Do you know what the Common Wealth Fund Survey reveals? More than hundreds of healthcare providers are struggling with medical billing issues or major medical debts. Any clue what leads to the problems of medical billing? Complicated hospital billing and revenue cycles.
So, what is hospital billing all about?
Hospital billing refers to the process of generating healthcare claims to bill payers for the in-patient and out-patient services rendered by hospitals. Little do you realize that hospital billing is a complicated and tedious process. Every hospital has several insurers to deal with, each with its own distinct plan and requirements. Moreover, following up with patient insurance details, submitting claims with health insurance companies for the services provided, and ensuring that the payment for medical services rendered is received on time are tricky.
Did you know that the obstacles in the hospital revenue cycle impact overall financial outcomes? Sometimes hospitals struggle to make ends meet. This explains why understanding the fundamentals of hospital billing is critical to avoid errors.
How does hospital billing work?
1. Registration
If you aren’t aware already, hospital billing starts from the moment a patient schedules an appointment at the hospital. The pre-registration phase is quite crucial. Once a patient arrives, the hospital administrative staff are responsible for collecting essential patient details such as an address, insurance coverage, and more. Every detail must be validated and documented with precision.
2. Initiate financial accountability
Once a hospital accrues all essential patient information, the biller must ascertain the healthcare services covered under a patient’s insurance plan. After all, insurance coverage varies for patients according to the plans offered by insurance providers.
Wondering how is assessing insurance coverage essential for establishing strong financial accountability? Well, verifying a patient’s insurance coverage helps hospitals bill the patients accurately. Also, evaluating a patient’s insurance coverage ensures transparency of details. For instance, if an insurance provider does not cover certain debilities or services, the hospital can inform patients about the expenses they will have to incur to proceed with the treatment.
3. Evaluate patients details during check-ins and check-outs
When a patient checks in at a hospital, the entire personal and insurance information of a patient is documented. On check-out post-treatment, the patient’s medical reports are sent to a medical coder to analyze and review the clinical documentation, translating the diagnostic services into billable procedure codes. What’s created next is a superbill. The superbill gives a detailed rundown of the healthcare services offered to a patient. Further, the bill is sent to a medical biller.
4. Prepare claims
Do you know what the next step in hospital billing is? Preparing medical claims. A proficient medical biller uses the superbill to create claims and reimbursements for the healthcare services offered. The claim comprises vital information like:
Patient details
Provider details
Services or treatment offered
Expenses that the payer or the insurance provider is expected to reimburse.
Also, while creating a claim, a medical biller must ensure that the claims meet the standards of billing compliance, as mentioned by the guidelines of the Health Insurance Portability and Accountability Act (HIPAA).
5. Seamless submission of claims
Once a biller is certain that the claims meet the necessary compliance standards, medical billers can continue submitting the claims. To avoid discrepancies and billing errors that lead to a loss in revenues, hospitals also rely on third-party organizations like 3Gen Consulting.
6. Adjudication
Describing ‘Adjudication’ as a decision-making phase is appropriate. Once the claims are submitted, insurance payers evaluate and review the claims with a detailed eye. The claims are either approved, denied, or rejected. Are you curious to learn the difference between rejected and denied claims? A rejected claim often demands resubmission owing to an error in medical codes. A denied claim, on the contrary, is a claim that is refused to be reimbursed by the insurance provider. Finally, if a claim is accepted, the insurance payer evaluates the cost that’s stated as the patient’s insurance coverage and reimburses the claimed amount.
7. Observation and collection
The next step in hospital billing is the generation of detailed patient statements. Do you know what the details include?
Services covered by the insurance provider
The expenses that are not covered are payable by the patients.
Post submitting a patient statement, it is critical for hospitals to ensure on-time collection of pending patient amounts.
To sum up:
Hospital billing is an integral part of a healthcare revenue cycle. Outsourcing the service to a third-party medical billing company like 3Gen Consulting is a good idea. The company helps hospitals streamline and optimize their revenue cycles and cash flow.
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