Subtotal $0.00
From ensuring financial stability and transparency to acting as a link between providers, insurers, and patients, medical billing forms the cornerstone for quality care in the healthcare industry.
Yet, as Becker’s medical review found, approximately 80% of US medical bills contain inaccuracies. This not only disrupts cash flow but also undermines patient trust and satisfaction.
Thus, to help you understand the crucial aspects of medical billing and make well-informed decisions, we have brought up this piece of writing that delves deeply into the role, process, and impact of medical billing practices in the reimbursement cycle.
Let’s begin.
Most of us are familiar with the 5W1H concept, introduced by Rudyard Kipling, to extract the most accurate and relevant answer to any existing question. Drawing inspiration from this timeless formula, we have examined the fundamentals of medical billing through the lens of 4 ‘W’ and 1 ‘H’.
Understanding the core principles of medical billing not only helps healthcare entities eliminate errors, simplify workflows, and improve cash flow but also motivates them to embrace technology and patient-centric billing approaches.
For instance, studying what medical billing is can help practitioners maintain accuracy in documentation and evaluate the administrative workload. Similarly, getting a gist of when medical billing encounters challenges enables them to implement checks and measures that improve financial health and efficiency.
Additionally, obtaining a comprehensive view of what factors contributed to the medical billing evolution entrusts institutions to stay abreast of the market demands, healthcare regulations, and medical advancements.
So, let’s start with the very first one.
In the US healthcare system, medical billing refers to the procedure of obtaining payments from the insurance companies for the care provided.
That means once the patient receives treatment, the provider submits a claim to the insurance company. This claim includes information on the type of diagnosis, therapy plans, and medication administered. The insurance company then reviews the claim based on the coverage and reimburses the amount directly to the provider or the patient.
Though this definition of medical billing sounds straightforward, the implementation becomes quite intricate due to the involvement of various steps, components, and stakeholders, each adding its own layer of intricacy. Such as:
We will chart a way forward by stating the most viable solutions. But first, let’s analyse its root cause.
To identify and mitigate the complexities involved, it is essential to know about the root cause of the challenges. Precisely pinpointing the key triggers can help anticipate and eliminate obstacles.
Below are some of the most common areas prone to experiencing issues.
According to WorldMetrics, coding errors can lead to an average loss of $1,200 per claim. The primary reasons include:
In a survey by Experian Health, nearly 3 out of 4 providers said that the number of denied claims increased between 2022 and 2024. The central reasons are:
Transitioning to VBC models brings both opportunities and challenges for Cardiology practices, particularly in the area of revenue cycle management. Practices need to adapt their billing processes to account for bundled payments, quality-based reimbursements, and the complexities of managing risk-sharing agreements. This requires sophisticated RCM systems that can handle performance-based payments, track quality metrics, and ensure compliance with the latest regulations.
Some key RCM adjustments for cardiology practices include:
Unlike claim denials, claim rejections happen even before the claim enters the processing ecosystem. It occurs at the clearinghouse. While a rejected claim can be resubmitted after rectifying the issue, a denied claim cannot be paid. As per an editorial published in Healthcare Finance, providers are seeing a rise in claim rejections as high as 10 to 15%. The leading reasons include:
As per one of the recent posts in the HIPAA Journal, in 2021, 37.5 million records were exposed in 64,180 data breaches. The main causes behind these complications include:
However, in the past few years, medical billing has evolved to be more digital, drastically shifting from traditional paper-based methods. Several factors have channeled these transitions; we have discussed the most significant ones in the subsequent section.
From the appearance of Electronic Health Records (EHRs) and computer-assisted coding (CAC) to the advancement of machine learning and GenAI, medical billing systems have transformed to be more transparent, accurate, efficient, and secure.
Here’s what compelled this evolution.
With the wide acceptance that patients should be active participants in their own healthcare rather than passive recipients of the provider’s treatment, healthcare entities have adopted a more patient-centric and value-based approach. Moreover, with the recent World Health Day 2024 theme, My Health My Right, there is a prominent recognition of a further evolution from ‘patient-centric’ to ‘human-centric’ care. This metamorphosis has opened doors to:
Feedback mechanism, automated payment options, upfront cost estimates, and so on.
The rules and regulations of the healthcare industry constantly evolve to address new challenges, embrace technological advancements, and respond effectively to dynamic patient-care standards. This necessitates the medical billing ecosystem to be robust, flexible, and capable of integrating the modifications, which in turn led to:
The healthcare industry holds plenty of sensitive information in the form of patient records. Some high-profile data breaches highlighted their vulnerabilities to misuse and unauthorized access. For instance, in 2011, Tricare Data Breach exposed the personal health data of 4.9 million patients. This underscored the pressing need to maintain the confidentiality and integrity of medical billing practices, which led to:
Before AI, medical billing practices were labor-intensive and susceptible to human errors and inefficiency. The emergence of AI made the process faster and more accurate by automating monotonous tasks like data entry, coding, and claim processing. However, the impact of AI in the reimbursement cycle is not just limited to automation; a number of its ground-breaking contributions extend to:
Having served more than 600 clients globally, we are the pioneers of advanced billing solutions. Committed to round-the-clock service and keeping the milestone of 94000+ coded charts/month, you can rely on us for quicker payments, simplified processes, and reduced expenses.
This is achieved by enhancing automation, eliminating duplicate tasks, and promoting efficient workflows based on the industry’s best practices. Get in touch today to leverage the unique amalgamation of our team, methodologies, and tech-driven innovations alongside a steadfast dedication to the clientele we partner with.
Learn more here.
Take Control of Your Practice’s Revenue with Customized RCM Solutions
