e., your employer) can submit claims to payers electronically. Usually, medical billers use software that meets electronic filing requirements established by HIPAA.
  6. Claim Tracking: Keep in mind that your part doesn’t end once a claim has been submitted. You must also check each claim status on a daily basis. If clearinghouses (i.e., middlemen) are used, they often feature dashboards that will give you easy access to updates for submitted claims.
  7. Payment Posting: When a hospital or physician’s practice receive their ERAs (i.e., electronic remittance advice), accompanying checks, or direct deposits, payments must be posted as well. So, don’t forget about zero-dollar remittances!
  8. Patient Payments: Once an ERA has been posted, the patient statement should be sent as well. It needs to include all outstanding balances, too. The statements should also include the date of services rendered, the services performed, the insurance reimbursement received, the payments compiled at the time of service, and the explanation as to why the patient balance is due.
  9. Denial Management: Denial or reimbursement issues must be tended to as soon as they are received from insurers. So, if a payer denies a claim, the ERA provides medical billers with a denial code(s) and a quick explanation for the claim’s denial.
  10. A/R Collections: Welcome to the final phase of medical billing! When it comes to patient collections, delinquent accounts can happen. Follow up with patients who don’t meet (i.e., pay) their patient financial responsibility after a set period of time.
  11. Credit Balances: Last but certainly not least are credit balances. While several events could cause a credit balance, medical billers must detect overpayments and swiftly refund them to the correct parties. Failure to do so could lead to consequences like litigation, civil monetary fines, etc.

Necessary Equipment for Medical Billing

Typically, the suggested supplies for medical billing include but are not limited to the following items:

  • A reliable computer
  • Fax machine
  • Printer
  • Scanner
  • Phone

Potential Risks or Complications of Medical Billing

It’s vital that you correctly perform medical billing tasks. Errors that occur at any stage in the process can prove quite costly in terms of revenue, administrative workload, and more. This highlights the necessity of well-trained medical billers who can correctly fill their role in the medical billing cycle. If you think about it, the financial wellbeing of a physician’s practice or provider organizations all depends on the effectiveness of the billing staff.

The word tips in wooden letter blocks

Pro Tips for Mastering the Art of Medical Billing

Here are some tips that may assist you in the future.

  • Make sure you understand the process. Think about it like this: How can you find a solution if you don’t understand the problem? When you need to fix issues in the billing lifecycle, it’s suggested that you first revisit the billing process and make sure you don’t have any questions. Generally speaking, it can be split into six parts:
    • Confirm insurance eligibility
    • Collect the patient’s portion
    • Share procedure and diagnosis codes for each patient’s visit
    • Confirm the proper code selection
    • Input claims into practice management software
    • Obtain reimbursement
  • Try not to make assumptions. This likely goes without saying, but one of the greatest barriers of a smooth cash flow process is a patient who doesn’t make their payment. First thing’s first: Don’t assume that a patient always knows what amount they are supposed to pay. Some patients aren’t informed or may be confused by their insurance plans, copays, deductibles, etc.
  • Know which method is best. Hint: The answer is usually electronic! Cash flow could be roadblocked if you use the wrong method or too many different ones. What do we mean by that? It’s best not to bill a patient by mail, follow up over the phone, and send overdue payments to a collection agency. Consistency is key here. Here are some suggestions to help you avoid these problems:
    • Educate yourself on the patient’s payment responsibility before their appointment
    • Regularly inform each patient of their payment responsibility
    • Handle any services that need pre-authorization before the patient arrives or as far in advance as possible
    • Establish clear-cut expectations and maintain price transparency regarding your organization’s payment policy
    • Place signs around your facility that state payments need to be collected upfront
  • Remember the big three. In the world of medical billing, your strongest allies against lost revenue are knowledge, mentorship, and practice. After you fully understand your organization’s billing process, it would be best to share that information with your coworkers in medical billing. You can help them become experts, too. Most revenue delays are caused by very preventable errors. A well-trained staff at the helm helps ensure that patient insurance policies are verified correctly, proper copays are calculated, claims are sent to insurers with accurate codes, etc.
  • Be aware of the most common errors. A detail-oriented mindset is like kryptonite to mistakes in the medical billing process. Below are some of the most common mistakes found on insurance claims:
    • Incorrect name and date of birth of the patient
    • Incorrect address or contact information of the provider
    • Incorrect payor ID and policy number (i.e., insurance information)
    • Illegible, handwritten documentation
    • Missing claim number information on appeals of denied claims

Portrait of a smiling African-American nurse

Why Should Medical Assistants Learn How to Perform Medical Billing Tasks?

It is very beneficial for Medical Assistants to learn how to perform medical billing tasks. This is because medical billing is a key component in maintaining the financial health of each provider. Thanks to MAs, MOAs, and other billing coders, physicians can maximize their time with each patient and better serve the public.

While medical billing isn’t always a job requirement, Medical Assistants are often responsible for at least some tasks in this realm. It’s a simple yet valuable skill that can lead to more significant opportunities. Therefore, it would be advantageous for MAs or aspiring Medical Assistants to pursue the proper training. Once they are ready to perform medical billing tasks, an MA could become more indispensable to their employer and possibly gain greater responsibilities.

Start Your Career in Medical Assisting

The ability to perform medical billing tasks is an essential skill that aspiring Medical Assistants should learn for their careers. It’s also an essential practice for the survival of most healthcare providers, such as physicians, hospitals, clinics, and other medical systems.

Think about it: Medical billing plays a critical role and serves as a significant component of a practice’s lifecycle. By assisting them throughout this process, Medical Assistants can help obtain valuable information, execute basic coding techniques, and submit insurance claims.

If you’re feeling inspired and want to pursue a career in medicine, Unitek College offers various healthcare programs, such as our Medical Assisting program.

Contact us today to learn more about our programs and tuition assistance options. Take the first step toward a rewarding future in healthcare!