Medical Billing: Front-End vs. Back-End

The medical billing process is broken into two stages: front end, and rear end. The front-end billing occurs before the patient has seen the doctor. This stage includes the front-office personnel and all patient-facing activities that are dependent on accurate billing.

The back-end billing process occurs after the provider has seen the patient. The billing process is resumed in the back office once the medical coder has completed their duties and the billing staff has access to the codes that represent the encounter with the patient.

The back-end billing team is responsible for a wide range of tasks relating to claims management and reimbursement. These tasks are just as important to revenue cycle management, as front-end activities where simple billing errors can increase claim denial rates. Back-end billing is more complex. Certified Professional Billers will be needed at every stage of the billing process, but the claim preparation and the post-adjudication processes demonstrate the level of education and expertise that is required.

Medical Billing Front-End

Staff who handle front-end billing should have a good understanding of the payer mix in their organization. Billers who are familiar with the health plans and payers accepted by their organization will be better prepared to verify insurance eligibility and stay abreast of deadlines.

Registration and Pre-registration

The process of processing an insurance claim starts when a patient calls the office of the provider to make an appointment, or registers in the hospital. The staff will usually ask for the patient’s insurance and demographic information or have the patient fill out a registration form when they arrive at the service location.

The billing staff is better equipped to prevent data entry errors when they follow standard operating procedures. In order to determine a patient’s eligibility, and benefits and obtain prior authorization, accurate patient data is essential.

Verification of Insurance Eligibility

Front-office staff will need to confirm the coverage of the patient’s plan before they can receive payment. This step can be performed by phone or using an electronic eligibility verification tool from the insurer. It verifies eligibility, including eligibility dates, coinsurance, copays, deductibles, and benefits of plans as they relate to specialty and location.

It is important to obtain the necessary preauthorization. Insurance companies often require preauthorization to ensure payment of medical services performed outside the primary care setting.

Point of Service Collections

The staff will inform the patient of their financial responsibility after determining benefits during eligibility verification. The biller can collect the copays, deductibles, coinsurance or the full balance due from the patient while they are at the front desk.

Medical billing relies on point-of-service collections to reduce costs and avoid bad debts and write-offs.

Encounter Form Generation

A patient encounter form is also known as a superbill, or fee ticket. It is generated for every encounter. The form includes a list of the patient’s demographics, as well as a place for the clinician to record diagnoses.

The front-end staff will create the encounter form. This form is used to provide information to the patient about the type and number of services they received. The provider signs the form and ticks the boxes at the end of each patient visit to certify that the services ticked were provided and can be billed. The encounter form is likely to be electronic if the provider uses a practice management and EHR system.


Front-end staff will make an appointment for a follow-up if necessary and confirm that the doctor has completed the encounter form. The checkout is also a second chance for point-of-service collections.

Medical coders convert billable information into medical codes after the patient has checked out.

Medical Billing Back-End

Medical billers communicate regularly with physicians in order to clarify diagnoses and obtain additional information regarding a patient’s encounter. The medical biller should be able to read a medical record, as well as understand CPT (r) and HCPCS Level 2 and ICD-10 codes.

Charge Entry

The encounter form informs the staff who enters charges what services and procedures have been performed, and why. The charge entry staff enters these charges, along with the payments made by patients at the time of the service, into the practice management software.

The staff member who is responsible for charging the service must contact the provider if they notice that the encounter form does not include a diagnosis. This is because payers require a diagnosis to justify the medical service.

The charge entry responsibility also includes reviewing the charges to ensure that all receipts and charges were included when reconciling charges. This review is done by comparing total charges and payments from encounter forms to a printed report of the charge entry for the day.

Claim Generation

The claim is created after the payments and charges are entered. It may be necessary to compile charges, revenue codes (CPT (r)), HCPCS Level 2, and ICD-10 code.

Medical billers can prepare claims by manually or electronically pulling information from the superbill. If you remember, the superbill is the form that details the patient’s demographic data, the services rendered to them, and the diagnosis used to verify those services.

The itemized form includes information about the date of service, the location, and signature of the provider, as well as their National Provider Identifier. This form may include notes or comments from the provider to support medically necessary treatment. It may also include the admission date, billing provider information, and referral provider information.

This information is then converted into a reimbursement claim, which is sent to the third-party payer.

Claim Scrubbing

Billers scrub claims to ensure that all diagnoses, procedures, and modifier codes are accurate and present. The scrubbing of claims also includes ensuring all required information about the patient, provider, and visit is included. Medical billers run claims through claim-scrubbing software to identify and correct errors.

