Mastering the Basics of Medical Billing & Coding - What it takes to be 100% Accurate and Efficient

Translating a patient health platform into the reference billing language is an important step in medical billing processing. While these are separate strategies, they are interdependent, and together ensure that healthcare providers receive compensation for their services.

Medical coding involves pulling important information from medical records and documents that can be billed for. Then, medical billing uses the medical coding to make insurance claims and bills for patients. The intersection of these two functions forms the cornerstone of the healthcare revenue cycle.

It is really important to teach healthcare organizations the basics of medical billing and coding. Such clarity allows providers and staff to move through the revenue cycle with ease, ensuring higher payments for the quality of care provided.

Important Terminologies in Medical Billing and Coding:

Medical billing and processing is an important component of healthcare. This ensures that healthcare providers are compensated for their services and insurance companies are billed accordingly. Understanding the basic steps of medical billing and codification is important for professionals. Below is a list of important terms and its definitions:

• DRG (diagnosis related group): DRG recognizes and groups patients with similar symptoms, such as pneumonia, based on their diagnosis and the level of care they generally require. This program helps Medicare and Medicaid determine appropriate payments for each hospital stay.
• Modifiers: These are additional codes superimposed on the primary policy code (such as CPT or HCPCS) to provide specific information about the service. For example, the researcher may indicate where the surgery was performed (such as on the ankle or finger) or in special circumstances, such as an emergency
• E/M codes: These codes define physician visits and services considering the severity of the case and the time spent with the patient. A simple office visit plus a brief exam would be a separate E/M code than a long discussion coupled with lots of research and experiments.
• NPI (National Provider Identification): This is a unique Social Security number for health care providers. This is a 10-digit code assigned to providers to bill and track their role within the health system.
• Superbill: This is primarily an invoice from a healthcare provider. It details the services provided to patients. Including patient information, diagnosis code for the condition being treated, service procedure code, medications used during the visit and other information related to it.
• Cost Sharing: This is the umbrella term for the portion of the healthcare bill that an insurance company, the patient, is responsible for. It can come in two forms: a fixed copayment or a co-insurance. 
• Deductible: A deductible is a specified amount of money that a patient must pay out of pocket before their health insurance plan begins to pay for covered medical expenses. It is a common component of many insurance policies, including health, auto, and home insurance. 
• Prior Authorization: Prior authorization, also known as prior certification, is a requirement of many health insurance companies, and mandates that the insurer must approve medical services, certain procedures , or on prescription drugs before manufacture or administration
• Payer: In an insurance or public health plan A payer is an entity responsible for medical care. The term "payer" includes a number of entities. Each department has specific duties and responsibilities:some text
  • Private Insurance Companies: Private insurance companies are for-profit businesses that provide health insurance to employers and individuals. They offer plans with networks, deductibles, premiums, and different levels of coverage.
  • Medicare: Medicare is the federal health insurance program in the United States that covers people with end-stage kidney failure. Some young disabled people and those aged 65 years and over.
  • Medicaid: A federal program that provides health insurance to low-income individuals and families. The eligibility criteria vary from state to state.
• Self-insured employers: Employers who take on the financial risk of offering health insurance to their staff are known as self-insured employers. Third-party professionals (TPAs) are frequently hired by these employers to perform claims administration and other business-related services.
• Other Government Initiatives: This includes initiatives that provide specialized protection. Including the Children's Health Insurance Program (CHIP) and the Veterans Health Administration (VHA).
• Medical Necessity: For a medical procedure or service to be considered necessary for insurance purposes. The need must be necessary for the diagnosis or treatment of a medical condition.
• Out-of-network: Services or providers that are not included in the insurance plan's preferred network are called out-of-network. and often causes patients to have higher costs.
• In-network: In-network refers to a service or provider that is part of an insurance plan's preferred network. This generally results in lower patient costs.

Important Codes in Medical Billing and Coding

Before delving into the intricacies of medical billing and coding, it is important to grasp the fundamental terminologies used in this domain. Here are some common terms:

• CPT Codes (Current Procedural Terminology): These are standard codes that denote specific treatments, diagnoses, and procedures. CPT codes refer services to healthcare providers for which insurance companies offer reimbursement.

