Medical billing & coding is the process of submitting and following up on claims to insurance companies in order to receive payment for

services rendered by a healthcare provider. The same process is used for most insurance companies, whether they are private companies or government-owned. Medical billers are encouraged, but not required by law to become certified by taking an exam such as the CMRS Exam, RHIA Exam and others. Certification schools are intended to provide a theoretical grounding for students entering the medical billing field.

Billing Process
The medical billing process is an interaction between a health care provider and the insurance company (payer). The entirety of this interaction is known as the billing cycle. This can take anywhere from several days to several months to complete, and require several interactions before a resolution is reached. The interaction begins with the office visit: a doctor or their staff will typically create or update the patient's medical record. This record contains a summary of treatment and demographic information including, but not limited to, the patient's name, address, social security number, home telephone number, work telephone number and their insurance policy identity number. If the patient is a minor then guarantor information of a parent or an adult related to the patient will be appended. Upon the first visit, the provider will usually give the patient one or more diagnoses in order to better coordinate and streamline their care. In the absence of a definitive diagnosis, the reason for the visit will be cited for the purpose of claims filing. The patient record contains highly personal information, including the nature of the illness, examination details, medication lists, diagnoses, and suggested treatment. The extent of the physical examination, the complexity of the medical decision making and the background information (history) obtained from the patient are evaluated to determine the correct level of service that will be used to bill the insurance. The level of service, once determined by qualified staff is translated into a standardized five digit procedure code drawn from the Current Procedural Terminology database. The verbal diagnosis is translated into a numerical code as well, drawn from a similar standardized ICD-9-CM(latest review being 10 [ICD-10-CM] database. These two codes, a CPT and an ICD-9-CM (will be replaced by ICD-10CM as of 10/1/2013) are equally important for claims processing. Once the procedure and diagnosis codes are determined, the medical biller will transmit the claim to the insurance company (payer). This is usually done electronically by formatting the claim as an ANSI 837 file and using Electronic Data Interchange to submit the claim file to the payer directly or via a clearinghouse. Historically, claims were submitted using a paper form; in the case of professional (non-hospital) services and for most payers the CMS-1500 form or HCFA (Health Care Financing Administration claim form) was commonly used. The CMS-1500 form is so named for its originator, the Centers for Medicare and Medicaid Services. At time of writing, about 30% of medical claims get sent to payers using paper forms which are either manually entered or entered using automated recognition or OCR software. The insurance company (payer) processes the claims usually by medical claims examiners or medical claims adjusters. For higher dollar amount claims, the insurance company has medical directors review the claims and evaluate their validity for payment using rubrics (procedure) for patient eligibility, provider credentials, and medical necessity. Approved claims are reimbursed

Failed claims are denied or rejected and notice is sent to provider. make required corrections and resubmit the claim.[1] A response to an eligibility request is returned by the payer through a direct electronic connection or more commonly their website. rejected claims need to be researched. Following that submission. A denied claim refers to a claim that has been processed and the insurer has found it to be not payable. invalid diagnosis codes. and over payments is high (often reaching 50%). Most practice management/EM software will automate this transmission.e. the .) A rejected claim has not been processed so it cannot be appealed.: truncated procedure code. Instead.for a certain percentage of the billed services. This process uses the same standards and technologies as an electronic claims transmission with small changes to the transmission format.e. simply acknowledging that the claim's submission was received and that it was accepted for further processing. Depending on the denial. Most commonly. Upon receiving the denial message the provider must decipher the message. This number may also be high due to insurance companies denying certain services that they do not cover (or think they can get away without covering) in which case small adjustments are made and the claim is re-sent. Prior to actually performing service and billing a patient. This first transaction for a claim for services is known technically as X12-837 or ANSI-837. This contains a large amount of data regarding the provider interaction as well as reference information about the practice and the patient. Common causes for a claim to reject include when personal information is inaccurate (i. corrected and resubmitted. These rates are pre-negotiated between the health care provider and the insurance company. etc. the payer will respond with an X12-997. A rejected claim refers to a claim that has not been processed by the insurer due to a fatal error in the information provided. There is a difference between a ³denied´ and a ³rejected´ claim. the care provider may use software to check the eligibility of the patient for the intended services with the patient's insurance company. This exchange of claims and denials may be repeated multiple times until a claim is paid in full. mainly because of high complexity of claims and/or errors due to similarities in diagnosis' and their corresponding codes.: name and identification number do not match) or errors in information provided (i. hiding the process from the user. The frequency of rejections. This is called an X12-271 "Health Care Eligibility & Benefit Response" transaction. When the claim(s) are actually adjudicated by the payer. this format is known specifically as X12-270 Health Care Eligibility & Benefit Inquiry transaction. filing an appeal with the appropriate documentation and proof can successfully overturn the original decision. or the provider relents and accepts an incomplete reimbursement. denied or rejected claims are returned to providers in the form of Explanation of Benefits (EOB) or Electronic Remittance Advice. reconcile it with the original claim. Denied claims can usually be corrected and/or appealed for reconsideration. denials. [edit] Electronic Billing Process A practice that has interactions with the patient must now under HIPAA send most billing claims for services via electronic means. although the terms are commonly interchanged.