Clearinghouses are used by some physician practices and providers to scrub their claims instead of or in addition. A clearinghouse, or third-party company, reviews, edits and formats medical bills (or sends them back to the billers to make any necessary corrections), before they are sent to insurers.

Claim forms

The Centers for Medicare & Medicaid Services (CMS) has created two forms of claim that medical billers use to get paid by insurers. These are the CMS-1500 and the UB-04.

CMS-1500 is a claim form used by Ambulatory Surgical Centers and providers to report services. The CMS-1450 (also known as UB-04) is used for reporting services and procedures at inpatient facilities such as hospitals.

Commercial payers can use customized claim forms depending on the reimbursement requirements. Nevertheless, many private payers have switched to the CMS forms.

The practice management software (or clearinghouse) is programmed to complete most of the fields on the forms.

Claim Submission

Organizations that provide healthcare services can submit medical claims directly to payors. This is done by using software that is compliant with HIPAA standards for electronic filing. The majority of physician practices choose to submit their medical claims via a clearinghouse.

Clearinghouses provide a variety of services. One of them is the review of claims to ensure that they comply with federal and payer regulations. The clearinghouse will send claims that need corrections back to the biller and then send corrected claims to the payer.

The data file will be processed and converted into a claim form that can be reviewed by the claims analyst or adjudicator. The clearinghouse report will show the date that a payer has received a claim. The payer may have added notes, like a patient not eligible for the date of service.

Claim Tracking

Billers’ work doesn’t end when a claim is filed. Billers should check the status of claims daily. When clearinghouses are used, they typically provide dashboards that give billers easy access to status updates of submitted claims.

Adjudication starts once a claim reaches the payer. Adjudication is the process of reviewing a claim and determining if the payer will pay a provider. This is determined by the information provided by the biller and whether or not the claim should be paid.

After adjudication, the payer generates two types of statements

  • Electronic Remittance Advice sent to providers
  • Patients receive an explanation of benefits (EOB)

ERA statements sent by the provider organization will detail which services have been paid, if any additional information is needed, or why a claim has been denied.

Payment Posting

Payments must be posted the same day that physician practices and hospitals receive their ERAs, along with any accompanying checks or direct deposit. Payments must be posted, even if they are zero dollars. These remittances often contain denial codes and important details.

Back-end billing staff must match payments with patient accounts. They will reconcile payments against claims and confirm that the data on the ERA or EOB matches payments. Medical billers must balance the direct deposits they receive and post.

Patient Payments

Patient statements for any outstanding balances should be sent as soon as the remittance advice is posted. The faster the statement is received, the quicker the payment will be made. The patient statement should include the date of the service, the services provided, the insurance reimbursement received, the payments collected during the service, and the reason for the balance due.

Post and balance these final payments, which are usually sent by mail. In many cases, the billing process is complete and the patient account is closed.

Denial Management

As soon as you receive a denial or reimbursement problem from an insurer, it is important to resolve the issue. The remittance advice provides billing staff with a code or codes for denials and a short explanation of why a claim was denied. Billing staff should review the denied claim to determine if additional information is required, if any errors need to be corrected, or whether the denial needs to be appealed.

Medical coders and medical billers work together to appeal denials of claims, depending on what the cause is. The billing staff prepares the appeal letter and then refiles the claims.

A/R Collections

Patient collection is the final phase in medical billing. Medical billers follow up with patients who do not pay their financial obligations after a certain period.

Patient follow-up may include offering conveniences, such as payment plans and online payment methods. Payment plans and online payment options are some of the conveniences that can be offered.

Medical billers send the revenue they collect to A/R management where payments are tracked.

Credit Balances

Receiving money for medical service charges that are higher than the actual charges is a major risk for provider organizations. Medical billing staff should identify any overpayments made and refund them promptly to the appropriate parties. If you fail to comply, it could lead to civil fines and litigation.

This post was written by Physicians Choice Medical Billing, LLC. has been providing exceptional, and comprehensive Full-Service Practice Management including medical billing, coding, revenue cycle management, credentialing and consulting services to our clients. Whether you are a new startup or an established medical group, PC has the experience and dedication to make your practice a financial success. The staff bring multiple years of experience and dedication. Fingerprinting in Tampa and Fingerprinting in St Pete with Physicians Choice provides the highest quality, professional digital Live Scan fingerprints in a comfortable professional office atmosphere. Physicians Choice offers both individual and corporate account service.

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