The Three Different Types Of Billing Systems In Healthcare

The Three Different Types Of Billing Systems In Healthcare
Dr Josh October 1, 2022 medical billing

Contrary to popular belief, medical health facilities do not use one medical billing system for all kinds of transactions. There are various kinds of medical billing systems, and overlooking their appropriate use can result in the loss of a considerable amount of revenue. Each billing system has its own type and use, but all three facilitate healthcare professionals and patients. That is why most of the time, healthcare providers are unable to ascertain a certain time for particular healthcare billing transactions. 

This article delves into the three primary types of medical billing, how they are used, and who uses them. 

Let’s get started! 

Types of Medical Billing 

There are three main types of billing systems:

  • Closed Medical Billing Systems 
  • Open Medical Billing Systems
  • Isolated Medical Billing Systems 
  1. Closed Medical Billing Systems 

As the name entails, billing charts and related health records in a closed medical billing system are kept safe within the domain of a particular clinician. Electronic Medical Record (EMR) is the most common digital tool for treatment charts and contains all data on a specific provider’s patient. Although an EMR can be connected with other EMRs within a practice, it cannot be used outside a healthcare practice’s boundaries. It is only for billing teams and the assigned physicians. 

Who can use closed medical billing systems?

Closed medical billing systems are highly suitable for stand-alone practices that are smaller in scale and contain lesser physicians. 

How are EMRs used?

EMRs perform various functions in a medical facility, and you can understand their multifaceted use in the following ways: 

  • Healthcare providers can keep a check on the due dates for a patient’s preventive screening or checkups.
  • Providers can track and monitor a patient’s vital parameters through EMR.
  • Physicians can connect various EMRs together for a comprehensive view of the treatment plan.
  • They can help track vaccination programs.
  1. Open Medical Billing Systems 

Patient health records move beyond the threshold of a single practice in an open medical billing system. All primary stakeholders in the industry, including patients, providers, healthcare organizations, billing teams, and third-party vendors, have access to this information. Electronic Health Records (EHR) transmit patient healthcare data to varying system sectors. EHR offers a comparatively wider-scale information chart than EMR. It is also not restricted to the boundaries of a particular practice as it can be monitored and edited by the patient and several healthcare professionals. 

Who can use open medical billing systems?

Larger healthcare organizations constituting several departments can use an open medical billing system due to the added flexibility. Organizations who wish to outsource their medical billing to a third-party vendor must switch to open billing systems as it allows seamless transmission of information to the outsourced medical billing professionals. 

How are EHRs used?

EHRs have various uses that transcend the border or maintain a digital version of paper-based treatment plans. Their use for stakeholders are: 

  • EHRs store critical healthcare details of a patient, such as past test results, demographic factors, previous diagnoses, allergic reactions, and any past or present medications. In short, they store the whole medical history of a patient in one place. 
  • Its easy accessibility allows different departments and specialists within a single practice to access the information on it whenever they want, offering a more holistic view of the patient’s health. 
  • An imaging center and laboratory can also access the EHR if a patient is referred to them. 
  1. Isolated Medical Billing System 

Isolated medical billing systems do not generally participate in medical billing structures but can greatly benefit healthcare providers. Instead of a healthcare provider or organization, patients maintain isolated medical billing systems solely through Personal Health Records (PHR). Patients can add their health information to these records, maintain them, and refer to them at their convenience. Patients can also take help from software tools to maintain their PHRs. 

Who can use isolated medical billing systems?

Isolated medical billing systems are only for patient use; thus, EMRs and EHRs are the only legally acceptable options. PHRs are unable to replace them. 

How are PHRs used?

Although PHRs are not legally accepted, they hold numerous benefits to healthcare professionals and the medical billing team. A few of their benefits are as follows:

  • PHRs can help patients fill in their medical information when registering with a healthcare organization. 
  • PHRs can offer a holistic view of prior and existing medical treatments and conditions when produced for healthcare providers.
  • Patients who use software tools to maintain their records can also use them for transmission and open communication. 

Dr Josh

Dr. Josh is a physician who's helping spread the knowledge about Telehealth and its advantages. At SmartClinix, he's providing his expertise and knowledge in the form of engaging articles on various health & tech related topics.

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