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Example of CPT Code:

Let us examine an average primary care appointment for a standard check-up:

99213 code: An "established patient office or other outpatient visit" is defined by this code as an appointment where a doctor or other licensed healthcare provider provides a moderate degree of care. It consists of components including medical decision-making, examination, and patient history.

The CPT code 99213 may be used to describe an office visit in which a patient with a chronic ailment, such as diabetes, sees their physician for a follow-up and the physician spends time discussing the patient's medical history, performing an examination, and formulating a treatment plan.

• The International Classification of Diseases (ICD) codes: ICD codes provide a consistent method for classifying and coding different medical illnesses, which is useful for diagnosis. They assist healthcare providers in accurately documenting patient diagnoses for insurance claims and statistical purposes.

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Example of ICD Code:

Here’s an example using ICD-10 to illustrate how these codes are structured and used in medical contexts:

Code J45.909: This code represents "Unspecified asthma, uncomplicated."

If a patient presents with symptoms consistent with asthma but without complications or specific details about severity or type, this ICD-10 code would be used. This code includes a generalized diagnosis of asthma with no further specification, which helps with standardized documentation, billing, and follow-up.

• HCPCS (Healthcare Common Procedure Coding System) is a standardized coding system in medical billing used to represent medical services, procedures, supplies, and equipment. It ensures clarity among healthcare providers, insurers, and other stakeholders regarding services provided.

HCPCS has two levels:

• The first category is the five-digit numeric code of the Current Procedural Terminology (CPT) system, used to define physician roles and procedures
• The second category contains alphanumeric codes representing services, products, and equipment that do not include CPT codes. These rules are used to pay for non-physician services, such as ambulance transport or medical devices.

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Example of HCPCS Code:

To illustrate the application of this code to healthcare billing and documentation, here is an example using a Level 2 HCPCS code:

Code E0601: This code stands for "Continuous Positive Airway Pressure (CPAP) device,” which is a device used to treat sleep apnea.

When a patient is diagnosed with sleep apnea and prescribed a CPAP machine, healthcare providers will bill Medicare or Medicaid for these durable medical devices (DMEs) using HCPCS code E0601.

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• Explanation of Benefits (EOB): After a collection procedure, insurance companies are required to provide policyholders with an EOB, which is an explanation of benefits. It functions as a thorough synopsis of all medical transactions, including the precise services that were invoiced to the insurance provider, the amount that the provider paid, and any outstanding balances that the patient must settle.

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The EOB usually contains a variety of crucial data, including:

• Service Information: A summary of the medical treatments or procedures that were invoiced to the insurance company, frequently including short summaries and related codes.
• Billed Amount: The entire amount that the healthcare practitioner bills for each service.
• Allowable amount: For each service, the insurer agrees to pay a maximum amount, usually determined by the terms of the policy and any amount negotiated with the healthcare provider
• Payments and adjustments: Details of what the insurer paid, as well as any adjustments such as discounts or contractual allowances, which reduce the amount of coverage.
• Patient Responsibility: The portion of coverage that the patient is responsible for, which may include deductibles, copayments, or coinsurance, and any amounts of insurance payments.
• Reasons for rejection or modification: When appropriate, the EOB provides explanations as to why items were rejected or modified, often using specific rules or explanations.

• E/M Codes (Diagnosis and Management): These codes are used to book patient visits and determine billing rates. Factors such as visit intensity, time spent with the patient, and the number of medical decisions involved are considered.

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Example of E/M Code:

To understand how E/M codes are applied, let’s consider a typical office visit and a general practitioner visit:

Code 99213: Stands for "an office or other outpatient visit for the isolation and care of a patient," involving a moderate level medical decision.

In this scenario, when a patient visits his or her primary care physician with ongoing issues such as diabetes and high blood pressure, the physician can review the patient’s medical history, perform a physical examination, and base a diagnosis on making informed medical decisions.

