hospital billing process

According to a Common Wealth Fund survey, 72 million Americans, making up 41% of the working-age population, are either experiencing medical billing issues or are facing a large sum of medical debt. {Quote the source in addition to the link}

One of the primary reasons why so many people around the country are facing medical billing problems is because the hospital billing process is highly complicated and confusing. Hospitals have to deal with over a thousand insurers, each having their individual requirements and plans. This leaves hospitals with the daily challenge of trying to provide the best healthcare possible to the public while still trying to make ends meet.

Understanding the fundamentals and complexities of the hospital billing process can help your organization ensure a smooth revenue cycle so that you can focus on what you do best: providing quality healthcare. Continue reading to learn more about the hospital billing process and how it works.

What is Hospital Billing?

Hospital billing is the process of generating healthcare claims to bill payers for the healthcare services rendered by medical providers and hospitals, including both outpatient and in-patient services. Integral to a hospital’s revenue cycle, the hospital billing process also includes billing payers for the medical facilities they provide, such as laboratory tests and the use of special medical equipment.

Once a medical billing claim is submitted, it is the medical biller’s job to follow the claim and ensure that the provider organization is reimbursed for the healthcare services rendered to the patient.

The hospital billing process plays a crucial role in boosting a hospital’s healthcare revenue cycle by ensuring that all necessary claims are billed. Unbilled claims lead to a loss of revenue and negatively affect a hospital’s bottom line because they keep hospitals from receiving the revenue they are otherwise entitled to.

hospital billing guidelines

Medical Billing Process Steps

As complex as it is, the hospital billing process can be divided into eight simple steps. The following are the 8 steps of the medical billing process:

  • Registration

The hospital billing process starts from the moment a patient schedules an appointment with you. This is known as the pre-registration phase. After scheduling an appointment, the patient must register with the provider organization they are visiting.

If the patient is visiting your facility for the first time, your administrative staff will be responsible for collecting the patient’s details, such as their address and insurance coverage. If the patient has been to your organization before, it is likely that you will already have all the necessary information that is required. Your staff will have to confirm the patient’s details on file, and the patient will only have to state the reason for their visit and staff to document it

  • Establish Financial Accountability

Once the medical biller has received the patient’s insurance information, they can ascertain which healthcare services are covered by the patient’s insurance plan and which are not. Insurance coverages differ from person to person, based on their plan and their insurance provider. This is why it is vital for the biller or VOB specialist to verify  each patient’s insurance coverage so that they may bill them accurately.

To ensure complete transparency and establish financial responsibility, if any services are not covered by the patient’s insurance provider, it is imperative that the patient is informed beforehand of any costs that they will have to incur.

  • Patient Check-in and Check-out

When a patient arrives at a healthcare facility, they are asked to fill out a few forms by the staff at the front desk to collect their personal and insurance information. They are also asked to provide some form of identification, such as their insurance cards and driver’s license. This is known as the check-in process.

Following the patient’s encounter with a healthcare provider, they check out of the facility, and their medical report from that visit is sent to a medical coder. This medical coder is responsible for analysing and reviewing the clinical documentation to translate the services provided to that patient into a diagnosis and billable procedure code. A superbill containing all the relevant and important details about the healthcare service provided is then generated and sent to the medical biller.

Typically, co-payments are also collected at this point of the hospital billing process. Copays are almost always billed at the time of service. However, the patient may pay the copay prior to or right after their visit.

medical billing process steps
  • Prepare Claims

After the patient checks out, the next step of the medical billing process is to prepare a medical claim in order to receive reimbursement for the services provided. The medical biller must take the superbill and use it to create a claim that comprises the patient and provider’s details, the details of the services offered, and the cost that the payer is expected to pay.

After creating a claim, the medical biller must ensure that it meets all basic requirements and standards of billing compliance as laid out by the hospital billing guidelines of the Health Insurance Portability and Accountability Act (HIPAA).

  • Claims Submission

After making sure that the claims created meet the necessary compliance standards, medical billers can submit their claims to the payer or a third-party organization called a clearinghouse. A clearinghouse takes away a considerable burden from the shoulders of medical billers by taking the relevant information needed to file a claim and reformatting them according to the requirements of the insurance payers.

  • Adjudication

During adjudication, the claim submitted is evaluated and reviewed by the insurance payer to determine whether it is compliant or not. Depending upon the claim submitted, it may then be accepted, rejected, or denied. The payer pays for an accepted claim, while a rejected claim is one that contains some sort of error and must be corrected and then resubmitted for reimbursement. On the other hand, a denied claim is a claim that has been refused to pay by the insurance payer.

If a claim is accepted, the payer will also determine how much of the cost stated on the claim will be reimbursed by them. Once this is done, the medical biller will receive a report detailing how much of the claim they will cover. It may also contain any possible explanation as to why a certain claim was denied.

  • Generate Patient Statements

The next step of the hospital billing process is to generate a statement for the patient detailing which services have been covered by their insurance provider and the portion of the cost that the patient is now required to pay.

In addition to a patient statement, the medical biller may also send an Explanation of Benefits (EOB) to the patient. An EOB is a written document that explains what services an insurance company has paid for and what services they do not cover under the patient’s coverage plan.

  • Collections

After sending the patient statement, the medical biller must make sure that the patient pays for the services that their insurance company did not. If a patient does not pay the remaining amount within the deadline, the case may be sent to a collection agency.

See Also: What Is A Patient Care Technician Or PCT?

The Bottom Line

The hospital billing process is an integral part of the healthcare revenue cycle. Outsourcing this critical responsibility to a professional third-party medical billing company helps you optimize your revenue cycle management and ensures that smooth processes bring in operational efficiencies and a smooth cash flow management.

With structured workflows and tech-enabled solutions, at Precision Hub, we join hands with your clinic to stamp out any billing interruptions and ensure a smooth and uninterrupted hospital billing process. Our team of dedicated medical billers work round the clock to keep a steady flow of claims going out and revenue coming in so that you can focus on what matters the most: providing patient care.

Recommended Posts