Quick Search

Sponsored
Ch. 14

Course 14: Running Your Own Medical Billing and Coding Service

In this course, you’ll learn about the day-to-day activities and responsibilities of the medical biller and medical coder. You’ll also explore some of the tools you’ll use as a professional biller and coder, the regulations you’ll have to follow, and tips on starting your own medical billing and coding service.

Explore a Day in the Life of a Medical Biller and Coder

Any time a medical service is provided, whether it’s a routine checkup or a major surgery, information about that service is recorded and given to the medical billing and coding specialist. A doctor gives the medical biller and coder procedure documentation of the services provided, which the biller and coder must then translate into the proper code. Medical billing and coding specialists are responsible for correctly coding the diagnoses and procedures performed by the healthcare provider. This requires a thorough knowledge of both ICD-9-CM codes and ICD-10-CM codes for diagnostics, and CPT codes for procedures.

A procedure document includes relevant information like the date of the procedure, the patient’s name, and his or her date of birth. More importantly, a procedure document includes the doctor’s diagnosis and the procedure performed. For example, a doctor may provide documentation of a mole removed from the torso of a patient via cryoablation (essentially, freezing the mole). The medical biller and coder would look at the procedure documentation and decide which codes correspond to the diagnosis and procedure listed. In the case of this example, a coder would select the CPT code 11710 (destruction of benign lesions or skin tags or cutaneous vascular proliferative lesions; up to 14 lesions) for the procedure, and the ICD-9-CM code 216.5 (benign neoplasm of skin of trunk, except scrotum) for the diagnosis.

The bulk of the medical coding portion of the billing process involves turning procedure reports into correct medical code, then entering it into the system for the claims process. Medical coders spend their day taking procedure documentation, looking up the proper codes, and entering that information into their claims software. Most medical coding is relatively straightforward (for example, the CPT code 99213 corresponds to a routine visit to the doctor’s office), but even with common codes there are discrepancies or gray areas. Coders must consult their manual, professional associations, and periodicals to stay up-to-date on current professional best practices.

Learn about lag days

Like medical billing, medical coding is a time-sensitive operation. Any hiccup in the coding process can cause a ripple effect, which delays billing, the claims process, and ultimately the reimbursement of the healthcare provider from the insurance company. For this reason, most coders are asked to keep their operations within a number of “lag days.” Lag days refer to time between when a procedure note is given to the coder and when the claim for that procedure is filed. Most offices keep the number of lag days between two and five, so coders must stay on top of their work in order to ensure efficiency in the operation of the health-care provider.

Review crosswalking

In certain cases, a medical billing and coding professional has to perform a code “crosswalk” between these sets of codes. Crosswalking is covered in depth in courses 11 and 12. To briefly review, a crosswalk refers to an equivalency or translation between two code sets. A medical coder may have to use a crosswalk in order to track data between two different sets of code (as in the case of ICD-10-CM and ICD-9-CM) or translate between two sets to comply with certain form requirements (as with translating CPT codes into ICD-9-CM codes).

Avoid clerical errors to shorten reimbursement time

Coders should also make sure the procedural and diagnostic codes that they are entering on a claim make sense with one another. For example, you would not want to pair the procedure code for a tonsillectomy with the diagnosis code for a broken hand. Inaccurate, contradictory, or improperly crosswalked codes are just a few of the many reasons a claim may be denied, and it is up to the coding specialist to prevent as many of these clerical errors as possible.

Understand the role of medical billers

As stated earlier, the job of the medical biller aligns closely with that of the medical coder, but there are other integral tasks that are unique to the medical biller. As you read in Course 2, the initial part of the medical billing process is the collection of data from the patient. Medical billing specialists must ensure they have all the relevant information from the patient and that this information is correct in order to proceed with a claim to the insurance company.

Once medical billers have the correct information regarding a patient’s history, contact information, and insurance policy (or policies), they then input that information into their medical claims software and begin the claims process. Upon translating the procedure notes into diagnostic and procedural codes (or upon receiving these codes from a third-party coder), the medical biller creates an insurance claim and sends this to an insurance company. Medical billers should be familiar with claim formats for each of the major payers, including Blue Cross/Blue Shield (and other private payers), Medicare, Medicaid, TRICARE, CHAMPVA, and various worker’s compensation and disability organizations.

