Full Guide to Medical Billing for Physicians
- Sirius solutions global
- Oct 27
- 5 min read
Running a medical practice means more than excellent patient care. It also entails navigating the complicated system of coding, claims, and collection the heart of medical billing for physicians. For physicians wishing to go beyond merely “seeing patients and hoping the bills get paid,” this handbook covers everything you need to know about medical billing for physicians, from fundamentals and definitions to best practices and trends for 2025 via workflow.
This comprehensive guide will help you understand the medical billing process and overall income cycle so you can optimize your revenue, whether you are a lone practitioner, part of a group, or planning to outsource. Learn how to ask the right questions to prevent expensive denials and boost your cash flow through effective medical billing management. Mastering the nuances of medical billing for physicians is the key to a financially healthy practice.
Patient intake & eligibility verification collect demographics, insurance, and benefits.
Coding & charge capture translate clinical services into CPT/HCPCS and ICD-10 codes.
Claim submission send claims (837P) to payers via clearinghouse.
Payment posting & reconciliation apply payer and patient payments to accounts.
Denials, appeals & AR follow-up manage denials and aged receivables.
Understanding these steps is essential for smooth and compliant medical billing for physicians.
CPT (Current Procedural Terminology): procedure codes describing services performed.
ICD-10: diagnosis codes that justify medical necessity.
HCPCS: codes for supplies, DME, and some services.
EOB/ERA: explanation of benefits (paper) / electronic remittance advice (electronic).
Clean claim: a claim submitted with correct fields and supporting info that’s likely to be paid without follow-up.
First-pass acceptance: percentage of claims accepted on first submission. Higher is better.
AR days (Days in Accounts Receivable): average time to collect revenue a key metric in medical billing for physicians..
1. Accurate Patient Intake
Gather subscriber information including full name, birthdate, address, policy number, and group number.
Get and share invoices signed together with patient permission.
Prior to the journey, one should determine eligibility and benefits, including co pays, deductibles, and earlier authorization demands. That is, policy number, group number, full name, birth date, and address i.e., subscriber information.
2. Charge Capture At Point Of Care
Document services thoroughly in the chart.
Use charge tickets or EHR charge capture tools to record CPT/HCPCS codes and modifiers in real time.
3. Medical coding (CPT & ICD-10)
Match suitable ICD-10 codes for medical necessity; connect CPT codes to the service performed.
Avoid miscoding: Know when to utilize evaluation and management (E/M) instead of process codes as well as how to apply modifiers (e.g., modifier 25, 59, or if applicable KX for medically-linked dental or other special cases).
4. Claim scrubbing & submission
Run claims through scrubbing software (clearinghouse) to catch missing fields and invalid codes.
Submit electronically (837P) to the payer. Track submission confirmations.
5. Payment posting reconciliation
Patient records getting payments from ERA/EOBs.
Reconcile write-offs, adjustments, and patient responsibility (co-pays, co-insurance).
6. Denial management and appeals
Triage denials: identify denials due to eligibility, coding, bundling, lack of documentation, or prior auth.
Fix and resubmit clean claims fast (within payer timely filing limits). Add medical records among the appeals as necessary.
Over/under-coding: Train providers and coders; perform periodic chart audits.
Incorrect modifiers: Have a quick modifier cheat sheet for common scenarios.
Missing ICD-10 linkage: Always ensure each CPT has an appropriate diagnosis code.
Bundling errors: Check payer-specific bundling rules before billing separate codes.
Payer types: commercial, Medicare, Medicaid each has different rules and fee schedules.
Prior authorization: identify services needing prior auth (imaging, some meds, inpatient stays). Get approvals before providing the service when possible.
Credentialing: providers must be credentialed and enrolled with payers. Delays in enrollment mean denied claims track expirations and re-credentialing dates.
EHR / Practice Management (PM) systems: ensure tight integration between
documentation and billing.
Clearinghouse / claim scrubbers: reduce rejections; add rules for payer-specific edits.
Denial management platforms: automate workflows and appeals.
Patient portals payment platforms: speed up patient collections and reduce A/R days.
AI-assisted RCM tools: can flag missing codes, predict denials, or automate follow-up calls.
First-pass acceptance rate target >90% for mature processes.
Net collection rate collected vs collectible charges.
Days in AR (A/R days) lower is better; aim for <40 days for healthy practices.
Denial rate & denial reversal rate track reasons and turnaround time.
Patient balance collected at point of service increases net collections.
Verify benefits the day before a quick step that reduces patient liability surprises.
Collect co-pays up front make it part of arrival workflow.
Use templated encounters with checked charge capture to avoid missed charges.
Daily scrubbing queue assign a short daily task for rejected claims rather than
batching weekly.
Monthly coding audits review 20–30 charts monthly for training opportunities.
Train clinicians on documentation small documentation tweaks (time, complexity, counseling) can justify correct E/M levels.
Triage: prioritize high-dollar and frequent denials.
Root cause: categorize each denial (eligibility, coding, medical necessity, prior auth,filing).
Correct & resubmit: capture missing info, correct codes, add documentation.
Appeal: produce concise appeal letters referencing payer policy and attaching key chart notes.
Track: log denial reason, responsible team, resolution steps, and outcome to preventrepeat errors.
Maintain HIPAA safeguards: encryption, BAAs, role-based access.
Stay current with payer rules and CMS updates (timely filing, telehealth billing guidance, any special modifiers).
Keep a compliance calendar for payer policies and provider re-credentialing dates.
Percentage of collections: most common for outsourced billing (4%–10%).
Flat per-claim or per-encounter fees: sometimes used for high-volume or
dermatology/imaging.
Hybrid models: base fee + percentage for collections over a threshold.
Inclusions: check if coding review, appeals, credentialing, and patient statement
management are included or billed separately.
Outsource if: you want faster collections, need specialized coding, or have high denial volumes that your small team can’t manage.
Keep in-house if: you need direct clinical control, have low claim volume, or immediate access to clinicians is essential for complex prior auths.
Consider a pilot with a clear SLA and a short termination window when testing an outsourced partner.
Outsourcing is always expensive. Not necessarily better RCM can increase net
collections by a larger percentage than the fee.
Claims will always get paid if submitted. Not true coding, documentation, eligibility, and payer rules all affect payment.
You don’t need to monitor KPIs. Wrong KPIs detect small problems before they
become large revenue leaks.
Verify patient eligibility benefits BEFORE encounter.
Capture co-pay at check-in.
Use templated notes that map to CPT codes.
Run claims through a scrubber before submission.
Post ERA payments within 48–72 hours.
Triage denials daily; escalate high-dollar denials.
Run monthly KPI report (first-pass acceptance, AR days, denial rate).
Audit 20–30 charts monthly for coding/documentation quality.
Keep credentialing and payer enrollment calendar current.
Ensure BAAs and HIPAA safeguards are in place with vendors.
In summary: medical billing is no longer just an administrative task it’s a important component of your practice’s financial health. As a physician, even if you delegate billing, you must stay informed.
Here’s what to do next:
Schedule a billing-process review: map your workflows from patient check-in to payment posting.
Run a denial-analysis: look back 90 days, identify top 3 reasons for denials.
If you use a vendor or are considering one, benchmark their performance (clean-claim rate, AR days, reporting).
Ensure your staff gets training or your vendor shows you how they keep up with coding/regulatory changes.
Embrace one piece of technology or automation this year (e.g, automated eligibility checks, EHR–PM–billing integration).
By doing these, you’ll improve revenue cycle performance, reduce stress on your staff, and spend more time where you excel: patient care.