Understanding these key terms is key for individuals involved in medical billing and coding. It lays the foundation for accurate and efficient coding, ensuring fair reimbursement and effective communication between healthcare providers and insurance companies

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Key Competencies in Healthcare Revenue Cycle Management

Medical billing and regulatory professionals are integral to the healthcare sector, facilitating a significant process to ensure accurate and prompt reimbursement for treatment provided. To succeed in this field, individuals must possess a set of essential skills. In addition to analytical skills, attention to detail, and knowledge of medical terminology, there are many other key skills required for success in medical billing and coding

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Organizational Skills

Medical billing and coding professionals process a large amount of patient data, medical records, and insurance claims on a daily basis. It is important to keep everything in control. This means keeping accurate records, filing documents properly, and ensuring that all information is readily available when needed.

Additionally, time management and prioritizing work are important skills in this area. Since medical billers and coders often handle lots of cases at once, each with its own deadlines and needs, knowing how to prioritize and manage time well is key. It ensures seamless functioning of daily operations.

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Digital Competence

Technology is an important factor in medical billing and coding. Professionals must be technologically savvy to analyze software programs for patient data generation, coding, and billing and electronic health records (EHRs). This efficiency translates into easier revenue cycle management for healthcare providers. Additionally, knowledge of spreadsheets and databases allows them to analyze data, spot trends, and create reports, all of which are critical to improving a healthcare provider’s revenue cycle.

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Effective Communication

Clear and effective communication is the cornerstone of success in medical billing and coding. Medical billing and coding professionals must provide information to healthcare providers, insurance companies and patients in a consistent and professional manner. This includes defining coding requirements, correcting document discrepancies and resolving billing or payment issues quickly and courteously.

Moreover, collaboration is integral to the role of medical billers and coders. They often work together with other health providers to ensure consistency in their coding and billing practices. Only strong communication can facilitate the smooth teamwork among the healthcare providers, which ensures that everyone is on the same page and working toward a common goal.

Technically, success in medical billing and coding will be determined by the proper mix of technical information, careful attention to detail, and adapting interpersonal skills.

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Demystifying the maze: A look into medical billing and coding

The healthcare industry may seem like a complex web of procedures and specializations, but one key behind-the-scenes process that ensures everything runs smoothly: medical bills. This intricacy between accuracy, reimbursement, and efficiency keeps the system afloat. To understand how this all works, let’s unravel the steps involved in medical billing and coding.

• Step 1: Building the Foundation - Patient Registration: Medical coders begin by examining the patient’s medical records, including physician notes, diagnostic test results, surgical reports, and other pertinent documents. Medical billers then collect patient information and verify insurance coverage. This step involves obtaining insurance details, identifying co-pays, and checking for coverage limitations.

• Step 2:  Cracking the Code - Charge Entry: Coders code medical research using the International Classification of Diseases (ICD) and medical services facilities using the Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT). After coding is complete, medical billers create claims based on the assigned codes. These claims contain patient information, insurance details, and codes for diagnoses and procedures, along with their associated charges.
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• Step 3: Verifying Insurance - Ensuring Coverage: The biller sends the insurance company the claim so it may be processed. Depending on the method being used, either electronically or manually can do this. The insurance provider examines the claim to ascertain eligibility for payment and coverage. Verifying policy coverage and adhering to rules and regulations are part of this process.
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• Step 4: Double-Checking for Accuracy - Claim Review: Medical billers then meticulously review the claims for any errors or missing information. They also ensure all necessary documentation, like medical records, are attached. This minimizes claim rejections and delays in reimbursement, keeping the financial flow smooth.

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Conclusion 
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Medical billing and coding professionals require a unique combination of accuracy, skill and dedication to ensure accuracy and efficiency. Professionals must be familiar with medical terminology, anatomy, and coding conventions. They also need to be dedicated to being up to date on industry rules and technological developments related to healthcare payment. However, reducing errors and optimizing payment depends on efficient communication between insurance companies, patients, and healthcare providers.

Medical billing and coding professionals can effectively manage the complexities of healthcare coverage by embracing these principles and continuing to refine their craft. This will ensure that patients receive the care they need and that healthcare providers are compensated fairly and promptly for their services.

If you are interested in learning the basics of medical billing and coding, feel free to write to us at partnerships@homrcm.com.

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