If you're looking to start up a medical billing service, or just want to know how the medical billing process works, you need to know that it's not as easy as you might think. The process of sending out a medical bill might seem easy: throw a charge on the bill, put in a dollar amount, sign the claim and mail it out. In actuality, it's a lot more complicated than that.
Purpose
The reason medical billing exists is so physicians and medical entities can be paid. Medical bills are sent to some kind of insurance company or health program for processing, and then payment is made on whatever is sent. There are three basic types of insurance you need to contend with.
Federal Government Insurance
One type of insurance are federal government programs. There's Medicare, which is federal insurance coverage for people 65 or older, and in some cases people who are permanently disabled. There's Medicaid, which is a state insurance, for people who aren't of great financial means or have serious disabilities that qualify them for state programs. Finally, there's TRICARE, a military health plan, that provides insurance coverage for some retirees from the military and their dependents.
State-Mandated Insurance
There are specialty insurances that are often mandated by . The two main insurances in this category are workers compensation and no fault. Workers compensation is mandated for employers of certain sizes, which differs in each state. No fault is mandated for drivers in each state. They're usually exempt from federal billing standards and get to set their own rules based on whichever state coverage is offered in. Therefore, they can require different forms be filled out, as well as other records that a person wouldn't have to submit with other types of insurance.
Commercial Insurance/Health Maintenance Organizations
There is what's known as commercial insurance, or health maintenance organizations. Insurance companies like Blue Cross, Aetna, UnitedHealthcare and CIGNA would fall under this category. They might offer national coverage or be contained within one or two states, depending on their size. Many of them require preauthorization for certain services. Overall, they are the easiest to bill.
Billing Forms
There are two main forms for billing claims. The first is called an HFCA-1500, which is the main billing form to submit physician claims. The second is called a UB-04, which is used to submit hospital claims. Medicaid uses its own type of billing form, which differs from state to state, and also from service to service sometimes. All of these types of insurance, and many others, will accept claims electronically, which saves you from having to figure out which forms to use. There are still many types of insurance that will require a paper claim, though.
Billing Codes
Each billing form needs to have certain codes on it before an insurance company will process the claim. Every bill needs to have procedure codes, which are known as CPT-4 codes, and diagnosis codes, which are known as ICD-9 codes. Depending on the procedure, some bills might also need to have HCPCS codes on them, which are secondary codes used to list supplies or pharmaceuticals.
After that, the informational needs change based on the insurance company being billed. For instance, Medicare will require modifiers on many claims submitted to them. Compensation requires information related to how an employee was injured. If an authorization is required for service, insurance companies will require the authorization number on the claim form. TRICARE needs the enlisted person's ID number, which isn't their SSI number. And all hospital bills need revenue code numbers on them.
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