Medical Billing and RCM Resource Hub
The knowledge you need to optimize your practice revenue
We believe it shouldn’t be so hard to find good information. This resource hub is a high-level overview of billing and RCM, designed to provide the knowledge to make informed decisions for your own practice.
What is medical billing?
Medical billing is simply the process of billing for medical services, but because healthcare costs in the USA are almost always paid by the patient’s insurance, billing for services is much more complicated than simply sending an invoice. Medical billers manage the various stages of the billing process to ensure that insurance companies compensate practices for healthcare services.
The process of billing the patient’s insurance involves at least 13 distinct steps, beginning as soon as the patient’s appointment is scheduled and often earlier:
Collect information at check in
Verify insurance eligibility
Verify prior authorizations, if applicable
Patient check-in; collect copay
Enter patient information into practice management software
Obtain and update patient’s medical records (EHR)
Charge entry based on services provided
Review claims for accuracy and validity; Claim “scrubbing” to correct any errors
Submit claims to insurance for payment
Receive and post payment
Follow up on unpaid claims
Investigate any claims that have been denied or are still unpaid for any reason
Reporting to client/practice manager
Each of these steps can be further broken down into its component parts, and each requires specific and detailed knowledge, expertise, and real-world experience. Smaller independent medical practices are generally not equipped to manage all the steps of the medical billing and RCM process, both due to the large volume of work as well as the detailed technical knowledge required. Billing companies help solve this challenge by strategically managing specific stages of the process, working in close conjunction with practice managers and office staff to ensure each step is completed successfully.
Further Reading:
Summary of the Medical Billing Process
Medical Billing Training Curriculum
What is Revenue Cycle Management (RCM)?
Revenue cycle management, or RCM, is the process of optimizing the various steps and systems involved in medical billing in order to:
Increase practice revenue
Reduce reimbursement times
Reduce denials and unpaid claims
Effective revenue cycle management requires a thorough high-level understanding of medical billing in order to identify opportunities to improve collections and increase revenue. Successful RCM for independent medical practices requires close communication and effective working relationships between physicians, office staff, and their medical billing service.
Further Reading:
Detailed Overview of Revenue Cycle Management
What do medical billing companies do?
Working with a medical billing company allows practices to outsource specific steps of the RCM process, which improves efficiency and reduces the workload of in-house office staff.
The services most commonly provided by medical billing companies fall into 4 categories:
1. Core services provided by almost all billing companies
Claims submission
Preparing and submitting claims to insurance companies for payment is the most basic function of a medical billing service. Billing services perform multiple checks to review each claim for accuracy and compliance before submitting it for payment.
Further reading:
Overview of the Claims Submission Process
The Medicare Claims Submission Process
Claim follow up
When claims aren’t paid promptly, a medical billing company will monitor each claim, determine the reason it has not been paid, and contact the insurance company if necessary.
Further reading:
How to Follow Up on Unpaid Claims
Best Practices for Following Up on Medical Claims
Appealing denials
Inevitably some claims will be returned unpaid. Billing services must identify the specific reason for each denial, correct any issues, then resubmit the claim for claim for payment. This process tends to be more laborious and complex than the initial submission, and may or may not be ultimately successful, depending on the reason for the denial.
Further reading:
Simple Steps to Follow Up on Denials
Understanding Health Insurance Claim Denials
Reporting
Medical billing companies should provide detailed reports to practices on the state of their submitted claims and both historic and expected revenue. These should be compared with historical data for the practice as well as industry benchmarks.
Further reading:
Key Performance Indicators in Medical Billing
2. Services commonly provided by most medical billing companies
Collecting old accounts receivable (A/R)
A practice may discover that their billing company has allowed many claims to go unpaid for a long period of time. This is one of the most common reasons for practices to switch billing companies. These unpaid claims can often still be collected, if the new billing company works diligently to uncover the exact reason for the denial, and then fulfill all of the insurance company’s requirements. Many billing companies charge a relatively high fee for this service.
