Medical billing and medical coding jobs and careers are easy to start, but hard to find work in. For medical billing, it's hard to get started because physicians already have someone doing their billing for them. For medical coding, entities are often reluctant to bring on someone with no experience. For both, the training and learning curve is harder and the information more voluminous than most people realize.

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One of the major problems in deciding to do work like this on your own is that no one wants to trust someone without any real billing or coding experience to do work for them. Both of these are harder to do than people who haven't done it realize. Going to a billing course or coding clinic isn't enough to make you an expert; both of these careers takes some expertise, practice and a long learning curve. It's not necessarily easier if you're working for a hospital, but you at least get the opportunity for more consistent training.

This isn't an overly detailed article on the subject, but it should be enough to give information to anyone looking at this as an independent career pause to think about it a lot more before giving it a shot. However, as I'm coming up on 20 years of being a health care consultant, I figured I might as well take some time to help someone who might be thinking about doing this as a career.


When people talk about medical coding, most of the time they're talking about diagnosis coding. In a hospital or clinic, there's a department that usually handles 95% of all the coding; some labs might enter diagnoses based on the scripts from physicians. For a small physician's group, coding is often handled by the physician. For a large physician's group, they might hire someone to code their bills.

Diagnosis coding takes longer to learn than billing, and one must be certified in order to get a job doing it. With the implementation of ICD-10 a few years ago, there are now more than 139,000 codes (70,000 ICD-10-PCS procedure codes and over 69,000 ICD-10-CM diagnosis codes)!

If you're in medical billing, the codes you need to know more often are procedure codes. Medical bills aren't paid by any insurance company without procedure codes. If you're lucky, you'll work with a physician who does the same thing most of the time, which makes things easier. However, if there's a change or an additional code an insurance company needs in order to pay a bill, and you're unfamiliar with this type of coding, you're going to be in trouble because the odds are the physician or diagnosis coder won't be able to help you.

Coding Issues

The reason hospitals and clinics are hesitant to hire people without experience in coding is because there are some heavy penalties for incorrect coding. On the fraud list of the Office of Inspector General's office, a division of the Department of Health and Human Services, is upcoding, which means coding a higher level of diagnosis than what the patient really had.

Diagnoses impact both inpatient and outpatient payments, though moreso on insurance claims, and upcoding gives the indication that a patient received a higher level of care than what the medical record might indicate. For instance, there's a major difference in reimbursement to a hospital if something is coded as a urinary tract infection or septicemia, though both may seem similar to a non-coder.

Coders also need to know how to code everything in a patient's chart that may be relevant to the reason they've presented themselves at either the physician's office or the hospital, without adding everything. They also need to figure out which diagnosis is the primary.

Sometimes it's cut and dry. If a person reports because they cut their toe open, one wouldn't code their history of heart problems. However, they might need to code diabetes if special treatment needed to be given to stop the bleeding because the person's foot isn't healthy due to the diabetes.

Medical Billing

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In general there are two types of medical billing. One is physician's billing, the other is facilities billing. Facilities can mean hospitals, clinics, nursing home, etc. Physician billing includes clinics, ambulances and the like, and it's separated by the fact that it's billed on what's known as a HCFA-1500 form almost exclusively. Facilities will often use both the HCFA-1500 and the UB-04 for billing, depending on who, for whom, and what they're billing.

For instance, hospitals mainly use the UB-04, but in some circumstances must submit the other form to collect on certain lab services or when they contract with businesses to provide specific services. Both usually bill electronically, so the form isn't as important as the format and the specific information that's required for insurance companies to make payment. Medical billing personnel don't have to be certified.

Medical Billing Issues

There are two main facts about medical billing. One, the work is never done. Whereas a medical coding person could conceivably get caught up and not have to code anything else in a day, medical billing always has more to do.

That's because, two, not every bill gets paid just because it's been sent out. There are literally hundreds of reasons medical bills won't get paid, and it's up to the medical billing person to figure it out. Reasons can include:

*Incorrect charges on a claim
*Incorrect codes on a claim
*Incorrect personal or demographic information on a claim
* Incorrect identification numbers on a claim
*Coordination of benefits issues (determining which insurance is primary if a patient is covered under more than one policy)
*No authorization number
*Missing charges
*Incorrect units of service

There's no one source to learn all the reasons medical bills aren't paid. It's all done on trial and error and time. Sometimes even the explanations of benefits aren't explanatory enough. A lot of time is spent calling both patient's and insurance companies trying to get information and to get bills paid. Without having the knowledge or background of what to ask and how to follow up your accounts receivable is going sky high, cash will be low, and everyone will be stressed.

I've spent years working with people on issues like these. Whereas almost every insurance company sends explanation of benefits that will mention why a claim hasn't been paid, the description isn't always cut and dry. Often billing people will see "denied" and immediately make the claim a self pay.

I worked in teaching people that if they weren't sure what a denial meant to call the insurance company, ask them, then start making notes to learn what the denials mean when they're seen. It's better to take time asking questions in case you get more money than sending statements to patients and waiting for them to call you to ask why a claim wasn't paid... and you can't answer the question.

Costs of Starting Either Business

The costs for starting both of these businesses can be relatively low, though much lower for medical coding. A medical coder can start a business with an ICD-10 manual book and nothing else, although purchasing coding software would reduce the time it takes in arranging codes properly.

Medical billing will cost a little bit more, although it should cost a lot more. The person would have to purchase both medical billing software and paper forms. Because of the paper file cabinets would be needed, although these days most insurance companies want to receive bills electronically. Software can range from around $500 all the way up to $10,000, but you have to know what you're looking for. What happens too often is someone buys the cheapest thing around and then has no idea how to use it properly.

Self employment isn't an easy endeavor, and getting into the health care financial industry without experience is a terrifying prospect. It's always best to see if you can get some real experience before thinking about embarking on your own.