Medical billing and coding is the process in the health care revenue cycle where services to insured patients are recorded and appropriate reimbursement claims are submitted to Health Insurance Companies for settlement.
The medical billing and reimbursement claims processing between the health care service providers like physicians, clinics or hospitals and the health insurance companies may take one day to several weeks before a claim is settled. It is also common for claims to be denied or rejected.
Because denials and rejections are common in medical billing and coding, it is typical to see medical billers performing denial management functions. For those who don’t understand denial management, here’s a quick overview.
First, there’s a difference between a denied and a rejected claim. For denied claims, the usual action to take is to correct the documents and appeal for reconsideration. A denied claim is a processed claim and found to be problematic by the insurer. This resulted to the claim being denied.
When claims are denied, the medical billers’ duty is to check the claim, adjust or edit the basis for the claim and then resubmit it.
Rejected claims on the other hand are those that were not processed by the insurance company because the information contained in the claim resulted in a fatal error. The rejected claims were not processed at all so an appeal for reconsideration cannot be made. Instead, the medical biller will inspect the claim, determine the cause of fatal error which may include truncated billing codes, incorrect insurance policy identification number or mismatched personal information. Invalid diagnosis can also cause the fatal error.
Once the cause of the error is determined by the medical biller, necessary corrections are then made and the claim is filed again to the insurance company for processing.