Understanding the Mechanics of Medical
Claims Billing

Medical claims billing is a multi-step process that begins when a patient receives treatment. The healthcare provider records the services provided using specific medical codes. These codes, known as ICD (International Classification of Diseases) for diagnoses and CPT (Current Procedural Terminology) for procedures, are then used to create a claim, which is submitted to the patient's insurance company for payment.

This process involves several key steps:

• Patient registration: This is the initial step where the patient's insurance and demographic information are gathered. This information is critical as it forms the basis of the claim.
• Insurance verification: This step involves confirming the patient's insurance coverage. It ensures that the services provided are covered under the patient's insurance plan.
• Coding of diagnoses and procedures: This is a critical step where the healthcare services provided are translated into universal medical codes. These codes are used by insurance companies to determine the amount of reimbursement.
• Charge entry: In this step, the charges for the services provided are entered into the billing system. These charges are based on the coded diagnoses and procedures.
• Claims submission: This involves submitting the claim to the insurance company. The claim contains all the necessary information for the insurance company to process and make payment.
• Payment posting: This step involves recording payments received from the insurance company. It also includes reconciling any discrepancies between the amount claimed and the amount paid.
• Follow-up and appeals: This is the final step where denied or rejected claims are addressed. The medical biller reviews the reasons for denial or rejection, corrects any errors, and resubmits the claim.

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