Navigating the world of medical billing can be daunting for new healthcare providers, but understanding its terms and processes is essential for successful practice management. This guide breaks down fundamental medical billing terms and processes to give healthcare providers a clear starting point.
Key Medical Billing Terms
ICD and CPT Codes
ICD (International Classification of Diseases) codes are used to identify diagnoses, while CPT (Current Procedural Terminology) codes specify medical, surgical, and diagnostic services. These codes are essential for insurance claims, helping define the purpose and nature of each patient interaction.
EOB (Explanation of Benefits)
An EOB is a document sent by insurance companies detailing what services were covered, what was paid, and what the patient might owe. Understanding EOBs helps providers and patients see how claims are processed and identify any discrepancies.
Modifiers
Modifiers are two-digit codes added to CPT codes to provide extra details about a procedure, like its location or circumstances that might affect billing. They help ensure the claim accurately reflects the service provided.
Claim Denial and Appeal
Claim denials occur when insurance rejects a submitted claim. Common reasons include errors in coding or missing information. Providers can appeal these denials, often requiring additional documentation or clarification to secure payment.
Medical Billing Process
Patient Registration and Insurance Verification
The process starts with collecting the patient’s personal and insurance information. Verifying insurance eligibility is crucial to avoid denied claims later on.
Medical Coding and Documentation
Once the service is provided, accurate documentation of the patient’s diagnosis and treatments is needed. Coders then assign ICD and CPT codes, ensuring claims reflect the services rendered.
Claim Submission
After coding, the claim is submitted to the patient’s insurance. Claims are often processed electronically, minimizing turnaround times and potential errors.
Payment Posting and Patient Billing
Once the insurance company processes the claim, they issue payment to the provider based on coverage. Any remaining balance is billed to the patient, often with an EOB for reference.
Denial Management and Follow-up
If a claim is denied, billing staff must investigate and address the reason. Common solutions include correcting coding errors or resubmitting documentation. Persistent follow-up can make a significant difference in timely payment.
Streamline Your Billing and Reduce Claim Denials
Partner with Allied Billing Services, a trusted medical billing company in Orlando. Our certified medical coders and comprehensive medical billing and physician credentialing services can help simplify your practice’s billing process.