Medical billing is the process of submitting medical claims of patients to insurance companies on behalf of health care providers. Efficient medical billing insures the success of the practice as it creates predictable cash flow for the health care provider.
Today, many health care providers are outsourcing their medical billing. It's the fundamental responsibility of the professional medical billing company to monitor the billing cycle where rejections and denials are handled in a timely manner. Moreover, it is key to follow up on any disputed portion of the claims and reduced reimbursements. Let's find out more how the medical billing cycle works.
The process starts with entering the patient demographics and insurance information into the practice management solution by the medical billing group. It is important that the medical billing team makes sure that the patient is eligible for the service before the patient comes in. Once demographics have been entered, the medical billing team enters the CPT and ICDs codes into the system after making sure that the codes are compliant with government regulations and policies. Since; ICDs and CPT are subjected to annual change and policies are often updated throughout the year. The process of entering CPT and ICDs in the system before submissions is called charge entry.
Charges have to go through certain manual and electronic claim edits. After they have passed the edits, claims that are ready to be submitted are called clean claims. Failed claims are sent back to the biller with notification for correction and re-submission. Cleans claims are then forwarded over to the clearing house in 837X12N format which makes sure that all claims are complaint to current regulations and are following the right EDI standards. An efficient clearing house transmits all approved and rejected claims back to the practice management solution within 24 to 48 hours.
Accepted claims are transmitted to the insurance EDI department which preps the claims and matches the transmitted information with that of the patient file and benefits. After EDI review at the payers end, the approved 837 claim files are forwarded over to the payer adjudication department and rejections come back to the office from payers via the clearing house.
The adjudication department approves payment on the accepted claims at the contracted rate and forwards them over to the finance department which either pays them as an EFT (Electronic Fund Transfer) or by paper check. (EOB) (Explanation of Benefits). Physician offices receive EOBs on the credentialing billing address and then they are posted into the system by the medical billing team to show an accurate picture of the account receivables.
Any rejections from the clearing house and payers along with the EOB and ERA denials are worked by the AR team for payment resolution and re-submission. With an ideal medical billing service all denials should be fixed and resubmitted the very next day when they come in. Also, all outstanding claims should be followed up within 30 days in case of non-payment. Ideally all claims with commercial and government plans pay within 2 to 4 weeks in compliance with state prompt payment regulations that vary from depending upon location.