How Medical Billing and Coding Works

At first look, it may seem so easy to do medical billing and medical coding. But if you look at the processes close, you'll understand why only professionals who have undergone medical billing education are allowed to be medical billers and coders. To see how the billing services differ from other processes, why don't you look at the entire process? You may think that medical billing and coding is similar to the work of medical transcriptionists. But actually, the latter is very different from the former because transcribing is just like turning an audio file into a text file. Yes, this process also uses medical software and these are all important to the health industry. But their similarity ends there.

Medical billers and coders are specialists on codes and billing services. Before they even have the right to enter this career, they have had trainings and education from various schools.

So, let's move on and see how medical billing and coding works.

  1. This process involves the interaction of the insurance company and the healthcare provider. This begins with the patient's visit to the healthcare provider. The medical biller will create or bring up to date the patient's medical record. The record's contents usually include the patient's demographic information, previous treatment, nature of illness, list of medication, exam details and diagnosis.
  2. The professional will evaluate the medical history of the patient and determine whether the services rendered to the patient qualify within the insurance. After determining the level of service, the professional will translate that into a 5-digit code obtained from the Current Procedural Terminology.
  3. Even the verbal diagnosis will be translated into codes. This time, the codes should be obtained from the ICD-9-CM. Both codes from CPT and ICD-9-CM are important in claiming payment from the patient's insurance.
  4. The medical biller will send a copy of the diagnosis codes to the patient's insurance company. This process is an electronic process, which involves formatting the claim using ANSI 837 file. To do that, the billers use a software called Electronic Data Interchange. If an electronic method is unavailable, the biller will have to submit a paper form instead.
  5. The insurance company will review the claim. Their medical directors do the reviewing and evaluating of the claim's validity.
  6. Approved claims will be reimbursed for a specific percentage. Usually, the rate is determined depending on what the insurance company and healthcare provider have agreed upon.
  7. Rejected claims are returned to the provider using the Explanation of Benefits form. Then, the biller will evaluate the message and make the necessary corrections to qualify the claim. The form will be submitted again. Usually, resending of claims can be done until the claims are fully paid or until the insurance company accepts the claim.

Now that you know how specialists use codes for medical coding and billing services, maybe it's time to consider studying this career, too. Besides, using medical software and having other necessary skills can be gained from enrolling into schools.  After that, you're ready to face the challenges of this tough world of medical billing and coding. 


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