What is Medical Coding and Billing?

In order for hospitals and doctors to be paid by insurance companies, they must first translate what was done for you into a system of codes.  US healthcare reimbursement is based primarily on two coding systems:  The 10thVersion of the International Classification of Diseases (ICD-10-CM), which corresponds to the patient’s injury or sickness; and the Current Procedure Terminology (CPT), which corresponds to the procedures that are performed for the patient.  These codes are then used by medical billers to create claims that are sent to the insurance company.  The system of codes and claims allow providers and payers to talk to each other in a common language regarding complex clinical procedures and services.

 

As an example, let’s assume a patient visited the doctor with a sore throat.  Upon examination, the doctor suspected a strep infection, and ordered a rapid test. With a positive diagnosis of strep throat, the doctor prescribed amoxicillin, a common antibiotic.  The medical coder will review the clinical report and translate the interaction to ICD-10-CM code of J.02.0 for strep throat, CPT code 87880 for the rapid strep test, and CPT code 00781-6401 for prescription of orally administered amoxicillin.  The medical biller will take these codes and create a medical claim, which contains an itemized list of procedures, services, and costs that is sent to the payer.  Upon recipient of the claim, the payer will perform a process called claims adjudication, where it will review the claim for accuracy and also determine how much of the claim it will pay for based on contracted rates, plan design, and benefit coverage.  Once the claim is adjudicated, it is sent back to the medical biller for processing.  The medical biller will determine how much the patient is responsible for after insurance payment, send the bill to the patient, and attempt to collect.

 

Given the complexity in translating healthcare interactions into a system of codes and bills, there are numerous chances for billing errors to occur during the process.  This does not necessarily imply ill will by the participants, as it is normal for errors to occur within complex interactions. 

What Are Some Common Billing Errors? ==>  

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©2019 by California Medical Billing Advocates, Inc.

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