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davidtrump

​​​​​​​Billing process

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Billing process

The medical billing process is a process that involves a health care provider and the insurance company (payer) pertaining to the payment of medical services rendered to the clients. The entire procedure involved in this is known as the billing cycle sometimes referred to as Revenue Cycle Management. Revenue Cycle Management involves managing claims, payment and billing. This can take anywhere from several days to several months to complete, and require several interactions before a resolution is reached. The relationship between a health care provider and insurance company is that of a vendor to a subcontractor. Health care providers are contracted with insurance companies to provide health care services. The interaction begins with the office visit: a physician or their staff will typically create or update the patient's medical record.

After the doctor sees the patient, the diagnosis and procedure codes are assigned. These codes assist the insurance company in determining coverage and medical necessity of the services. Once the procedure and diagnosis codes are determined, the medical biller will transmit the claim to the insurance company (payer). This is usually done electronically by formatting the claim as an ANSI (American National Standards Institute) 837 file and using Electronic Data Interchange to submit the claim file to the payer directly or via a clearinghouse. Historically, claims were submitted using a paper form; in the case of professional (non-hospital) services Centers for Medicare and Medicaid Services. At time of writing, about 30% of medical claims get sent to payers using paper forms which are either manually entered or entered using automated recognition or OCR software.

The insurance company (payer) processes the claims usually by medical claims examiners or medical claims adjusters. For higher dollar amount claims, the insurance company has medical directors review the claims and evaluate their validity for payment using rubrics (procedure) for patient eligibility, provider credentials, and medical necessity. Approved claims are reimbursed for a certain percentage of the billed services. These rates are pre-negotiated between the health care provider and the insurance company. Failed claims are denied or rejected and notice is sent to provider. Most commonly, denied or rejected claims are returned to providers in the form of Explanation of Benefits (EOB) or Electronic Remittance Advice.

In case of the denial of the claim, the provider reconciles the claim with the original one, makes necessary rectifications and resubmits the claim.This exchange of claims and denials may be repeated multiple times until a claim is paid in full, or the provider relents and accepts an incomplete reimbursement.

There is a difference between a “denied” and a “rejected” claim, although the terms are commonly interchanged. A denied claim refers to a claim that has been processed and the insurer has found it to be not payable. A denied claim can usually be corrected and/or appealed for reconsideration. Insurers have to tell you why they've denied your claim and they have to let you know how you can dispute their decisions. A rejected claim refers to a claim that has not been processed by the insurer due to a fatal error in the information provided. Common causes for a claim to reject include when personal information is inaccurate (i.e.: name and identification number do not match) or errors in information provided (i.e.: truncated procedure code, invalid diagnosis codes, etc.) A rejected claim has not been processed so it cannot be appealed. Instead, rejected claims need to be researched, corrected and resubmitted.

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