We can use diagnosis and procedure codes to monitor the spread of disease or the effectiveness of a procedure. In the United States of America, these medical codes are majorly used for reimbursement processes. Conclusively, these codes are used to prepare medical bills accurately and efficiently.

It is often observed that most of the people assume that patient-doctor interaction is one to one interaction. Although the reality is different; visiting a physician is a quite complicated procedure. This procedure consists of a complex system of information flow and payment collection. This interaction is based on a three-party system;

  • Patient.
  • Healthcare providers; (providers include physicians, hospitals, physical therapists, emergency rooms, out-patient facilities, and other medical services rendered by medical practitioners).
  • Payer: it includes health insurance companies or other secondary payers.

Medical billing is the process of translating services provided by healthcare vendors into standard codes (defined by HIPAA act) to prepare claims to obtain payments from health insurance companies for reimbursement.

The role of a medical biller in the healthcare industry is to negotiate and arrange for payment between three parties i.e. (patients, healthcare providers, and payers). The medical biller ensures that the healthcare provider is compensated for the services they vendor by billing both patients and payers. For this purpose, the medical biller collects all the information that is required to create a “superbill”. Then compile the information of this superbill to prepare a bill that is known as a claim. These claims are then submitted to health insurance companies for reimbursement.

A Superbill is a detailed receipt of the healthcare services that you provided to your client/patient. The super-bills may include the following information;

  • Basic information by the patient; like name, address, phone number, basic information of the healthcare facility e.g. office address.
  • Basic information of the provider; it includes the doctor’s name and NPI number.
  • ICD-10 codes for the patient’s diagnosis.
  • CPT Codes: It includes the list of all codes that correspond to the services you have rendered to your patients.
  • Fees: It includes the list of the associated charges for the treatment or the diagnostic services provided by the healthcare practitioners.
  • Payment: It involves the list of all payments that are tailor-made towards the services of the physician.

Medical claims are medical bills submitted to health insurance carriers and other insurance providers for services provided to patients by healthcare practitioners. When you visit the doctor, hospital or another provider, your service generates a bill. This bill is then translated into a medical claim to your insurance carrier to process for payment.

The claim contains the demographic information, medical history, insurance coverage and also a report (that contains the information of the procedures performed during the patient’s visit and the reason behind that treatment procedures.

It is insurance against medical expenditures. Simply, people who have subscribed to the health insurance plan, pay a certain amount of payment in order to have a degree of protection against medical expenses.

There are different kinds of health insurance plans;

  • Indemnity:

It refers to pay for service insurance. Patients may opt for any insurance provider they like. This insurance plan is comparatively costlier but it is more flexible. Due to the sudden increase in the inflammatory pressure indemnity is becoming less popular.

  • Managed care organizations (MCO):

It is a blanket term that includes organizations like Health Maintenance Organizations (HMOs) and preferred provider organizations (PPOs). In this insurance policy patients have fewer options but their premiums and deductibles are fixed and generally lower but it also lowers down health insurance costs for the patients simultaneously.

  • Consumer-driven health plans:

It is similar to PPO but it also features a complimentary savings account. These insurance plans have high deductibles and low premiums yet they are increasingly popular insurance plans in the US healthcare marketplace.

Subscribers pay the charges of each insurance plan and health insurance companies to save this subscription amount in the savings account. These savings then are further used to pay the charges of healthcare services that are mentioned in the medical bill before the deductible has been met.

Medical billing specialists interpret the patient’s insurance plan information and verify that information to prepare claims so that they are accepted by the health insurance companies. The creation of the claim is essential where medical billing overlaps with medical coding. As medical billers analyze procedure codes and diagnosis codes and prepare claims according to the standardize policies of HIPAA.
Procedure codes include CPT and HCPCs codes that describe the health insurance companies what kind of treatment procedures are rendered by healthcare providers during the patient’s visit. While diagnosis codes are documented using ICD codes that demonstrate medical necessity. In general, procedural codes describe the What of patient’s visits and diagnosis codes tell the WHY. The biller encapsulates the information of the patients and patient’s visit into the standardized codes along with the cost of the healthcare service charges to prepare a claim; that is reimbursed from the health insurance companies.

A general clean claim contains the following information;

  •  What is the information of the patient and what are the services rendered by the healthcare providers?
  • Why is the treatment received by the patient?
  • Who provided the healthcare service?
  • When were the services rendered to the patient by the provider?
  • How much the treatment services costs to the patient or their payers?

If this information is accurately mentioned in a claim then the claim is compliant (factually and formally correct claim). This claim ensures the reimbursement and hence, an optimized return on revenue for the healthcare service.