Starting a Medical Practice: Understanding medical billing
We are almost done with setting up the medical practice. Now you have your staff ready, credentialing done, office space, medical insurance contracts, business corporation set up as well as your attorneys and accountants by your side. Now is the time to set up medical billing. You need a good system to file the patients’ billings to the medical insurance companies. Timely filing is important otherwise the insurance companies will deny you the right to collect payment. Also billing needs to be efficient, so you do not miss any charges to bill. There are two ways to set up medical billing:
1) Inhouse Medical Billing: When you hire your medical billing staff, get the required software, and submit the charges to a medical billing clearinghouse.
2) Outsourcing Medical Billing: Since the medical billing has become almost completely electronic, many companies do offer to do billing for your medical practice. These companies have an office in the US or abroad. They charge a set percentage of collections to do the work.
To better understand the billing process let me take you through the steps of medical billing:
STEP 1: MD sees the patient and documents ICD 9 codes and CPT codes on a billing form.
STEP 2: The billing form is sent to the billing office (inhouse office or outsourced company)
STEP 3: Medical Billing Clerk enters the data into a medical billing software.
STEP 4: Medical Billing Clerk then uploads the data to a medical billing clearinghouse.
STEP 5: Medical billing clearinghouse scans the billing for errors and then forwards clean claims to the medical insurance company. Claims with errors are returned to the medical billing office.
STEP 6: Insurance company makes a decision on the filed claim. If it decides to pay then you get a check, otherwise you get the dreaded ‘NO’
STEP 7: Medical Billing Clerk corrects the claim for errors and then re-files it back via clearinghouse to the insurance company.
In our next post we will talk about pros and cons of inhouse billing and outsourced billing. There are some pitfalls of outsourcing one should be aware of.