Running a medical practice isn’t just about caring for patients—it’s also about keeping the doors open. And that means getting paid for the services you provide.

This is where medical billing and coding play a crucial role. To most providers, billing feels like a maze of codes, forms, and denials.

However, if you understand the basics and establish robust processes, your practice can avoid unnecessary revenue loss.

Think of billing and coding as the translation between the care you deliver and the payment you receive.

Coding converts the clinical side (diagnosis, procedures) into universal codes, while billing turns those codes into claims and reimbursement. Let’s break it down step by step.

Medical Billing vs. Medical Coding: What’s the Difference?

Many providers use “billing” and “coding” interchangeably, but they’re two different steps in the revenue cycle.

Medical Coding: Translating diagnoses, treatments, and procedures into standardized codes like ICD-10 (diagnoses), CPT (procedures), and HCPCS (supplies, drugs, equipment).

Example: A patient presents with strep throat. The coder assigns ICD-10 code J02.0 (Strep throat) and CPT code 87880 (Rapid strep test).

Medical Billing: Taking those codes and creating a claim to send to insurance payers. The biller ensures eligibility, applies modifiers, checks payer rules, and follows up on payments or denials to ensure timely resolution.

Example: The biller submits the strep test claim to Blue Cross. If denied for “no medical necessity,” they check documentation, appeal, and resubmit.

Think of coding as the language and billing as the process that ensures you actually get paid. Both must work hand in hand.

The Medical Billing Process (Step by Step)

Billing isn’t just “send a claim, get paid.” It’s a structured workflow with multiple checkpoints. Each stage ensures accuracy, compliance, and timely payment. Here’s how a typical practice should handle it:

1. Patient Registration & Insurance Verification

Every billing journey begins the moment a patient checks in. Registration is more than just writing down a name—it’s about capturing the right demographics and confirming insurance before care is delivered. If mistakes happen here, they ripple through the rest of the billing cycle.

• Collect demographic info (name, DOB, address).
• Verify insurance coverage (eligibility check via clearinghouse/portal).
• Confirm co-pays, deductibles, and prior authorizations.

2. Documentation of Services

Once the visit starts, accurate documentation becomes the backbone of billing. Providers must record the patient’s story, exam details, and treatments in a clear and structured manner. Without complete notes, there’s no basis for coding, reimbursement, or even legal protection.

• Document patient visit details (chief complaint, history, exam, treatment).
• Record personal, service, and payer details.
• Ensure accuracy because if it’s not written, you can’t code or bill it.

3. Medical Coding

Here’s where clinical language gets translated into numbers. Coding bridges the gap between what happened in the exam room and how payers recognize it. The correct ICD-10, CPT, or HCPCS codes ensure compliance and fair payment—while incorrect ones can result in denials or underpayments.

• Assign ICD-10 for diagnosis.
• Assign CPT/HCPCS codes for procedures and supplies.
• Apply modifiers when needed (e.g., modifier 25 for separate E/M on the same day as procedure).

4. Charge Entry & Claim Creation

With documentation and coding in place, the next step is turning all that data into a claim. This is where accuracy matters most, because the claim acts as your official request for payment. A clean claim upfront saves time chasing denials later.

• Enter codes into practice management software.
• Build claims with patient data + coding.

5. Claim Scrubbing & Submission

Before claims reach the payer, they go through a “scrubbing” process. Think of it as proofreading—catching typos, missing fields, or coding mismatches before they cause rejections. Once scrubbed, the claim is submitted electronically for processing.

• Clearinghouse scrubs claim for errors.
• The claim is sent electronically (EDI) to the insurance company.

6. Adjudication & Payment Posting

At this point, the ball is in the payer’s court. Insurance companies review the claim, make a decision, and send back an Explanation of Benefits. Payments and adjustments are then entered into the billing system to update the account balance.

• Payer processes claim (approve, deny, or adjust).
• Payments (EOB/ERA) are posted into the system.

7. Denial Management & Appeals

Not every claim gets paid the first time. Denials happen, but what matters is how quickly and effectively the practice responds. Identifying the cause, correcting the issue, and resubmitting or appealing ensures revenue doesn’t slip through the cracks.

• Review denials for cause (coding errors, missing documentation, authorization issues).
• Resubmit corrected claims or file appeals.