deductible. The doctor is then responsible for collecting the out-of-pocket expense from the patient. The insurance payment is further reduced if the patient has a copay.00. The amount that is paid by the insurance is known as an allowable amount. the insurance may only allow $50. Large insurance companies can have up to 15 different plans contracted with one provider. If the patient had a $500.00.00 by the insurance. For example. The physician will therefore receive $56. and the insurance would issue payment for future services. this amount would be the patient's responsibility to pay.00 would not be paid by the insurance company. A coinsurance is a percentage of the allowed amount that the patient must pay.00 and the patient will pay $14. It is most often applied to surgical and/or diagnostic procedures. the doctor would be paid $45.00 copay. Providers typically charge more for services than what has been negotiated by the doctor and the insurance which they will receive 80% of the allowable Medicare fee and 20% will be sent to the patient . the reason. which shows the line-items of the claim that will be paid or denied. or a coinsurance.00. and if denied. if paid. Instead. the regular fee for a particular service is $100. a coinsurance of 20% would have the patient owing $10. although a psychiatrist may charge $80.00 deductible. so the expected payment from the insurance company for services is reduced.or can be 'Nonparticipating' in which the physician will receive 80% of the fee. the amount. Steps have been taken in recent years to make the billing process clearer for patients. the health care provider or medical biller must have complete knowledge of different insurance plans that insurance companies are offering. and the laws and regulations that preside over them. and so a $30. and subsequent charges would also be the patient's responsibility. the deductible is met.00. Similarly Medicaid has its own set of policies which are slightly more complex than Medicare. until his expenses totaled $500.00 for a medication management session. For example. When providers agree to accept an insurance company¶s plan. the contractual agreement includes many details including fee schedules which dictate what the insurance company will pay the provider for covered procedures and other rules such as timely filing guidelines. The Healthcare Financial Management Association (HFMA) unveiled a "Patient-Friendly Billing" . the contracted amount of $50. [edit] Payment In order to be clear on the payment of a medical billing claim.payer will ultimately respond with a X12-835 transaction.00 reduction (known as a "provider write off" or "contractual adjustment") would be assessed. In Medicare the physician can either be 'Participating' .00 and the insurance company owing $40. After payment has been made a provider will typically receive an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) along with the payment from the insurance company that outlines these transactions. At that point.00. If the patient in the previous example had a $5. Using the above example. while Medicare's fee structure is $70.00. and may bill patients for 15% or more on the scheduled amount.

software companies and medical offices spent thousands of dollars on new technology and were forced to redesign business processes and software in order to become compliant with this new act. more straightforward manner. Several companies also offer full portal solutions through their own web-interfaces. electronic claims processing. This was in part because providers who inadvertently . as the Consumer-Driven Health movement gains momentum. Additionally. Medical billing service providers and insurance companies were not the only ones affected by HIPAA regulations. Title I of this Act protects health insurance of workers and their families. healthcare providers and health plans must follow in order to provide their services aptly and ensure that there is no breach of confidence while maintaining patient records.S. with the advent of medical practice management software also known as health information systems it has become possible to efficiently manage large amounts of claims.project to help healthcare providers create more informative and simpler bills for patients. However. medical providers have been urged to electronically send their claims in compliance with HIPAA to receive their payment. medical billing was done almost entirely on paper. when they change or lose a job. HIPAA is a set of rules and regulations which hospitals. as well as reimbursement advice. Medical office personnel may obtain certification through various institutions who may provide a variety of specialized education and in some cases award a certification credential to reflect professional status. health insurance companies. [edit] HIPAA The medical billing field has been challenged in recent years due to the introduction of the Health Insurance Portability and Accountability Act (HIPAA). doctors. The Certified Medical Reimbursement Specialist (CMRS) accreditation by the American Medical Billing Association is one of the most recognized of specialized certification for medical billing professionals. Title II calls for the electronic transmission of major financial and administrative dealings. several aspects of medical billing and medical office management have created the necessity for specialized training. which negates the cost of individually licensed software packages. payers and providers are exploring new ways to integrate patients into billing process in a clearer. Due to the rapidly changing requirements by U. Many software companies have arisen to provide medical billing software to this particularly lucrative segment of the market. many patients found that their insurance companies and health care providers required additional waivers and paperwork related to HIPAA. [edit] History For several decades. Since 2005. As a result of these changes. including billing.

The major information need to be followed is to maintain privacy of both the patient's personal or demographic details as well as providers details. providers farm out their medical billing process to a third party known as a Medical Billing Service. . paving the way for further practice growth. A recent trend towards outsourcing in countries such as India has shown a potential to reduce costs. but it is not clear if this trend will continue or decline as a result of customer concerns over privacy. These entities promise to reduce the burden of paperwork for medical staff and recoup lost efficiencies caused by workload saturation. particularly as a practice grows beyond its initial capacity to cope with its own paperwork.released Protected Health Information to the wrong entity would now be exposed to litigation under HIPAA. [edit] Role of the Medical Billing Service In many cases.