Medical and hospital billing differ from all other types of private business billing. Between the itemization for individualized services and the special requirements for insurance companies, the process can be overwhelming for someone in the accounting department who is inexperienced with medical payment procedures. Many physicians’ offices and hospitals use medical billing companies rather than hiring and training their own staff in this complex system. Medical payment service companies are often better able to keep up with the frequent changes in governmental and insurance company requirements.

Physician Billing

When a patient sees a doctor, the person is first charged for the time spent with the healthcare professional, then charged for each of the individual services performed during the time spent under the care of the doctor and the medical staff. For example, any x-rays, cultures or shots given are itemized and charged. All services are compiled into one bill when possible.

Insurance Plans

If the patient has insurance, the individual is charged a co-pay at the time of the visit. Medicaid, Medicare and other special governmental programs are accounted for at this time. There are certain requirements for insurance companies. Only certain services may be charged for, and then, only certain payment request amounts are accepted by the insurance company. It must be sent to a specific office and must follow proper medical coding protocol. A copy of the bill is usually prepared and sent to the patient. If the physician billing is done improperly, the bill may be only partially paid or denied entirely by the insurance company. This is usually followed up with an adjustment to the bill so that the physician or hospital can be paid for services rendered.

Regulations

In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was passed in an effort to better protect an individual’s privacy. With this federal regulation came a host of rules and requirements that must be followed by physician and hospital billing departments. As a result, the electronic transfer of a patient’s medical and billing information must be kept under several safeguards.

The Fair Debt Collection Act is another set of rules and regulations which must be followed by doctor and hospital billing departments. This affects how and when the medical care providers can collect the debt owed for services rendered. In the event the health care provider looks to the patient to pay the entire bill or remaining unpaid portions, there are certain guidelines which must be honored.