Further reading:
Medical coding support
Each type of medical procedure or doctor-patient interaction is assigned a specific alphanumeric code established by Medicare’s ICD-10 coding system. Medical coding is very closely related to medical billing, because insurance companies reimburse at a specific rate for each code. In smaller independent practices, physicians are often responsible for coding. Assistance and training from a trained coder can help providers understand the optimal way to bill each insurance company in order to capture all revenue for which they are eligible.
Further reading:
Introduction to Medical Coding
Example of an Undergraduate Coding Curriculum
Verification of benefits
Before seeing a patient, office staff should confirm that the patient’s insurance will cover any care that may be provided. This is usually a relatively simple but labor-intensive process that involves direct outreach to the patient’s insurance company through an online portal or by phone.
Further reading:
Three Ways to Verify Insurance Benefits
Guide to Verifying Insurance Coverage
Resources on Prior Authorization
Patient support
Patients may require assistance in understanding their medical bills, addressing issues with insurance coverage, or any number of other related issues. Often the medical billing company may be better positioned to assist with these issues than the office staff, and many medical billing companies provide this type of support for clients.
Further reading:
3. Supplemental services offered by some billing companies
Technology consulting and support for practices
Billing companies often develop a unique level of expertise regarding the use of technology and software in medical practices. This is especially true of billing companies that focus on serving particular specialties. These companies are often well positioned to help practices address highly specific technology issues.
Further reading:
Overview of Medical Technology for Small Practices
Guide to Practice Management Software
Chart audits
Chart audits are essential for ensuring compliance with medical billing guidelines. Since billing companies work closely with charts and billing codes, providing chart audits is often a natural addition to other services.
Further reading:
Credentialing
Insurance credentialing for physicians and nurse practitioners is a prerequisite for submitting claims to that insurance. Credentialing with new payers can also open up opportunities for practices to increase revenue. Because of this close relationship between credentialing and billing, many medical billing companies manage credentialing for clients as well.
Further reading:
Guide to Credentialing Services
Payer contract negotiations
Reimbursement rates for specific procedures is often dependent on a specific contract between the provider and each individual insurance company. Negotiating a more favorable contract can lead to an immediate increase in revenue for the same care.
Further reading:
A 10 Step Process for Payer Contract Negotiations
How to Negotiate Payer Contracts, Part 1 | Part 2
Training in Payer Contract Negotiation
Compliance consulting
Compliance with healthcare billing regulations is absolutely essential for any practice. Billing companies are often well positioned to help clients address any compliance issues before they become a problem.
Further reading:
What is Healthcare Billing Compliance?
Healthcare Billing Compliance Overview
Practice marketing consulting
Since marketing is closely tied to revenue, some billing companies have a depth of expertise in medical practice marketing. As with practice technology, effective practice marketing is often highly specific, and a depth of specific knowledge is often required to be successful.
Further reading:
Marketing Strategies for Medical Practices
30 Marketing Tactics for Medical Practices
4. Adjunct services that support the billing & RCM process
Virtual office assistants
Many tasks related to medical billing are easily performed outside the office, and remote workers are often much more cost-effective than onsite staff. Some medical billing firms are able to provide remote workers for clients, to address both billing processes and other office tasks.
Further reading:
Guide to Remote Workers in Medical Practices
Virtual scribes
Thorough documentation is essential to medical billing, and in the age of EHR’s, scribes are almost a requirement for physicians to stay on top of each day’s charting. Some billing companies may provide remote scribe solutions for clients.
Further reading:
The Advantages of Virtual Scribes
Types of Medical Billing Companies
The medical billing industry is highly decentralized, with literally thousands of individual companies providing billing services. These range from “mom and pop” outfits with only a handful of clients to multi-billion-dollar companies owned by private equity firms. Mid-sized medical billing companies tend to focus on certain specialties and often develop a high level of knowledge and expertise in serving practices within those specialties, continually investing in relevant technology and training. However, the barrier to entry into the medical billing industry is relatively low, and many companies lack such depth of experience.
Further reading:
Guide to Medical Billing Companies
Entry-Level Medical Billing Course
Undergraduate Medical Billing Program
Healthcare Financial Management Association Courses