Using Medical Billing and Coding Software
A Practice Management Walkthrough

A step-by-step walkthrough of typical medical coding and billing software. Learn to use practice management software with this guide...

Most medical billing operations and doctors offices work with a practice management software program. This typically includes:

Most medical coding and billing software packages have several steps to filing a complete claim and maintaining a comprehensive patient file. We've broken down these steps here - let's begin!

1. New Patient Entry

When you get a new patient you need to open a new guarantor account. This is the account for the person who is financially responsible for all medical costs, called the guarantor.

The information in this section is generally self-explanatory. It includes basic personal information such as name, date of birth, address, contact information, and insurance details.

Any dependents on the guarantor's policy (like the spouse or children) also need to be entered, along with their basic information.

Think you may have missed something? Don't worry! Most practice management software will prompt you if you've left out information or have any discrepancies.

When entering new patients it's important to make sure they're not already in the system.

An easy way to check for this is to do a date of birth search, which picks up on any patients with the same date of birth. This way you can cross-check the names and make sure you don't have any duplicates.

Once you've saved the patient information, your medical coding and billing software assigns a unique identification number to each patient.

These numbers identify the guarantor and dependent accounts and allow you to easily search for the patient in the future by using their account number.

Another important part of this process is entering the patient's insurance information.

Many times, the insurance information is the same for each family member. But this is not always the case. Your software allows you to assign unique insurance coverage to each individual patient if necessary.

2. The Encounter

An encounter is when a patient goes to the office or clinic to receive treatment from the healthcare provider.

After the healthcare professional sees the patient, a claim must be generated.

Entering Charges

Each system has a different way of entering charges, but they all have the same components. This includes inputting:

  • the specific diagnosis
  • procedure codes
  • any necessary modifiers
  • and charges for the visit on the patient's file.

This claim uses codes to describe the patient's visit. The claim will either be billed to the insurance company or directly to the patient.

To record an encounter you must enter the charges into your medical coding and billing software (see box to the right).

Once you save this claim, the information is added to the patient's file in the system.

If the charges are going to be billed to an insurance company, the claim may be automatically put in an electronic queue for claims processing.

3. Posting Payment

After a claim is paid, you'll need to post the payment to the patient's account.

When payments are made you'll enter them into the medical coding and billing software. Here they'll be automatically reflected in the balance on the patient's account. This is called posting a payment.

There'll be different ways to post a payment, depending on your practice management software.

Generally, payments fall in two categories: patient or insurance.

If it's a patient payment, it'll usually be for a copay or a payment on a balance remaining after insurance.

If it's an insurance payment, it will be entered differently.

Insurance companies almost always pay providers according to a negotiated rate. This is a certain dollar amount for certain codes, and usually results in a reduced payment.

According to the agreement between the insurance and the provider, the provider cannot bill for the unpaid amount. It becomes a write-off, and is subtracted from the remaining balance.

Other payment may also need to be reflected, such as:

  • patient or insurance refunds
  • payments from collection agencies
  • payment on bounced checks.

Either way, your practice management software will have the ability to process these transactions.

4. Patient Statement

If a balance remains on the patient account after the insurance payment, you'll have to bill the patient.

This is usually the result of a copay, co-insurance, deductible, or non-covered charge. You'll need to bill the patient directly.

Usually this bill will be generated automatically for all remaining balances. It will continue to go out until the balance is paid in full.

Each patient statement will include an itemized report of the procedure codes, charges, and the balance remaining.

Your medical coding and billing software allows you to create unique statements, depending on the doctor, time frame, or dollar amount. Once you've finalized all of your options, you send patient statements.

Some systems allow you to print the statements and mail them yourself. Others will process statements through a clearinghouse, which will mail the statements for you. It all depends on the software package that's right for your needs.

Most medical insurance claims and patient billing is handled through a process similar to this one. This process allows most claims to be reimbursed within a month, and creates a steady stream of income for healthcare providers and other personnel.

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