The process of availing of healthcare services is quite straightforward. Book an appointment, pay, get checked, and then buy medicine if it has been prescribed. However, a variety of patients exist in the market. Some of them are insured while others are not. Insured patients may be availing PPO (Preferred Provider Organization), HMO (Health Maintenance Organization), POS (Points of Service), or any other type of plan. All of these factors affect the way medical bills are made.

Though it may seem as if it’s only important for the patient to select the best insurance provider and pay invoices; it is equally as important to understand where they come from. After all, how do medical care providers justify the amount they charge for their services and how do insurance plans play a role in the billing process?

The origin of invoicing

Invoices can be traced back to Mesopotamia when the barter system was still in place. Except money was not exchanged and transactions were recorded on clay tablets. This led to the invention of writing and the concept of recording transactions in a rudimentary form of bills. Until the 1800’s bills were merely used to record transactions. It was only during the industrial revolutions that the first bills as we know them today started to emerge. This was largely thanks to the adoption of paper-based money in Europe during the 17th century, in Sweden.

During the 1900’s many companies started printing out invoices with their company’s logo in them. It was also around this time that they started to evolve into the modern-day bills we know today. It was not until the 1960’s that the concept of electronic invoicing was developed. Though many companies were skeptical, large corporations started adopting it in certain departments. After the successful integration of these systems, more and more industries started adopting the practice. For example, by introducing electronic billing systems Microsoft was able to save 2 million dollars annually. Nowadays almost every industry makes use of electronic invoicing systems.

Digitization of Medical Billing procedures

Almost 50 years ago medical billing procedures were largely inefficient. They were paper-based which led to the process of making and clearing claims one that took days, sometimes even weeks. Even after processing, payments would be delayed, bills would slip through the cracks, and revenue generation was large less profitable than what it could be. Since the introduction of electronic invoicing software in the ’60s, the billing procedure has come a long way, from an exclusively paper-based procedure to a largely electronic one.

Nowadays, medical coding and billing are now executed via the use of sophisticated software. Many companies offer complete telehealth solutions along with free medical billing services. The CAQH has estimated using medical billing software for a single claim can save a practice 40 minutes and 15 dollars in direct costs. Though many practices haven’t completely digitized their medical billing procedures.

Still, those practices that have chosen to avail free medical billing services  have observed an unprecedented boost in efficiency because it has cut down the time needed in the process. First, verifying a patient’s eligibility, their insurance status takes minutes.  It is much easier to obtain verified information and make superbills making the process smoother for the patient. However, before analyzing the advantages of medical billing software it is important to understand what medical coding and medical billing are.

What is Medical Coding?

Medical coding involves the use of codes to describe the diagnosis, and medical services conveyed to the patient during the appointment. The codes entered are standardized and revised every few years. There are a few code sets that are generally used in the healthcare industry. The first one is, ICD-10 which is used to describe the patient’s demographics, condition, ailment, and injuries. The second one is also a diagnostic code; the CPT code set is used for uninsured patients. Hence, the CPT code set uses ICD-10 codes.  Finally, the HCPS procedure codes are used for non-medical services such as ambulance rides and usage of prescription drugs.

Before the 80’s the process was paper-based with over 70,000 recorded manually. Nowadays thanks to the introduction of medical coding software, the process has become efficient and automated. Medical coding precedes billing, a bill cannot be produced without the proper coding. When medical coding is performed incorrectly it results in potential losses because if procedures are not documented they cannot be justified in and the claims (Invoices or Bills are also known as “claims” in the healthcare industry).  can be denied or worse, be written off. Furthermore, if the codes are documented incorrectly then healthcare providers can face a potential lawsuits for fraud.

What is Medical Billing?

Medical billing is the process of making claims when a patient avails a physician’s services. Though the definition is fairly straightforward, there’s a multitude of elements involved in the invoicing procedure making it a complex process.

The billing process begins with a patient reserving an appointment and ends with the payment delivered to hospitals/practices and ultimately the physicians. They can be administered by the doctor, trained specialists, or a third party offering paid or free medical billing services.

Though medical billers are primarily concerned with the bill making procedure they also participate in the information verification procedures. They ensure that a patient’s personal information, insurance provider are legitimate and up to date when they check-in.

If during or after the appointment a particular procedure is requested, medical billing staff ensure that the requested treatment is covered by their insurance and submit authorization to carry it out if needed. Fees are adjusted and discounts are provided according to the policy of the insurance provider.

Insurance “claims” need to be generated for the portion of the bill that has to be paid by insurance providers. Medical coders and billers work on creating “superbills” which are forms that are used to create claims for insurance providers for reimbursement. Each procedure carried out by the physician must be justified or it will be rejected or denied which leads to suboptimization of revenue generation. The whole process was paper-based requiring a dedicated team to keep track of bills from physicians, patients, and insurance providers. Even then, revenue generation was subpar because bills were misplaced, lost, or not recorded properly. Which is why many practices now use billing software or work with outsourcing companies that provide free medical billing services.

