What is medical billing?

Medical billing is an important element of the revenue cycle in healthcare. A healthcare facility’s ability to manage billing efficiently and accurately has a direct impact on how quickly and completely that organization will be reimbursed for the services it provides to patients.

Here we'll explore the basics of medical billing, review the steps included in most medical billing processes, and parse the differences between the related tasks of medical coding and medical billing.

What exactly is medical billing?

Medical billing involves submitting and tracking claims with payers to receive payment for medical services. It includes translating medical procedures and diagnoses into medical codes, preparing and submitting claims, and resolving any issues or denials to ensure timely reimbursement.

Medical billing is a core component of revenue cycle management (RCM), the process of effectively managing and optimizing the financial aspects of a healthcare organization. In healthcare, the revenue cycle starts when a patient schedules an appointment and ends when the provider receives payment. Shortening the time from service to payment is the goal of revenue cycle management, and an efficient and accurate medical billing process is a crucial element.

What does the medical billing process include?

Billing in healthcare is a multi-step process to ensure timely and accurate payment for services provided. While this process may differ depending on payers, payment models, and other factors, here are the common steps.

• Patient registration: Collecting patient demographic and insurance information
• Insurance verification: Confirming the patient's insurance coverage and eligibility
• Medical coding: Assigning appropriate medical codes to the services provided
• Charge entry: Recording the charges for the services provided
• Claim submission: Submitting claims to the payer for reimbursement
• Claim adjudication: The payer reviews the claim and determines the payment amount Payment posting: Recording the payment received from the payer or patient 
• Denial management: Handling any claim denials and resubmitting or appealing if necessary
• Patient billing: Generating and sending invoices to the patient for any remaining balance
• Follow-up and collections: Following up on unpaid claims and working to collect outstanding balances

Effective medical coding and billing is essential for optimizing revenue and maintaining the financial health of any healthcare organization, whether a small practice, a specialty practice like orthopedics or women’s health, or an integrated healthcare system with surgery centers, hospitals, and large practices.

Let’s take a closer look at the ins-and-outs of medical billing, along with key considerations for healthcare providers.

What’s the difference between medical coding and medical billing?

Medical billing and medical coding are two distinct but closely related processes in the healthcare revenue cycle. Medical coding involves the translation of medical diagnoses, procedures, and services into alphanumeric codes.¹ These codes are used for various purposes, including billing, reimbursement, and statistical analyses of matters like population health issues and general clinical research.

Medical billing is the process of submitting claims to insurance companies or other payers for reimbursement of healthcare services provided to patients. Medical billers use the codes assigned by medical coders to create claims and ensure that they are accurate and compliant with the payer's requirements. Alternatively, many healthcare organizations now utilize integrated healthcare technology platforms to generate codes automatically, based on clinical documentation, and incorporate them seamlessly into subsequent billing tasks. Some technology providers also offer services to take on some or all of the medical coding and billing process.

Solving the challenges of medical billing

Even though medical billing is a core process for healthcare centers, this work can be challenging to do accurately and efficiently. Arduous administrative work, ever-changing regulatory guidelines, accessing and managing the correct data, and other hurdles can slow the process and result in lower rates of reimbursement.

Thankfully, healthcare technology can help. To learn more about the common challenges behind medical billing and how innovative technologies like athenaOne are solving them, read our companion article, Solving the challenges of medical billing.

Read to see our platform in action? Reach out to an athenaOne medical billing expert to learn how an integrated healthcare platform can help you streamline the medical billing process, improve your claims accuracy, and help your practice stay focused on what matters most: delivering excellent care to patients.