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Why Understanding the Medical Billing Process Is Important for Business Administrators in Healthcare

The Southeastern Oklahoma State University (Southeastern) Master of Business Administration (MBA) with a Concentration in Healthcare Information Systems online program presents several business concepts integral to the successful operation of various healthcare organizations. One of the most important is the medical billing and coding processes, which translate patient visits into languages healthcare facilities can use for claims submission and reimbursement.

The Electronic Health Records course in Southeastern’s program prepares students to become successful users of medical practice management software so that they can perform management duties in any medical office. Healthcare professionals — especially administrators — must understand the entirety of the process and why it is so important in today’s digital environment.

What Is Medical Coding?

The medical coding process commences with a patient’s visit to any healthcare setting. During the patient encounter, healthcare providers document the details of the visit or service in the patient’s medical record and elucidate the reasons for administering particular services, items or procedures. As a article notes, there are several code sets, including ICD-10 diagnosis codes, CPT and HCPS procedure codes, charge capture codes and professional and facility codes.

When a conflict with a claim arises, healthcare providers rely on clinical documentation to support their reimbursements from payers. Inadequate documentation of service can result in claim denial and even a write-off for the healthcare organization. If providers attempt to bill payers or patients for services that are incorrectly documented or absent from the patient’s medical record, they could face a healthcare fraud or liability investigation.

After a patient departs from the healthcare facility, a skilled medical coder scrutinizes the clinical documentation to link the services provided with corresponding billing codes associated with a diagnosis, procedure or charge in addition to the professional or facility code.

What Is Medical Billing?

Medical billing involves submitting claims to payers and billing patients for their financial responsibility, and this process begins even before medical coders start translating medical records. When a patient arrives for a visit, administrators provide forms to confirm their information, including their address and insurance coverage. After verifying insurance coverage for services and obtaining prior authorizations, they confirm the patient’s financial responsibility.

In the front-end medical billing process, administrators inform patients about any costs for which they are responsible. Once the patient checks out, medical coders retrieve the medical records and begin translating the information into billable codes. Together, medical coders and back-end medical billers utilize these codes and patient information to create a “superbill,” or an itemized form to create claims that include provider information, patient information, visit details and justifications for the care provided.

Medical Billing Issues Are a Serious Systemic Problem

One of the biggest challenges in medical billing today is the sheer volume of codes and regulations that must be adhered to. These codes are constantly updated, and their application can vary by payer. Billing errors often occur due to incomplete or inaccurate patient information, lack of clarity in clinical documentation and issues with prior authorization, according to Insurance claim denials and delays in payment can also result from disputes over medical necessity, coverage limits and contract negotiations between providers and payers. As a result, medical billing errors can lead to frustration, financial losses and administrative burdens for patients and providers.

Steps for Establishing Consistent Billing Process Workflows

It takes a consistent approach to the workflow to minimize medical billing issues and avoid the hassles for both patients and providers that come with it. Graduates of this program are prepared to implement or streamline the following step-by-step process (as noted in the article):

Pre-visit: Administrators verify patient information, check insurance eligibility, obtain prior authorization and collect copays and deductibles.

Patient visit: Providers document the patient’s medical history, conduct a physical exam, order any necessary tests and perform procedures.

Documentation and coding: Medical coders translate the medical records into codes that correspond to specific diagnoses, procedures and services.

Claim submission: Administrators submit claims to payers using the coded medical records and any required supporting documentation.

Payer review: Payers review the claims for accuracy and completeness and determine whether the services provided are covered under the patient’s insurance plan.

Payment processing: Following approval, the payer issues payment to the provider, either directly or through a third-party billing service.

Patient billing: If the patient has any financial responsibility — such as copays, coinsurance or deductibles — the provider bills the patient for these charges.

Denials and appeals: If a claim is denied or underpaid, the provider may file an appeal or resubmit the claim with additional documentation to support the services provided.

The Role of the Explanations of Benefits (EOB) Document in Billing

This document outlines the services provided by the healthcare provider, the amount charged, the amount paid by the insurance company and the amount owed by the patient. It serves as a communication tool between the healthcare provider, the insurance company and the patient, ensuring transparency and accountability in the billing process. It allows patients to verify that they received the billed services and helps them understand their financial responsibility, while also helping providers identify and address any billing discrepancies or issues.

The medical profession has made great strides in ensuring accuracy, transparency and accountability in the billing process. In order for the industry to continue improving the system, the most trusted institutions of higher education in the U.S. are playing a key role in training professionals to deliver on these vital objectives, for the benefit of patients and providers alike.

Learn more about the Southeastern Oklahoma State University online Master of Business Administration with a Concentration in Healthcare Information Systems program.

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