8. Patient Billing & Collections

The final step is communicating with patients about what they owe. Bills should be clear, accurate, and timely—otherwise, balances can turn into bad debt. Strong patient communication not only boosts collections but also builds trust.

• Bill patients for deductibles, co-pays, or non-covered services.
• Provide clear communication to reduce bad debt.

6. Adjudication & Payment Posting

Once a claim reaches the payer, it undergoes adjudication—the review process that determines whether the claim is approved, denied, or adjusted. The outcome is sent back as an Explanation of Benefits (EOB) or an Electronic Remittance Advice (ERA). At this stage, the billing team posts payments and adjustments into the system to keep patient accounts accurate.

• Payments (EOB/ERA) are posted into the system.

7. Denial Management & Appeals

Even the cleanest claims can face denials. These issues can arise due to coding mistakes, missing documentation, or prior authorization problems. The key is not to let denials pile up—each one must be analyzed, corrected, and resubmitted quickly to recover lost revenue. Appeals, when necessary, should be backed by solid documentation.

• Denials are reviewed for cause (coding errors, missing documentation, authorization issues).
• Corrected claim or appeal is resubmitted.

8. Patient Billing & Collections

After insurance has paid its share, the responsibility often shifts to the patient. This includes co-pays, deductibles, or charges for services not covered by their plan. Sending clear, easy-to-understand bills helps patients know exactly what they owe, reducing confusion and boosting collection rates. Good communication here also preserves trust between the practice and its patients.

• Patient is billed for deductibles, co-pays, or non-covered services.
• Clear communication reduces bad debt.

Coding Systems You Must Know

Medical billing and coding run on a universal “language” of numbers and letters. These codes ensure that providers, payers, and government agencies all speak the same language when it comes to patient care. Without them, claims would be confusing narratives instead of standardized data. Here are the three main coding systems every provider works with daily:

ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification)

This system focuses on why the patient is being treated—the diagnosis. ICD-10-CM codes describe conditions, illnesses, and injuries in incredible detail, allowing payers to understand the medical necessity behind services. Every bill starts here because, without a diagnosis, procedures can’t be justified.

• Used for diagnoses.
• Example: E11.9 = Type 2 diabetes mellitus without complications.

CPT (Current Procedural Terminology)

If ICD-10 explains why the patient is being treated, CPT explains what was done. These codes encompass a wide range, from routine check-ups to complex surgeries. Maintained by the American Medical Association, CPT codes are the backbone of outpatient billing and have a direct influence on reimbursement.

• Maintained by AMA. Describes medical, surgical, and diagnostic procedures.
• Example: 99213 = Office/outpatient visit, established patient, low complexity.

HCPCS Level II

While CPT covers most procedures, it doesn’t cover everything. That’s where HCPCS Level II comes in. These codes identify supplies, equipment, and medications that providers use daily—things like wheelchairs, ambulance rides, or chemotherapy drugs. They fill the gaps that CPT leaves behind.

• Used for supplies, equipment, and drugs not in CPT.
• Example: A0428 = Ambulance service, basic life support, non-emergency.

Payer-Specific Rules You Can’t Ignore

Each payer (Medicare, Medicaid, and commercial insurers) has quirks that providers must understand:

Medicare

• Covers patients 65+ and some disabled individuals.

• Follows strict guidelines (LCDs, NCDs).

• Common denials: lack of medical necessity, missing modifiers, frequency limits.

Example: Medicare may only cover a bone density scan once every two years.

Medicaid

• State-administered program for low-income individuals.

• Each state has unique rules.

Common issues include pre-authorization, strict documentation, and retroactive eligibility.

Commercial Payers (Aetna, Cigna, BCBS, UnitedHealthcare, etc.)

• Rules vary widely by plan.

• Frequent denials: “not covered under plan,” “out-of-network,” or “duplicate claim.”

Example: BCBS may bundle certain lab tests, while Aetna may require modifiers.

Common Billing Mistakes (That Cost You Money)

Even the best practices can lose revenue due to small errors that slip through the cracks. The problem? Most of these mistakes are preventable with the right workflow and attention to detail. Here are some of the most common slip-ups that can quickly drain your bottom line:

Wrong Patient Information → Claim Rejection

A single typo in a name, date of birth, or insurance ID can be enough to reject a claim. These rejections waste staff time and delay payment. Always double-check patient demographics during registration.

