Medical Billing and Insurance Coding - Best Practices to Increase Revenue

Your healthcare organization exists to improve patient outcomes and overall quality of life.

Without an optimized revenue cycle, this noble mission cannot be achieved. Therefore, it’s wise to invest in resources that strengthen your financial operations.

This post explores how you can streamline medical billing and insurance coding to strengthen your revenue cycle and increase revenue.

Key Differences Between Medical Billing and Medical Coding

Medical coding and medical billing are two separate but interdependent processes that you need in order to drive revenue outcomes.

The key differences are the mechanisms and goals as follows:

• Medical Coding: It is the process of translating your clinical notes into alphanumeric standardized codes that insurance companies can easily process. The goal is to ensure claim accuracy and compliance.

• Medical Billing: It is the process of using codes to create and submit claims to payors, and then managing payments/denials. The goal is to ensure payment for services and to improve collection speed.

How Do Claim Denials Impact Healthcare Revenue Cycles?

The interdependence between coding and billing means coding errors can lead to denials when your billing team finally submits claims.

It can affect your financial operations in the following ways:

• Delayed cash flow: High denial rates significantly increase Days in Accounts Receivable (A/R), the time it generally takes you to receive payment after delivering services. Such delays can affect all operations, including your ability to cover payroll and medical supplies.

• Increase in cost to collect: It costs money and personnel hours to rework denied claims. A high cost to collect increases your administrative burden and reduces resources for patient care.

• Potential permanent revenue loss: A significant number of rejected claims are never collected, even after appeals. The revenue losses can strain operations and affect care delivery.

You can avoid many of these revenue cycle issues by streamlining clinical documentation. DeliverHealth offers two integrated solutions to reduce manual documentation and improve accuracy:

• InstaNote: An AI-powered documentation solution you can use to convert patient conversations into structured clinical notes automatically. It supports both ambient and dictation workflows and also includes coding suggestions.

• InstaCode: An AI-powered coding solution to help you improve accuracy and productivity. You can easily adapt it to your existing revenue cycle and clinical operations.

You can deploy these two enterprise-grade solutions independently or combine them to create unified documentation-to-coding workflows.

Book a demo today to see how DeliverHealth can help you streamline documentation and coding to improve compliance and revenue.

Medical Billing Compliance and Regulatory Requirements

Beyond the immediate risk of claim denials, billing and coding non-compliance can also expose you to long-term risks, including invasive audits, revenue recoupment, and legal penalties.

Therefore, risk management is essential, and you should start by mastering the following regulatory requirements:

• HIPAA: You must abide by patient data security guidelines during both documentation and claims transmission. If you automate documentation, the tools must be HIPAA-compliant.

• Coding accuracy: All codes should accurately reflect the services rendered. You should avoid upcoding (billing for a more expensive service than the one you provided) and unbundling (billing separately for parts of a single procedure). Also, you should prevent downcoding, which can cause your practice to lose out on reimbursements you are entitled to.

• Payor-specific requirements: Note the payor-specific rules. Some private insurers may have different billing guidelines compared to Medicare/Medicaid.

Also, you must strictly abide by coding guidelines and systems to ensure documentation and billing integrity.

Common Medical Coding Systems Used in Healthcare

You want to get coding right because accuracy affects reimbursement levels and the number of days in A/R.

Here are the common medical coding systems you should master:

• ICD-10: Originating from the International Classification of Diseases, 10th revision, ICD-10 provides a consistent way to describe diagnoses and patient conditions. An example is E08.621 (Diabetes mellitus due to underlying condition with foot ulcer).

• CPT: While ICD-10 helps you explain the “why”, Current Procedural Terminology (CPT) helps you explain “what” you did (the procedures/services). An example is 97597 (wound debridement, first 20 sq cm).

• HCPCS: The Healthcare Common Procedure Coding System helps you identify medical supplies and products. It also covers some services not covered in CPT. An example is E0114, representing crutches.

Step-by-Step Medical Billing Workflow in Healthcare Practices

As we noted earlier, coding and billing are interdependent, and errors at the documentation stage can lead to costly rework later. As such, every step should serve as a checkpoint to ensure accuracy, compliance, and reimbursement readiness.

Here’s a workflow checklist to guide you through the process:

1. Register the patient and gather their demographic and insurance information.

2. Verify the patient’s insurance, checking their eligibility and the benefits they qualify for.

3. Proceed with the encounter and document what happened during the visit (patient history, clinical findings, assessment/diagnosis, procedures, orders/treatment plan).

