Key Steps in Medical Billing Claim Preparation Process

by | Published on Sep 26, 2022 | Podcasts, Medical Billing (P) | 0 comments

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Outsource Strategies International (OSI) is a HIPAA-compliant medical billing company in the U.S. providing medical billing solutions for physician offices, clinics, family practices, and hospitals. We serve all major specialties including dentistry.

In today’s podcast, Loralee Kapp, one of our Solutions Managers, discusses the claim preparation process in medical billing.

Podcast Highlights

00:30 What is a Medical Claim?

01:40 Steps in Medical Claim Preparation and Submission

03:12 Medical Billing Insurance Claims Process

Read Transcript

Hey all, this is Loralee Kapp, the Solutions Manager with Managed Outsourced Solutions. Today I want to go over what the claim preparation process is in medical billing.

Physicians submit claims or bills to commercial and federal health insurers in order to be 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.

00:30 What is a Medical Claim?

To start, let us talk about what is a medical claim. 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 and timely bills along with submitting them to the payers, and monitoring the adjudication to ensure they are getting paid fully. 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 which meets electronic filing requirements as established by the HIPAA claim standard. Manual claims are only permitted in certain circumstances. Electronic claims are paperless patient claim forms generated in the practice management system, that then transmits 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.

01:40 Steps in Medical Claim Preparation and Submission

Now let’s talk about the steps involved in medical claim preparation and submission.

First is medical billing and coding: The claim submission process in medical billing begins with the patient registration. At the front-end medical billing stage, basic patient data is collected such as – the patient demographic information, including personal and contact information, patient referral or appointment scheduling followed by patient health history, and the 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 co-pays for 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 ICD-10 codes, indicating the diagnoses and CPT and HCPCS codes to report the services and procedures performed. Partnering with a professional medical coding service can speed up the process and ensure coding accuracy.

03:12 Medical Billing Insurance Claims Process

Next is the 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 the payments made by the patient at the time of service. Claims are prepared from the superbills which are created from the medical codes and patient information. The superbill will include the healthcare provider details, patient information, and information relating to the visit – medical codes, modifiers, and the place of service codes, time, units, and quantity of items used, and the insurance authorization information. You can also include accurate and supportive documentation in the superbill to support the 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 the procedures performed, and related diagnosis and procedure codes
  • Patient and provider data
  • Insurer data
  • Medical necessity
  • The age and gender specific procedures and
  • Medicare, Medicaid, and other data information

If errors are detected, they are immediately corrected. Claim scrubbing results in more accurate claims and minimizes the risk of denials.

The next step is 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 (typically used for physician practices) and the CMS-1450 or UB-04 (typically used for hospitals). Commercial 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 or a clearing house or a medical billing company.This is followed by the adjudication process.

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 companies can deny or reject a claim. They will send an Electronic Remittance Advice (ERA) form back to the provider, detailing what services are reimbursed or if any 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 the denial. Providers can then correct and resubmit the claims for reimbursement.

Patient statement preparation: After a claim is reimbursed, the medical billing team will prepare a 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 from the out-of-network facility or provider.

Finally is A/R Follow-up: The final phase of the medical billing process is patient collections. Medical billers will initiate this process to collect patient payments. Accounts receivable (AR) is the balance of money due to the provider from patients and payers. Specific and consistent active accounts receivable follow up is an essential part of the 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 non-compliance, 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 the smooth process that ensures that they are getting paid for services delivered.

Loralee Kapp

Since joining our RCM Division in October 2021, Loralee, who is HIT Certified (Health Information Technology/Health Information Management), brings her extensive expertise in medical coding and Health Information Management practices to OSI.

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