Medical Billing

What is medical billing? Key Steps of Medical Billing and Collection Process

Medical Billing and collection Process

In this fast-paced world, everything comes with a price tag. You cannot deny the importance of finances whether it is business, healthcare, or even day-to-day chores. Medical billing is the financial aspect of healthcare services and procedures. The collection process in medical billing is one of the most vital parts and must be done with great care.

In simple words, Medical billing is a process of preparing medical bills for healthcare services providers to get them reimbursed for the services they provide to patients. To prepare medical bills, a medical billing professional collects all the required information including patient demographics, clinical services provided, and insurance details; compiles medical bills, and sends them to the payer for reimbursements.

We have enlisted below the medical billing collection process steps for you to understand how the whole process works. The collection process in medical billing is easily identified with the help of these steps. The steps are more like a medical collections process flow chart that automatically leads from one stage to another. But Before that, to understand what is medical billing is important.

Is Medical Coding the Same as Medical Billing?

Medical coding and medical billing are not the same, but they are closely related. Medical coding and medical billing are two separate but equally important functions in the healthcare industry.

Medical coding is the process of translating medical procedures and diagnoses into standardized codes. These codes are used by healthcare providers, insurance companies, and government agencies for a variety of purposes, including billing and reimbursement, clinical research, and quality improvement.

On the other hand, medical billing is the process of submitting and following up on claims with insurance companies to receive payment for services provided by healthcare providers. Medical billing involves verifying insurance coverage, submitting claims, and resolving any issues or denials that arise during the claims process.

While medical coding and medical billing are different, they are closely linked. Accurate and complete medical coding is essential for medical billing because it ensures that claims are submitted with the correct codes, which is necessary for proper reimbursement. Additionally, medical billing requires a thorough understanding of medical coding and the ability to interpret and analyze medical records to ensure that claims are accurate and complete.

Besides, medical coding and billing are critical functions in the healthcare industry, requiring specialized knowledge and skills to perform effectively.

Medical billing collection process steps

The medical billing collection process steps are:

  • Patient registration
  • Insurance eligibility check and authorization
  • Patient check-in
  • Coding
  • Charge entry
  • Claims submission
  • Medical billing and collection process
  • Payment posting

Let’s have a detailed look at these steps which are the most essential part of billing and collections procedures in medical practice.

1. Patient Registration

Medical billing services start from the front desk. As soon as the patient calls, the front desk officer will search for the patient demographics if the patient has already been registered. If no prior information about the patient is found then the patient’s demographic information needs to be entered carefully which includes name, address, SSN, insurance information, and the reason for the visit. Entering a patient’s demographic information at the front office requires extreme care and accuracy because any error or mistyped information at this stage can cause problems later on when submitting the medical bill.

billing process

2. Insurance Eligibility Check and Authorization

As soon the patient provides insurance information and the reason for the visit, it is now one of the most important stages of the medical billing process is to check for the eligibility of the patient for medical services. There are multiple types of insurance plans, which differ in various ways.

It becomes even more complex when government-run health insurance programs also differ from state to state. At this stage, if the insurance does not cover the patient or is partially covered, the medical biller would calculate the bill or copay after the checkup. So, it depends on the type of insurance plan the patient is registered with, which determines what insurance carrier has authorized medical services. At this stage, if a medical billing professional finds that the required medical service is not authorized then it should be clearly communicated to the patient that the service is not authorized and the medical bill would be personally paid.

3. Patient Check-in

When the patient arrives for the scheduled appointment, the front desk officer continues by confirming the information which can be an insurance card and verification with a personal ID. At this stage, if the insurance does not cover the patient or is partially covered, the medical biller would calculate the bill or copay after the checkup.

4. Coding

There are two types of medical codes used to prepare medical bills: ICD-10 (International Classification of Diseases) and CPT (Current Procedural Terminology) codes. ICD codes are used to describe the patient’s diagnosis and CPT codes narrate the clinical procedure performed by the physician. After the patient check-out, all the information of the visit is sent to a medical coding professional who assigns the procedure codes. Accurate CPT and ICD codes are imperative to claim the payments from the Payers. Insurance carriers check for the accuracy of the procedure codes and modifiers, insurance claims get rejected if the diagnosis codes do not correspond to the procedure performed. Expert-level understanding of medical coding is a must to properly compile medical bills, which is why medical coding and billing resources are trained professionals who can accurately transcribe the details of a patient visit into standard codes.

5. Charge Entry

Charge entry is the stage in the medical billing process when medical billing professionals assign the assigned dollar value as per the service fee. It is another important phase where a medical biller determines the exact value of the service provided. The charged fee should accurately reflect the codes and service provided; any misappropriation or overcharged entries can result in the denial of the payment.

6. Claims Submission

Once the medical billing professional confirms the accuracy of the claims, they become ready to submit. Mostly, medical claims are submitted electronically and insurance companies have a different schedule for claim submission. At this stage, it’s necessary that all the requirements of the payer are met, and the claims are then processed.

medical billing and collections process

7. Medical Billing and Collection Process

Medical claims adjusters examine the claims and release the payments after a certain time period or if they find some issue with the claims, they send it back with the reason for the rejection. It is again now the responsibility of the medical biller to rectify the problem, make corrections, and resubmit it to complete the medical billing and collection process.

8. Payment Posting

Ensuring the provider has been paid is the last stage in the medical billing process. If the payment matches the claim, they are posted or the remaining balance is billed to the patient. To learn more about our medical billing process, please get in touch with our Medical Billing and Coding Specialists.


The collection process in medical billing must be curated with immense care and attention. All the steps of this process are equally important and none of them can be omitted. The billing and collection procedures in a medical practice make or break a healthcare organization, which is why medical practitioners hire professionals to conduct the medical billing processes.