Contrary to mainstream belief, healthcare organizations do not use the same billing system for all kinds of medical practices. There are a variety of medical billing systems for different practices, and overlooking each’s appropriate use can result in significant revenue loss.
Medical billing companies in New York as well as other states, rely on three types of billing systems to streamline their operations. While each system is unique and has its own use, all three work to facilitate the patients and the healthcare system.
This informative blog delves into three types of medical billing, including how and when each is used to manage the excessively rising healthcare demands nationwide.
Overview – 3 Types of medical billing systems
- Closed Medical Billing System: Used by small practices for managing billing, collections, and account receivable processes.
- Open Medical Billing System: Used by large healthcare organizations and allows information sharing among key stakeholders.
- Isolated Medical Billing System: Used by small practices that only see a particular type of patient. Patients use this system to maintain their personal health records through PHR.
What is Medical Billing
Before diving into the different types of medical billing services, let’s look at what a medical billing system is.
Medical billing is a systematic process of claim submissions to insurance companies to receive reimbursement for the rendered treatments to the patients. A medical claim prepared by the biller includes all the necessary information about the patient, such as their personal details, demographics, medical history, insurance verification, etc.
A biller’s job is complex as it requires extensive knowledge of different types of insurance plans and the process of claim submission with different deadlines by each provider.
Medical billing professionals must ensure that the claims are accurate and have been submitted on time, complying with the regulations and policies set by the payers and third-party organizations.
Like any other field, medical billing practices have evolved and become more complex with time. They are broader and more specialized, requiring additional help from billing specialists. Therefore, the billing services have been divided to facilitate different medical practices.
3 Types of Medical Billing Systems
Medical billing systems enable the healthcare staff to store and retrieve patients’ information and track and process transactions. Three primary types of medical billing services are used for different medical practices.
Here are the three main types of medical billing systems:
Closed Medical Billing System
This is the most common type of billing system in the US. The system does not allow any modifications once installed and rolled on. Here are some key elements of the closed medical billing system:
- As the name suggests, the closed system keeps the billing charts and patient health records within the access of a particular clinician.
- The information entered into these systems doesn’t change over time
- It uses digital tools such as Electronic Medical Records (EMR) for treatment charts
- The EMRs contain all the necessary information about the specific provider’s patient, including diagnosis and treatment plans.
- The EMRs can be internally connected with other practices for other healthcare staff to access the records easily.
- The EMRs are only restricted to the physician and the billing department and cannot be used outside of that.
- The system only requires entering data into the software and generating an invoice.
Who can use it?
Typically, small practices with solo physicians use this type of billing system to manage their billing, collections, and account receivables. The major setback of this system is that it does not allow information flow or data sharing between providers and patients.
Open Medical Billing System:
As the name suggests, an open medical billing system offers a relatively more collaborative structure than a closed system. It allows modifications as needed over time but requires timely maintenance from the companies that deploy them. Here is the main element of an open system:
- In this type of system, a patient’s healthcare records travel outside the boundaries of a solo practice.
- The system allows all the concerned parties, such as patients, providers, billing teams, and other healthcare organizations, to access the information.
- The care receiver’s health data can travel to different divisions of the system via Electronic Health Records (EHR)
- The information in the EHR can be accessed and edited by other healthcare professionals and patients without being restricted to a single practice.
- It enables healthcare practices to accept claims from out-of-network insurers to facilitate the patients.
Who can Use it?
An open medical system is specially designed for large healthcare practices with multiple departments for the smooth flow of information. If an organization plans to outsource its billing process to third-party vendors, it must switch to an open system to transmit and keep track of information handled by the billing specialists.
Isolated Medical Billing System:
A system isolated from patients, healthcare facilities, and practices is called an isolated medical billing system. While this type of system does not participate in the billing structure, it does benefit healthcare organizations. Here are some key elements of an isolated medical system.
- Isolated systems are only managed by patients and not by providers or organizations via Personal Health Records (PHR)
- It is a stand-alone software program that only accepts a particular type of insurance by only one type of provider and treats all patients equally.
- It cannot be integrated with other systems and requires the information to be manually entered into independent systems for analysis.
- The data in the system must be regularly checked to ensure everything is up-to-date.
Who can Use them?
Isolated systems are only used by clinics and small healthcare organizations that see only a particular type of patient, for instance, pediatricians. They are only to be used by the patients.
These were the three types of medical billing systems used for different types of medical practices. There is no good or bad system when it comes to determining the usefulness of each. They are installed as per the needs of a healthcare organization with the goal of achieving efficiency.
Outsourcing medical billing services is the best solution for small practices to manage cash flow and claim submissions so they can focus on their core operations. With medical billing companies in New York, you won’t have to worry about your billing processes.