3 Types of Billing Systems in Healthcare

Medical billing is a cornerstone in the healthcare industry. It is as essential as it is complicated. It can be managed in the house or outsourced to medical billing specialists, as many healthcare providers prefer. There are many different aspects to medical billing that most people are unaware of, including revenue cycle monitoring, operational and financial performance audits, business process optimization, security risk analysis, system migration, and data conversion, to name a few. Overall, there are three different types of medical billing systems in the healthcare industry. This article aims to provide you with a better understanding of them all and a greater appreciation of the medical billing industry as a whole.

1. Open Medical Billing Systems

An open medical billing system is the most common in today’s healthcare industry. It allows for multiple healthcare providers to have access to a patient’s records. It also allows healthcare professionals to transfer data across numerous specialty practices or facilities. All patients are assigned an EHR (electronic health record) number, also known as an EMR (an electronic medical record). In this system, no matter what type of doctor a patient sees, the patient’s medical history follows them electronically. All doctors can update the record, and any other healthcare provider in that network can review those notes. However, that is only done if it is in conjunction with providing the patient medical care. Many compliance issues must be adhered to within this type of system that does not allow just anyone with access to the records to review them for no reason.

While the systems may be the same or very similar, the software used to access the system varies greatly. A medical billing department needs to have software that can effectively communicate with other software applications that use the open system. The complexities involved in this type of system is why many hospitals and medical care providers choose to outsource their medical billing services, especially in highly populated states like California. Some of the best medical billing companies in California and other highly populated states use proprietary methods to use open systems. That allows them to improve a healthcare provider’s efficiency and profitability. This system is also why HIPAA (Health Insurance Portability and Accountability Act) requirements are essential. They help protect the privacy of all patients.

Some software applications do not work on an open system. This is because the healthcare provider may wish to maintain sole access to a patient’s records. This is the next type of system that will be discussed.

2. Closed Medical Billing Systems

Some patients appreciate a bit more privacy and security with regards to their medical records. For example, celebrities, athletes, and important people in the business community may not want their medical records to be accessed by someone with prying eyes. A closed medical billing system works similarly to an open medical billing system, but with one big difference. The medical records and medical billing information are isolated to a single medical practice and cannot be shared between networks or healthcare providers. While this type of system does not provide 100% privacy, it dramatically reduces the chances of a patient’s medical records being revealed to anyone without proper authorization.

3. Isolated Medical Billing Systems

A closed medical billing system is not quite enough security for everyone. Some people, for example, influential government officials, may need to utilize an isolated medical billing system for the most privacy protection. This type of system does not allow for medical records to be maintained at any healthcare facility or medical practice. The individual patient holds all of their medical records. Doctors and other healthcare providers will update and manage those records. However, the physical records always remain in possession of the patient. Medical professionals who utilize these systems must have software that allows them to update a patient’s records without retaining any of the information.

All the systems have pros and cons. It is in the best interest of all healthcare providers to utilize a system that allows them to interact with all three types of billing systems. This is why so many doctors use professional medical billing services to be confident that patient privacy concerns can be properly managed. At the same time, the providers can focus on providing the best possible care for their patients.

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