An independent guide to the healthcare revenue cycle
Medical Billing | Your Complete Guide to Billing, Coding & Careers
Every doctor's visit, lab test and hospital stay creates a financial record that has to travel from the provider to an insurance company, and often to the patient, before anyone is paid. Medical Billing is the work that manages that journey: it turns documented care into accurate claims, follows them through insurance review and makes sure any remaining balance is billed correctly.
This guide explains the billing process step by step, how it connects to medical coding, what billing services and software do, and what careers in the field look like, including remote work, training options and government salary data.
Medical billing basics
What Is Medical Billing?
Medical billing is the process of preparing, submitting and following up on claims so that healthcare providers are paid for the services they deliver. A billing team takes information from a patient encounter (who the patient is, what insurance they carry, what was done and why) and turns it into a claim a health plan can review and pay. After the plan responds, billing staff record the payment, resolve any problems and bill the patient for whatever amount they owe.
Why medical billing matters
In the United States, most healthcare is paid for at least partly by a third party: a commercial insurer, Medicare, Medicaid or another program. Providers usually aren't paid at the time of service. They depend on accurate claims to receive insurance reimbursement later. When billing works well, practices are paid for the care they provide and patients receive statements they can understand. When it doesn't, claims are delayed or denied, revenue becomes unpredictable and patients may receive confusing or incorrect bills.
How billing connects providers, patients and payers
Medical billing sits between three parties with different roles and information. The billing process is how they exchange that information in a consistent, standardized way.
Providers
Physicians, hospitals, clinics and other professionals document the care they deliver and submit claims for it.
Payers
Commercial insurers and government programs such as Medicare and Medicaid review claims against coverage and policy rules.
Patients
Patients pay the share their plan doesn't cover, such as deductibles, copayments and coinsurance.
What medical billing specialists do
A medical billing specialist manages claims from creation to resolution. Typical tasks include checking insurance eligibility, reviewing charges, submitting claims electronically, monitoring claim status, posting payments, correcting and resubmitting rejected claims, appealing denials and answering patients' billing questions. In a small office, the same person may also handle registration or coding.
Billing is not the same as collecting payment
Billing and collection are related but distinct. Billing means producing an accurate claim or statement for services rendered. Collection is the work of actually receiving the money: posting insurer payments, following up on unpaid claims and collecting patient balances. A claim can be billed correctly and still go unpaid if no one follows up on it.
Where billing fits in revenue cycle management
Revenue cycle management (RCM) describes the complete financial life of a patient encounter, from scheduling and registration to final payment. Medical billing is the core of that cycle, but its success depends on earlier steps. Accurate registration, eligibility checks, prior authorizations, clinical documentation and coding all determine whether a claim is paid the first time it's submitted.
Step by step
How Does the Medical Billing Process Work?
Most medical claims pass through the same core stages, from the moment a patient is registered to the moment the account reaches a zero balance. The work is often grouped into the front end (before the visit), the middle (documenting and coding care) and the back end (claims, payments and follow-up).
- Front end
- Middle
- Back end
- 1Front end
Step 1: Patient registration
Staff collect the patient's demographic details, contact information and insurance information, usually including a copy of the insurance card. Small errors at this point, such as a misspelled name or an incorrect member ID, are a frequent cause of claim rejections later.
- 2Front end
Step 2: Insurance eligibility verification
Before the visit, the practice confirms that coverage is active and checks the benefits that apply: copayments, deductibles, coinsurance, and whether the service needs prior authorization or a referral. Many offices run this check electronically.
- 3Middle
Step 3: Medical documentation
The clinician records the encounter, typically in an electronic health record (EHR): symptoms, findings, diagnoses and the services performed. Documentation is the foundation for everything that follows. A service that isn't documented generally can't be billed.
- 4Middle
Step 4: Medical coding and charge entry
Documentation is translated into standardized codes: ICD-10-CM for diagnoses, and CPT or HCPCS for procedures, services and supplies. Charges are then entered for each coded service based on the practice's fee schedule.
- 5Middle
Step 5: Claim generation
The billing system combines patient, insurance, provider, code and charge information into a claim. Physician and other professional services are usually billed in the CMS-1500 format (electronically, the 837P transaction). Hospitals and facilities use the UB-04 format (837I).
