If you or a loved one has recently been in the hospital, you may find yourself drowning in sky-high bills and struggling to wrap your head around confusing codes and pricing practices. Hospital billing can be confusing and overwhelming, but you don’t have to panic if you’ve received a medical bill you don’t understand. Below, you’ll learn about medical billing and how it works.
What is medical billing?
Medical billing is submitting and following up on claims with insurance companies to receive payment for services rendered by a healthcare provider. To bill insurance companies, healthcare providers must use a particular coding system called ICD.
ICD codes are used to describe diagnoses, procedures, and medications so that both medical professionals and insurance companies can understand. These codes are constantly updated, making billing insurance companies a challenge.
The medical billing industry
The medical billing industry consists of the patient, health provider, and insurance. The patient pays a premium to the insurance. The insurance then pays the health care provider whenever the patient is treated. The health provider can send the bill to the insurance or use a third-party billing service.
Some healthcare providers use third-party billing services
Medical billing is usually handled in-house, but the hospital can also use a third party medical billing service. These services can help providers get paid faster by submitting claims electronically and following up with insurance companies on behalf of the provider.
For example, Remedy Billing is one of the third-party billing services healthcare facilities use. If you’re curious about how this type of billing works, you can learn more at Remedy Billing’s new site.
The medical billing process
The medical billing process begins when the patient receives services from a healthcare provider. The provider will then generate a bill, which will be submitted to the patient’s insurance company.
The insurance company will review the bill and determine how much they are willing to pay. If there are any discrepancies, the insurance company may deny the claim or ask for more information. The provider will then follow up with the insurance company to ensure that the claim is processed correctly.
Once the insurance company has paid the claim, the provider will send a bill to the patient for any remaining balance. The billing can either be front-end, meaning the payment occurs before the service, or back-end, meaning payment happens after the service completes.
What do medical bills cover?
So you’ve visited different medical facilities, and you’ve noticed that the billing is different for the same services. How is this so? How do providers determine the bill? These are some of the things they consider when billing.
- The facility’s capacity–the number of beds a facility has will influence what they charge you
- The hospital’s reputation
- The supply and demand–how readily available are the services you need?
- The charge description master list (CDM)–the CDM is a list of standard prices for billable prices and thus could determine how large of a bill you receive.
The billing process can be overwhelming, but it is essential to understand the basics to get the most out of your medical care. By knowing what to expect and being proactive about billing, you can avoid any surprises.