Wednesday, January 12, 2011

Medical Billing Basics

The medical billing process began with pre-registration of the patient. It was the time to gather personal information, insurance and medical information about the prospective patient. It is vital that this information is captured and entered onto the computer system accurately for future contact with the patient and for successful payment of claims. The use of a registration check list is very helpful. The revenue cycle and the success of the practice depend on the accuracy of this information.

By gathering the patient's insurance information, we are able to Establish Financial Responsibility for the visit. This is the second step in the medical billing process. Information such as: the name of the insurance company, the name of the insured (not always the patient), type of policy, the ID number and the phone number for the insurance company are vital pieces of information for successful payment of claims. It is important for front end staff to know which insurances companies the practice participates with and which ones you don't participate with. Many practices do participate with one specific plan within an insurance company but not others. For many practices, insurance claims and payments are the bulk of the revenue cycle. It is the life blood of your practice. Collecting every dollar that your practice is entitled to is critical to the financial health of your practice. Obtaining the insurance information before your patient arrives for their first appointment allows for verification of eligibility and benefits, obtaining the required referrals and authorization, co pay and deductible information. This information must be accurate. Inaccuracy will lead to rejections or denials and will cost your practice money.

Patient check in is the third step in the medical billing process. Most practices will have an Information sheet and/or Intake packet for the patient to fill out. Again, we are collecting personal, insurance and medical information needed to receive payment for services. It is a time in the process where you can verify the information that you already have and obtain any important information that you don't have. Most practices will have the patient sign an Assignment of Benefits (AOB). The AOB is a document that authorizes the practice to treat the patient, authorizes the insurance company to send payment for such treatment directly to the practice and most importantly, that the responsible party (patient, insured parent or guardian) will be responsible for payment to the practice. During patient check in, it is important to obtain a copy of the insurance ID card. Be sure to copy the front and the back of the card and keep a copy of the card in the patient's chart. Other common practices are to ask the patient at each visit if their insurance and co pay information is still the same and to collect the co payment at the time of visit.

The medical billing process is made up of many sub-processes. The front end processes, are the processes that occur before the Dr. has seen the patient. They may seem like minutiae, but my twenty years of experience in healthcare and medical billing and collections have proven to me that careful attention to these details are critical to the successful payment of first time submission claims. Successful claims payments on the first try should be the goal of every practice. Failure to navigate the intricate rules of the insurance process will lead to rejected, denied or short paid claims. Re-working and resubmitting claims for payment will cost your practice time and money in salary, phone expenses and postage. Extra attention to detail at the front end processes will produce positive results.

Upon patient checkout, most practices use a superbill or SOAP note. SOAP is an acronym for subjective, objective, assessment and plan. SOAP notes and superbills are encounter forms that list all the procedures that a practice performs. Information on these encounter forms are patient name, date, the name of the doctor providing the service and any payment or co-payment information related to the services provided. There is usually space provided for the doctor to make any special notations or recommendations for further testing. Some forms have a place for the patient signature as well as the doctor/providers signature. Every service performed or dispensed must be converted into a CPT or HCPC code. Depending on the specialty of the practice, Modifiers will also be on the form. SOAP notes and superbills should also have the most common diagnoses encountered by the practice. Simply put, the diagnosis is the doctor's opinion based on examination of what is wrong with the patient. Every diagnosis must be converted into an ICD code. Mistakes in assigning correct CPT codes can affect proper payment for services. Mistakes in coding can also result in rejections and denial of claims. Rejections, denials and improper payment result in reworking and resubmission of the claim. Claims follow up for rejections and denials costs a practice time and money. Many practices employ a CPC (Certified Professional Coder), a person that has training in assigning the correct code for a given service.

To sum up, a superbill or soap note must be filled out accurately for each patient so that the correct charges can be entered for services rendered. It is critical to your practices' bottom line that mistakes are minimal as mistakes lead to rejections, denials or improper payments. Rejections, denials and improper payments require additional man hours and other expenses to fix and resubmit the claim and that translates into more money spent trying to get paid and less money for the practice.

I received my Bachelor's of Science Degree in Business Administration from the University of Bridgeport, CT. I have Twenty years of experience in the Healthcare field. I have extensive hands on knowledge of Coding and Billing, and have specialized in Collections and Revenue Cycle Management. I am a member in good standing of the American Academy of Professional Coders, attaining my CPC - Certified Professional Coder credentials.


froz said...

An excellent article which helped me understand the basics of medical billing.. Another site that i found helpful in this regard is