Medical billing is the process of submitting and following up on claims with health 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 sponsored programs. 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.
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 sometimes referred to as Revenue Cycle Management. This can take anywhere from several days to several months to complete, and require several interactions before a resolution is reached. The relationship between a health care provider and insurance company is that of a vendor to a subcontractor. Health care providers are contracted with insurance companies to provide health care services. The interaction begins with the office visit: a physician or their staff will typically create or update the patient's medical record.
After the doctor sees the patient, the diagnosis and procedure codes are assigned. These codes assist the insurance company in determining coverage and medical necessity of the services. 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.
Medical classification, or medical coding, is the process of transforming descriptions of medical diagnoses and procedures into universal medical code numbers. The diagnoses and procedures are usually taken from a variety of sources within the health care record, such as the transcription of the physician's notes, laboratory results, radiologic results, and other sources.
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