How the Medical Billing came into Practice?

Posted on

Medical billing today is the most inevitable professional discipline for the settlement of medical insurance claims across all the medical establishments and medical insurance companies. Before going into detail to see how medical billing came into practice let us see what does it exactly means and what are the basic responsibilities of a medical biller. A medical biller processes the medical information, personal information and related medical information of the patient with the use of alpha numeric codes and send them to the insurance company for further  verification of those information with the objective of processing exact and due amount of medical insurance claim. From the perspectives of medical establishment, medical insurance companies and insured patients medical billing serves as a crucial job distinction to serve the interests of all parties concerned. Let us now see the historical accounts of how medical billing came into practice.

How the Medical Billing came into Practice

Medical service and bill payment before insurance


Before the onset of services of medical insurance companies the bills raised by the physician’s offices used to be directly paid by the clients or patients and there was no complex billing procedure involving the process of keeping records and third party intervention was there. Patients used to pay directly to the attendant physician or staffs for the service they received. This was the common scenario of medical service and corresponding payment of bills before insurance companies came into picture or medical billing came into practice.

The beginning of medical billing


In the beginning when the insurance companies got involved in medical insurance, the officials of the insurance companies had to visit the physician’s offices to make contract of payment of bills for their covered lives. Gradually with the popularity of medical insurance, insurance companies resolved to pay an ‘usual and customary’ amount to the physician as the reimbursement for their service. By the term ‘usual and customary’ meant that the physician would be paid an average of the chargeable amount for the particular service in that region. To maintain proper reimbursement and to hike the rate of received payment physicians started to increase this ‘usual and customary’ rate. With this pulling of interests from both ends of insurance companies and medical services clients started to suffer as they had to give higher premiums for the promised service. With this situation government had to involve with necessary regulations for safeguarding the interests of all concerned parties. With the formation of strict regulations the business of medical insurance got momentum and it spread in the public sphere in huge proportion. With this rise of medical insurance the proper and accurate settlement of claim became necessary as insurance companies with their growing business could afford to pay the claims without getting into the exact process and steps of the bill being raised and verifying them. This made the necessity of a well organized medical billing process felt by both the insurance companies and health care establishments.

From paperwork to computerization


Never can be the description complete of how medical billing came into practice without analyzing the scientific breakthrough in the advancement of the profession. In the beginning medical billing used to be done entirely done on paper and there was no industry specific codes to transmit the patient information but gradually with the growing need of safeguarding the insurance companies’ and policyholder’s interest the use of alpha numeric codes became obvious with the objective of maintaining privacy and secrecy of information. The second biggest leap forward in the history of medical billing is the use of computer, internet and subsequent use of made-for-the-purpose billing software which as a whole completely change the face of the medical billing profession.

From the first advent of medical insurance to the modern medical billing software, medical billing came a long way and its recent rise as one of the top medial profession is only a recent phenomenon.