How long is a Medical Billing Cycle?
The medical billing cycle is the cornerstone of financial operations in healthcare; it ensures that providers are reimbursed for the services while taking care of the compliance and patient satisfaction. For healthcare professionals, understanding the duration and intricacies of this cycle can be tough so through this blog post I have explored the medical billing cycle in depth, detailing its definition, what are the steps to follow, with the duration and best practices. By partnering with Shoreline Healthcare Technologies, providers can stay calm and focus on patient care.
What Is Medical Billing?
It is the process of submitting and tracking the claims with insurance to obtain the payment for the services rendered to patients. It serves as the financial backbone of healthcare practices, transforming clinical services into revenue.
Reports from Healthcare Financial Management Association (HFMA), highlights that effective billing practices can reduce claim denial rates by 10%-20%, significantly improving cash flow.
The Medical Billing Cycle: Steps and Duration
The medical billing cycle begins with the patient’s appointment fixing, goes through verification, coding, charge capture, submitting and tracking the payment with the payer till the final payment collection. And the duration of the process depends on the payers such as Medicare, Medicaid and other commercial insurances, accuracy of the claims submitted, and the efficiency of the internal workflows. On an average, the process can be completed anywhere from 30 to 90 days. However, any missteps in billing can delay or reject the claims further extending the time frame. Let’s have a look at the key steps involved in the medical billing cycle, their typical duration, and best practices to optimize each stage. For US healthcare professionals, mastering the billing cycle is key to delivering quality care while maintaining a healthy bottom line.
Step 1: Patient’s Pre-Registration
Duration: 1–3 days
Pre-registration is the foundation of the billing cycle and begins once the appointment is scheduled. It involves collecting demographic details like legal name, address, date of birth, insurance information (policy number, provider), and patient’s medical history.
Best Practices to follow:
- Using electronic health record (EHR) systems for seamless integration of data.
- Verifying the patient information to avoid errors.
We at Shoreline Healthcare Technologies use the advanced EHR software that integrates with the billing system , ensuring error-free registration and setting the stage for a smooth billing cycle.
Step 2: Insurance Verification
Duration: 1–2 days
The next step in the cycle is getting the patient’s insurance details and verifying the coverage information, policy status, services provided, co-pays, deductibles, and preauthorization requirements. It helps to prevent claim denials due to ineligible services or lack of authorization.
Best Practices to follow:
- Contact insurers directly or use automated verification software.
- Check whether preauthorization is needed for specific procedures.
- Document all verification details in the patient’s record.
According to the report issued by The Centers for Medicare & Medicaid Services (CMS), it is found that 10% of claims are denied due to improper verification of the insurance details.
We at Shoreline Healthcare Technologies use a cloud-based software to verify the insurance coverage details in real-time, thereby reducing denial rates and ensuring compliance with payer requirements.
Step 3: Patient Encounter and Service Delivery
Duration: Same day as visit
During the visit, physicians record the diagnoses and procedures performed, or any supplies used. This clear and detail record is very important for coding and billing.
Best Practices to follow:
- Document all the details thoroughly with the physician signature on each page.
- Use standardized templates to streamline documentation.
- Train clinicians on the need for proper documentation practices.
Step 4: Medical Coding
Duration: 1–3 days
Coding is the most crucial part of the entire billing cycle. It involves translating the clinical documentation into standardized codes, such as Current Procedural Terminology (CPT) and International Classification of Diseases (ICD-10-CM), which communicate the diagnoses and procedures to payers for reimbursement.
Best Practices:
- Employ certified coders familiar with the latest CPT and ICD-10-CM.
- Use latest coding software to reduce errors.
- Stay updated on CMS coding guidelines to avoid claim rejections.
Step 5: Charge Capture and Entry
Duration: 1–2 days
Charge capture involves recording all billable services provided during the patient encounter. The charges can be manually entered or automated into the Practice Management System.
Best Practices to follow:
- Automate charge capture to reduce missed charges.