4. Enter the above documentation into the coding system and assign the appropriate ICD-10 and CPT codes.

5. Package the coded information into a claim and submit it to the payor.

6. Receive an Explanation of Benefits (EOB) or Remittance Advice (RA) from the insurer after it has adjudicated the claim and issued a payment, or denied it.

7. If there is a denial, initiate your denial management process.

8. If the insurer paid and there is a balance, you can proceed to initiate patient billing.

Common Challenges in Medical Billing and Insurance Coding

Most of the problems you’ll face in your efforts to streamline revenue cycle management stem from operational and technical bottlenecks.

These challenges include:

• Incomplete documentation: Narratives of patient encounters can be vague or miss vital details, affecting every downstream billing workflow. The common causes of this are time pressure and human error, which you can solve by using InstaNote’s ambient AI capabilities to chart in real-time and generate EHR-ready notes.

• Poor interoperability: Integration issues across your charting and coding systems can compromise data integrity. We solved interoperability at DeliverHealth by offering seamless workflows that integrate clinical documentation (InstaNote) with coding (InstaCode).

• Coding errors: Even with comprehensive documentation, you can still make coding mistakes due to human error. You can reduce manual errors by using DeliverHealth’s AI-assisted coding suggestions.

Best Practices to Improve Medical Billing Accuracy

One of the best ways to ensure a functional revenue cycle is to implement automated systems that prevent errors across all 8 stages of the billing workflow we discussed earlier.

You can do this in the following ways:

• Systemize front-end verification: Many claim denials arise from errors at the registration desk. For instance, you could have data-entry errors or outdated insurance information. You can address this through verification systems, such as real-time eligibility (RTE) checks.

• Use automated scrubbing solutions: 30% of all claims are initially denied for several reasons, including avoidable errors. Before forwarding a claim to an insurer, you can use “claim scrubbers”, which are software tools that check for errors before submission using rule-based systems.

• Automate root cause analysis: While you can address individual denials, treating them like isolated events is rarely the best approach. Instead, you can run a denial-tracking dashboard to identify patterns and solve recurring issues.

• Eliminate manual handoffs: Because the workflow involves several steps, manual handoffs can lead to many human errors. Consider optimizing the entire billing workflow using integrated systems.

Frequently Asked Questions (FAQs)

Let’s now answer some of the common questions we get about medical billing and insurance coding:

What Tools Help Automate Medical Billing and Coding?

Depending on how you want to optimize your operations, you can use the following tools to automate various aspects of coding and billing workflows:

• Electronic Health Record (EHR)

• AI-powered ambient documentation tools

• Autonomous coding platforms

• Clinical Documentation Improvement (CDI) tools

• Intelligent clearinghouses

• Revenue Cycle Management (RCM) suites

How Does AI Improve Medical Documentation and Coding?

AI can now help you streamline or automate many processes that were previously done manually, improving accuracy and general productivity.

You can leverage the benefits of AI-driven documentation solutions to improve your processes as follows:

• Ambient Clinical Intelligence (ACI): Use it to chart in real-time and generate structured notes in your preferred format. It understands clinical nuance and helps you capture subtle details you might forget when charting after hours.

• AI-powered autonomous coding: Use it for zero-touch workflows in demanding high-volume settings. It often includes real-time Evaluation and Management (E/M) coding to help reduce the risk of overcoding (compliance risk) or undercoding (financial loss).

How Can Healthcare Providers Reduce Administrative Work in Billing?

You can reduce the administrative burden of billing work by:

• Automating front-end verification using RTE tools.

• Streamlining documentation at the point of care using an AI scribe for physicians.

• Leveraging autonomous coding, especially if you are in a high-volume facility.

• Using claim scrubbing tools to reduce downstream denial management tasks.

Conclusion

As we’ve explored, the era of manual medical billing and insurance coding workflows is behind us. Best practices now demand that you embrace technology for nearly all stages of the coding and billing workflow.

It’s especially valuable now that advances in AI make it possible to automate even tasks that require high clinical intelligence and context, such as charting. At DeliverHealth, we are on the cutting edge of AI and can help you streamline charting and coding with our AI-powered solutions.

InstaNote can listen to your patient conversations and write your clinical documentation instantly, while InstaCode ensures a seamless documentation-to-coding workflow.

Request a demo to discover how our AI-powered solutions can help you reduce documentation burden and support your coding and billing workflows.