Medical Billing Process of United States

In this article let us learn about the Medical Billing Process Management, Cycle and Flow Chart Steps of United States of America.

Medical Billing Process

In US the medical expenses are very high, so nearly 90% of the Citizens do have medical insurance

This medical billing process includes various steps and the very first one starts with the Patient and the Payer relation.

Patient and Payer

It is the individual in whose name the policy is taken, it is also known as Policy Holder.


This may include the policyholder’s family members.



Primary Insurance:

It is the insurance company which pays the first or the major share of the patient’s medical bill.

Secondary Insurance:

This pays the balance after the primary insurance which may include co-insurance, the amount applied to deductible as well as charges that are non-covered under the primary policy but may be covered under the secondary policy.


Medical Billing Process Flow Chart:

Medical Billing Process


Patient Registration:

In US, whenever patient wants to visit provider office the first step patient has to do is to take an appointment by registering at the front desk of the doctor’s office by providing the demographic and insurance details.

Patient should also sign an Assignment of Benefits and Release of Information documents.

  • Assignment of Benefits or AOB:

This is a document signed by the patient authorizing the Insurance to pay the provider directly.


  • Release of Information or ROI:

As per the HIPAA regulations we need to protect patient health information.

ROI is a document, signed by the patient authorizing the provider to release his information to all those involved in medical billing process.

HIPAA: Health Insurance Portability and Accountability Act.

This HIPAA act was issued by the US government to Protect Health Information (PHI).


Once the provider office collects the information of the patient, the next step is


Insurance Eligibility Verification:

In this process provider or medical billing company has to verify with insurance company, whether patient services covered under the plan and eligible at the time of service.

It is one of the most important steps in medical billing process. As per the research most of the claims are denied because of incorrect or inadequate information provided by the patient. So it is very important to perform the insurance eligibility verification process to get rid of denials.

Ultimately, the Eligibility-Verification department plays a vital role is curbing the denial of the claims, and bringing in more money to the Doctor’s office, and Medical Billing office as well.


Encounter or Patient Visit Doctor’s Office:

During this stage, the patient meets the Doctor and explains his condition that is the problems he is facing and the Doctor or Provider gives the medication. During this stage, the Doctor’s explanation about the Diagnosis (DX) and Procedure (CPT) is recorded as a voice file.

Diagnosis (DX): This is the disease that the patient has for which he has come in to see the Doctor.

Procedure (CPT): This is the treatment given by the Doctor to the patient.


Medical Transcription:

It is also known as MT, this is the process of converting or transcribing the voice files that the Doctor has recorded during encounter into text format.


Medical Coding:

This is the process of assigning numeric or alpha numeric codes to the diagnosis and the procedures.

Charge Ticket/ Super Bills:

This is a type of charge sheet, which will have a list of procedure codes given by the particular provider. Small-scale provider, laboratories or a radiologist to cut down the cost and time towards transcription and coding usually uses this.

Demo Entry:

Demo Entry means the information of the patient’s demographics and insurance plan is entered into the system at the billing office.


Charge Entry:

Entering of the diagnosis, procedures and modifiers along with related information like date of service (DOS), authorizations (Referral or Prior), the initial date for which the patient has seen the Doctor for this condition (Onset Date) and the billed amount.

Claims: With the help of Demo entry and Charge entry, we proceed to create the claim.

Clearing House:

This is a software application that checks for errors in an E-Claim. If it comes across an error that claims is dropped (Dropped Claim) and claims without errors (Clean Claim) are converted from Billing Company specific format to Insurance Company Specific format and then forwarded to the Insurance Company.

The clearinghouse will then send a report to the billing office, which is known as the SCRUBBER REPORT, which will include the following:

  • Total number of claims received
  • Number of Clean claims.
  • Total number of dropped claims and
  • The reason for dropping the claims.

And the last and final stage in the Medical Billing Process Flow Chart.


Insurance Adjudication Process:

Here we will go through what happens to claim once it reaches the insurance company.

Once the insurance company receives the claim it will check for errors in the claim which might not have been recognized by the Clearing House.

Example: Like patient name mismatch, missing Dx code, the change in a DX code which has not been updated by the clearing house and so on. These claims will be rejected and not sent for the next stage with the insurance company.


Conclusion: So this is the complete medical billing process steps of United States. In our next article, let us discuss more about medical billing terminologies, Billing concepts, Insurance Classification, Managed care plans and AR Denials.

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