Incorrect Coding → Underpayment or Denial

Choosing the wrong diagnosis or procedure code means the payer either denies the claim or reimburses at a lower rate. Both scenarios hurt your revenue and compliance record. Proper training and audits reduce these costly errors.

Missing Modifiers → Partial Denial

Modifiers indicate to the payer whether a service was distinct, bundled, or required additional effort. Forgetting to add them—such as modifier 25 or 59—can lead to services being bundled together, resulting in partial or no payment.

Not Checking Eligibility → Non-Covered Services

Skipping eligibility verification is akin to treating a patient without sight. If the service isn’t covered, you end up with unpaid claims and angry patients. Always confirm coverage, deductibles, and prior authorizations upfront to avoid any unexpected costs or delays.

Late Claim Submission → Timely Filing Denials

Every payer has strict deadlines for claim submission. Miss them, and the claim is automatically denied—no second chances. Staying on top of submission timelines is crucial to avoid wasting money.

Poor Documentation → Audits and Recoupments

If it isn’t documented, it didn’t happen—that’s how payers and auditors see it. Incomplete or vague notes not only cause denials but can also trigger audits and repayment demands. Strong documentation protects both revenue and compliance.

Documentation and Compliance

Auditors live by the phrase: “If it’s not documented, it didn’t happen.”

• Always document: history, exam, treatment, time spent (if billing by time).
• Support medical necessity: show why the service was needed.
• Stay updated with payer compliance rules (especially Medicare).

Failing documentation isn’t just about denials—it risks audits, fines, and penalties under HIPAA and the False Claims Act.

Modifiers, Bundling & Coding Challenges

Modifiers are two-digit codes that provide payers with additional information about a service. Examples:

• 25: Significant, separately identifiable E/M service.
• 59: Distinct procedural service.
• 95: Telehealth service.

If you skip modifiers, expect reduced payments. If you misuse them, expect audits.

Bundling is another headache—some services are “packaged” together, meaning you can’t bill separately. For instance, certain surgical follow-ups are bundled into the global period.

Best Practices for Smooth Billing

Let’s make this section highly actionable for providers and practices:

• Run eligibility checks before every visit – Avoid unpaid claims.
• Use claim scrubbing software – Catch errors before payers do.
• Track denials weekly – Don’t let denied claims pile up.
• Create payer-specific cheat sheets – Reduce repetitive mistakes.
• Invest in coder training – ICD-10 and CPT updates occur annually.
• Post payments daily – Keeps A/R clean.
• Follow timely filing deadlines – Medicare: 1 year, commercial payers: 90–180 days.
• Audit your own claims quarterly – Prevent surprise audits.
• Communicate with patients upfront – Explain deductibles, co-pays, and balances.
• Consider outsourcing billing – If administrative work consumes provider time, a billing company can enhance collections.

FAQs

How long does it take to get reimbursed?

Payers reimburse according to the following timeline

• Medicare: 14–30 days.
• Commercial payers: 30–45 days.
• Medicaid: Varies by state.

Do providers need separate billers and coders?

Small practices often have one person handling both administrative and clinical tasks.

Larger practices benefit from separation—coders focus on accuracy, billers on payment.

What’s the average denial rate for practices?

The industry average is 5–10%, but some practices see rates of 20% or higher due to errors.

Can providers appeal denied claims?

Yes. Most payers allow at least one level of appeal. Strong documentation is key.

Should we outsource billing?

Depends on volume and staff capacity. Outsourcing often improves collections and reduces admin headaches, especially for specialty practices.

Final Thoughts

Billing and coding aren’t the “fun” part of medicine, but they’re the fuel that keeps your practice running. The truth is, most revenue loss isn’t due to low reimbursement rates—it’s due to preventable mistakes: missed eligibility checks, coding errors, or late submissions.

If you establish solid processes, train your staff, and stay compliant with payer rules, you’ll experience smoother cash flow and fewer denials. And if all this feels overwhelming, partnering with an experienced billing service, such as Swiftcare Billing, can help you focus on what you do best: treating patients.