8 September, 2023

Healthcare Billing and Coding 101: Understanding the Basics of Medical Coding and Billing

The modern healthcare industry is a value-based system where the quality of care that medical institutions provide dictates the revenue they can generate. In this ecosystem, healthcare billing services are the conduit between healthcare providers and third-party payment providers, like insurance companies. 

This means healthcare providers are entirely reliant on the process of medical coding and billing for revenue generation. That’s why every healthcare provider, irrespective of their scale of operation, must be well-versed with the basics of medical coding and billing. 

Understanding the nuances of healthcare billing and coding can help them maintain a steady revenue stream while providing quality healthcare. 

But what is medical billing and coding? Let’s uncover the process and its fundamentals.

What Is Medical Billing?

This is the process of documenting and submitting claims to medical insurance companies. Insurance companies scan the information outlined in the medical bill as proof of the services that a medical institution has provided before reimbursing it for those services/treatments.

But if you think medical billing is a simple process that involves collecting and documenting healthcare information, you’d be mistaken. 

Medical billing is only one element of an elaborate healthcare billing and coding process through which healthcare providers get compensated for their services. 

Depending on the data presented in the documentation, a medical practitioner or institute can: 

  • Get reimbursed by the insurance company
  • Bill the patient for payments for the treatment provided

Because of its importance, the process of drafting a medical bill is complex. Even a small mistake can result in a claim denial, leading to payment delays and thousands of dollars of loss. It can only be executed by individuals trained to carry out these services. 

What Is Medical Coding?

Medical coding refers to standardized codes used by the healthcare industry as a whole. These codes are used to process all patients’ healthcare data and medical records. To put it simply, think of it as a standardized language in which certain healthcare terms correspond to specific alphanumeric codes. So, there’s a code for every condition, treatment, or procedure that medical professionals perform to treat patients. 

Just like computer programming languages, there are multiple globally accepted medical coding systems in healthcare. These codes cover everything that can happen to patients from birth to death. 

Types of Medical Codes

At present, there are three accepted processes of medical coding that billing experts use while drafting a claim. These are:

  • Current Procedural Terminology (CPT)

CPT codes refer to various procedures performed by an independent physician or a clinic to treat a given condition, chronic or otherwise. CPT codes were developed and are maintained by the American Medical Association (AMA). 

  • Healthcare Common Procedural Coding System (HCPS)

Formulated by the Centers for Medicare and Medicaid Services, the HCPS process of medical coding corresponds to procedures performed at a hospital, prescribed medications, and even supplies that might be needed to perform certain medical actions.

  • International Classification of Diseases (ICD)

Developed by the World Health Organization (WHO), the ICD has codes for the classification of death certifications and other mortality-related processes. 

To sum it up, a healthcare billing and coding expert uses one or more of the above codes to evaluate prescriptions and treatments and then drafts a medical bill claim. The expert must be well-versed in these codes to be able to perform their job with dexterity and confidence. 

What does medical billing and coding do? 

A medical coder looks at prescriptions, a patient’s healthcare records, lab test results, and any procedure performed at a medical facility. They collect information from all of these sources and tag each with a specified medical code. A medical biller then uses these codes to draft a claim.

Although these two are standalone processes, highly trained experts can perform both jobs. As a career, healthcare billing and coding is as important as any. According to the US Bureau of Labor Statistics, there will be a 7% growth in this industry between 2021 and 2031.

More and more healthcare providers are in need of such expert services to help streamline their billing processes and manage their revenue. 

Benefits of Medical Billing and Coding

As mentioned earlier, medical institutions depend on the money they make from treating patients to pay staff salaries, preserve infrastructure, and upgrade their equipment. So, maintaining a revenue source that can fund all functional and operational pursuits is not just important but a basic requirement. 

A fast, efficient, and meticulous healthcare billing and coding process is, therefore, the key enabler for healthcare providers to continue providing services uninterrupted. 

So what are the benefits of medical billing and coding? 

  • It helps maintain the revenue cycle. 
  • A seamless healthcare experience also has a tremendous bearing on the reputation of any medical institution. It can help establish goodwill that can attract more business from well-discerning patients. 
  • Having the capability to process claims quickly also ensures a healthcare provider does not unduly charge the patient money that their insurance can cover. 
  • It ensures that there are always enough funds to perform daily operations or make upgrades. 
  • Last but not least, a tech-powered healthcare billing and coding system ensures all caregivers are given full and fair compensation for their lifesaving services. 

Thankfully, electronic health records (EHR), automation in billing and coding, and other innovations have made the process much more optimized and error-free than ever before. 

Make the Process of Medical Coding and Billing Easy with CHB

If all these technicalities have confused you or made you worry about having dependable healthcare billing and coding in place, there’s no need to stress. 

You can outsource the important but complex process of medical coding and billing to experts like Certified Healthcare Billing Services. With years of experience in medical billing and coding services, we provide end-to-end services to ensure healthcare providers enjoy seamless revenue generation. From state-of-the-art EHR Software to medical billing credentialing and contracting services, we’ve got you covered. 

Contact Certified Healthcare Billing Services to learn more.

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