Admin
10/03/2025

Medical Billing Process - What You Need to Know About It

An error-free billing procedure reduces claim denials and enables medical practices to achieve better financial outcomes. The medical billing process itself is complex. However, segregating it into these steps can help you understand it completely. Let’s discuss this one by one.

Patient Registration

The first step of the process starts when the patient schedules an appointment with a provider. If the patient has set up an appointment for the first time, it must provide personal information and insurance details. Likewise, the practice staff ensures the patient is eligible for the services. However, if the patient has seen the provider before, it shares the reason for the visit.

Patient Financial Responsibility

The medical billing team must check the patient’s eligibility for insurance coverage beforehand. It is essential to determine whether the insurance company covers the services rendered by the healthcare provider. Similarly, patient financial responsibility is the amount of money the patient owes to the provider. If the billers know the patient’s eligibility, it saves time and avoids claim denials. For instance, if the insurance company does not cover certain services a physician offers, the billing team must communicate this to the patients.

Superbill Creation

The next part of the medical billing process involves the creation of superbill. But what it really is? After the completion of patient’s visit, it is the time for medical coder to jump in. The coding team goes through the physician’s notes after the patient check out. After analyzing the rendered services, the medical coders translate the information into CPT codes. In addition, these codes must be accurate and clearly depict the procedures physicians perform. This information also includes the demographic details of the patients and it is collectively called superbill.

Superbill shows the detailed information about the rendered services in the form of accurate medical codes. Likewise, it includes patient’s name, provider’s name, rendered services, diagnosis codes, procedure codes, and other information related to the visit. Similarly, this information must be error-free because it leads to the creation of medical claim. Once this process is complete, the superbill goes to the medical billing team via software.

Ensure Compliance in the Medical Billing Process

The billing team enters the information related to the rendered medical services into the billing software. Similarly, the cost of the procedures is also entered into the software. After creating the claim with accurate codes and procedure costs, it is time to ensure compliance. Does the claim meet all the compliance requirements? If yes, the billers are ready to send the claim to insurance payers. Talking about the procedures a physician performs, it is essential to maintain coding accuracy. Payers reject incorrect claims, which leads to payment delays.

Ensuring HIPAA compliance is mandatory for medical billers and practice staff. According to the HIPAA standards, the protection of patient information is essential. Every claim consists of the following information that needs to be secured:

Patient Information (demographic info and medical history)
Procedures Performed (in CPT or HCPCS codes)
Diagnosis code (an ICD code) – it shows medical necessity
National Provider Index (NPI) Number
Place of Service code (some claims have this information)

Besides the confidentiality of patient information, billers must be aware of other Federal and State regulations. In addition, every insurance company has its guidelines related to claim submissions. Hence, billers should be updated and leave no reason that may lead to claim denials.

Create and Transmit Claims

Submitting claims electronically under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) is mandatory. However, there are certain conditions in which providers or practice staff can submit claims manually. The manual submission of claims increases the chances of errors, takes longer to submit, and makes the billing process less efficient. So, it is a better approach to submit claims electronically and reduce the chances of errors.

Medical billers can submit claims directly to payers like Medicare and Medicaid. However, if billers are not submitting claims directly to the payers, the claims will most likely go to a clearinghouse. What is the role of a clearinghouse? It is a third-party organization that receives the claim and reformats it according to the payer regulations. For instance, if a biller is going to submit claims to five different insurance companies, the clearinghouse will reformat every claim according to the defined guidelines of each insurance payer.

Check Payer Adjudication

Accepted claim

The insurance payer has decided to reimburse the claim. However, it will determine the amount paid to the provider within the arrangement rules with their patient.

Rejected claim

If the claim has an error, it is rejected. Missing patient information, errors in demographic details, or miscoded procedures can be the reasons. The billing team can resubmit the claim after making the required changes.

Denied Claim

The claim is denied when the insurance payer refuses to pay the healthcare provider for the rendered services. This happens when the provider bills a procedure the insurance company does not cover.

After the payer adjudication process, the insurance company send a report to the billing team. This report contains the details about how much the insurance payer will pay. Moreover, payers share the details about why they are paying this amount. Other than this, the payers share why they do not cover some procedures.

If healthcare providers hire medical billing services, their team will examine the report from the insurance payer. Additionally, the billing team will check whether the procedure codes match those mentioned in the initial claim. Further, billers will make sure everything mentioned in the report is accurate. In case of discrepancies, the billing team starts the appeal process with the insurance company.

Patient Statements and Bills

After receiving the reports from the insurance company, the billing team creates the patient statements. In this statement is a bill for the services the patient received from the healthcare provider. When the insurance payer is ready to pay the provider, the rest is sent to the patient. In addition, the billing team adds an Explanation of Benefits (EOB) with a statement that clearly explains the services covered by the insurance company.

Following Up on Statements and Manage Collections

The final step of the medical billing process is to pay the bills. Likewise, the medical billing team sends accurate bills to the payers. In addition, they need to follow up on the bills until they get paid. This information is stored in the patient’s file when the insurance company pays the bill. In some cases, the patients are reluctant to pay their part. At this point, medical billers ensure patients understand their financial responsibility. Billers send follow-up calls and bills to manage patient collections.