Complete medical billing and coding are crucial components of any healthcare practice’s revenues and reimbursements. Medical billing and coding depend highly on proper documentation and timely submissions, etc. This is why medical billing and coding require a team of professionals overseeing an appropriate billing process. It is categorized as one of the most complicated processes of healthcare administrative tasks.
What is medical billing?
One of the primary reasons for medical billing is generating revenues and reimbursements. The process of complete medical billing ensures that physicians and healthcare providers are getting reimbursed for the services they rendered. It might seem like a one-on-one interaction with a doctor or physician, but it actually comprises a more complex process. The whole “going to the doctor” thing consists of three separate parties; the patient, the healthcare physician or provider, and the insurance payer. Healthcare providers can include any of the following:
- Physical therapists
- Emergency rooms
- Outpatient facilities
- Any other medical service provider
Medical billers are responsible for ensuring that the physicians are being timely reimbursed for the services they perform. In order to bill, medical billers gather information regarding the procedure performed and convert it into a bill for the payer. This bill is known as a medical claim, and it contains the following:
- Patient’s information, e.g., demographics
- Medical history
- Insurance coverage
- Procedures performed by the physician
Medical billing and medical coding overlap where these claims are being created. Specific codes are used to translate the information into a medical claim.
Types of Billing Systems:
Three basic types of billing systems include the following:
- Closed Billing System:
- This kind of medical billing system doesn’t allow any transfers. This means the healthcare record remains with a particular practice – focusing on a single practice. One of the significant examples of a closed billing system is using EMRs. EMR stands for electronic medical records.
- Open Billing System:
- On the contrary, open billing systems allow the transfer. It represents a more collaborative record-keeping and structure of billing. It allows transfer across healthcare physicians, practices, billing teams & facilities, etc. Examples of open billing systems include using EHRs (Electronic Health Records), i.e., allowing the patients’ personal data to be transferred.
- Isolated Billing Systems:
- On the other hand, the isolated billing system is completely separate from healthcare physicians, practices, and facilities. It involves the use of PHRs, also known as Personal Health Records.
Process of Complete Medical billing:
This process comprises a series of steps to ensure proper medical billing. It makes sure that physicians are timely reimbursed for the services and procedures they perform. Following are the steps of the medical billing process:
- Registration of the patient
- Determining the financial responsibility of the patient
- Superbill is created based on the information gathered. It includes using the diagnosis and procedure codes and comprises demographic and medical information. Creating a superbill also involves requesting; identification, a valid insurance card, and collection of co-payments.
- Preparation of a medical claim by using the superbill; One must ensure that the claim meets the insurance payers’ and HIPAA compliance requirements and standards.
- After checking compliance and accuracy, medical claims are submitted.
- Payers determine the compliance and validity of the medical claim, also known as adjudication of the claim. Based on this, reimbursements are determined.
- If the claim is approved and processed, the patient statement is prepared.
- Statement follow-ups.
What is medical coding?
The transformation of medical diagnosis, procedures, services, and equipment used into codes is known as medical coding. These universal alphanumeric codes are used based on the patient’s documentation, including lab results, physician’s notes, etc. The team of medical coders ensures that correct codes are being used in medical claims. This is one of the reasons why proper documentation is the critical component of accurate medical billing and coding. These codes report:
- Patient’s diagnosis
- The medical necessity behind procedures, treatment, supplies, or services performed on the patient.
- Procedures, treatment, services, and supplies provided by the physician to the patient
- It also reports any unusual medical condition that took place/affected during the treatment session.
Assigning the correct code is one of the major challenges faced by medical coders. However, various medical billing outsourced services companies like U Control Billing provide complete medical billing solutions for physician practices. Medical billers ensure to reduce errors and increase reimbursements.
Types of medical codes:
There are three commonly used medical coding systems,:
- ICD 10 – International Classification of Diseases, 10th Edition:
ICD stands for International Classification of Diseases. ICD 10 is the 10th Edition of the ICD coding system and is published by the World Health Organization (WHO). This coding system comprises two medical code sets:
- International Classification of Diseases, Tenth Revision, Clinical Modification
- International Classification of Diseases, Tenth Revision, Procedure Coding System
There is a significant difference between the two types of ICD 10 codes:
- ICD-10-CM — diagnosis code set used for all healthcare settings
- ICD-10-PCS — procedure code set used only in hospital inpatient settings
Importance of the ICD 10 codes:
Compared to ICD-9, the tenth Edition of ICD codes provide more specificity to the healthcare providers and payers. ICD 10 codes provide more detailed information about a patient’s condition, injury, and disorder. These diagnosis codes can be used to track patients’ conditions information, types, and the number of treatments or procedures the patient received.
Structure of ICD 10 codes:
ICD-10-CM codes consist of about three to seven characters (i.e., alphabet and digits). The code begins with an alpha character, with the second and third characters being the digits. However, the fourth, fifth, sixth, or seventh can be any of the two, i.e., alphabet or digits/numbers.
- CPT – Current Procedural Terminology codes:
Current Procedural Terminology (CPT) codes are maintained by the American Medical Association (AMA). CPT codes are one of the most commonly used code sets and are further divided into several categories.
- Category I
- These are the most commonly used codes by medical coders to report medical services and procedures. These codes are five-digit numeric codes only, ranging from 00100 to 99499.
