What Does a Medical Billing Company Do, and How Do You Check the Work?

What Does a Medical Billing Company Do?

A medical billing company takes a completed visit and carries it to a posted payment: it builds the claim, sends it, posts what the payer pays, works what the payer refuses and bills the patient for the rest. Each step leaves a record you can read, so you can tell whether the work is happening.

This post lays the work out as a responsibilities table with the proof to ask for at each step. For the money side, read the in-house vs outsourced billing costs guide, and for the risk side, is it safe to outsource medical billing.

Who Does What, and What Proof Should You See?

The split below is the usual one for a professional practice that outsources billing but keeps the clinical and front-desk work. Your contract can move a line in either direction, so treat the middle column as the question to settle in writing.

Credentialing, payer contracts and the practice's own bank account are not billing steps, and a company that offers them should price them separately. Our credentialing service is one example of work that sits outside the claim.

What Does the Billing Company Put on the Claim?

On a professional claim, the CMS-1500 or its electronic form, the 837P, the company enters the diagnoses in item 21, the place of service in item 24B, the diagnosis pointer in item 24E, the rendering provider's NPI in item 24J and the billing provider in item 33. CMS describes the CMS-1500 as the standard claim form used by a non-institutional provider or supplier to bill Medicare carriers.

Under 45 CFR 162.1101, the health care claim transaction is a request from a provider to a health plan to obtain payment, with the information that goes with it. The company's job is to make that request complete and correct before it leaves. The professional medical billing service page walks through the same path in more detail.

How Do You Tell Whether It Is Worth It?

Look at three numbers from one month of reports, and compare each with what the company said on the sales call.

1. Days from charge entry to claim submission. We send claims within 24 hours of charge entry, so ask any company for its own figure and how it is measured.
2. Time from a denial arriving to someone working it. We work denials within 48 hours, so ask for the date received and the date acted on for a sample of denials.
3. Deposits against remittances. Total posted from remittances for the month should match the money that reached your account, with any gap explained.

A company that cannot produce those three lines for you is not telling you enough to judge it. Ask for them by claim, not as averages, since an average can hide a week when nothing went out.

How Do You Trace One Claim Through the Table?

Pick one paid claim and one denied claim from last month and follow each down the proof column. It takes about ten minutes and shows more than a summary report does.

1. Find the visit date and the charge entry date, and note any gap between them. That gap is on your side of the table.
2. Find the date the claim was submitted, and the date the clearinghouse accepted it. A rejection at this point means the claim needs a correction, not an appeal.
3. Find the remittance. For a paid claim, check that the posted amount matches the payer's payment and that the patient balance matches the patient responsibility on the remittance.
4. For a denied claim, read the CARC and remark codes, then find the action taken, who took it and the date.
5. Ask the company to explain any step you cannot find. A missing step is a finding, whether or not the claim was eventually paid.

Do this each quarter with a different pair of claims. If both traces are complete, the process is working. If one is not, you have found the exact step to raise with your account lead.

What Does a Billing Company Not Do?

It does not treat the patient, document the visit or decide what was done. A billing company can query a clinician about a note, but it cannot add what the note leaves out. It also does not own your payer contracts, your bank account or your patient accounts, and the agreement should say so.

The related checks are in the guides. The safety guide covers access and money routing, and choosing a billing partner covers how to compare companies. For what happens to a denial after it is worked, see the denial management playbook.

How We Handle the Billing Steps

We run the steps above for your practice, with automated eligibility checks, multiple claim scrubbing rules, claims sent within 24 hours of charge entry and denials worked within 48 hours. See the family medicine billing page or book a call.