- Review charges for accuracy before submission.
- Conduct regular audits to identify missed or miscoded charges.
Step 6: Claim Submission
Duration: 1–2 days
After the charge entry the claims are submitted electronically to payers via Electronic Data Interchange (EDI) using the clearing houses. The expedite the claim validation before submitting it to the payer.
Best Practices to follow:
- Use claim scrubbing software to identify errors before submission.
- Submit claims promptly to meet payer deadlines.
- Track submission status to ensure timely processing.
Step 7: Claims Adjudication
Duration: 14–30 days
The submitted clams are reviewed for their accuracy, medical necessity, and compliance with coverage policies by the Insurance companies. Based on the criteria met these claims can be approved, denied, or partially and payments are issued via electronic funds transfer (EFT) or checks.
Best Practices to follow:
- Monitor adjudication status through payer portals.
- Address partial payments or denials promptly.
- Maintain clear communication with payers.
Step 8: Payment Posting
Duration: 1–2 days
Once the claims are accepted the insurance process the payment which is recorded in the EHR or practice management system, with the Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA).
Best Practices to follow:
- Post payments promptly to maintain cash flow.
- Use automated payment posting tools for efficiency.
Step 9: Denial Management
Duration: 7–14 days
It involves reviewing and identifying the errors. Check for incorrect codes or missing documents and information. Once corrected these claims are again submitted, and appeals are filed if necessary.
Best Practices to follow:
- Analyze the reasons for denials to prevent recurrence.
- Check for the payer deadlines and resubmit within the time frame.
- Maintain a robust appeals process.
Step 10: Patient Billing and Collections
Duration: 30–60 days
After receiving the insurance payments, the remaining balance has to be billed to the patient. Provide a clear, transparent bill with flexible payment options or plans to encourage timely payments.
Best Practices to follow:
- Provide clear, itemized patient statements.
- Offer online payment portals for convenience.
- Follow up on unpaid balances regularly.
The medical billing cycle is a complex process typically spanning for about 30–90 days. A prolonged billing cycle weakens financial health, burdens administrative staff, and delays provider payments. From front-end data capture to back-end collections, every step matters. By understanding and optimizing each step providers can enjoy timely reimbursements and financial stability. By outsourcing your billing processes to an expert team like Shoreline Healthcare Technologies you can make use of the expertise and technology to streamline the cycle, reduce denials, and enhance revenue.
FAQs
Q1. How long does it take to complete a medical billing cycle?
+On average, a complete billing cycle takes from 30 to 90 days. But with efficient practices like using automation and expert billing teams like Shoreline Healthcare Technologies we can reduce this to under 45 days.
Q2. What causes delays in the billing process?
+Use of incorrect codes, incomplete & insufficient documents, failure to get pre-authorization, and lack of timely follow-up on denials can cause delay in the process.
Q3. Does outsourcing billing service can we get the payment early?
+Yes. By Outsourcing to a professional firm like Shoreline Healthcare Technologies improves claim accuracy and with less denial rates we can get quicker reimbursements.
Q4. Can digital tools help reduce billing cycle time?
+Yes Absolutely. With EHR integration, automated eligibility verification, and denial tracking tools we can significantly streamline the cycle and makes the process quicker.
Q5. Why is accurate coding important in medical billing?
+Use of correct codes ensures proper reimbursement, reduces denials, and maintains compliance with regulations and helps to shorten the billing cycle.
Q6. Is ShorelineMB the same as Shoreline Healthcare Technologies?
+Yes, ShorelineMB.com is the official website of Shoreline Healthcare Technologies, a leading provider of medical billing and RCM services.
Sharanya Rajmohan
Content Writer
Sharanya brings clarity to the complexities of medical billing and healthcare regulations. With a knack for turning industry shifts into straightforward, actionable insights, her blogs help readers stay informed without the jargon.
Contact Shoreline Healthcare Technologies today and learn to optimize your revenue cycle.