Medical billing is the process of submitting and following up on claims with health insurance companies to receive payment for services provided by healthcare providers. It is a critical component of RCM, encompassing several key steps to ensure that healthcare providers are reimbursed for their services efficiently and accurately. Each step plays a vital role, contributing to the financial health of the healthcare provider. However, charge entry stands out as a particularly critical stage because it involves handling sensitive data directly tied to the financial aspect of billing.

Charge entry in medical billing is the process of recording and submitting charges for the medical services and procedures provided to patients. It is essentially the initial step in the revenue cycle where healthcare providers document the details of services rendered and initiate the claim for reimbursement.

The process starts by gathering key details about the patient, including their background information, medical history, and how they plan to cover the cost of the visit (insurance or self-pay). Then, information about the appointment itself is collected, such as the date, healthcare professionals involved, and specific services provided. This process not only affects the financial health of healthcare organizations but also has significant implications for patients and payors.

Important Steps in Charge Entry Process: 

Charge entry captures service details and ensures accurate reimbursement. Here's a breakdown of the key stages involved in this process^[1]:

1. Step 1 - Receiving Files

EOBs (Explanation of Benefits) and checks are received securely from the client in a scanned format. These documents contain critical information about patient claims, payments, and any discrepancies that need to be addressed. Upon receipt, the files are securely transmitted to ensure data privacy and confidentiality. This initial step sets the foundation for the entire billing process, ensuring that all necessary information is available for subsequent stages.

2. Step 2 - Retrieval and Assignment

The Medical Billing team downloads the scanned EOBs and checks from the secure FTP site, ensuring all files are complete. The team reviews the documents for accuracy and completeness, checking for any missing information or errors. After this review, the files are organized into batches and assigned to the Payment Posting team based on workload and expertise. This structured approach maintains a smooth workflow and minimizes delays in the billing cycle.

3. Step 3 - Patient Data Input

The Payment Posting team meticulously records essential patient demographic information into the billing system. This includes comprehensive details such as patient reference and billing particulars like the patient account number, amounts allowed, billed, adjusted, and paid. Additionally, any denial-related information, such as reasons for denial and actions taken, is also documented with precision. By capturing these crucial data points accurately, the team ensures the integrity and completeness of patient records within the billing system.

4. Step 4 - Explanation of Benefits (EOB) Follow-Up

In this step, a thorough investigation into partial payments is conducted, analyzing discrepancies by comparing EOB documents with claims and payment records. It aims to uncover billing inaccuracies or coding errors, taking corrective actions to ensure clients receive full reimbursements. This proactive approach minimizes financial losses and streamlines the revenue cycle.

5. Step 5 - Claims Review

The Billing Resources team reviews each denied Explanation of Benefits (EOB) claim, examining denial reasons, medical records, and billing documentation. They scrutinize coding, documentation, and compliance with payer policies to identify root causes and assess claim validity. Based on the analysis, actionable insights and recommendations, including appeals, error correction, and preventive measures are provided. 

Impact of Charge Entry Process on Patients, Payors and Providers:

Charge entry is not just a step in the Medical Billing process; errors in charge entry can significantly affect revenue. Incorrect codes or fees can cause underbilling, resulting in lost revenue for healthcare providers. A study revealed that about 8% of claims are denied due to eligibility problems and claim denial rates have increased significantly, with nearly half of financial leaders in healthcare reporting an increase. Specifically, 37% noted an increase of at least 5% in claim denials^[2]​. Additionally, these errors can lead to claim denials and payment delays, further impacting cash flow. Here is how it impacts the key players:

• Patients: Inaccurate charges can lead to unanticipated bills and delays in care. They may receive unexpected bills that are much higher than they anticipated. Additionally, errors in charge entry can lead to delays in care. If a provider's records inaccurately reflect the services a patient received, it could hold up the processing of insurance claims or prevent patients from getting authorized for necessary treatments.
• Payors (Insurance Companies): Errors in charge entry can cause financial and legal issues for insurers in several ways. First, they may end up paying for services that were never actually rendered. This can lead to significant financial losses. Second, inaccurate coding can result in the wrong amount being billed, which can lead to disputes with patients and providers. Additionally, errors in charge entry can trigger claim denials or delays, further impacting insurers' cash flow. Repeated errors can also damage an insurer's reputation for accuracy and efficiency, potentially leading to a loss of customers.
• Healthcare Providers: Accurate charge entry is the backbone of a healthy revenue cycle for healthcare providers. It ensures that all services rendered are captured correctly and billed accordingly. This leads to faster and more complete reimbursement from insurers, which improves cash flow and financial stability. Additionally, accurate charge entry helps providers maintain good relationships with patients and insurers. 

Conclusion: 

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Accurate charge entry in medical billing is crucial for all stakeholders - patients, payors, and providers. It ensures transparency, financial stability, and timely care. For patients, it prevents unexpected bills and delays. Payors rely on it to avoid financial losses and maintain customer satisfaction. Providers benefit from proper reimbursement and operational efficiency, allowing them to focus on quality care. Ultimately, precision in charge entry is indispensable for a smoothly functioning healthcare system, promoting financial integrity and patient satisfaction.

If you are a healthcare provider and wish to discuss Charge Entry and its process in depth, feel free to write to us at partnerships@homrcm.com.