medical billing

							9.7 Annexure 7 – Medical Billing

Source: AHSL-BPO Document

The physician doesn’t get paid for his services immediately after they are rendered.
Majority of the patients have insurance coverage and details of such coverage are
provided to the physician before treatment. It is the responsibility of the physician to
submit claims to the insurance company and get paid for his services. Submitting
Claims and getting paid is a lengthy process and involves a lot of rules and regulatory
systems and is very complicated. The physician needs to adhere to all these rules
before submitting claims. This is the concept of Medical Billing. Sometimes the
physician cannot provide his entire attention to this activity. He entrusts this activity to
Billing Companies. This is a process of the physician providing rights to Billing
Companies to bill Medical Insurance claims in order to save his time energy, and
money.

There are more than 500,000 healthcare professionals in the United States who need
to bill for their services. Most healthcare providers employ billing staff in their own
office or are part of a larger organization like a group practice or a hospital that
processes their claims and helps manage their finances. Some healthcare providers
choose to outsource their claim processing and accounts receivable management,
and qualified billing services have the opportunity to provide these services.

What is a billing center/ house?
Billing center is a centralized office that handles the provider/ hospital’s billing
activities. It could be a part of the hospital network or can be an outsourced
organisation. Billing houses relieve the burden of maintaining hospital bills and
accounts and assist in claims submission process. Billing houses can handle more
than one hospital/ provider at a time as they are independent organization.

How Billing Companies Charge For Services?
Two common methods used to charge for billing services are:
· Flat fee per claim basis
· Percentage of accounts receivables per month

The flat fee method was popular when this service business first came into being.
Companies would charge from $2.50-$4.50 per claim and 50% of that amount for
resubmissions. All other charges would be billed separately. Ex: patient bills, EMC
fees, and postage costs. This method is not widely used today.

The number one method used today is the percentage of accounts receivables in a
given month. This percentage can range from 5% to as high as 16%. It is our opinion
that 10% and up is on the high end. If you are contemplating going with a company




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charging this rate be sure that there are no additional charges and try to lock that rate
in for a few years. Many companies will include patient bills, clearing house fees, and
postage costs as part of your percentage. This is an area where you may be able to
negotiate. The one time set up fees range from $500.00-$2500.00 depending on the
level of work that is required up front. Prior to the first claim being generated your
practice needs to be set up on computer. This involves setting up your providers,
places of service, provider ID's, insurance carriers, ICD9/CPT codes, fee schedules,
patient base and productivity reporting. The billing service needs to contact carriers
advising them of the billing intermediary status on your behalf as well as testing and
getting you set up with the EMC carriers. Those companies charging the higher rates
may be setting up software for you and or training your staff along with some
consulting services.

What is the overall billing process?
After the provider renders services to the patient, the billing company will submit bills
to the insurance company/ payer, using the insurance information that was last
provided, as well as information about the reason for the examination, and the exact
type of procedure performed.




What does a billing center do with respect to claims process?
A billing center's full service approach includes:
        Claim entry,




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       primary and secondary electronic and computer generated hard copy claims,
       patient primary, co-insurance and deductible billing,
       the handling of all telephone and written inquires regarding claims and billing
       issues,
       payment application and deposits,
       and insurance and patient follow-up on unpaid claims.
It should be able to provide electronic billing for all insurance carriers, including
Medicare, Medicaid, Blue Cross/Blue Shield and NEIC companies and also a vast
array of medical practice analysis reports, to facilitate better management of your
medical practice operation.

The needs of all medical practices are not the same. The billing center should
customize its services to meet the unique needs of each client. Whenever possible,
however, procedures and forms already in place should be utilized. The billing center
should be able to adapt its protocols

Parties in Medical Billing
There are three parties in the Medical Billing Process. The PHYSICIAN, The
INSURANCE COMPANY and The PATIENT. The Physician in order to attain his
objective should comply with the rules and regulations outlined by various insurance
companies in submitting claims and at the same time should not penalize the patient.

Types of Payers
There are various insurance companies in US. They are broadly classified into two.
Federal Plans and Private Plans. Federal Plans include the following within its fold:
Medicare, Medicaid, Railroad Medicare, CHAMPUS (Tricare), and UMWA. Private
plans are insurance companies that act as the payer. Examples of private plans are
Blue Cross Blue Shield, Aetna, Cigna, United Health Care, Prudential Health Care
and others. Private payer plans are subdivided into traditional indemnity benefit plans,
self-insured plans and managed care plans.

Medical Billing Forms
HCFA 1500 – Most commonly used claim form for billing services that are rendered at
an office location. This form is used only to bill for Professional services. There are
33 fields in this form.
In this form we fill the charge details - CPT code the standardised code format for the
service rendered, Type of service, Place of service, modifier – is added along with the
CPT code which gives an additional value to the code, diagnosis code – the part of
the body where the service was rendered, units & billed amount.

UB 92 - This form is used for billing services rendered at a facility or a hospital; it is
used only for billing Technical services. There are 83 fields in this form.

Types of Payers




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There are various insurance companies in US. They are broadly classified into two.
Federal Plans and Private Plans. Federal Plans include the following within its fold:
Medicare, Medicaid, Railroad Medicare, CHAMPUS (Tricare), and UMWA. Private
plans are insurance companies that act as the payer. Examples of private plans are
Blue Cross Blue Shield, Aetna, Cigna, United Health Care, Prudential Health Care
and others. Private payer plans are subdivided into traditional indemnity benefit plans,
self-insured plans and managed care plans.




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