What Is Medical Billing and Coding, and Why Is It Important?

What Is Medical Billing and CodingMedical billing and coding is the process of submitting patient information and healthcare service information to insurance companies  to ensure that healthcare providers are compensated for the procedures they perform and the care they provide. Technically speaking, medical billing and medical coding are two separate practices — but they are very closely related. They play a critical role in the reimbursement cycle, ensuring that healthcare facilities receive the compensation they require and that patients are billed both efficiently and accurately.

What Is Medical Coding?

Medical coding is the process of taking information compiled by the physician after an examination or a procedure and translating it into a numerical code that indicates the type of care provided during the visit. According to Medical Billing & Coding Certification, the medical coder must be able to interpret medical terminology and determine which medical code best represents the services received during that visit.

On the surface, it sounds like a simple task, but medical coding can be quite complex. There are literally thousands of medical codes, and each code will have an impact on how much the insurance company pays versus how much the patient is required to pay after the claim has been filed. Some medical codes must be listed in a specific order in order for insurance to provide coverage for a particular procedure. It’s vital that medical coders do their job efficiently and accurately, as it can have a significant impact on an patient’s livelihood.

Once the medical coding is completed for a patient’s visit, it is transferred to the billing department where the claim will be created by the medical biller.

What Is Medical Billing?

Medical billing is the process of compiling the medical codes associated with a visit and including the corresponding patient information  to create a generate for the insurance company. This bill is commonly referred to as a claim.

The first step of medical billing requires the medical biller to create the claim, which must then be submitted to the insurance company. The insurance company reviews the claim, and if the codes have been properly included, they will make the payment accordingly. The claim and insurance compensation are then returned to the healthcare facility, where the medical biller will review it once again.

At this point, the medical biller must determine how much the patient owes out-of-pocket, and a bill is drafted for the individual patient.

Medical billing can be quite time-consuming and complex, but in recent years, online medical billing has begun to streamline the process.

The Relationship Between Medical Billing and Coding

Medical billing and coding have a symbiotic relationship, and the two practices are very closely related. Many professionals in the medical billing and coding industries complete medical billing and coding programs that train them in both practices, allowing them to work in either position. By having a working knowledge of both the billing and coding procedures, you will be prepared to step into either role with ease.

Job Description of a Medical Biller

According to Betterteam, a medical biller’s job description may include the following responsibilities:

  • Maintaining accurate medical recordinformation for all patients
  • Preparing and submitting medical claims to insurance companies
  • Preparing invoices for patients after an insurance payout has been received
  • Investigating claims that are being disputed by patients or by the insurance company
  • Developing payment plans to help patients manage their healthcare balances

Reasons Medical Billing and Coding Are Important in Healthcare

In many ways, medical billing and coding provide the foundation of the healthcare system. The privatized healthcare system in the United States requires capital to continue providing quality patient care to everyone who requires it. As a result, there must be an effective and efficient medical billing and coding procedure in place at every office, practice, clinic, and hospital. These are a few of the reasons why medical billing and coding play a critical role in the healthcare industry:

Ensures Accurate and Efficient Billing

The vast range of medical codes and the complex billing procedures ensure that every claim is accurate, increasing the likelihood that the clinic or healthcare facility will receive the compensation required to stay in business. In addition, when medical billing and coding work together, it allows for an efficient billing process in which claims are submitted as soon as possible, compensation is provided quickly, and patients are subsequently billed in a timely manner. The reimbursement cycle in the healthcare sector must be seamless to keep operations running smoothly for all patients.

Meets Regulatory Guidelines

Regulatory compliance dictates many of the policies in the healthcare industry, including how the process of medical billing and coding can be completed. When medical billing and coding programs are effectively implemented in a healthcare setting, it is much easier for that facility to remain in compliance and avoid the crushing fees and penalties that can be incurred when these guidelines aren’t strictly adhered to.

Transmits Patient Information Accurately

In a sense, medical codes are a universal language, and when each practice relies on the same codes to bill their procedures and services, it is much easier to record and transmit patient information. While one doctor may describe a symptom or a treatment differently than another physician, the same medical code can be used for both circumstances. This consistency helps protect patient information and ensures that their medical record is always up-to-date. It also allows for the safe transmission of patient information between the healthcare facility, the insurance company, and the patient.

Bridges the Gap Between Healthcare Providers and Payers

Insurance coverage is constantly changing, and many patients do not have a complete understanding of what their insurance policy will cover when they go to the doctor. In addition, physicians are often most concerned with providing patients with the care that they need, and they are not always considering the specific insurance policy that the patient has.

As a result, there can be a gap that can be difficult to fill — but accurate medical billing and coding can make that gap much less sizable. Medical billing and coding serve as a bridge between healthcare providers and insurance companies as well as patients. It helps all parties involved understand the costs that have been incurred, the coverage that will be provided by insurance, and the amount that the patient is required to pay out of pocket.

It’s crucial that medical billing and coding is as accurate and transparent as possible, as this will instill trust in both patients and insurance companies. Effective medical billing and coding is an important component of any patient care plan, as it helps to alleviate the stress of the financial burden that can be associated with healthcare.

Identifies Healthcare Trends

Online medical billing and coding also offers insight into emerging healthcare trends. In many cases, these are the first records that identify the type of care patients require at any given moment. Medical billing and coding can give insight into the elective procedures that patients are opting for and help practices prepare for an influx in requests for that procedure. They also can help tell the story of the types of symptoms that are present in a community or the types of illness trends that are beginning to take shape. By paying attention to medical billing and coding, healthcare professionals can retain and analyze large amounts of data that can help them improve their policies and procedures across their practice so that all patients benefit.

The Future of Medical Billing and Coding

Medical billing and coding will continue to play a vital role in the healthcare, particularly as healthcare facilities seek to improve the patient care experience and ensure that every patient receives the healthcare services that they need to live full, healthy lives.

Medical Billing and Coding programs, such as the Medical Billing and Coding Certificate of Achievement at Carrington College, can prepare you for a career in this vital sector of the healthcare industry.

For more information, contact Carrington College today or visit our Student Consumer Information page for important information on program outcomes.

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