What is Medical Billing Software & Who Are Qualified Medical Billers?

Few people today realize how complex the process of accurate medical billing has become. This has created a flood of new medical billing services and new medical billing software solutions. Not surprisingly, medical billing software scams abound.

It is critical therefore that both health care providers and those looking for employment as medical billing workers understand the advantages and disadvantages of various types of medical billing software and what it takes to become a qualified medical biller.

Medical Billing Is Hard!

If anyone thinks that processing medical claims is hard and confusing now — just wait, it’s about to get worse.

With the anticipated growth in Medicaid and payments linked to outcomes (because of health care reform), plus the coming huge expansion of diagnosis codes (from 14,000 ICD-9 codes to over 100,000 ICD-10 codes), the complexity is only growing – and at an accelerating pace.

Fortunately, sophisticated medical billing software exists to help health care providers automate and manage data. The danger, however, is that the software systems that have been developed in response to an increasingly staggeringly complex medical billing process have become themselves increasingly complex, and this has created a situation that is ripe for misusing these tools to not only accidentally over-reimburse but to submit false claims-with the attendant risks and penalties.

Types of Medical Billing Software Systems

In 2000, The Department of Health and Human Services ordered its Office of Inspector General to survey the different types of medical billing software to identify how the Medicare reimbursement process could be adversely affected. The Office of Inspector General surveyed four types of systems and identified their strengths and weaknesses:

Basic billing software relies heavily on user knowledge and entry skills. It is widely distributed by Medicare fiscal agents and the private sector. Users key most, if not all, claims information onto a claims facsimile. The software manipulates these entries to produce an electronic claim. Typical errors involve entry errors, incorrect or missing patient or provider information, incorrect or incomplete diagnosis codes or invalid Current Procedural Terminology (CPT) codes. Basic medical billing software, developed for mass markets, usually does not allow users to customize or override its programs. The greater risk of claim error is in data entry.

Informational software augments basic software capabilities. It uses data bases and linked files to recall patient, provider, diagnostic and service information. Invalid code combinations, missing diagnosis and other errors that might prevent processing of a claim can be brought to the user’s attention before the claim is submitted for payment. Informational software does not appear to generate erroneous claims. It provides tools to help providers code their claims accurately. Vulnerabilities are more likely to stem from improper software configuration and use. For example, limited procedure coding options for office visits may steer claim decisions to higher value procedure codes.

Interactive software combines and enhances basic billing and informational software capabilities. It can give the user options for correcting problems detected by the software. What distinguishes interactive software from other medical billing software is its ability to provide the user with information and the likely consequences (no pay, more pay, less pay) of their decision.

Proprietary software may present the greatest risk of misuse. This type of software is developed for a specific user. Inner workings of proprietary software may only be known to a single person or a select few. Hidden programs may add or modify claim information producing erroneous or fraudulent claims. Unlike commercially available software packages, manufactured for a broad market, proprietary software is created to meet a specific, single customer’s needs. Commercial software that produces inaccurate claims has a greater chance of detection and of being reported by honest medical providers. Proprietary software presents a vulnerability to Medicare because it is created for, and used by, a select few. Proprietary software, and not commercial software, poses the greatest risk of being intentionally designed to produce improper or inaccurate claims.

Summary: overall the results from The Department of Health and Human Services Office of Inspector General were encouraging, i.e., companies creating commercial grade medical billing programs “pose little risk of producing erroneous or false claims.” They considered proprietary software, on the other hand, to be more “black boxes” with a higher risk of misuse or fraudulent use. In all systems, the likelihood of human error greatly outweighed the chances of software error.

It is worth noting that the emergence of EMR/EHR systems since this report was prepared raises an entirely new set of issues and concerns. These systems generally make it easy for providers to pick procedure and diagnosis codes (e.g. from a drop-down menu); however, if these products encourage providers to overuse particular codes, there can be substantial risk to the practice.

Qualified Medical Billers

Given these sophisticated software systems, one might think that the job of medical billing service providers has gotten easier. Indeed, almost everywhere you look today, i.e., online, in your email in-box, in magazines and newspapers, it doesn’t take long before you see an ad that claims you can earn a decent living, working at home no less, as a medical billing service provider-no experience necessary.

If this sounds too good to be true – it is.

The Federal Trade Commission has recently filed false advertisements charges against many companies that have sold at-home software package pages that supposedly allow one to work at home processing medical claims:

Few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues-let alone recover their investment and earn a substantial income.

Most of the nation’s leading providers of medical billing software and medical billing services hire medical billers to perform charge entry, payment posting, denial management, A/R follow-up and other billing functions – but most will not to hire billers who work from home.

The training and certification of medical billers and coding specialists is typically strict. For example, many medical billing companies require their billers to be CPC (Certified Professional Code) certified, and such certification requires formal class work followed by a certification process from an industry-recognized institution.

Medical billing software is only going to get more complex going forward, and the demands on medical billing providers is going to increase, but for those with the right training and experience, their employment future is looking bright.