Medical billing and coding are the cornerstones of the healthcare revenue cycle which ensures that payers and patients reimburse providers for services delivered. Coding and billing are separate processes, but crucial for providers to get payments for healthcare services. When chargeable information is extracted from medical records and clinical documentation, then it is known as medical coding. On the other hand, in medical billing codes are used to create insurance, claims, and bills for patients. Creating claims is where medical billing and coding intersect to form the backbone of the healthcare revenue cycle. Apart from this, it is also essential to understand how medical billing codes work. Employees play a crucial role in billing and medical coding as they are responsible for facilitating healthcare facilities to providers.
In this blog, we will make you understand the fundamentals of medical billing and coding so that healthcare organizations and associated staff & employees can operate a smooth revenue cycle to earn all the allowable reimbursement for quality delivery.
What Is Medical Coding?
Medical coding is the process of converting medical diagnoses, procedures, and services into universally recognized alphanumeric codes. These codes are used for documenting and categorizing various medical services provided to patients. The main purpose of medical coding is to facilitate accurate and efficient billing, insurance claims, and data collection in the healthcare industry.
What Is Medical Billing?
Medical billing is broken into two main categories: front and back-end.
Front-End Billing: It starts when a patient registers at the office or hospital after appointment scheduling. The patient fills out the information forms which are used to verify the health plan of a patient. Essentially, the front-end billing process involves informing patients of any costs they are responsible for. Ideally, costs are collected in copayments during the start or end of an office visit. Once the visit of a patient is completed, medical coders work with their medical records and convert the information into billable codes.
Back-End Billing: In back-end billing claims are transmitted to payers. These payers can be state-provided health insurance like Medicare or Medicaid, which requires Medical Coders and Billers to fill out a CMS-1500 form. Using codes and patient information, medical coders and back-end medical billers create a superbill which is an itemized form that providers use to create claims. The superbill encompasses:-
Provider Information: This comprises location, and signature, as well as the name and National Provider Identifier (NPI) of ordering, referring, and attending physicians.
Patient Information: It comprises name, date of birth, date of first symptom, insurance information, and other patient data.
Visit information: Date of service(s), procedure codes, diagnosis codes, code modifiers, time, units, the number of items used, and authorization information.
Process of Medical Billing and Coding
When a patient encounter in a physician’s office or other healthcare facility, therein the process of coding starts. Many steps are involved in medical billing and coding that ensures the accurate and timely reimbursement for healthcare services provided to patients. Firstly, the patient gives the personal and insurance information during the registration and check-in process as it is crucial for medical billing. During the patient encounter, the healthcare provider examines the patient, diagnoses their conditions, and provides required treatments or services. All the details of the patient, including diagnoses, procedures, etc., are documented in the medical record of the patient. After all this, the medical coders review the medical documentation and translate diagnoses, procedures, and services into standardized codes using ICD-10CM codes for diagnoses. However, keep in mind that the coding process requires a deep understanding of medical terminology and coding guidelines. Once the medical coding is complete, medical billers take the coded information and prepare a claim.
Top 4 Benefits of Medical Billing and Coding
- Accurate Billing
Medical coding ensures that healthcare services and procedures are accurately documented and coded. This accuracy reduces the risk of errors in billing, leading to fewer claim denials and faster reimbursement for healthcare providers.
- Efficient Reimbursement
Proper coding and billing practices help healthcare facilities receive timely and appropriate reimbursement for the services they provide. This financial stability allows healthcare providers to continue offering quality care to patients.
- Research and Data Analysis
Coded medical data is valuable for research and data analysis. It helps identify trends, track disease patterns, and assess the effectiveness of treatments. Researchers and public health agencies can use this data to make informed decisions and improve healthcare practices.
- Healthcare Cost Control
By minimizing billing errors and optimizing revenue cycles, billing, and medical coding contribute to controlling healthcare costs for both providers and patients.
Final Thoughts
Proper billing and medical coding make it easier for patients to understand the services they receive and the costs associated with their healthcare. This transparency improves patient engagement and empowers individuals to make informed decisions about their health.