Finally, payments and co-payments are collected from the patients. They can choose to pay upfront or in 30 days depending on the insurance or hospital’s policy. In the case payments are not received, then a reminder has to be posted to patients. Further non-payment compliance has to be dealt with swiftly to ensure revenue collection.

Strategic Benefits of Billing Software

Maximizing Efficiency and Reducing Costs

David Cutler’s policy proposal “Reducing Administrative costs in U.S Health Care” states that just the costs of claims related activity and prior authorization is around 140 billion dollars annually. This is solved when making use of electronic billing systems practices, the cost of office supplies such as paper and ink go are mostly eliminated making the business more ecofriendly. Furthermore, the use of medical billing software decreases the amount of time healthcare providers need to spend on administrative tasks. Furthermore, if a practice chooses a business that provides free medical billing services, efficiency in administrative expenditure will soar.  It also reduces the need for a large team of medical billing specialists to keep track of claims and invoicing procedures.

Access data securely through an online portal

It doesn’t matter how efficient a filing procedure is, physical copies of documents can be stolen easily, difficult to work with, and often scattered in a large file room. This often leads to staff wasting time trying to find files. A physical record also needs is time-consuming to manually organize and update with incoming data. The medical billing software allows you to keep track of all of your data: claims, superbills, statements of charges, and EOB’s from insurance companies in one place. They can be accessed simultaneously with one click all without taking up space and backed up in cloud-based servers. It is also easier to initiate claims, track receivables, and reducing denials of claims. They also generate payment reminders for receivables.

Increased growth

Patient data is automatically connected to the billing system. Both previous patient records and current patient records can be accessed simultaneously. Their eligibility and previous health record can be checked instantaneously. Being able to trace every single piece of information and updating in real-time helps practices increase their transparency and at the same time, increase their revenue collection. Which in turn helps health care practitioners expand their business. This is especially true for practices that avail free medical billing services because it allows health care providers to focus on delivering quality healthcare services to patients whilst obtaining their payments from patients and insurance providers on time.

Outsourcing Medical Billing

Many private practices and hospitals choose to have dedicated in house medical coding and billing staff.  However, many of these have started to shift towards outsourcing their billing particularly telehealth, and private practices. Some providers even provide free medical billing services with their telehealth services. According to Grand View Research, the global medical billing outsourcing market is worth 23.1 billion dollars, and it is projected to grow at a rate of 12.3%.

One of the biggest reasons why they choose to do so is that medical billing software requires a fair bit of coding, they are not always intuitive to use. Naturally, health care practitioners are not software specialists and it takes up a significant portion of their time to engage in the billing procedure.

Why more health care providers are outsourcing their medical billing

One of the biggest advantages of outsourcing is that there are many businesses offering free medical billing services. Practices are dealing with trained experts who have extensive experience working with different types of practices. They are up-to-date with the latest developments in the industry. In-house medical billing staff on the other hand usually requires specialized training which can lead to increased costs.

However, for Medical Billing service providers changes in laws, codes, and updates in software is something they have to handle daily because their business is dependent on it. Hence, they’re much more efficient at the revenue management cycle.

Outsourcing not only allows practices to access to free medical billing services but also have access the latest technological developments without needing to spend an extra amount of money. They no longer have to make investments in software purchases or spend an exorbitant amount of money upgrading existing software. It becomes the responsibility of the medical billing service provider.

The most important advantage of outsourcing is that it saves time. Physicians, nurses, and other healthcare providers do not need to worry about the time-consuming billing procedures. As a result, you and your staff can worry about what matters more, providing the best service to patients.

Outsourcing is compatible with both general and niche practitioners. Though, if a practice is specific then it would benefit more from a provider that has experience in the niche that the practice is currently working in. General practices that make use of general codes do not need to worry because the billing process is straightforward and most medical billing service providers can handle it efficiently.

The only disadvantage of free medical billing services is that often hospitals are not entirely comfortable turning over their billing department to a third party. The provider’s system may not necessarily be compatible with the system you use at an office. Practices also feel like their overall control decreases because any problems arising within the office can be solved in person which is not the case for an online management system. However, this can easily be solved by choosing the right provider.


Medical Billing has come a long way, from costly manually recorded transactions to sophisticated free medical billing services that have eliminated human error. Outsourcing medical billing software has also helped practices and hospitals of all sizes deliver the highest quality of patient care. By deciding to entrust time-consuming administrative tasks like billing, healthcare providers can rest assured that claims will be processed in an efficient and timely manner, maximizing revenue generation.

Outsquare is one stop solution for all your telehealth platform needs.  Not only will you get a clinic portal, secured messaging, and HIPAA- compliant secured clouds with encryption, but also assist your practice with free medical billing services.  Medical Billing services include online scheduling, self-check-in, integrated billing, and an experienced RCM team at your service.  Take complete over your bills and money. Contact us at (516) 6304 025

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