Medical billing was done on paper for many decades. Today our world is computerized and also networked, thereby making medical billing and claims process a very efficient process. It also allows for a lot of claims to be managed in much lesser time.
Many companies have developed medical billing software with the intention of selling them to potential users. A newer development in this area is the availability of online medical billing interfaces that can be accessed on the Internet. Thus one need not even invest or purchase on individual medical billing software to use it.
The process of medical billing involves an interaction between a healthcare provider and the insurance company that finally pays the bill. A record of all the event of the patient’s visits to the doctor is summarized that will contain the following details:
- Demographic details
- Nature of illness
- Details of examinations
- Medication details
For the purpose of medical billing, now the level of service has to be determined. This is done by evaluating the extent of different tests and examinations, and other data collected. The level of service is now converted into a five digit procedure code from the Current Procedural Terminology (CPT). Also the verbal diagnosis (disease details etc) has to be numerically coded using the ICD-9 (International Classification of Diseases, Ninth Edition).
The next step after diagnosis and medical coding is the process of transmission of the claim to the insurance company. This is done electronically as an ANSI 837 file using Electronic Data Interchange via a clearing house. In the early days (and sometimes even now) this process was done using the paper CMS form-1500.
Now it is the insurance companies’ job to process the claim by testing its validity, eligibility after looking at the credentials etc. The claim can be rejected if the claim fails the test and a rejection message will be sent to the claim submitting source. After receiving the rejection message, the client has to make the necessary action / correction, and resubmit the claim. This resubmission process may be repeated many times. Today it is seen that almost 50% of the claims are being rejected mainly due to different errors and the complex character of claims. Further there are also false and fraud claims that have become a big challenge to the medical billing /insurance industry.