Billing and Coding
What is “Billing and Coding”?
The Healthcare industry is different from most others in a couple of important ways. One of the most significant of these differences is the way the Healthcare industry handles money. Understanding this difference is the key to understanding what we mean when we talk about Billing and Coding.
Think about this: when you go the auto shop and have them change the oil in your car, you pay the mechanic right then and there – you hand him cash or a credit card. When you go to your accountant to get help with your taxes, you pay the accountant right then and there (though he might just take the money out of your tax return). Still, almost every time you use any service, or purchase any product, you pay for it.
But when you go see your doctor, you don’t pay him. Instead, your health insurance company pays him for you. That is a significant difference. If you go to the emergency room and you don’t have health insurance, you still don’t pay the doctor, the State Government pays the doctor who helps you.
So imagine you are a doctor and you spend your day meeting with patients, setting broken bones, taking blood, doing check-ups. Every time you provide a professional service, you expect to get paid for your time and expertise, but you can’t just charge the person whom you are helping directly. Instead, you have to charge their health insurance company. To do this, you send that company a demand for payment . . . otherwise known as a BILL, just like the bills that the electric company and your cell phone company send you every month for the services they provided to you.
When we talk about Billing, this is what we mean: the process of demanding payment for specific services provided in doctor’s offices, clinics, and hospitals, from health insurance companies.
But what about Coding . . . ?
What makes this Billing process complicated is a system for translating the individual services that doctors, nurses, and other healthcare professionals provide (taking blood, setting bones, surgical procedures, etc.) into special codes that the insurance companies use to determine how and what to pay for. When your doctor hits your knee with the hammer to make your leg jump, the office doesn’t put “hit patient’s knee with the little rubber hammer” on the bill to the health insurance company, instead they put something like: G4Z8817. It means the same thing . . . it’s just a different way to communicate the information.
Even a single health insurance company has many different insurance plans that pay different amounts for different medical services – with a whole range of things that doctors and nurses do for people and many different companies providing insurance, you can see how it can be a difficult system to manage. This is why the industry needs professionals who know how to handle the complex Coding system used to communicate about the Billing process. Without using this system properly, a dentist or hospital can’t survive!
When we talk about Coding this is what we mean: the process of translating the services provided in a clinic or hospital into the right codes that insurance companies use to decide how and what to pay for those services.
When you put them together, you can see that “Billing and Coding” simply refers to the specific process that healthcare providers use to communicate with health insurance companies about the work they do in order to get paid.
Connect With Us