Hospital billing services is the process that is used by hospitals that allows them to obtain compensation for their work from insurance companies. Regardless of the medical field, the process works roughly the same way. Essentially, the hospital creates a list of covered procedures and sends them to the insurance company. The list describes the costs associated with each procedure, and the amount of payment required for every claim. The insurance company will then make the payments when the medical paperwork has been filed and documented in the correct fashion. The field of billing, as it relates to healthcare practice management, is continuing to grow and increasingly requires higher levels of certification as it progresses.

With changes in technology, the way in which the billing process works has expanded. Traditionally, the hospital would be required to make hard copies of all of their documents, which would then be sent by mail to the insurance company. This process has been made more efficient through the use of computerization. It is now possible to use various types of software to transfer this information. Not only has the process becomes more of a time saver, it has also become more accurate. While the electronic billing process has become standard in the healthcare community, there are still several companies that use a manual billing and coding process. Most of them are only doing so due to technical issues that could arise during the switch, and are in the process of remedying the issue.

In order for medical service providers to provide the right documentation to the insurance company, it is necessary for them to understand which procedures are covered by the insurance policy. In the majority of cases, the medical service provider will charge more than the insurance company policy is willing to provide. The quantity that the insurance company is willing to pay for is referred to as the allowable amount. In order for the medical billing process to be completed accurately, the medical service provider must have access to knowledge about the codes and prices revolving around each procedure. In most cases, the insurance provider will provide a detailed list of the benefits that explain all of the payments allowed by the company policy.

The process of hospital billing services is also effected by the Health Insurance Portability and Accountability Act, or HIPAA. HIPAA was a form of legislation introduced in 1996 with the intention of protecting the privacy of medical patients. The law requires for the documents transferred between the medical and insurance companies to be electronically filed with the government. It also requires for several documents to be signed to assure that the appropriate information can be transferred from the healthcare provider to the insurance company. Many of the software manufacturers involved have developed tools to make this process simple.