Note: In medical billing, people often use different terms to refer to the same thing. Here are some of the most commonly used variations:
- A Doctor is also referred to as a Physician or Provider.
- A Doctor’s Clinic is also called a Doctor’s Office, Physician’s Office, Provider’s Practice, or Provider’s Facility. The terms facility, practice, clinic, and office all refer to the place where a patient meets with a doctor.
- Insurance is also referred to as a Payer or Carrier.
Use Case 1: In-House Billing
A patient calls or walks into the Physician’s (Doctor’s or Provider’s) office to schedule an appointment.
On the appointment day, the patient checks in, provides demographic details (name, DOB, address, etc.), and gives insurance information.
The doctor reviews previous medical records and prescribes treatment.
ICD Codes (Diagnosis Codes)
- Each disease is represented by an ICD Code (also called Dx Codes, Problems, or Diagnosis Codes).
- ICD codes help classify diseases, symptoms, and causes of death.
CPT Codes (Procedure Codes)
- Each treatment is represented by a CPT Code (also called Procedure Codes).
- CPT codes describe the procedures performed on the patient.
After the consultation, the patient leaves, and the doctor’s office submits a claim to the insurance company for payment.
Use Case 2: In-House Billing with Two Insurances
Some patients have multiple insurance policies:
- The first insurance billed is the Primary Insurance.
- The second insurance is the Secondary Insurance.
- If applicable, the third is the Tertiary Insurance.
Once the primary insurance pays its portion, the balance is sent to the secondary insurance for further processing.
Use Case 3: Self-Pay
Patients without insurance are considered self-pay and must pay for services out-of-pocket.
The clinic generates a statement and sends it to the patient for payment.
Use Case 4: Patient Responsibility
Some insurance policies only cover a percentage (e.g., 80%). The remaining amount is the patient's responsibility.
The balance is billed to the patient after the insurance company processes the claim.
Use Case 5: Clearinghouse Workflow
After submitting a claim, the billing team sends an EDI 837 file to the clearinghouse.
The clearinghouse validates the claim and forwards it to the appropriate insurance company.
Once processed, the insurance company generates an EDI 835 file (electronic remittance advice) and sends it along with the Explanation of Benefits (EOB).
Use Case 6: Co-Pay Workflow
A co-pay is a fixed amount the patient must pay at the time of service.
Co-pay details are verified through the patient's insurance card or an eligibility check.
Use Case 7: Deductible Workflow
A deductible is the amount a patient must pay before insurance coverage begins.
For example, if a patient has a $500 deductible, they must pay that amount first before the insurance covers any costs.
Use Case 8: Lab Billing
If a doctor requests lab tests, the samples are sent to a laboratory.
Once results are ready, the lab's billing department submits a claim to the insurance company for payment.
Example Patient Conversation
Jake: Calls the MyFirstHealth clinic.
Linda: Hello, this is Linda from MyFirstHealth Clinic. How can I help you?
Jake: Hi, I’d like to book an appointment with Dr. John for today at 5:30 PM.
Linda: Sure! Have you visited our clinic before?
Jake: No, this is my first time.
Linda: Okay. May I have your last name, first name, and date of birth?
Jake: My last name is Jake, my first name is Mike, and my DOB is XX/XX/XXXX.
Linda: Got it! Please arrive 15 minutes early to complete the check-in process.
Jake: Will do. Thanks!
At 5:15 PM, Jake arrives at the clinic and checks in.
Jake: Hi, I have an appointment with Dr. John at 5:30 PM.
Linda: Welcome, Jake! Do you have insurance?
Jake: Yes, my employer provides insurance. Do you need that information?
Linda: Yes, please.
Jake: Apart from my employer’s insurance, I also have a family insurance plan.
Linda: Great! We’ll list your employer’s insurance as primary and your family plan as secondary.
Jake: That makes sense. Thanks!