- 6Back end
Step 6: Claim submission
Most claims are sent electronically, often through a claims clearinghouse that checks formatting and required data before forwarding them to the right payer. Claims that fail these edits are rejected and must be corrected before the payer will process them.
- 7Back end
Step 7: Payer adjudication
The payer reviews the claim against the patient's coverage, its medical and payment policies, and coding rules. It then pays, partially pays or denies the claim. The patient receives an explanation of benefits (EOB), and the provider receives a remittance advice, often electronically (ERA).
- 8Back end
Step 8: Payment posting
Billing staff record each payment, contractual adjustment and patient responsibility amount against the services it covers. Many practices post electronic remittances automatically and review the exceptions by hand.
- 9Back end
Step 9: Denial follow-up
Denied or underpaid claims are reviewed to identify the reason. Staff then correct and resubmit or appeal them within the payer's deadlines. Tracking denial reasons over time helps teams fix recurring problems earlier in the process.
- 10Back end
Step 10: Patient billing and balances
Once insurance has processed the claim, the remaining amount the patient owes is billed on a statement. Staff answer billing questions, arrange payment plans when practice policy allows and follow up on outstanding balances.
Workflows vary. The order, timing and ownership of these steps differ between organizations. Many practices collect copayments at check-in, before any claim exists. Hospitals often split coding, billing and follow-up across separate departments. Some steps, such as prior authorization or secondary insurance billing, only apply to certain services or patients.
Billing & coding
What Is Medical Billing and Coding?
Medical billing and coding are two halves of one process. Medical coding translates documented healthcare services into standardized codes. Medical billing uses those codes to prepare claims, send them to payers and manage them until the account is resolved.
Understanding Medical Coding
Medical coders review clinical documentation, such as physician notes, operative reports and test results, and assign codes that describe the patient's diagnoses and the services provided. Codes give payers, public health agencies and researchers a consistent, machine-readable description of care.
A coder doesn't decide what care was delivered. They describe what the medical record supports. When documentation is unclear or incomplete, coders typically send a query to the provider rather than guess.
Understanding Medical Billing
Billing staff take the coded encounter, combine it with patient and insurance details, and manage the resulting claim. Their focus is the payer relationship: submission rules, claim status, remittances, denials, appeals and, ultimately, the patient's balance.
How Medical Billing and Coding Work Together
Consider a patient who visits a family physician for a persistent cough. The physician documents the history, examination and assessment. A coder assigns an ICD-10-CM diagnosis code that reflects the documented condition and a CPT code for the level of office visit the documentation supports. The billing team then submits the claim.
If the payer denies the claim, billing and coding staff work together to find out why. They check whether the problem was a coding error, missing documentation or a payer-specific rule, then decide how to correct it. This back-and-forth is why the two functions are so often taught, and discussed, together.
Coding
Medical coding workflow
- Review clinical documentation
- Identify diagnoses and services
- Assign ICD-10-CM, CPT and HCPCS codes
- Query the provider if notes are unclear
Billing
Medical billing workflow
- Enter charges and build the claim
- Submit through a clearinghouse
- Track payer adjudication
- Post payment or work the denial
Why documentation, coding and payer rules matter
Documentation quality
Codes can only describe what the record supports. Vague or incomplete notes lead to less specific codes, provider queries or denials.
Coding accuracy
Overstating a service, sometimes called upcoding, creates compliance and legal risk. Under-coding means the provider isn't paid for documented work.
Payer requirements
Payers publish their own coverage, modifier and documentation policies. A correctly coded claim can still be denied if it doesn't meet them.
Common Medical Coding Systems
Three code sets appear on most U.S. professional claims. Each answers a different question about the encounter. Hospitals also use ICD-10-PCS to report inpatient procedures.
ICD-10-CM
International Classification of Diseases, 10th Revision, Clinical Modification
- Describes
- Diagnoses, symptoms and the reasons a patient received care. Diagnosis codes help show why a service was medically necessary.
- Format
- Alphanumeric codes of three to seven characters, updated annually.
