Medical coding is the process of extracting billable information from the medical record and clinical documentation, whereas medical billing is the process of using those codes to create insurance claims and bills for patients. Creating claims is the point at which medical billing and coding come together to form the backbone of the healthcare revenue cycle.
The procedure begins with patient registration and concludes when the provider receives full payment for all services provided to patients.
Depending on the complexity of services rendered, claim denial management, and how organizations collect a patient’s financial responsibility, the medical billing and coding cycle can take anywhere from a few days to several months.
What is Medical Coding?
The process of medical coding services begins with a patient encounter in a doctor’s office, hospital, or another healthcare facility. When a patient encounter occurs, providers document the visit or service in the patient’s medical record and explain why specific services, items, or procedures were provided.
According to AHIMA, accurate and complete clinical documentation during the patient encounter is critical for medical billing and coding.
When a claimed conflict arises, providers use clinical documentation to justify reimbursements to payers.
Once a patient has left a healthcare facility, a professional medical coder reviews and analyses, clinical documentation to match services to billing codes associated with a diagnosis, procedure, charge, and professional and/or facility code.
During this process, coders use the following code sets
DIAGNOSIS CODES IN ICD-10 Diagnosis codes are essential for describing a patient’s condition or injury, as well as social determinants of health and other patient characteristics. The International Statistical Classification of Diseases and Related Health Problems, Tenth Revision (ICD-10) is used by the industry to capture diagnosis codes for billing purposes.
The ICD-10-CM code set alone contains over 70,000 unique identifiers. The World Health Organization (WHO) maintains the ICD coding system, which is used in various formats around the world.
Procedure Codes in CPT and HCPCS
Procedure codes are used to supplement diagnosis codes by describing what providers did during an encounter. The procedure coding system is comprised of Current Procedural Terminology (CPT) codes and the Healthcare Common Procedure Coding System (HCPCS).
The CPT coding system, which describes the services provided to a patient during an encounter for private payers, is maintained by the American Medical Association (AMA). Each year, the AMA publishes CPT coding guidelines to assist medical coders with coding-specific procedures and services.
CPT codes include modifiers that further describe the services. The use of CPT modifiers assists providers in receiving accurate reimbursement for all services.
While most private payers use CPT codes, CMS and some third-party payers require providers to submit claims using HCPCS codes. In certain circumstances, the Health Insurance Portability and Accountability Act (HIPAA) requires organizations to use HCPCS codes. CPT codes only indicate the procedure, not the items used by the provider.
Modifiers to HSPCS codes help further specify services.
Codes for Charge Capture
Coders assign charge master codes to physician order entries, patient care services, and other clinical items. A chargemaster is a collection of standard prices for services and products provided by a provider organization.
Procedure descriptions, time reference codes, departments involved in the medical service, and billable items and supplies are all examples of charge capture codes.
The CMS Hospital Price Transparency rule requires hospitals to publish their charge masters and display the prices of 300 shoppable services on their websites.
Revenue cycle management leaders use these prices to negotiate claims reimbursement rates with payers in a process known as charge capture. Coders submit the codes and associated charges to payers, and providers bill patients for the balance.
Codes for Professionals and Facilities
Medical coders also translate medical records into professional and facility codes when applicable.
Professional codes identify physicians and other clinical services provided and link them to a billing code.
Hospitals, on the other hand, use facility codes to account for the costs and overhead associated with providing healthcare services. Charges for medical equipment, supplies, medication, nursing staff, and other technical care components are captured by these codes.
When a hospital-employed provider performs clinical services, hospitals can include professional codes on claims. If a non-hospital provider uses the hospital’s space and supplies, however, the facility cannot include a professional code.
Integrating professional and facility coding into a single platform may make the process easier for hospitals.
What Is Medical Billing?
Medical billing refers to the process by which healthcare organizations submit claims to payers and bill patients for their financial obligations. The front-end billing process has already begun while coders are busy translating medical records.
Medical Billing at the Outset
When a patient registers at the office or hospital and makes an appointment, medical billing begins.
Administrative staff members ensure that patients complete required forms and confirm patient information, such as home address and insurance coverage, during pre-registration. Staff should confirm the patient financial responsibility after confirming that the patient’s health plan will cover the requested services and submitting any prior authorizations.
Staff informs patients of any costs they are responsible for during the front-end medical billing process. Ideally, the office should be able to collect any copayments from the patient during the appointment.
Medical Billing at the End
According to the AAPC, medical coders and back-end medical billers collaborate to create a “superbill” by combining codes and patient information.
Typically, the form includes:
- Provider information includes the name, location, and signature of the rendering provider, as well as the name and National Provider Identifier (NPI) of the ordering, referring, and attending physicians.
- Name, date of birth, insurance information, date of the first symptom, and other patient information
How Covid-19 Impacted Medical Billing and Coding
The COVID-19 pandemic resulted in a number of changes to medical billing and coding procedures.
In the medical and dental industries, for example, electronic claims management adoption increased by 2.3 percentage points in 2020.
During the pandemic, CMS also made significant changes to the Medicare Physician Fee Schedule, which impacted medical billers and coders.
Medical billing and coding are critical components of the healthcare revenue cycle.