What is Medical Billing? How a Workflow Solutions System Can Help.

June 10, 2021
by Admin

What Is Medical Billing?

101: Medical billing is the process of submitting medical insurance claims for review and payment based on established contractual standards. AKA we shake down the insurance companies (the baddies) to get your doctor(s) paid their due!

Medical bills are submitted for even the smallest of items or services. Like that $10 bill your aunt Gladys got for the aspiring pill she took at the hospital last week when her knee was acting up because she was expecting rain? Yeah that gets a bill. So do your labs. Your operating room has a bill. The assistant at surgery gets billed. The pathology gets billed. Shit…even the room that the slide that your pathology got read in…yeah that gets a bill too. It is nuts. Every service or supply rendered in the regimen of care from a doctor or hospital gets a bill for every waking moment spent with a patient <— that’s you.

The Steps: Workflow Parts of Medical Billing

Every medical bill hits a number of steps before it is paid. Thanks to your friendly neighborhood insurance company, the number is quite a bit larger than it needs to be, but hey why make it simple or easy right? Then they pay faster (God forbid!).

STEP 1: Coding (more importantly, reliable and accurate coding)

All the stuff your doctor does in the room with their doctor brain, or worse, when they slice you if need be…yeah that gets reduced to a five-digit code called a CPT. Yes, folks, we have reduced the practice of making a human healthy to a series of five-digit codes, and guess what…it is more art than science despite the fact that it shouldn’t be. But again, complexity is King in the US healthcare system. At the coding stage, the codes are assigned for provided services. This process is so complex, that there is a specific role in medical billing companies for Coders. That’s right, we botched this system so badly that there is a job description for specifically translating from service to CPT code. These codes are set by national standards related to levels of care and time spent providing the service. You can thank the American Medical Association (AMA) for this series of over 20K codes. Oh, and if you’re curious about who likes this fun-filled system, check the AMA’s donor list (hint: it has insurance companies on it). But I digress..proper coding from the beginning of the claims process prevents delays in payment.

STEP 2: Charge Entry

This is the super fun data entry process whereby patient accounts are created and inserted into medical records-keeping programs AKA EMR AKA EHR AKA PM AKA Billing system (we use 50+ a day at Auctus so we have acronyms a-plenty). These entries allow for the creation of patient accounts and the collation of patient and location reports related to services provided and claims that have been unpaid. It’s a ledger. It tracks what you’re charged for. Capisce?)

Charge entry must be done before any bills/claims can be sent (duh. If any required steps are missed during the chart entry process, billing can be delayed via claim rejections/denials, etc.

STEP 3: Claim Submission

So doc coded their bill (or didn’t and his/her staff did it for them)….now what. At this stage, the claim is created in whatever system the practice is using…there’s like thousands of them and they all work differently so NBD…just another way billing is made super consistent and simple for your doc! Think of a claim as a static picture of a bill or an invoice. The claim is sent to the medical billing entity for preparation to be submitted to insurance. This is where your Auctus biller does a ton of cool stuff to make sure your doc gets paid…or if you’re not doing Auctus where less cool people do less cool stuff and probably get paid less (*this statement has not been evaluated for accuracy but it’s like probably right). These claims through the mail (if you’re 75 years old or more) or via electronic clearinghouses. Think of a clearinghouse like a techy USPS. Electronic submission provides a much faster turnaround on claims. Billing systems and clearinghouses can do really slick stuff like submit medical records, authorization requests, benefit calculations, claim status inquiries…but most insurance companies don’t accept all of these little tidbits of information because…say it with me now…why make it easy?

STEP 4: Denials / Rejections

Patients can be denied care by their medical insurance company. I’m sure this is news to all of you readers because none of you have ever experienced an issue with a bill right? Every denial/rejection is sent back to the practice in a fun little file called a 277CA or an 835 (intermixed with payments). There are specific steps that must be followed, which are required by law related to denials. There are a series of codes called CARC and RACR codes which can be aligned in different combinations. These combinations often offer a piece to the puzzle of what has happened, but rarely enough information on their own to take a productive step towards payment. Oh, and the format of the files the docs get back…yeah they’re different per software program, per payer, per clearinghouse. Anyone remember factorials from highschool math? It applies here. Learn more about how to manage your denials here.

Anyhoo, each bill that has been denied must be carefully processed by the insurance company and have any remaining liability passed onto patients for invoice payment (your favorite part!).

STEP 5: Collections

We send Bruno. Bruno is angry and hungry…some call that hangry. It is scary. Pay him.

JK JK. Sometimes medical bills are not paid by patients and clinics (shocker). Doctors, clinics and hospitals don’t have a ton of weapons at their disposal. They can mail you stuff. They can call you. It is all annoying, but not the best way to obtain payment. Traditional collections agencies have different tools at their disposal to track people, report against credit, submit legal filings etc. Docs don’t like to do that. There’s a ton of regulatory red tape. It just isn’t a feel good thing. So often times it is outsourced. Typically, a set amount of time must elapse before the collection process begins (roughly 3 months), and then the bill is passed to the collection agency to start the “repayment” (synonym for harassment) processes.


That may have been slightly oversimplified, but you get the gist right?

What Our System Provides

So what do we do differently?

1) We specialize. Your doctors do that too. You don’t want your orthopedist who is great at hammering your bones managing your lasik surgery do you? Yeah, so we focus on what we know and we crush it. We know plastic surgery and dermatology. It’s our bread and butter.

2) We use your system. 75%+ medical billing companies use 1-3 systems. We use 50+ every day. Your data. In your system. Under your control. With full transparency.

3) We put our money where our mouth is. That means you don’t pay for our software. That means no long contracts – we earn your business every month. That means no term clauses. That means if we screw up your claim, we pay for it. That means we don’t write off to make your AR look pretty…not our money to make disappear and we’re not good magicians anyways.

4) We do other stuff too, but like…just call us? We’ll see if we’re a fit and a wise woman once said “you are not everyone’s doctor,” likewise we know we’re not everyone’s billing company!

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