Insurance Coding and Billing

Medical billing and coding is a complicated but critical part of medical practice management. With all the different medical insurance providers available today, not to mention Medicare and Medicaid, there are a myriad of different forms and procedures to follow in order to receive payment for medical services rendered. Incorrect forms or improperly followed procedures lead to delays in payment which can upset the budget of a medical office. It is a challenging job for those running any type of medical practice.

Every medical procedure and diagnosis is assigned a five-digit numerical code that aids in communication of information among medical providers and insurance agencies. A standard set of codes was created and is updated by the Current Procedural Terminology Editorial Panel of the American Medical Association. These codes are used by all organizations within the United States. Following treatment, a trained office employee determines the level of service and diagnosis the patient received and assigns the corresponding five-digit procedure codes. These codes are used in billing the patient’s insurance company to receive payment.

Medical billing is simply requesting payment from insurance companies for patient care. While the concept is simple, the reality is not. The codes are submitted to the patient’s insurance company. The insurance company then processes the claim codes and reviews them for patient eligibility and medical necessity. If approved, payment is sent to the provider. This process may take anywhere from several days to several weeks to complete. Should the claim be rejected, several more months of negotiations between the provider, insurance company, and patient may ensue.

The role of the medical billing and coding specialist is becoming even more complex as most medical offices and insurance companies change from paper forms to electronic. Training is required to ensure employees working in billing and coding are ready to take on the new electronic methods. Moreover, as with any transition, there are periods of chaos where some of the work is handled through the old method while some is performed with the new technology. Additionally, kinks and glitches are present in most new systems and need to be quickly corrected. With billing and coding, it is critical that the claims are filed quickly and correctly, so the period of transition between the two systems must be managed well.

As part of good practice management, insurance billing and coding are clearly important; without it, the office has no income! To be successful at billing and coding, a medical office needs an employee with the proper training. The codes are specific and the forms are complicated and mistakes can dramatically delay both payment and, potentially, necessary patient care.


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