When the claim is returned and the healthcare provider is properly reimbursed for services, medical billers must then bill the patient. This process involves following up with patients about late payments or arranging for a collections service in the case of notably delinquent bills. Medical billers are also responsible for interpreting the Explanation of Benefits (EOB) and explaining the general billing process to patients. Medical billers must be familiar with co-pays, coinsurance, and deductibles in order to bill patients correctly.

If a claim is returned to the healthcare provider as denied or rejected, the medical billing expert must determine why and correct errors if possible. If the claim was denied because of inaccurate or inappropriate coding, the medical biller must input the correct codes and resubmit the claim (or pass it back to the third-party coder who initially coded the procedure).

Medical billers must also prepare appeals to denied claims on behalf of patients or the healthcare provider. A denied claim may be due to a clerical error (as with a missed code), or it may come down to a discrepancy in the provider’s contract with a payer. Medical billers also have to help patients prove the necessity of their medical procedure. They must be prepared to research all of the elements of the appeals process. As with coding, the appeals process is time-sensitive, so medical billers handling claim appeals must work quickly and efficiently to ensure their appeal is filed in a timely manner.

See What Tools You Will Use as a Biller and Coder

Many professionals in the field rely heavily on billing and coding software. This software is especially important if you are planning on working from home. Software like Medisoft or MediTouch allow coders to look up specific codes for accuracy and create claims quickly. There are dozens of billing and coding software programs at various price points, and you will have to assess what your individual needs and preferences are when it comes to the coding software you use.

While medical billing and coding software is becoming an industry standard, some smaller practices still use paper hard copies for their coding and billing services. Paper is less efficient than electronic records, and can create problems such as duplicate data (in the case of there accidentally being two separate files for one patient), not to mention the massive amount of physical space needed for storage of paper claims. Coding and billing via hard copy also makes it difficult for different parties (like other insurance companies or healthcare providers) to access important health records. Still, despite the clear advantages of electronic health records for the purposes of billing and coding, professional billers and coders should familiarize themselves with hard copy billing and coding forms. Medical billers also have to refer to hard copies of a patient’s medical records and EOBs throughout the day when creating a claim.

Find Out What Regulations You Have to Follow

While there are no laws that apply exclusively to medical billing and coding, billers and coders must operate within the laws and regulations that govern the whole of the healthcare industry. Because the information they handle includes confidential patient medical histories, they must follow guidelines laid out in the Health Insurance Portability and Accountability Act (HIPAA), and the Correct Coding Initiative, which is a project of the Centers for Medicare and Medicaid (CMS).

Title II of HIPAA, also known as the Administrative Simplification Statute, ensures that the confidentiality of patients will be secure when their information is transmitted electronically. This applies to all entities that handle health information electronically, including health plans, healthcare providers, and healthcare clearinghouses. These rules also apply to any off-site or third-party entity (such as a freelance biller or coder) that handles sensitive healthcare information. The HIPAA Administrative Simplification Statute states, effectively, that all parties capable of accessing or transmitting sensitive health information have a set of rules in place that a) protect patient health and b) identify which employees or persons will have access to a particular level of private information. Privacy rules may vary from one practice to another, and HIPAA mandates internal audits as a primary method of ensuring adherence to the law. Audits may mean a routine review of protocol and procedure for the medical coder and biller.

Note that this part of HIPAA applies only to electronic transactions, including claims and encounter information (such as ICD-10-CM codes) and inquiries into claim status. Healthcare providers, coders and billers, clearinghouses, and insurance companies are not required to submit this information electronically, but if they do, they must follow HIPAA guidelines.

The Correct Coding Initiative provides detailed guidelines for professional coders and billers. Updated annually by CMS, the initiative ensures that the codes used for various medical transactions are uniform around the country. You are already familiar with certain initiative regulations: The initiative mandates that Current Procedural Terminology (CPT) be used to code medical procedures, and that ICD-10 be adopted by October 1, 2014 for all diagnostic reports. The Correct Coding Initiative also regulates which codes will be used in pharmacy and dental transactions. The medical biller and coder should be aware of these regulations and be able to research them whenever the need arises.