- Maintained by
- CDC's National Center for Health Statistics, with CMS
CPT®
Current Procedural Terminology
- Describes
- Medical, surgical and diagnostic services performed by physicians and other qualified health care professionals, such as office visits, procedures and tests.
- Format
- Category I codes are five digits. Category II and III codes end in a letter.
- Maintained by
- American Medical Association
HCPCS Level II
Healthcare Common Procedure Coding System
- Describes
- Products, supplies and services not covered by CPT, such as durable medical equipment, ambulance services and certain drugs. (HCPCS Level I is CPT itself.)
- Format
- A letter followed by four digits.
- Maintained by
- Centers for Medicare & Medicaid Services
Medical coding and billing career responsibilities
In medical coding and billing careers, coders are responsible for abstracting information from records, assigning and sequencing codes, applying modifiers, querying providers and keeping up with annual code set updates. Billers are responsible for clean claim submission, payer follow-up, payment posting, appeals and patient account questions.
Small practices frequently combine both jobs in one position. Hospitals and large groups usually separate them and add specialized roles such as coding auditors and denial analysts.
| Comparison | Medical coding | Medical billing |
|---|---|---|
| Primary responsibility | Translating clinical documentation into accurate, standardized diagnosis and procedure codes. | Turning coded services into claims and managing them until the provider is paid and the account is resolved. |
| Main tasks | Reviewing records, assigning ICD-10-CM, CPT and HCPCS codes, applying modifiers, querying providers about unclear documentation. | Charge review, claim submission, tracking claim status, posting payments, working denials and appeals, sending patient statements. |
| Common tools | EHR, code books or encoder software, payer coding policies, NCCI edit tables. | Practice management or billing software, clearinghouse portals, payer portals, remittance reports. |
| Required knowledge | Medical terminology, anatomy and physiology, official coding guidelines and conventions. | Insurance plan types, payer rules, claim forms, reimbursement concepts, patient financial communication. |
| Common job titles | Medical coder, coding specialist, coding auditor, clinical documentation specialist. | Medical billing specialist, claims specialist, billing coordinator, patient account representative. |
| Relationship with insurers | Mostly indirect. Codes must meet payer policies, and coders may help answer coding-related denials or audits. | Direct and ongoing: submitting claims, checking status, responding to requests and filing appeals. |
Billing services
Medical Billing Services: What Healthcare Practices Should Know
A medical billing company, sometimes called a billing service or RCM vendor, performs billing work on a provider's behalf. Arrangements range from submitting claims only to managing the entire revenue cycle. Knowing what each service involves makes it easier to compare proposals and decide what to keep in-house.
Medical claims submission
Preparing and transmitting claims to payers, usually electronically through a clearinghouse.
- Claim scrubbing for missing or invalid data
- Electronic and paper submission
- Correcting rejected claims
Insurance verification
Confirming coverage and benefits before services are provided so that surprises are caught early.
- Eligibility and benefits checks
- Prior authorization tracking
- Coordination of benefits review
Payment posting
Recording insurer and patient payments and reconciling them against expected amounts.
- ERA and paper EOB posting
- Contractual adjustments
- Deposit reconciliation
Denial management
Investigating denied claims, fixing what can be fixed and appealing where appropriate.
- Root-cause categorization
- Corrected claims and appeals
- Trend reports for the practice
Accounts receivable management
Following up on unpaid and underpaid claims, typically prioritized by age and dollar value.
- Claim status follow-up
- Aging report review
- Payer escalation
Revenue cycle reporting
Regular reports that show how claims and payments are moving through the cycle.
- Collections and adjustments
- Denial and rejection rates
- Days in accounts receivable
Patient billing support
Producing patient statements and handling billing questions on the practice's behalf.
- Statement generation
- Patient phone or portal support
- Payment plan administration
Coding-related support
Some companies offer certified coders or coding audits in addition to billing work.
- Coding from documentation
- Coding and documentation audits
- Code update education
Medical Billing Services for Small Practices
Solo physicians and small group practices face the same payer rules as large health systems, usually with far fewer administrative staff. That's why medical billing services for small practices are a common topic for practice owners. The real question is less about whether outsourcing is good or bad and more about which arrangement fits the practice's volume, specialty, staff and budget.
