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Medical billing

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Medical billing, a payment process in the United States healthcare system, is the process of reviewing a patient's medical records and using information about their diagnoses and procedures to determine which services are billable and to whom they are billed.

This bill is called a claim. Because the U.S. has a private healthcare system, health insurers are the primary entity to which claims are billed for physician reimbursement. Once the services are provided, the healthcare provider creates a detailed record of the patient's visit, including the diagnoses, procedures performed, and any medications prescribed. This information is translated into standardized codes using the appropriate coding system, such as ICD-10-CM or Current Procedural Terminology codes—this part of the process is known as medical coding. These coded records are submitted by medical billing to the health insurance company or the payer, along with the patient's demographic and insurance information. Most insurance companies use a similar process, whether they are private companies or government sponsored programs. The insurance company reviews the claim, verifying the medical necessity and coverage eligibility based on the patient's insurance plan. If the claim is approved, the insurance company processes the payment, either directly to the healthcare provider or as a reimbursement to the patient. The healthcare provider may need to following up on and appealing claims.

The medical billing process requires accuracy, knowledge of medical coding guidelines, and familiarity with insurance policies to ensure timely and accurate reimbursement for healthcare services rendered. Medical billers are encouraged,^{[by whom?]} but not required by law, to become certified by taking an exam such as the CMRS Exam, RHIA Exam, CPB Exam and others. Certification schools are intended to provide a theoretical grounding for students entering the medical billing field. Some community colleges in the United States offer certificates, or even associate degrees, in the field. Those seeking advancement may be cross-trained in medical coding or transcription or auditing, and may earn a bachelor's or graduate degree in medical information science and technology.

It is not required to have a certification to learn billing, though it may help with employment prospects, and billing practices vary from state to state

History

In 18th century England, physicians were not legally permitted to charge fees for their services or take legal action to collect payments. Instead, patients would offer "honoraria," which were voluntary payments inspired by what was believed to be a Roman custom. This honorarium rule applied only to non-surgeon physicians. Meanwhile, surgery was treated as a "public calling," allowing courts to cap surgeons' fees to reasonable amounts. The honorarium rule for non-surgeon physicians and the public calling status for surgeons highlighted the unique, non-commercial constraints on medical professionals at the time. These constraints further emphasized professionalism over commerce, distinguishing these professions from regular businesses.

In the 19th century, the American colonies abandoned the English honorarium and public calling principles. Instead, physicians could use standard contract and commercial law to set and collect fees. Unlike in England, U.S. courts viewed medical services like goods with fixed prices, allowing physicians to sue for outstanding payments and freely set terms, independent of obligations tied to public service.

Before the spread of health insurance, doctors charged patients according to what they thought each patient could afford. This practice was known as sliding fees and became a legal rule in the 20th century in the U.S. Eventually, changing economic conditions and the introduction of health insurance in the mid-20th century ushered an end to the sliding scale. Health insurance became a conduit for billing, and it standardized fees by negotiating fee schedules, eliminating additional charges, and restricting discounts that the sliding scale offered.

For several decades, medical billing was done almost entirely on paper. However, with the advent of medical practice management software, also known as health information systems, it has become possible to efficiently manage large amounts of claims. Many software companies have arisen to provide medical billing software to this particularly lucrative segment of the market. Several companies also offer full portal solutions through their web interfaces, which negates the cost of individually licensed software packages. Due to the rapidly changing requirements by U.S. health insurance companies, several aspects of medical billing and medical office management have created the necessity for specialized training. Medical office personnel may obtain certification through various institutions who may provide a variety of specialized education and in some cases award a certification credential to reflect professional status.