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.