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October 9, 2023

Understanding Insurance in Medical Billing

Healthcare expenses are growing at a higher rate than inflation, which makes it essential for everyone to have health insurance coverage. Insurance in medical billing helps patients save their emergency funds and savings but also assists in dealing with the mounting medical costs. Furthermore, health insurance offers a range of benefits.
Additionally, as medical billing services providers, we can attest that healthcare insurance, while covering crucial services, is also less expensive than paying out of your pocket. However, you need help understanding and navigating healthcare insurance’s ethos successfully. So, let’s first dive in to understand:

What is Insurance in Medical Billing?

Insurance claims submission is the process of submitting a claim and then following up on it as the payment of services offered by a healthcare professional. Once a claim is submitted for the corresponding services provided by a provider, the billers in healthcare facilities follow these up for receiving remittances.

Importance of Insurance in Medical Billing

Most financial experts and advocates agree that health insurance policies are essential to a patient’s financial planning. Furthermore, insurance must be purchased while you are young and responsible for staying safe and secure. Investing in an insurance plan at an early age comes with many advantages, including:

Better Sum Insurance Coverage
Lower Premium Rates
Not needing medical tests, etc.

Medical Insurance Billing Process

The process of insurance in medical billing does sound overly complex; however, in reality, it comprises 8 simple steps, including the following:

Patient Registration
Financial Responsibility for the Patient Visit
Overviewing Patient Check-In and Check-Out
Observing Coding and Billing Compliance
Preparation and Transfer of Medical Claims
Looking into Payer Adjudication
Producing Patient Bills and Statements
Assigning Patient Payments and Collections Arrangement

Some Basic Insurance Terms

As a patient or a healthcare provider, you must stay aware of the basic insurance terms in medical billing. Some of the common healthcare insurance terms include:

1. Enrollee or Subscriber

A subscriber or (enrollee) is the person who buys the insurance plan themselves, or either their work buys it for them.

2. Dependent or Dependents

Dependents include the subscriber’s:

Civil partner
Spouse
Children up to the age of 26 are covered under the same plan

3. Benefits

Your health insurance plan covers all services or healthcare items.

4. Excluded Services

These are healthcare services that are not included in your health insurance plan.

5. Primary vs. Secondary Insurance Company

There are instances where two insurance plans can cover a person. For example, this happens when a child is covered under both patients’ plans. Double insurance does not mean that a provider is paid twice. Instead, the two policies are termed as the primary policy, while the other is the secondary. For children covered by their parents’ plans, this is decided with the birthday rule. The birthday rule states that whichever parents’ birthday falls first in a calendar year, their policy will be the primary insurance in the medical billing process.

6. Co-Insurance

Co-insurance is the percentage of every bill you pay out of pocket.

7. Co-Payments

Co-payments are the fixed amounts a patient must pay out of their pockets. The co-pay is usually due at the time of services.

8. CCOB (Coordination of Benefits)

Benefits coordination becomes relevant when two or more insurance plans cover the same person. COB is what determines which plan pays first.

9. Deductibles

It is the amount a patient pays for the covered medical services before their insurance plans start paying. For instance, with a $300 deductible, you can pay $300 yourself. However, deductibles might not apply to all services. Furthermore, most health insurance plans have separate deductibles for in-network and out-of-network providers.

10.DME (Durable Medical Equipment)

Supplies or equipment ordered through a healthcare provider for extended or everyday use by the patient. The coverage for DME might include:

Wheelchairs
Medically-necessary splints
Blood testing strips for diabetics
Crutches

Final Word

Realizing the importance of insurance in medical billing is vital for both patients and healthcare service providers. Getting an early insurance policy plan shields patients from rising healthcare costs. Furthermore, careful navigation of the insurance terms is essential. As one of the largest healthcare billing providers, we stress an insurance plan’s cost-effective importance in ensuring financial security amidst health uncertainties.