Medical billing and coding are the backbones of the healthcare revenue cycle, ensuring payers and patients reimburse providers for services delivered.
Medical billing and coding translate a patient encounter into the languages used for claims submission and reimbursement.
Billing and coding are separate processes, but both are crucial to receiving payment for healthcare services.
Medical coding involves extracting billable information from the medical record and clinical documentation, while medical billing uses those codes to create insurance claims and bills for patients. Making claims is where medical billing and coding intersect to form the backbone of the healthcare revenue cycle.
The process starts with patient registration and ends when the provider receives full payment for all services delivered to patients.
The medical billing and coding cycle can take anywhere from a few days to several months, depending on the complexity of services rendered, management of any claim denials, and how organizations collect a patient’s financial responsibility.
Ensuring provider organizations understand the fundamentals of medical billing and coding can help providers and other staff operate a smooth revenue cycle and recoup all of the reimbursement allowable to deliver quality care.
Medical billing and coding translate a patient encounter into the languages used for claims submission and reimbursement.
Billing and coding are separate processes, but both are crucial to receiving payment for healthcare services.
Medical coding involves extracting billable information from the medical record and clinical documentation, while medical billing uses those codes to create insurance claims and bills for patients. Making claims is where medical billing and coding intersect to form the backbone of the healthcare revenue cycle.
The process starts with patient registration and ends when the provider receives full payment for all services delivered to patients.
The medical billing and coding cycle can take anywhere from a few days to several months, depending on the complexity of services rendered, management of any claim denials, and how organizations collect a patient’s financial responsibility.
Ensuring provider organizations understand the fundamentals of medical billing and coding can help providers and other staff operate a smooth revenue cycle and recoup all of the reimbursement allowable to deliver quality care.
CPT AND HCPCS PROCEDURE CODES
Procedure codes complement diagnosis codes by indicating what providers did during an encounter. The two central procedure coding systems are the Current Procedural Terminology (CPT) codes and the Healthcare Common Procedure Coding System (HCPCS).
The American Medical Association (AMA) maintains the CPT coding system, which describes the services rendered to a patient during an encounter with private payers. They work with the ICD-10 codes to round out what happened and why.
The AMA publishes CPT coding guidelines each year to support medical coders with coding specific procedures and services.
Medical coders should be aware that CPT codes have modifiers that describe the services in greater specificity. CPT modifiers indicate if providers performed multiple procedures, why service was medically necessary, and where on the patient the system occurred.
Using CPT modifiers ensures that providers are to be reimbursed correctly for all services provided.
While private payers tend to use CPT codes, CMS and some third-party payers require providers to submit claims with HCPCS codes. The Health Information Portability and Accountability Act (HIPAA) requires HCPCS codes, which build on the CPT coding system.
Many HCPCS and CPT codes overlap, but HCPCS codes can describe non-physician services, such as ambulance rides, durable medical equipment use, and prescription drug use. CPT codes do not indicate the type of items used during an encounter.
The HSPCS also has its modifiers, although many of the modifiers are the same as those used by the CPT coding system.
PROFESSIONAL AND FACILITY CODES
Medical coders also translate the medical record into professional and facility codes, when applicable, explains the AAPC, formerly known as the American Academy of Professional Coders.
Professional codes capture physician and other clinical services delivered and connect the services with a code for billing. These codes stem from the documentation in a patient’s medical record.
On the other hand, hospitals use facilities codes to account for the cost and overhead of providing healthcare services. These codes capture the charges for using space, equipment, supplies, prescription drugs, and other technical components of care.
Hospitals can also include professional codes on claims when a provider employed by the hospital performs clinical services. But the facility cannot use a professional code if a provider is not under an employment contract and uses the hospital’s space and supplies.
A best practice for hospitals is to integrate professional and facility coding. The University of California (UC) San Diego Health recently implemented single-path coding, which brought experienced and facility coders into one platform.
“Regardless of what EHR you’re using, typically there’s a line of demarcation, firewall, or separation between ‘profile and facility,” explained Cassi Birnbaum, MS, RHIA, CPHQ, FAHIMA, the academic health system’s System-Wide Director of Revenue Integrity and Health Information Management.
“There are ways in our EHR to push codes from professional billing to facility billing through the charge router, but it’s not the easiest or the most straightforward process, and there are many potential points of failure.”
With professional and facility coders working in silos, Birnbaum saw duplicative efforts and decreased coding productivity.
She decided to integrate the departments using a standard coding platform. Since incorporating professional and facility coding, US San Diego Health has seen its clean claim rate increase and coding productivity skyrocket, with colonoscopy coding down from 12 minutes to less than five minutes.
WHAT IS MEDICAL BILLING?
While coders are busy translating medical records, the front-end billing process has already started.
FRONT-END MEDICAL BILLING
Medical billing begins when a patient registers at the office or hospital and schedules an appointment.
“From a revenue cycle perspective, getting the most accurate information up front starts with patient scheduling and patient registration,” explained Gary Marlow, Vice President of Finance for Beverly Hospital and Addison Gilbert Hospital. “That provides the groundwork by which bill claims are collected most efficiently and effectively possible.”
At check-in, billers and patient financial services staff ensure patients complete required forms, and they confirm patient information, including home address and current insurance coverage.
At check-in or check-out, billers or other staff should also collect copayments, when applicable. Provider organizations should collect copayments while a patient is in the office or hospital to ensure timely collection of patient financial responsibility.
Part of the front-end medical billing process also involves confirming patient financial responsibility. Medical billers and patient financial services staff verify that requested services are covered by a patient’s health plan and submit prior authorizations when necessary.
Once a patient checks out, medical coders obtain the medical records and turn the information into billable codes.
BACK-END MEDICAL BILLING
Together, medical coders and back-end medical billers use codes and patient information to create a “superbill,” AAPC explains.
The superbill is an itemized form that providers use to create claims. The condition typically includes:
- Provider information: rendering provider name, location, and signature, as well as the name and National Provider Identifier (NPI) of ordering, referring, and attending physicians
- Patient information: name, date of birth, insurance information, date of the first symptom, and other patient data
- Visit information: date of service(s), procedure codes, diagnosis codes, code modifiers, time, units, the number of items used, and authorization information
Provider notes and comments may also be included on the superbill to justify medically necessary care.
Pulling information from the superbill, either manually or electronically, allows medical billers to prepare claims.
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