Starting a Medical Billing & Coding Business

The revenue cycle in plain English

Every time a patient sees a provider, money has to travel from an insurance company (and the patient) to the provider. That journey is the revenue cycle:

1. Scheduling and registration: patient demographics and insurance details captured
2. Eligibility and benefits verification: is the coverage active, and what does the patient owe?
3. Prior authorization: some services need payer approval in advance
4. Visit and documentation: the provider documents what was done and why
5. Coding: documentation is translated into diagnosis codes (ICD-10-CM) and procedure codes (CPT and HCPCS Level II), with modifiers
6. Charge entry: codes, units, and fees are entered into the billing system
7. Claim scrubbing and submission: claims are checked for errors and sent electronically (usually through a clearinghouse) to payers
8. Adjudication: the payer pays, denies, or pends the claim and sends an electronic remittance advice (ERA, the 835 transaction)
9. Payment posting: payments, adjustments, and patient responsibility are posted
10. Denial management and appeals: fixing and resubmitting or appealing denied claims
11. Patient billing: statements for deductibles, coinsurance, and copays
12. Reporting: collections, accounts receivable (A/R) aging, denial rates

A billing company can take on all of this (full-service revenue cycle management) or a slice of it.

Billing versus coding

Many small billing companies offer both. Some specialize in coding only (often for hospitals or large groups via remote contracts) because it is less operationally intensive.

Service models

Who your clients are

• Solo and small group physician practices
• Mental and behavioral health therapists (a large, underserved market of solo practitioners)
• Physical, occupational, and speech therapists
• Chiropractors and acupuncturists
• Podiatrists and optometrists
• Ambulance and non-emergency medical transportation companies
• Durable medical equipment (DME) suppliers
• Laboratories and diagnostic imaging centers
• Dental offices that bill medical insurance for certain procedures
• New practices opening without an in-house billing team

Tip: Pick one or two specialties to start. Payer rules, common denials, and codes are specialty-specific. A billing company that "only does behavioral health" or "only does physical therapy" sells more easily than a generalist.

A day in the life of a solo billing owner

A typical day with six small-practice clients might look like this:

• 8:00 a.m. Check the clearinghouse rejection reports for every client and fix overnight rejections (a mistyped member ID, a missing referring provider).
• 9:00 a.m. Enter yesterday's charges for two therapy practices from their EHR charge review screens; scrub and submit.
• 10:30 a.m. Post ERAs that arrived overnight; flag two underpaid claims against the contracted fee schedule.
• 11:30 a.m. Call a payer about a batch of claims stuck in "pending" for 45 days; get a reference number and a reprocessing promise.
• 1:00 p.m. Lunch, then a 20-minute discovery call with a chiropractor who is unhappy with their current biller.
• 2:00 p.m. Work the denial worklist: three medical necessity denials need visit notes attached for appeal; one coordination-of-benefits denial needs the patient to update their primary insurance.
• 3:30 p.m. Send a provider query about an unspecified diagnosis.
• 4:00 p.m. Prepare a month-end report for one client and an invoice for your fee.
• 4:45 p.m. Update your payer notes with today's lessons.