Start Your Own Business

The medical billing and coding field is expected to grow steadily in the next few decades. As health informatics change and the healthcare industry continues to expand, coders and billers will be in demand to cope with the increased burden of processing information that changes hands during a medical procedure. Third parties sometimes perform billing and coding operations, and there are opportunities for entrepreneurs to build their own billing and coding business.

One of the interesting benefits of starting a billing and coding profession is the ability to work from home. Because the job requires mostly clerical work that can be done on a computer, a medical biller and/or coder does not need to work from a medical office or even interact with patients directly. However, starting your own coding and billing business will not be easy. Even if you are working from home, you’ll have to stay in frequent contact with your clients, health insurance companies, and clearinghouses. Explore the following tips to running your own successful billing and coding business:

1) Get certified

Certification is not formally required for medical billers and coders, but if you’re starting your own business, you’ll want to have a certification from a school or training program that’s recognized by either the American Health Information Management Association (AHIMA) or the American Association of Professional Coders (AAPC). This certification will assures prospective clients that you have achieved a certain level of expertise and dependability.

2) Get experience

Before you start your own billing and coding service, you’ll want to get some experience working at a healthcare provider’s office. While it might not make sense to start your own at-home business working for someone else, you’ll have a very hard time finding any clients willing to entrust the sensitive health information of their patients to an unknown third party. Working for an established provider grants you a reference, proof of your legitimacy, and possibly even future clients.

3) Know the law

As you pursue certification, you’ll undoubtedly learn the regulations and laws that govern the day-to-day tasks of a medical biller and coder. However, don’t forget about local, state, and federal laws, as well. If you’re going to run your own billing and coding service, you’ll need to apply for a business license. You may also need to apply for special licenses within your state. Some medical billing agencies, for example, must be registered as collections agencies. You may also need to get a federal tax ID number for your small business. It’s worth the time and money to consult a professional accountant or financial adviser when it comes to setting up these licenses.

4) Get the tools

Like any start-up business, a medical billing and coding business will require some initial investment. Fortunately, unlike the capital needed for a lot of other small business, this investment is relatively low. You’ll have to invest in coding, billing, and accounting software, such as Quickbooks. You should invest in high-quality software (which may cost as much as $1,500), and avoid any program that seems too good to be true. You’ll also have to budget for expenses such as a computer and monitor, a fax machine/copier/scanner, separate phone line, reference books, clearinghouse fees, and more. To save money, explore all your options when searching for reference books. For instance, reference books can cost around $450, but there are online reference services that are available for around $30 per month. Also, set aside a space in your home for an office, and furnish it accordingly. Lastly, add the cost of training and certification into your start-up budget. All in all, be prepared to spend between $4,000 and $6,000 to start your coding and billing business.

5) Actively pursue networking opportunities

Once you’ve got your certification and business license and your home office is set up, it’s time to reach out to clients. If you worked with a provider before starting your own business, that provider may have work for you, or may be able to suggest other offices in need of coding and billing services. Note that smaller practices may have less on-site administrative help and could be interested in outsourcing coding and billing tasks. You may also want to choose a medical specialty, like cardiology or radiology. If you become proficient in a certain area of coding and billing, it’s easy to reach out to different practices that focus on the same thing. Set up a website for your business and keep it updated regularly.

You should also network the old-fashioned way, by attending conferences and joining professional associations. Professional associations like the AAPC provide valuable resources and opportunities to learn from other individuals in your field.

6) Get paid

When you’re about to begin work with a client, you’ll have to work out how you’ll be paid. Third-party coders can be paid by the hour, by the claim, or by a percentage of that client’s monthly revenue. The payment arrangement will depend on a number of things, such as the size of the practice and the frequency of patient visits. A general practitioner, for example, can have more than 40 office visits a day and charge a small amount, while a radiologist may have only a few visits but charge a significantly higher amount. Whichever payment rate you decide on, be sure to get that rate in a written contract.

Wrapping Up Course 14

Medical coding and billing is a complex, multifaceted career so you will need a unique set of personal attributes to run your own business. Due to the fine-grain nature of your work, you must be detail-oriented, highly organized, and comfortable with math, data entry, medical guidelines, and industry terminology. You must be able to prioritize important tasks in order to meet certain deadlines and you should prepare yourself for the realities of being a small-business owner, which requires significant personal investment on your part to get off the ground.

Medical Billing and Coding Online