Why Physicians go for Medical Billing Companies to do billing?

America has more than 3000 insurance companies, each with a number of plans. This posed a problem to the physicians. Every insurance company required the medical claims filed to them according to their own rules and formats. Also, when physicians sent out claims to these insurance companies the explanation of the diagnosis and the treatment, necessary to every claim, were voluminous and time consuming.

The forms and codes developed by Center for Medicare and Medicaid Services (CMS – formerly known as HealthCare Financing Administration HCFA) reduced the volume of the information to be transferred to the insurance companies but the volume was still considerable and required skill and time. The medical treatment performed still had to be encoded. These codes, with the patients’ demographic information, still had to be entered into specific medical billing software’s. This process was again time consuming and the extra personnel and infrastructure meant extra costs. They could not handle the volume and turned to specialist billing offices for assistance.

It was easier for a physician to source their non-medical, accounting work to a billing office so that he could concentrate on his practice. Thus the medical billing office became an intermediary between the physician and the insurance companies.

The billing office collects information relevant to the patients’ treatment from the physicians’ office. Using these codes and forms, the billing office bills the insurance companies and patients on behalf of the physicians. Until recently, medical billing was usually done by typing out and mailing claims to various insurance companies. Now the objective of the medical billing industry is to offer fast, efficient, and error-free claims processing using computers to log and transmit claims to the insurance companies.