Are you looking for a job in the medical field? Read here to learn the difference between medical billing vs. medical coding to see which one is best for you!
The medical billing industry will be worth $16.9 billion by 2024. Medical coding, on the other hand, will be worth about $25.4 billion by 2025. This brings us to the difference between medical billing vs. medical coding.
There’s some generalization about medical billing vs. medical coding. Some people use the terms interchangeably. The truth is that they are both distinct job functions in the medical field.
Challenges with medical billing include lack of proper IT structure and trained staff. It also encounters a lack of proper financial policy and billing errors. For these reasons, most healthcare providers opt to outsource their medical billing processes.
The demand for medical coding is influenced by the increasing number of patients in hospitals. The need to store their data efficiently has led hospitals to embrace medical coding. Let’s now delve into the in-depth details to understand the difference between medical billing vs. medical coding.
What’s Medical Billing?
Medical billing refers to the payment practice within the healthcare system. The process entails the submission and following up on claims with insurance companies for payment. Medical billing is for services like treatment, testing, and procedures.
Medical billing translates from a healthcare service into a billing claim. Insurance companies, private or government-sponsored, use the same process in billing. The responsibility of the medical biller is to follow up the claims.
They must ensure the healthcare provider receives reimbursement.
Why Healthcare Providers Bill Patients
The interaction between a healthcare provider and a patient may seem like a one-to-one interaction. In reality, though, it’s a large and complex system of information and payment. The patient may only interact with one person in the facility, but his treatment is part of a three-party system.
The patient is the first party of the system. The second party is the healthcare provider, while the third is the insurance company. The term provider, in this case, refers to physicians, hospitals, and emergency rooms. It also encompasses physical therapists and outpatient facilities.
Anywhere else where medical services are performed also qualify under the term healthcare provider. The reason for billing is that healthcare providers must be compensated for the services they offer.
The biller must collect all the information about the patient and the procedures performed. He then compiles the data into a bill that he then forwards to the insurance company. The bill is also referred to as a claim.
It contains the patient’s medical history, demographic information, and insurance coverage. A report of the procedures performed and why must also accompany the claim. Remember that the biller has the responsibility of explaining the charges to the patients.
This is especially necessary where the billing process involves copayments and co-insurance.
Medical Billing and Insurance
Health insurance is the money an insured person pays to have some form of protection against medical costs. It comes in several types, including the following.
Under this option, the patient is free to choose any insurance provider they like. This arrangement is usually costlier but comes with more flexibility. Due to rising healthcare prices, indemnity insurance is slowly losing its popularity.
2. Managed Care Organizations
This is a term used to refer to insurance organizations like Preferred Providers Organizations. It also includes Healthcare Maintenance Organizations. Here, patients have fewer options on the providers they can choose, but the premiums are more affordable.
MCOs are the most preferred form of health insurance in the U.S. today.
3. Consumer-Driven Health Plans
These allow consumers to use health savings, medical payments, or health reimbursement accounts. Through the accounts, the members can pay for their regular healthcare expenses directly. Any unused balanced is rolled over to the following year.
Making the Claims
Medical billing and medical coding overlap directly at the point of creating a claim. Medical billers take the diagnosis codes used by the coders to develop the claims. The procedure codes tell the payer what service was provided by the healthcare provider.
Diagnosis codes, on the other hand, demonstrate medical necessity. They are documented using ICD codes. Procedure codes tell what the patient’s visit was about while the diagnosis codes tell why the visit was done.
The biller then adds information about the patient and, along with it, the cost of the procedures. The claim now has a “who, what, why, when, and how much.” At this point, the biller checks to see that the request is compliant in terms of being formally and factually correct.
The process is long and complicated as the biller must know what is allowed in the claim. The payer will then evaluate the procedure and decide how much to pay to the provider. Once the payer approves the request, it’s sent back to the biller, showing the amounts payable.
The biller checks the amount, calculates the balance, and forwards it to the patient.
What’s Medical Coding?
Medical coding is another essential specialty in the healthcare industry. The responsibility of medical coders is to decipher the documentation of interaction between patients and the healthcare provider. They then determine the diagnosis code and appropriate procedure to reflect the services offered.
For medical coders to ensure coding accuracy, they sometimes have to query physicians about procedures performed. They also educate other medical staff on gathering the necessary information.
Medical codes tell a silent story about the visit of the patient. The coding specialist then translates this information into codes that match each of the possible services. If the coder is unsure about any part of the patient’s record, they should seek clarification.
How Do Medical Billers and Coders Work?
Now that you’ve seen the difference between medical billing vs. medical coding, how do the two work? Both billers and coders work together to collect information and document it. By coding and billing patient’s information in good time, they ensure providers receive compensation without delay.
Both jobs are equally important to the office cash flow in any healthcare facility. Sometimes, the work is performed by two individuals. In other settings, one person can perform both functions. The professionals work behind the scenes in clinics, nursing homes, hospitals, and sometimes in pharmacies.
Much of the work is done with computer systems. As such, it’s possible for these professionals to work remotely from home for a few days a week. It provides an excellent opportunity for professionals to find a career closer home.
It’s essential to note that medical billing vs. medical coding can both be hectic. For example, when the insurance company rejects a claim, the biller has to contact the insurance company. They then must resubmit the claim documents with the necessary adjustments.
Both billers and coders must be keen on details. Codes must be entered correctly into the system for the validity of claims. More importantly, they must have the interpersonal skills necessary for communication with other professionals.
Billers and coders must know how to use coding software. Being able to follow instructions is also of utmost importance. They are also called upon to exercise integrity since patients’ information is confidential.
Obtaining Medical Billing vs. Medical Coding Certification
The entry-level positions of billers and coders demand applicants to have some minimum qualifications. At the very least, they should have a high school diploma and a corresponding certificate. Getting the proper certifications is a crucial aspect of being hired.
It prepares applicants to become more dependable and capable team members. Since the two functions are closely intertwined, most medical programs offer combined courses in both areas where students gain a better understanding of the skills.
Multiple organizations provide certification for healthcare administration courses. These include AAPC, NCCT, NHA, and AHIMA. Each type of accreditation is specific to the kind of working environment.
The certification courses are available in various medical schools, among them being Ultimate Medical Academy. After the course, you’ll sit for an exam. The billing and coding exams require the learners to memorize lots of medical terms and alphanumerical codes.
These are related to drugs, supplies, and procedures. Students should understand in-depth information related to anesthesia, radiology, and pharmaceuticals.
There exist differences between medical billing vs. medical coding. The two terms are used interchangeably, which is sometimes acceptable because of the functions involved. Medical coding is more of a preliminary to medical billing.
A coder assigns codes to the medical procedures performed on the patient. Using these codes, the biller does the costing for all the services offered. He then forwards the information to the insurance company for reimbursement.
Both medical billers and coders work in settings like hospitals, pharmacies, clinics, and similar medical facilities. Both professions require a minimum certification of a high school diploma. They also call for interpersonal skills like communication to enable coordination between departments.
Coders and billers must also work with integrity. Patients must be able to trust them with their bills and insurance claims. Besides, they also must be able to maintain confidentiality with the information they handle.
Working as a biller and coder can be a lot more tasking than being specialized in one area. However, you get better pay if you handle both functions at the same time.
If you’re interested in becoming a coder or a biller, here is how to start your healthcare career.