6 Reasons Medical Billing and Coding Are Critically Important

Revenue cycle management (RCM) involves all the financial processes of healthcare services. It begins with patient registration and pre-authorization. Next comes billing, coding, and claims submission. Then payments and post-payment processes like denial management, A/R follow up, and reporting. 

The mid-cycle’s key tasks are billing and coding. So why are medical and coding important? Gaps or inaccuracies in these workflows can create downstream challenges and delay payment. 

Let’s review medical billing and coding, their relationship, and how to improve them for your nephrology or urology practice. 

What Is Medical Billing?

Medical billing describes the process of generating healthcare claims for submission to insurance companies, government entities, or patients. It requires collecting all the codes assigned to the delivery of care and services. 

These codes become the superbill and include: 

• Provider details 
• Patient demographics 
• Services provided 

A superbill generates the claim. Submitting of the claim occurs digitally, sending it to insurers or patients. 

What Is Medical Coding?

Medical coding refers to the universal medical codes used to refer to the various healthcare services, procedures, diagnoses, and equipment. Physicians note transcriptions, as well as lab and radiology results, provide the information to assign the code. 

A medical coder must align the appropriate codes to inform payers of these things: 

• The diagnosis of the patient
• Medical necessity for services, supplies, or treatments
• Treatments or services provided
• Medical conditions or other circumstances that affect treatments and services 

Types of Medical Coding

There are several medical coding families, including: 

• ICD-10-CM (Clinical Modification): This set contains codes for conditions, diseases, injuries, and more. Coders use these to establish medical necessity. 
• ICD-10-PCS (Procedure Coding System): These codes are primarily for hospital inpatient procedures. 
• CPT® (Current Procedural Technology): The American Medical Association (AMA) owns and maintains these codes. They cover most outpatient services and some inpatient services performed in facilities. 
• HCPCS Level II: This group reports procedures and bills for supplies for Medicare, Medicaid, and other insurers. 

Additionally, CPT® and HCPCS Level II codes can contain two-character modifiers. These offer clarity about: 

• Patient status 
• The part of the body receiving services 
• Payment instructions 
• Events that changed the service 

From One of Our Partners: Charge Capture vs. Coding: Understanding Their Unique Roles in Medical Billing  

The Relationship Between Medical Billing and Coding 

Medical billing and coding are related but are different. They are part of the RCM mid-cycle and occur after the patient interaction. 

The key difference between medical billing and coding is their goal. Medical coding interprets procedures into the universal language of codes. Medical billing is what occurs after coding and involves the submission of the claim. 

Thus, billing depends on coding precision, which relies on charge capture. 

Charge capture focuses on recording and documenting all billable services to ensure that providers are properly reimbursed for their services. Medical coders can translate the information in charge capture into the appropriate codes. If there are errors here, it can impact revenue.  

There are different models for medical billing and coding that nephrologists and urologists can leverage. 

In-House Medical Billing and Coding vs. Outsourcing

In-house medical billing, the traditional process, puts all the work on internal resources. It’s a complex ecosystem. Codes change often, as does coverage.  

These combine to create challenges relating to: 

• Error rates increasing due to manual processes 
• Compliance issues 
• Lack of efficiency, which slows reimbursements 
• An inability to scale as practices grow 

Many practices have adopted an outsourced option to lessen these concerns. Such a solution is the FTE (full-time equivalent) model. Skilled and credentialed billers and coders manage all the administrative parts of the process. It’s cost-effective, efficient, and flexible. 

Practices can realize revenue faster with fewer denials and accelerated submissions. But it’s not a risk-free option. A vendor could still go out of business, and breaches in compliance are possible. 

Related Article: Traditional Medical Billing Vs. an FTE Model 

6 Reasons Medical Billing and Coding Are Important 

Why are medical billing and coding important? We’ve reviewed what they are and how they connect. They both influence RCM, cash flow, and all financial operations. Here are more reasons why they matter: 

1. Ensure Accuracy and Efficient Billing

Medical billing and coding are complex, with an array of codes. Failures in accuracy and efficiency increase the rate of payer denials. When this happens, you extend the reimbursement cycle. 

A streamlined approach with certified experts eliminates most errors. It also ensures you don’t miss any charges. 

2. Comply with Regulations 

Every activity in medical billing and coding includes a compliance factor. If you have gaps in following guidelines, you could suffer fines or other penalties. Compliance in healthcare billing and coding must adhere to these to minimize risk. 

3. Record and Share Accurate Patient Information

Every patient is unique, but codes are universal. Because of this, your practice can record and share this information. You can do so easily with payers, patients, and other providers. It creates consistency and supports care continuity. The information is always current as well. 

Data management in healthcare requires effective billing and coding practices. These are financial backend tasks. However, they also create a formal record of medical history, treatments, and diagnoses. 

4. Close the Gap Between Providers and Payers

Insurance coverage changes regularly, which can be challenging for providers and patients. It creates a gap, but correct medical billing and coding can bridge it. It allows all parties to understand costs and coverage. 

With this clarity, providers can deliver a better patient experience. You can explain their out-of-pocket costs. 

5. Improve Financial Task Productivity

Increasing medical billing and coding productivity empowers your ability to scale and grow. Interlinked billing and coding activities should power a seamless workflow. Technology aids this with automation and other advanced features. 

6. Strengthen Financial Stability

Your ability to deliver proper and timely claims impacts your cash flow. If it’s volatile, you may encounter operational challenges. It keeps you from providing care to more patients. 

Prioritizing medical billing and coding provides greater control over financial performance. Linking these activities can yield insights. You can learn about root causes related to denials or inefficiencies. 

Related Article: From Errors to Emergencies: How Inaccurate Coding Can Affect Your Practice 

How You Can Start Improving Your Medical Billing and Coding Right Now

• Evaluate the start of the RCM process—patient registration. If there are inconsistencies or problems here, billing and coding will have them as well. 
• Request a financial assessment of your current medical billing and coding practices. An outside eye can identify gaps, trends, and improvements related to RCM. 
• Review billing and coding software options designed for your practice type. 
• Investigate automation capabilities in medical billing and coding that help to streamline reimbursement. 
• Consider outsourcing options for billing, coding, and collections. 
• Integrate your healthcare tech stack to optimize medical billing productivity.