The 10 Steps of the Medical Billing Process
1. Register the patient and schedule the visit
Collect the patient's legal name, birth date, address and a copy of the insurance card, front and back. Errors here cause many later denials.
Free help: New vs established patient checker
2. Verify eligibility and get prior authorization
Check coverage before every visit with a 270/271 eligibility check: active coverage, copay, deductible and who pays first. Get prior authorization (a 278 request or the payer portal) for services that need it.
Free help: How to verify eligibility · Who pays first tool · Prior authorization guide
3. Estimate and collect the patient's share
Tell patients what they will owe and collect copays at check-in. Self-pay patients must get a good faith estimate.
Free help: Patient responsibility calculator · Copay calculator · No Surprises Act calculator
4. Capture every charge
After the visit, record every service on the encounter form or superbill, with the diagnoses that support it. Missed charges are lost revenue.
Free help: Superbill generator
5. Code the visit
Turn the documentation into ICD-10-CM diagnosis codes, CPT and HCPCS procedure codes and modifiers. Pick the E/M level from medical decision making or time.
Free help: ICD-10 lookup · HCPCS lookup · E/M calculator · Modifier decision tree · Global period calculator
6. Create and scrub the claim
Build the claim: a CMS-1500 (837P) for professional services or a UB-04 (837I) for facilities. Scrub it for errors before it goes out.
Free help: CMS-1500 claim checker · CMS-1500 instructions · UB-04 instructions · MUE lookup
7. Submit the claim on time
Send claims electronically through a clearinghouse. Read the 999 and 277CA acknowledgments the same day and fix rejections fast. Every payer has a filing deadline.
Free help: Timely filing calculator · Payer guides
8. Post payments
When the payer pays, it sends an 835 electronic remittance (ERA). Post each payment and adjustment, and check that you were paid the right amount.
Free help: How to read an ERA · Underpayment calculator · Medicare rates by ZIP code
9. Work denials and appeals
Look up each denial code, fix what you can with a corrected claim, and appeal the rest before the deadline.
Free help: Denial code guides · Corrected claim deadline calculator · Appeal letter generator
10. Bill the patient and track your numbers
Send clear statements for the patient balance and offer payment plans. Track days in A/R, denial rate and collection rate every month.
Free help: Days in A/R calculator · Denial rate calculator · Net collection rate calculator
Front End, Middle and Back End
| Stage | Steps | Goal |
|---|---|---|
| Front end | 1 to 3: registration, eligibility, authorization, patient estimates | Right patient, right payer, no surprises |
| Middle | 4 to 6: charge capture, coding, claim scrubbing | A clean claim the first time |
| Back end | 7 to 10: submission, payment posting, denials, patient billing, reporting | Get paid in full, fast |
The Electronic Transactions Behind Each Step
| Transaction | What it does | Step |
|---|---|---|
| 270 / 271 | Eligibility question and answer | 2 |
| 278 | Prior authorization request and response | 2 |
| 837P / 837I | Professional or institutional claim | 6 and 7 |
| 999 / 277CA | Claim accepted or rejected at the front door | 7 |
| 276 / 277 | Claim status question and answer | 7 |
| 835 | Electronic remittance advice (payment details) | 8 |
Medical Billing vs Revenue Cycle Management
Billing is steps 6 to 9: building claims, sending them and following up. Revenue cycle management covers all 10 steps and the reports that show where money leaks. Read more in what revenue cycle management is.
Do It In-House or Outsource?
Small practices often lose money on steps they skip, such as eligibility checks and denial follow-up. Compare the real costs in in-house vs outsourced billing and how much medical billing costs.
Sources: ASC X12 HIPAA transaction standards (45 CFR Part 162); NUCC 1500 instructions (v13.0); CMS Medicare Claims Processing Manual, Pub. 100-04 (Chapters 1, 25 and 26); CMS payment floor and clean claim rules.
Frequently Asked Questions
Reviewed by Hassan Raza Awan, Founder — 4+ years of hands-on U.S. medical billing experience. General billing information — verify against current CMS guidance and your payer contracts.
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