Medical coding billing is an important part of the transaction that takes place between a doctor, his or her patient and the patient’s health insurance provider. Once the patient’s bill has been processed, a claim must be sent to the insurance company in order for the costs to be paid. This claim is referred to as medical coding, or medical billing. A similar process is carried out when making a claim on any type of insurance, but because of the busy nature of the healthcare field, extra paperwork can pose a significant frustration to doctors and other medical staff who are already overloaded with work. Because most medical staff do not have time to deal with insurance claims, many clinics and hospitals will hire a medical billing service for this exact purpose.
A medical billing service is a third-party company hired to help a clinic deal with excess paperwork. While they have been successful in cutting clinic costs and increasing efficiency, they are seen by some as a threat to patient privacy, because they are given access to a patient’s confidential records. Because of this, many medical facilities prefer to hire their own staff to deal with medical billing, as they are subject to the same confidentiality requirements as doctors, nurses and other clinic or hospital staff. Even so, the practice of outsourcing billing to companies located as far away as India is on the rise.

One option for hospitals and clinics that would prefer to keep their medical coding billing within their own facility is to use a practice management software, or health information system, to submit their claims electronically. These computer programs have shown a great increase in efficiency, as they can deal with large quantities of claims at a time, and are often cheaper than hiring a team of people to deal with the same quantity of paperwork. Other benefits to practice management software include the fact that electronic claims can be submitted more quickly than their paper counterparts, and that replies are also sent back at a greater speed. In addition, a patient’s information can be run through the software before the claim is submitted, to see if they are eligible for the requested services. Most health information systems come as licensed software, which can be costly, but several companies offer web-based interfaces, that are much more affordable.

The increase in recent years of electronic claims submissions is partly due to changing regulations in the healthcare field. The Health Insurance Portability and Accountability Act, implemented in 2005, encourages healthcare providers to submit  their claims, as well as other financial and administrative documents, electronically. Many medical facilities have switched to electronic submissions in order to comply with the new medical coding billing regulations.