The Value of Medical Billing in the Healthcare Industry

Medical billing is an intricate relationship between a healthcare provider and the insurance payer. The interaction begins with the doctor or their staff creating or updating the patient's medical record. This record contains a summary of treatment and information such as the patient's name, address, social security number, home telephone number, work telephone number, and policy identity number for the respective insurance held by the patient.
Upon the first visit, the doctor or medical practitioner will usually give the patient one or more diagnoses in order to better coordinate and streamline their care. In the event that a conclusive diagnosis is not reached, the reason for the visit will be cited for the purpose of claims filing. The patient record contains highly personal and sensitive information which includes the nature of the illness, examination details, medication lists, diagnoses, and suggested treatment.
In order to determine the correct level of service that will be used to bill the insurance company, the extent of the physical examination, the complexity of the medical decision making and the background information history obtained from the patient are evaluated.
Once determined by qualified staff, the level of service is translated into a standardized five digit procedure code drawn from the Current Procedural Terminology or CPT database. The verbal diagnosis is translated into a code as well, drawn from a similarly standardized International Contagious Diseases or ICD-9 database. These two codes, taken from the CPT and ICD-9 manuals, are equally very important to medical billing companies for claims processing.
Once the procedure and diagnosis codes are correctly determined, medical billing companies will transmit the claim to the insurance company that will make the payment. This is usually done using electronic data interchange to submit the claim file to the payer directly or via a clearinghouse.
In the past, claims were submitted using a paper form. Today, advances in modern technology have influenced the medical billing service industry in a way that has made things easier for both parties. The insurance company processes the claims usually by medical claims examiners or medical claims adjusters. Approved claims are reimbursed for a certain percentage of the billed services at rates which have been pre-negotiated between the health care provider and the insurance company.