Electronic Claim Submission

We know that "Medical Billing is a Process of Submission of Bills/Claims to the Insurance Company in a specified format for the service rendered (for the treatment given) by the doctor for the patient."  And also we know that the most widely used form is Health Care Finance Admin-1500 designed by the Health Care Financing Administration (CMS 1500 or HCFA 1500).

But instead of Sending in Paper form, We can also use Electronic transmission of claims. Here are the advantages sending the claim electronically instead of paper claims.

  1. Electronic Submission of Claims (Electronic Data Interchange or EDI) can help reduce paperwork, eliminate printing and mailing expenses, and improve claim   payment accuracy.

  2. No concerns of claims being lost in transit, no concerns regarding data entry errors being made by insurance staff while processing claims, less rejections,   less turnaround time between the process of data and process of claim by the insurance company.

  3. When you file an electronic claim, you also save valuable time. When a paper claim is filed, the U.S. mail may take a few days to deliver the claim. The  insurance company must digitize the information, then it must process the claim and, finally, the company has to mail the statement and reimbursement    back to you. With electronic claims, you send the claim through Internet connection. This takes as much time as picking up the telephone and calling the  company. The insurance carrier instantly receives the claim, the claim is already digitized and the company can process the claim immediately.

Now you may ask a  question, since Electronic claim transmission is acceptable and useful, then why do we need still to use CMS 1500 to send the claims.The answer is : we cannot completely wipe off the Paper format, because there are some scenario, you need to send only by paper claims. We will see later about that scenario


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Medical Billing–Patient Insurance

Patient Insurance

We know that, patient has to give his insurance information to the Doctor before the treatment. Collecting the patient insurance information is very important data entry part to avoid delayed or denials.

Either at the time of appointment or at the time of patient visit the practice(Check in), patient insurance information has to be collected. If it is existing patient, then we need to verify the existing patient insurance information which is already in the file(or computer system).

Very Important. For New Patient, we need to collect signed copy of HIPAA consent form. For more details, please check here.

The following information has to collect from the patient

1. Insurance Company Name

2. Policy No (Unique number to identify the patient within the insurance system)

3. Policy Group No (Identifies in which plan the patient enrolled with the insurance company)

4. Effective Date (From which date, benefits or covered services are allowed)

5. Relationship to the Patient(Patient may have the insurance on his name, or he/she may be covered by one of the family member)

6. Insured details such as first name, last name, etc if the patient is not the same as insurer.

7. Copay and deductible amount

And also, we need to scan the patient insurance card back and front part into the system. Sample Insurance card here.






Different format of Medical Forms


In the last section, we said submission of claims to the insurance company in a specified format. Let us see some important format as follows

1.  HCFA(Health Care Financing Administration)  1500 form or CMS(Centers for Medicare and Medicaid Services) form.
It is a standard form that non-institutional providers use such as your family doctor or specialist used send claims. Mostly individual
Physician charges are billed on the CMS 1500 form

2.  UB-04( uniform institutional billing claim form) Form (formerly UB-92 OR CMS-1450)
This form is used to submit claims for institutional providers such as hospitals. Some insurance accepts CMS 1500 form to submit  hospital billing. You should always check the insurance company which form they prefer to bill hospital charges.

You can see sample CMS 1500 and UB04 Form here


Sample CMS 1500 and UB04 Form

Medical Billing Process

Medical Billing is a Process of Submission of Bills/Claims to the Insurance Company in a specified format for the service rendered (for the treatment given) by the doctor for the patient. Why the doctors approach the insurance company for the payment? Since the Majority of patients has insurance coverage and details of such coverage are provided to the doctor before the treatment. So it is the responsibility of the doctor to send the claims to the insurance company and get paid for the treatment given.

Here is the overall medical billing process. In the later section, we will see more detail on each section.


Insurance Verification:
Process started from here and usually front desk people are doing this process. Its a process of verifying the patients insurance is active or inactive by calling insurance or through online verification. If the insurance is inactive, it does not make any sense to send the claim/bill to the insurance company to get paid. So the front office people have to make sure that patient insurance is active even before the patient appointment. If the insurance is not active, then they have to collect the fee from the patient itself(In medical billing, this normally called as Self Pay claim or Patient Responsibility claim).

Charge Entry:
Charge entry is nothing preparing the claim to be sent to the insurance company. After getting the treatment details and patient disease details from the doctor, the billing department will start preparing the claim.The claim details, that are needed to get your insurance claims processed are entered here, and includes, the face sheet of the patient, doctor details, information about the insurance coverage of the patient and billing information.

Payment Posting:
Payment posting is simply posting payments from the insurance company into the system. The insurance company sends a check along with an Statement(This is statement is called as Explanation of benefit , shortly as EOB). On the EOB the insurance company will tell you the allowed amount and the amount they paid.

Denial Management:
The insurance companies reject(deny) paying claims for a number of reasons. Incomplete claim form, inconsistent patient information, etc.The insurance company indicates the reason for the denial in the Statement. Billing department will resolve those errors and again submit the claim to the insurance company.

Here is the overall medical billing process. In the later section, we will see more detail on each section.



Questions or feedback are always welcome. You can email me at vbsenthilinnet@gmail.com.

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