Medical Billing and Coding Can Be Described

Medical billing and coding can be described as the process of presenting and following up on claims to health insurance companies for the purpose of obtaining payment for services provided by the healthcare provider. Regardless of whether an insurance company is government-owned or privately owned company, the process for medical billing and coding is similar for many companies. For an individual to become a specialist in medical billing and coding, he/she is usually encouraged to become certified through taking an exam. While such individuals are not compelled by the law to do so, certification schools have been established as avenues for theoretical foundation for students entering this field.

What is Medical Billing and Coding?

Generally, the medical billing and coding process is an interaction between the insurance company that caters for the health expenses and the health care provider. Medical coding involves the allocation of either a numeric or alphanumeric code to a clinical procedure, diagnosis, or treatment. This process facilitates the easy, fast, and precise retrieval of information for review of the medical billing and the patient's health information or record. This process is important in the medical field because it can be used in collection of data to carry out health studies, analyze outcomes on patients, and in health care planning.

While billing and coding are used interchangeably in the medical field, coding basically entails translating clinical documentation into numeric or alphanumeric codes. This clinical documentation process can range from a single word or phrase to the entire stay of the patient in hospital. On the contrary, billing involves the management and filing of claims, preparation of insurance forms, processing of working denials and payments. This process usually requires the transfer of necessary information from coded data to reimbursement claims (Becker, 2009).

History of Medical Billing and Coding in America:

Medical billing and coding is a concept that has existed in the medical field for approximately 500 years. However, the history of these practices can be traced back to early 1900s when doctors began to organize themselves into the American Medical Association and other local brands. During the same period, medical billing and coding emerged following the discovery that health care industry needed to establish a standardized approach to tracking patients' diagnosis and treatment. This was also accompanied by the need to offer uniform standards to billing insurance companies for health care services.

In the early 1900s, physicians received their payments for the services they provided when they were called out as hospitals were regarded as separate entities. Consequently, these physicians were no longer anticipated to offer free hospital services with the first insurance policies being provided in 1910. In America, people with medical insurance during this time had received them from industries like railroads. The initial attempts towards a medical insurance were in 1913 when the American Association for Labor Legislation had a conference on social insurance (Morgan, n.d.).

The first initiatives by the American government to provide medical insurance occurred in 1908 when it established an employees' compensation program for its civilian workers. The first successful result or outcomes of these initiatives was in 1911 when Wisconsin started the first successful state system. By 1940, the initial pre-paid group health care plans were set up and later renamed the Health Maintenance Organizations. As Medicaid and Medicare were enacted into law in 1950, over 700 private health insurance firms had emerged a decade later.

The initial health insurance claims were made on paper and medical billing required complicated forms like the CMS-1500 provided by the Centers of Medicare and Medicaid services. During the 1970s and 1980s, a fee-for-service model was in use with which health care providers would charge for every individual service they provided. Since insurance companies negotiated the fees and paid based on the fees, patients experienced shortfalls as doctors usually charged more. Significant changes in these procedures occurred in mid-1980s when the government and private insurers established fixed-payment methods with complex diagnoses codes. The 1996 HIPAA Act brought many stipulations including the need for electronic billing and up-to-date technology in attempts to streamline this practice.

The use of classification systems in medical billing and coding can be traced back to 1948 when the World Health Organization created the International Classification of Diseases that is updated after every decade. As WHO took control of the classification system, there are other classification systems that were developed in the United States for domestic purposes. The Common Procedural Terminology (CPT), which is updated annually, was developed in 1966 by the American Medical Association and describes medical services and procedures.