Introduction to Medical Billing

Search Medical Billing and Coding Programs

Get information on Medical Billing and Coding programs by entering your zip code and request enrollment information.

Sponsored Search

Introduction to Medical Billing

Procedure and diagnosis codes are used to track the spread of diseases and the efficiency of a certain procedure.

However, mainly, in the US, they are used in the reimbursement process.

In other terms, codes are useful for accurate and efficient billing.

Why We Bill

When you go to a doctor, it may seem like one-to-one interaction.

Search Medical Billing and Coding Programs

Get information on Medical Billing and Coding programs by entering your zip code and request enrollment information.

Sponsored Listings

However, it is a part of a large and complex system of information and payment.

While a patient with insurance has only direct interaction with a healthcare provider, the check-up they came for is a part of a three-party system.

One party is the patient, another one is the healthcare provider, and the third one, in the insurance company or payer.

The ‘healthcare provider’ term includes physicians, hospitals, physical therapists, ERs, outpatient facilities, and other places where medical services are provided.

The job of a medical biller includes negotiating and arranging for payment between these parties.

They ensure that the services of the healthcare provider are compensated for by billing both the insurers and patients.

To accomplish this, the biller collects the information that can be found in ‘superbill’ about the patient and the procedure they received and makes a bill for the insurance company.

This is called a claim, which contains medical history, insurance coverage, demographic information of the patient, and the report on which procedures were performed and why.

medical billing

More About Insurance

Let’s look at the quick overview of the insurance process.

Health insurance is the coverage of medical expenses.

In simple terms, people who hold insurance a.k.a. the insured or subscribers pay a particular amount to have a level of protection against medical costs.

Health insurance can be of different forms, which include:

  • Indemnity (pay-for-service insurance) is where the patient can choose any provider they prefer.
    This insurance is usually more expensive but offers more flexibility to the insured person.
    However, with the rising prices for healthcare, it is losing its popularity.
  • Managed care organizations (MCO) include such organizations as Preferred Provider Organizations (PPOs) and Healthcare Maintenance Organizations (HMOs).
    There are fewer options for patients in choosing the provider, but their deductibles and premiums are usually lower and fixed.
    Basically, managed care insurance reduces the options for patients but also the costs of insurance.
    Currently, this is one of the most popular health insurance options in the US.
  • Consumer-driven health plans.

Every type of insurance covers some services and procedures and doesn’t cover the others.

Medical billers should interpret the insurance plan of a patient and create an accurate claim based on this information.

health insurance

More About Claims

The process of claim creation is where medical billing and coding overlap.

Medical billers use diagnosis and procedure codes listed by medical coders and create claims.

From procedure codes, whether they are CPT or HCPCS, payers find out which services the healthcare provider performed.

Codes used for diagnosis documented with ICD codes justify the medical necessity.

Simply speaking, procedure codes describe the patient’s visit, and the diagnosis codes, describe the reason for it.

Together with the performed procedures and their cost, the biller adds information about the patient and their visit.

So the claim contains information about a what, a who, a why, a when, and a how much.

The biller also ensures that the claim is compliant, e.i., checking that it is formally and factually correct.

The process is complicated, as the biller should know what is allowed by the claim so the payer could evaluate the procedure entirely and decide on the amount of compensation for the provider.

If the payer approves the claim, they send it back to the biller with the amount that the payer will pay.

The biller takes the balance (this is what this amount is called) and sends it over to the patient.

Day-to-Day Activities

Now, as you know more about the process in general, let’s explore the everyday activities of a medical biller.

Working with Patients

When patients receive services from healthcare provides, they usually get the bill at the end of the services too.

The biller creates it based on the balance the patient has (if they have any), adds the procedure or service cost to the balance, deducts the amount that the insurance covers, and factors in a patient’s deductible or copay.

Billers also handle patient’s medical records every day.

While coders use medical records to code the medical services, billers work with patient’s medical records and insurance plans to develop an accurate medical bill.

Working with Computers

Currently, some type of practice management software is used in almost every doctor’s office in the country.

It helps them keep track of patients, scheduled visits, store medical information, and run the practice more smoothly.

medical billers

Creating Claims

Most of the day medical billers spend creating and processing medical claims.

They have to know what type of claims insurers accept and adjust them accordingly.

They also often deal with insurance clearinghouses to simplify the claims processes.

Billers also have to ensure that all claims are compliant.

Ideally, each claim they send should be “clean”.

This is a claim that has no errors and will be processed rapidly by the payer, making sure that the healthcare provider will be compensated for their services promptly and efficiently.

Notification and Communication

A biller constantly communicates with providers, patients, insurance payers, and clearinghouses.

Since they are a waypoint for the reimbursement process, they often need to clarify information and follow-up with all parties of the process.

Billers also have to notify of and explain the bill patients.

They are responsible for issuing Explanations of Benefits (EOBs) to patients, which contains the list of procedures the payer covers and why.

Billers also have to follow up with patients concerning the payment of the balance of their medical bill.


If there are patients with unpaid bills, medical billers have to arrange for the collection of the debt.

This is not necessarily something they handle every day, but it’s something that can happen.

Leave a Comment

Search Medical Billing and Coding Programs

Get information on Medical Billing and Coding programs by entering your zip code and request enrollment information.

Sponsored Search