- Category II
- This category comprises codes for performance measurement. Category II codes are supplemental tracking codes. These alphanumeric codes comprise four digits ending with an “F.” These codes are optional, meaning they are not required for proper medical coding.
- Category III
- This code set comprises temporary codes for emerging technology, procedures, and services. They are alphanumeric codes, four digits ending with a “T.
- HCPCS – (Healthcare Common Procedure Coding System, Level II):
HCPCS stands for Healthcare Common Procedure Coding System, commonly referred to as HCPCS Level II Classification codes. This code set is specifically for healthcare providers, medical equipment suppliers, and physicians. It involves filing health plan claims for:
- Medical devices
- Transportation services
- And any other items or services
Structure of HCPCS codes:
These codes consist of five characters, starting with an alphabet from A to V, followed by four digits. For instance, the HCPCS code set G0425-G0427 is for Initial Telehealth Consultations, telehealth consultations, initial patients, or emergency departments.
Errors in medical billing and coding:
Everything from documentation and codes to modifiers should be correct when it comes to medical billing. There are various common errors in medical billing and coding; however, they can be reduced by outsourcing the billing services. Medical billing outsourced services companies offer complete full-service medical billing solutions for healthcare practices.
Following are some of the most common medical billing and coding errors by healthcare providers:
Incomplete or inaccurate documentation:
Assigning the correct codes depends on accurate and complete documentation. Sloppy or incorrect documentation by physicians or healthcare providers makes it difficult to do proper medical coding. Missing information or misreading can also lead to under-coding, which results in lost revenues for the healthcare practice.
Use of incorrect codes in medical claims:
Human error or incorrect documentation can aid in the use of incorrect procedure codes in medical claims. Even a minor mix-up in the codes or a wrong keystroke can change the code completely, resulting in the use of an incorrect code.
Use of incorrect modifier:
The most commonly used modifier includes modifier 22. This modifier reports that the patient’s procedure took more time or work than typically required. Overusing this modifier eventually increases the reimbursements and revenues of the healthcare practice. Using the modifier 22 requires proper documentation for approvals, or else it can lead to a claim being rejected or denied.
Using different codes for reporting a medical procedure when a single comprehensive code exists is known as unbundling. Several medical services can be coded against one comprehensive CPT code. Using separate codes results in higher reimbursements from the insurance carriers. However, unbundling codes is an unethical practice and can result in civil liability for healthcare providers. Centers for Medicare and Medicaid Services (CMS) clearly state that unbundling and upcoding “can expose providers to criminal and civil liability.”
This practice is also considered fraudulent and Medicare abuse. It involves the healthcare provider submitting a medical claim by billing a more expensive or comprehensive medical procedure than the actual one. This act results in higher reimbursements. Upcoding also involves reporting more excessive time than the actual time spent on the procedure.
Under-coding in medical billing includes not using codes of all the procedures performed. This can often happen due to oversight but can also be done intentionally by the providers. Under coding results in loss of revenues as physicians or providers are not reimbursed for all the services they performed. It results in patients being billed for lesser procedures or services, therefore, lesser payments and a lower reimbursement rate.
Duplicate billing occurs when the same patient is billed for the same service or procedure multiple times when it was performed once. It can also be a result of human error.
Outsourcing Complete Medical Billing and Coding:
U Control billing is a results-oriented, outsourced medical billing services company providing solutions to your practice. With U Control Billing, you get:
- Fee schedule review and analysis
- Eligibility verification.
- Authorization alert
- Claim tracking
- Reduced rejections and denials
- Patient statement processing, Mailing
- Customized Monthly financial reports
- Rules-based claim review
- Scrubbing and Insurance follow-up.
- Always remain HIPAA Compliant
- Improved Quality & Increase in Revenue
- Billing in 24 Hours & Timely Follow-ups
- Patient Support & Customer Services
- Competitive Pricing
- Maximized reimbursements
- Reduced overall expenses
We consider ourselves a “remote business office,” providing you with billing in 24 hours and always being available to answer any of your queries. We understand that medical billing is a crucial component of any healthcare practice and, if not done correctly, can impact the revenue cycle.
Pricing & Plan:
“We only get paid when you get paid.”
With U Control Billing, say no to fixed costs. Your billing costs will depend on your monthly receipts, meaning if your production dips down, so will your billing cost. U Control Billing offers two Pricing Plans:
- Medical Billing Only
- Complete Revenue Cycle Management
Frequently Asked Questions (FAQs)
1. What are the three types of billing systems?
There are three basic types of medical billing systems, including the following:
- A closed medical billing system doesn’t allow any transfers—for example, using EMRs.
- Open systems allow the transfer. It represents a more collaborative structure of billing—for example, using EHRs.
- Isolated billing systems are completely separate from healthcare physicians, practices, and facilities, such as PHRs.
2. What is the best software for medical billing?
Medical billing software has several benefits, including revenue cycle management, reduced errors, and increased reimbursements. Following are some of the most commonly used software for complete medical billing:
- What are medical billing services?
Medical billing is the process of submitting medical claims. It plays a vital role in physicians and healthcare practices getting reimbursed for their services. Complete medical billing also involves follow-ups of the medical claims submitted and managing the claim denials.