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Medical Billing and Coding: A Vital Process in Healthcare Management

Medical Billing and Coding: A Vital Process in Healthcare Management

By Kiwi Health

Published: Sep 2, 2023

Table of contents

The healthcare industry is a complex ecosystem where patient care, medical professionals, and financial transactions intersect. At the heart of this intersection lie medical billing and coding, two critical processes that ensure the smooth operation of healthcare management.

These processes translate the healthcare services provided into a language that is universally understood for billing and insurance purposes. By doing so, they play a pivotal role in ensuring that healthcare providers are appropriately compensated for their services.

This article delves into the intricacies of medical billing and coding, their impact on healthcare management, and how technology is revolutionizing these processes.

Understanding Medical Billing and Coding

Medical Coding: The Language of Healthcare

Medical coding is typically the process of converting healthcare diagnoses, medical services, procedures, and equipment into universally recognized medical alphanumeric codes.

The codes are derived from a variety of sources, including physician’s notes, laboratory results, radiologic results, and other sources of clinical documentation. 

These codes serve as the foundation for the billing process, enabling healthcare providers to submit accurate and standardized claims to an insurance company and other payers.

The Importance of Accurate Coding

Precise and comprehensive clinical documentation during a patient’s visit is essential for medical coding and billing. The cardinal principle in healthcare billing and coding departments is, “If it’s not documented in the medical record, don’t code it or bill for it.”

Clinical documentation serves as a justification for reimbursements when disputes arise with a claim. In instances where a provider fails to document a service adequately in the medical record, the organization risks facing a claim denial and possibly a write-off. This highlights the significance of meticulous and accurate documentation in the healthcare workflow.

The Coding Process

After a patient’s departure from the healthcare facility, a certified medical coder meticulously examines and interprets the clinical documentation. 

The coder’s task is to link the services provided with the corresponding billing codes, which pertain to diagnosis, procedure, charge, and professional or facility codes. 

During this process, coding experts utilize the following sets of codes:

  • ICD-10 Diagnosis Codes: Diagnosis codes play a crucial role in articulating a patient’s health status, including their specific ailments or injuries, along with factors related to their health influenced by societal conditions and other personal attributes. The healthcare sector utilizes the Tenth Revision of the International Statistical Classification of Diseases and Related Health Problems (ICD-10) as a standard system to record these diagnosis codes for the purpose of billing.
  • CPT and HCPCS Procedure Codes: Procedure codes serve as a supplement to diagnosis codes by detailing the actions taken by healthcare providers during a patient visit. The system of procedure coding is primarily composed of Current Procedural Terminology (CPT) codes and the Healthcare Common Procedure Coding System (HCPCS), which together provide a comprehensive account of the procedures performed.
  • Charge Capture Codes: Coders connect physician order entries, patient care services, and other clinical items with a chargemaster code. A chargemaster is a comprehensive list that details the standard costs of services and items offered by a healthcare provider organization.
  • Professional and Facility Codes: When relevant, medical coders also convert the medical record into codes that represent professional services and facility-specific information.

Medical Billing: The Financial Backbone of Healthcare

Medical billing is the process by which healthcare organizations submit claims to payers and bill patients for their own financial responsibility. While coders diligently work on translating medical records, the front-end billing process has already started.

Front-End Medical Billing

Medical billing starts when a patient registers at the office or hospital and sets up an appointment. During pre-registration, administrative staff members ensure patients complete the required forms and confirm patient information, including home address and insurance coverage. 

After verifying that the patient’s health plan will fully cover the requested services and submitting any prior authorizations, staff should confirm the patient’s financial responsibility.

Back-End Medical Billing

Together, medical coders and back-end medical billers utilize codes and patient data to generate a “superbill,” a detailed form employed by providers to formulate claims. This document generally encompasses information about the provider, the patient, and the specifics of the visit.

The Role of Medical Billing and Coding in Healthcare Management

Medical billing and coding are fundamental to the financial stability of healthcare institutions. They guarantee that healthcare providers receive compensation for the services they render, allowing these organizations to continue providing care to patients. 

The duration of the medical billing and coding cycle can vary widely, ranging from a few days to several months. This timeline is influenced by factors such as the complexity of the services provided, the management of claim denials, and the methods organizations use to collect payments from patients.

The Influence of Technology on Medical Billing and Coding

In the modern era, technology has become a significant driving force in the healthcare industry, and medical billing and coding are no exceptions. 

The advent of various technological tools and software has revolutionized these processes, leading to increased efficiency, accuracy, and productivity.

Electronic Health Records (EHRs)

Electronic Health Records (EHRs) have been a game-changer in the healthcare industry. EHRs are digital versions of patients’ paper charts containing a patient’s medical history, diagnoses, medications, immunization dates, allergies, treatment plans, radiology images, and laboratory and test results. 

By providing an organized, comprehensive data set for each patient, EHRs facilitate the coding process, making it easier for coders to find the information they need to assign the correct codes.

Moreover, EHRs improve the accuracy of patient data, reduce the likelihood of data replication, and provide up-to-date, patient-centered records that support decision-making. They also enhance the privacy and security of patient data, a crucial aspect of the healthcare industry.

Computer-Assisted Coding (CAC) Solutions

Computer-Assisted Coding (CAC) solutions use natural language processing to read and interpret clinical documentation, automatically generating appropriate medical codes. 

This technology significantly reduces the time and effort required for manual coding, leading to increased productivity and efficiency.

CAC solutions also improve coding accuracy by minimizing human errors that can lead to claim denials or delays. They provide consistent coding, ensuring that all relevant codes are captured, and help maintain compliance with ever-changing regulations and coding guidelines.

Medical Billing Software

Medical billing software has streamlined the billing process, making it more straightforward for healthcare providers to submit claims and receive payments. 

These software solutions automate various billing tasks, including patient registration, appointment scheduling, charge entry, claim submission, payment posting, and follow-up.

Medical billing software also provides features like electronic claim submission, which reduces the time it takes to receive reimbursements and claim scrubbing, which checks claims for errors before they are submitted, thereby reducing the likelihood of claim denials.

The Impact of COVID-19 on Medical Billing and Coding

The COVID-19 pandemic has brought about several changes to medical billing and coding processes. For example, in 2020, there was a 2.3% rise in the adoption of electronic claims management across the medical and dental sectors.

Medical billers and coders had to determine new codes and reimbursement policies with the emergence of a new virus. These changes underscore the dynamic nature of the field and the need for ongoing education and adaptability among medical billers and coders.

Embracing the Future of Healthcare with Kiwi Health

Medical billing and coding are integral to healthcare management, ensuring smooth operations and facilitating quality patient care. 

Embracing such technological advancements is key to navigating the evolving landscape of healthcare system management.

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