Electronic medical billing: steps and insights

Providers submit claims to the healthcare insurance companies to get payment for the services provided. This process is called medical billing in the US healthcare practice. If they use software for this, it is called electronic medical billing.

The whole process, that includes claims, payment and billing, is also referred to as Revenue Cycle Management. The RCM starts with the first patient visit. After that, the provider needs to assign a five-digit Current Procedural Terminology code to classify description of the medical procedure. The provider uses a numerical code from either ICD-9-CM or the ICD-10-CM database to describe diagnosis.

The provider sends a claim with codes defined to the payer, insurance company. These codes help insurance company determine the coverage required. The claim is sent as an American National Standards Institute (ANSI) 837 file through Electronic Data InterchangeClearinghouses can act as a middleman between healthcare providers and insurance carriers. It checks if a provider’s claim is composed in accordance with ANSIx12 (Electronic Data Interchange standards XML schemas) and passes it further is everything is alright. If not, it makes front office rejection and sends the claim back to the provider.

The insurance company studies the claim and evaluates its payment validity by checking patient eligibility, provider credentials, and medical necessity. It can either accept the claim and reimburse it or deny and return for improvements via electronic data interchange, Electronic Remittance Advice (ERA).

Upon receiving the denied claim, the provider makes all the necessary improvements, enclose the previous claim, and send it again to the insurance company. Such back and forth claim interchange can repeat multiple times. The sum finally paid by the insurance company is called allowable amount.

Prior to performing services, a provider can check with the insurance company if a patient is eligible for specific services. This process is similar to the claim submission, known as X12-270 Health Care Eligibility & Benefit Inquiry transaction. The insurance company replies through the direct electronic connection, X12-271 Health Care Eligibility & Benefit Response transaction.

The claim submission process is technically known as X12-837 or ANSI-837. The insurance company replies with X12-997, proving that it has received the claim and accepted for further processing. The response, both denial and approval, is sent via a X12-835 transaction.

Electronic medical billing is the digital way for providers to get paid by insurance companies. Glorium has developed solutions for this sphere of healthcare software. We created a billing solution for the DME providers and practices’ healthcare information system. Its aim is to simplify the workflow of the company. We are always glad to share the experience. Do not hesitate to ask.

AboutAndrei Kasyanau
As CEO at Glorium Technologies, I help tech startups bolster their teams with agile product development services on demand. Our custom development can reduce time to market by up to 30% with 40% in savings compared to in-house teams. As a professional, I’ve experienced both corporate life with financial giants and entrepreneurial life out on my own, where I built my business from the ground up in an agile environment.