Physician medical billing: What are the different types?

Medical billing has become one of the most vital components of the healthcare industry. Many companies exclusively assist and compile medical billing for healthcare practitioners and organizations.

There are different types of medical billing in healthcare namely open, closed and isolated systems. Medical billing companies across the United States of America opt for any one of these types of medical billing to perform the job of bill compilation.

Medical billing companies in Texas, Florida, California, and other states seldomly go for an isolated approach for physician medical billing. The other two methods are more common in practice.

The main process of medical billing is to make claims with the insurance companies and ask for follow up and then settle the amount for the healthcare organization. Apart from this, another crucial job of medical billing companies is to calculate the amount of different medical services provided to the patients.

It is a medical billing process that ensures that the cycle of reimbursements and services works accurately and on time so that the revenue generation is not hindered, else this might strain the healthcare practice and also hurts the retention of the patients.

Medical billing systems:

As mentioned above, medical billing systems are very essential for any medical practice. There are three kinds of billing systems currently prevalent in the healthcare sector. Let’s have a look at them below :

1. Open System:

The open billing system is known to be a synergetic kind of medical billing compilation. In this system, complete data of the patient is transferred into other practices with the help of Electronic Health Records (EHRs) usually in more than one practice.

This type of billing system is known to offer easy access to the practitioner, the patient, insurance payers, stakeholders, billing teams, and third-party vendors.

EHRs provide all the information as compared to the EMR and also allows the medical billing companies to edit them at any given point because of the granted access.

The open system style of medical billing is widely preferred by medical billing companies in Texas, California, and other states because of its transparency and flexibility. It is known to be an excellent billing system, especially for the tertiary healthcare system where there are a lot of departments in one hospital.

The system benefits the healthcare organization dramatically and it is always advisable for a big healthcare system to outsource its medical billing to companies that are working under an open billing system.

All the complex details are saved about the patients are saved in the EHRs. This gives benefits to the patient as they can always check their status and if they want to change their health practitioner they can opt for the other one within the same organization.

The system is quite simple and with the help of software systems and the EHRs, it assists the patients and medical health providers easily and effectively.

Another benefit of an open system is that as it is transparent, the information is already in the hands of all the people who are relevant and the data is ensured to be secured and safe, thanks to the latest technology so it doesn’t land in the hands of unauthorized people.

2. Closed System:

A closed billing system is one that uses various digital methods and tools in order to track the records of the patient and then focus on a single practice.

This kind of billing system highly depends upon electronic medical records (EMRs) as they prefer digital tools. Complete information about the patient such as the diagnosis and relevant treatments are all documented in the EMRs. The data remains within the medical practice and is not allowed to be used outside but in order to get a second opinion or assistance, the data can be accessed by an outsider with the help of other EMRs.

The closed medical billing system mainly benefits healthcare providers who are dependent upon a limited number of physicians. It requires getting hold of other medical billing systems in order to outsource the documentation of the revenue and reimbursement cycle.

For instance, if there are any kind of changes in the treatment then the EMRs will identify them immediately and will track the vital data of the patient easily. This will help the practitioner to decide where to refer the patient if needed.

3. Isolated system:

In this kind of medical billing system, the patient health records (PHRs) are used for the maintenance of data. The patient at times maintains the records and data on his own by recording the details according to his own convenience. There are a lot of software systems now which help patients to record their data on their own easily.

But the reality is, that PHRs just cannot replace EHRs or EMRs which are legally approved to compile the records of the patients.

Even though in this system the patient fills out all the details on their own they still need to double-check it with the medical practitioner. They need to communicate more often with the health provider in order to record their vitals and other crucial data on the PHRs so that the data is error-free.


The above-mentioned methods for compilation of medical bills for any organization are all in use and provide accuracy and mental peace to the health providers however it is always advised to choose such a medical billing system that provides seamless and effortless solutions to the maintenance of billing records.

The health organization should select that medical billing process that is not intimidating and easy to understand especially for the patient as this will help in retaining the patient in the future. if the patient is retained, the medical healthcare system will enjoy reimbursements in return which is mandatory to have a healthy cycle of the revenue!

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button