The per capita expenditure on healthcare in the United States increased significantly since 1960 and amounted to $125000 in 2020, according to Statista. A significant portion of this sum is spent on health insurance. Physicians need to submit claims or bills to commercial and federal health insurers to get paid for the services rendered to insured patients. Claim submission in medical billing involves several complex steps and getting it right is the key to optimal reimbursement. Medical billing outsourcing to an expert is the best way to achieve this goal.
What is a Medical Claim?
A claim begins at patient registration. A medical claim is a bill sent by the physician to the patient’s health plan for services rendered. The claims preparation process in medical billing involves translating patient encounters into accurate, timely bills, submitting them to payers, and monitoring adjudication to ensure they get fully paid. There are many steps involved in claim preparation and submission and understanding them is essential to manage the process efficiently.
Medical claims are submitted using medical billing software that meets electronic filing requirements as established by the HIPAA claim standard. Manual claims are permitted only in certain circumstances. Electronic claims are paperless patient claim forms generated in the practice management system and then transmitted directly to the payer electronically in accordance with the health plan’s submission requirements or through a third party vendor such as a medical billing service. Leading medical billing companies can manage the process using cloud-based software or work on the practice’s billing software.
Steps in Medical Claim Preparation and Submission
- Medical billing and coding: The claim submission process in medical billing begins with patient registration. At the front-end medical billing stage, basic patient data is collected such as:
- Patient demographic information, including personal and contact information
- Patient referral or appointment scheduling
- Patient health history
- Insurance eligibility verification
If there are procedures or services that insurance will not cover, patients are informed about their financial responsibility. The staff will also collect any copayments from them at the visit.
Back-end medical billing begins after the patient checks out. The medical report from the patient’s visit is sent to the medical coder. Medical coding involves pulling out billable information from the medical record and clinical documentation. When a patient encounter occurs in a physician’s office, hospital, or other healthcare facility, physicians document the visit in the patient’s medical record and detail the reason for delivering specific services, items, or procedures. Medical coders review the clinical documentation and assign the correct billing codes – ICD-10 codes to indicate diagnoses and CPT and HCPCS codes to report services/procedures performed. Leveraging professional medical coding services can speed up the process and ensure coding accuracy.
- Medical Billing Insurance Claims Process
Preparing the superbill: The patient’s insurance plan and payer regulations determine whether a procedure is billable. Charge entry involves entering these charges for the services provided into the practice management system, along with payments made by the patient at the time of service. Claims are prepared from superbills which are created from the medical codes and patient information. The superbill will include healthcare provider details, patient information, and information relating to the visit – medical codes, modifiers, place of service codes, time, units, quantity of items used, and insurance authorization information. Physicians can also include accurate and supportive documentation in the superbill to support medical necessity of services.
Claims scrubbing: During the medical billing insurance claims process, billers will check the codes to make sure that the services/procedures coded are billable. They will also scrub the claims to ensure that there are no mistakes. This process involves scanning claims for the following:
- Accuracy of procedures performed, and related diagnosis and procedure codes
- Patient and provider data
- Insurer data
- Medical necessity
- Age and gender specific procedures
- Medicare, Medicaid, and other data
If errors are detected, they are immediately corrected. Claim scrubbing results in more accurate claims and minimizes risk of denial.
- Claim submission: Claims are submitted on payer-specific forms. Medicare and private insurance companies use different types of claim forms. Medicare claims are submitted on the CMS-1500 form (for physician practices) and the CMS-1450 or UB-04 (for hospitals). Private payers, Medicaid, and other third-party payers may use different claim forms based on their specific requirements or have unique claim forms based on the CMS format. Submitting a clean claim in medical billing also involves meeting standards of billing compliance such as HIPAA. Once the claims are complete, they will be submitted to the insurance company via a third party vendor like a clearing house or a medical billing company.Adjudication: The medical billing process also includes monitoring adjudication. Once they receive a claim, the insurance company will evaluate it to determine its validity and if accepted, how much it will pay the provider. The insurance company can deny or reject a claim. It will send Electronic Remittance Advice (ERA) forms back to the provider detailing what services are reimbursed or if any more information is required. The report will also include explanations as to why certain procedures will not be covered. If a claim is rejected or denied, the report will provide the reason for this. The provider can then correct and resubmit the claims for reimbursement.
Patient statement preparation: After a claim is reimbursed, the medical billing team will prepare the patient statement. The patient will be billed for procedures not covered by the insurance company. If the patient received care from an out-of-network provider, the No Surprises Act, which went into effect on January 1, 2022, requires the provider to submit a claim to the health plan for out-of-network services to see if the payer will provide coverage. The patient cannot be billed for the unexpected balance bill from the out-of-network facility or provider.
A/R Follow-up: The final phase in the medical billing cycle is patient collections. Medical billers will initiate processes to collect patient payments. Accounts receivable (AR) is the balance of money due to the provider from patients and payers. Specific and consistent activeaccounts receivablefollow upis an essential part of successful revenue cycle management.
The claim submission process in medical billing is complex and error-prone. Inefficient processes can lead to several problems such as reduced reimbursement, denials, penalties for regulatory noncompliance, and even fraud and litigation costs. Partnering with an experienced provider of medical billing and coding services is a practical strategy for providers to ensure a smooth process that ensures that they get paid for services delivered.