What is Medical Billing

Medical Billing is a method of securing payment for services rendered by a doctor and occurs without the patient's knowledge or involvement between doctor visits and insurance payments.

The procedures for processing medical billing requests and payments are based on a patient's diagnosis and treatment, the codes that correlate to those diagnoses and treatments, and of course new HIPAA laws.

A patient's diagnosis and treatment is a doctor's assessment of a his or her health problem and the solution for it. Found in a patient's medical record, these diagnoses and treatments are used to determine who should be billed, what should be billed, why it should be billed, and how much should be billed. Medical billing works with the diagnosis of the patient, the treatment issued to the patient, and contains the time that the doctor spent with the patient. In this regard, the time that a doctor spent with a patient acts as a doctor's time sheet. Treatment of course, includes the medications, prescriptions, physical therapy, or whatever else administered and thought to improve the health of a patient.

Medical billing registers a patient's diagnosis and treatment as codes - and these codes represent a patient's diagnosis and treatment procedure. People who register patient diagnosis and treatment as codes are called coders, and they take information from a patient's record and prepare that information for billing. Coding this information makes the process of medical billing easier to perform on paper or on a computer terminal. Through codes, medical billing assigns patients to diagnostic related groups and then sends these groups (as codes) to a medical insurance company for payment processing.

As more and more people (coders) get into the medical billing field however, regulations continue to introduce new methods to enforce accuracy in reporting claims. One error may cost a medical instituation hundreds of thousands of dollars to investigate and correct, or worse, document a wrong diagnosis as correct - and unfortunatly initiate a fatal medical procedure. To prevent these types of events, medical billing employees go through extensive training before attempting to process a claim. Other regulations are enforced by recent HIPAA laws.

Due to public privacy concerns, the Health Insurance Portability and Accountability Act (HIPAA) requires that those who work in medical billing, inform patients as to how their personal and medical information will be used and shared. According to the HIPAA, health insurers must also fully train employees working in medical billing, show patients their medical records and correct errors when requested, and explain their privacy procedures to patients even though these explainations may not be very detailed. These are just a few of the ways that the HIPAA influences the way that medical billing operates.

In addition to influencing the way medical billing works, the Health Insurance Portability and Accountability Act also influences the way medical billing software is developed and is changed over the years as new regulations are enforced. Some coders process claims from home as freelancers or telecommuters and thus, must use medical billing software that updates its functions in order to work within HIPAA regulations.