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The 9 Steps of the Medical Billing Process — Including the Ones Most People Skip

Dec 5, 2019

Medical billing is a unique animal, requiring plenty of knowledge about different insurance companies, plus a reliable process in place to make sure nothing is missed. If your team works at a doctor’s office or health organization, make sure you’re tackling all these steps. 

1. Insurance verification – Check the patient’s insurance coverage and benefits before the date of service to ensure payment for services. Is the claim going to get paid by the insurance company the patient provides at the time of service or prior to the date of service? 

Most doctor’s offices have this part down, of course. After all, without it, you may bill the wrong insurance company or might not get any payment from the patient at the time of service, making it far more difficult to challenge later.  

2. Patient Demographic EntryCollect data from the patient (usually on a face sheet) that provides the physician with a name, address, phone, email, cell, date of birth, etc. 

While any provider will ask for name, address, and phone number, not all of them get all of the information up front. Be sure your team is having patients fill out all the forms completely. Make sure your intake forms include the proper consent to email, call them, or text them. You’ll also need guarantor information and minor information, if applicable. 

3. CPT & IDC-10 Coding – Ah, the joys of medical codes. Medical providers use these to “communicate” to insurance companies for payments. These are placed on 1500 or UB04 claim forms. 

The problem here is making sure the codes are correct. One tiny typo or error can mean insurance denials, not meeting contractual requirements, errors in provider utilization data, or a delay in claims processing.

4. Charge Entry – This is the process medical providers use to translate Coding to their Charge Master/Fee Schedule, converting the CPT code to their fee schedule (WC, GH, SELF PAY or CMS) to bill the insurance their rate (fee schedule or UCR) to the payer. 

With these translations, there is plenty of room for error, resulting in Incorrect billing to the payer and incorrect billing to the patient. 

5. Claims Submission – When all that’s done, you’ll send claim forms (paper or electronic) to the designated payer assigned at the patient’s time of service.  

Sending a bill sounds easy, but many doctor’s offices struggle with timely filing issues and providing appropriate documentation to substantiate the medical necessity of the procedures and services provided. 

6. Payment Posting – Payment is received, and now you must reconcile the insurance/patient’s payment to the correlating procedure for a specific date of service. 

Errors here result in incorrect billing if contractual adjustments are not taken, appeals not being sent timely if denials are not coded correctly when receiving the Explanation of Benefits (EOB).

The Most Critical Steps in Medical Billing

Financial teams at doctor’s offices go through the above steps every single day. When people pay their bills, you’re all set. But what happens when patients don’t pay? Many front desk staff find that process more challenging. Rather than processing payments and coding, they are now asked to follow-up with people — often an uncomfortable task. These next steps are what to do when you don’t receive payment. 

7. AR Follow-Up – Your team will track claims that are not paid by the patient at the time of service or those not paid by insurance companies. Clean claims should be paid in 14 days if billed electronically. 

Put in place a system for following up: who will do it, what dates or time frame it will occur. Follow-up is crucial to keep cash flow in your medical practice. Sometimes, the issue is something simple, such as confusion or a lost bill. But do you have a process in place if patients cannot pay their portion after insurance pays? 

8. Denial Management – Next, your team needs to track claims denied erroneously or those denied due to an error in registration/coding. 

Again, medical codes are one area where mistakes happen. You’ll need a process to track denials that require appeals and confirm coding requirements — or else risk lost revenue. 

9. Reporting – The final step is to manage your reports. Determine where their DSO/AR falls and trends with specific payers. 

Without this tracking and someone to manage it (and examine it!), you will lose revenue and may struggle with cash flow. 

Handling the Follow-up

Many medical providers and doctor’s offices outsource the final three steps, finding it easier to turn those processes over to someone else. Companies such as Capital Recovery already have streamlined processes in place and are trained to help patients who cannot pay. If your office is losing revenue, contact us for help.