Differences Between Coding and Billing

Billing or Coding? What’s the difference and what does it mean in your Dermatology practice?

Managing your practice is about more than providing good, effective and efficient treatments for your patients and clients, it also requires you to manage your dermatology practice like a business too. That is – if you want to be able to employ staff, make a living wage and support your own family as well! It follows that you’ll also need to have more than just medical knowledge. Concerns such as billing and coding are also now part of your vocabulary and understanding if there is a difference and/or how billing and coding works, is critically important.

Both are a part of the “revenue cycle.”
While it turns out there are some distinct differences between the two, the expression “splitting hairs” comes to mind because the reality is, they are very closely intertwined. Billing and Coding are in fact both part of the revenue cycle for your dermatology practice although they perform slightly different functions.

Medical Coding
Unlike the “chicken and the egg” we know which one comes first and it’s medical coding. Medical coding is the process of extracting information from the medical records of a patient and the clinical documentation provided by the specialist, inputting those specialized codes to then represent medical diagnoses, treatment decisions, and procedures undertaken.   

Medical Billing
It’s the process where these codes are now used to create insurance claims and/or invoices for patient payment. The medical biller deciphers the codes to create the bills that generate a payment. Where billing and coding intersect is what is often referred to as the revenue cycle.

Why is it so important to know and understand the differences?
While the work is similar there are some pretty fundamental differences that may impact who is best suited for each type of work and impacts the type of training and education required to be successful at either. Certainly there are many dermatology practices where this person may be one and the same but understanding the key differences may help you to make a decision about whether you WANT the same person to support the two tasks. Here are a few things to consider:

  • Medical billing to some degree is about good customer service, and great customer relations. A medical biller will work with patients directly and with insurance companies too. Customer relations collecting on delinquent files is an important skill set!
  • From the time a patient first enters the practice, accuracy in information collection will be crucial and will support the efforts of a biller as they go about creating the invoices and collecting on payments – whether from patients or insurance companies. People skills are a must!
  • Coding skills are a little more detail-oriented in nature and require an analytical mind. They don’t rely as heavily on interactions with patients and/or other members of the public.
  • Your coding team often remains behind the scenes, working directly with the dermatologist or service provider and perhaps with the billing team but rarely with anyone else. 
  • Medical coders are also expected to work within strict guidelines, often using specialized and detail-oriented software and often have to upgrade these skills.
  • While education levels are similar for both, research suggests that coders might earn an average of about $5,000 more than their billing associates.
If it’s not already obvious, the answer to our original question is that yes, there is indeed a difference between medical coding and medical billing and each contributes in a significant way to the successful operation of your dermatology practice. Medical coding will increase efficiency, lead to fewer denied claims when done accurately, reduce your accounts receivable cycle and comes with the added benefit of being able to generate a variety of useful, timely reports. Accurate billing will increase your revenue generation and with dedicated resources also lead to faster claims processing. Both together will ensure that you have more time to focus on your core competency – providing patient care – while still maximizing your potential as a profitable business. 

If you are looking for professionals who offer exceptional service in support of your dermatology practice you might want to schedule a call with a member of the Derm Care Billing Consultants team. Ask us how we can support your practice and start 2023 heading in the right direction by managing your practice effectively AND efficiently!