Medical Billing

Medical billing is the process of submitting claims and collecting fees from insurance companies or government entities for services rendered by a healthcare provider to a patient. Once the invoice is received from the provider, the insurance company reviews the claim and either approves or rejects it. If approved, reimbursement is sent to the provider; if rejected, a notice. For failed claims, the provider must make necessary corrections then resubmit their file.

Claim procedure begins by entering accurate diagnostic and procedural codes. The corresponding codes for medical procedures are listed in the Current Procedural Terminology prepared by the American Medical Association in 1966. Historically, this was done on a paper form. Paper claims, however, take considerable amount of time to process. With the advent of electronic technology, software manufacturers have reformed medical billing by creating software or health care systems that allows online claims submissions. Health care systems make medical billing process easier by omitting tedious paper works.

Medical billing may be prepared either by the physician, their staff, or a third party knowledgeable about medical billing procedures and laws. Some of the laws covering medical billing are the Fair Debt Collection Act and the more recent Health Insurance Portability and Accountability Act (HIPAA). HIPAA particularly governs online healthcare financial transactions and protects the privacy of electronic data transmissions.