Many practices choose a hybrid: front-desk tasks such as registration and copay collection stay in-house, while claims follow-up, denials or older accounts receivable go to a vendor.
| Factor | In-house billing | Outsourced billing |
|---|---|---|
| Control | Direct oversight of staff, priorities and workflow. | Work is managed by the vendor under the terms of the contract. |
| Costs | Salaries, benefits, training, software and clearinghouse fees. | Vendor fees, plus any software or setup costs the contract specifies. |
| Expertise | Depends on the experience of the people you hire and retain. | Access to a wider team, though experience varies widely by vendor. |
| Continuity | Vulnerable to turnover, vacations and sick leave on small teams. | Vendor provides coverage, but performance depends on the vendor. |
| Visibility | Information is immediately available inside the practice. | Relies on reporting and system access defined in the contract. |
- Common administrative challenges
- Small practices often rely on one or two people for registration, billing and follow-up. When a key person is out, claims can stall. Keeping up with payer rule changes, annual code updates and prior authorization requirements also takes time that small teams may not have.
- Staffing considerations
- An in-house biller needs training, backup coverage and access to current coding and payer resources. Practices that outsource still need someone internally who owns front-desk data quality, answers vendor questions and reviews reports.
- Cost structures and contract terms
- Billing companies commonly charge a percentage of collections, a fee per claim, a flat monthly fee or a combination. Read how "collections" is defined, whether setup or software fees apply, the minimum term, termination notice requirements and how your data is returned if you leave.
- Claim management and reporting
- Ask how often you'll receive reports, which metrics they include and whether you'll have direct access to your billing system. You should be able to see claim status, denials and A/R aging without waiting for the vendor.
- HIPAA and data security
- A billing company that handles protected health information for a practice is generally a business associate under HIPAA, which requires a business associate agreement (BAA). Ask how the vendor protects data, who can access it and how it handles security incidents.
- Vendor selection and integration
- Find out whether the vendor works in your existing EHR and practice management system or requires its own. Integration affects charge capture, data migration, staff workflow and what happens to historical data.
Learn more about business associate requirements in the HHS HIPAA Privacy Rule guidance (opens in a new tab).
How to Choose a Medical Billing Company
Use these questions when you interview vendors. Ask for answers in writing and compare at least two or three proposals on the same terms.
Medical Billing is an educational resource. It doesn't provide billing services or recommend specific vendors, and this checklist is for general guidance only.
- 1
Relevant specialty experience
Does the company currently bill for practices in your specialty and with your main payers?
- 2
Transparent pricing
Are all fees written down, including setup, software, statements and fees on old A/R?
- 3
Contract conditions
What is the term, the notice period, and how are claims in progress handled if you leave?
- 4
Reporting capabilities
Which reports are standard, how often are they delivered and can you access data directly?
- 5
Software compatibility
Will they work in your current EHR and practice management system, or require a change?
- 6
Data security
Will they sign a BAA, and how do they control access, train staff and respond to incidents?
- 7
Clear communication
Who is your point of contact, and how quickly do they respond to questions and issues?
- 8
References and documented performance
Can they provide references from similar practices and explain how they measure their results?
Careers
Medical Billing and Coding Jobs: Career Opportunities Explained
Medical billing jobs exist anywhere healthcare is paid for: physician offices, hospitals, billing companies, laboratories and insurers. Most roles are administrative and computer-based. Responsibilities, titles and qualifications vary considerably from one employer to another.
1. Learn
Build foundations
- Medical terminology
- Insurance basics
- Computer skills
2. Train
Complete training
- Certificate or degree program
- Coding and billing practice
3. Start
Entry-level role
- Billing clerk
- Insurance verification
- Patient accounts
4. Grow
Credential and experience
- CPB, CPC, CCA or CCS
- Specialty knowledge
5. Advance
Specialize or lead
- Coding auditor
- Revenue cycle analyst
- Billing manager
Common Medical Billing and Coding Jobs
Medical billing and coding jobs fall into a few broad groups. Billers manage claims and payments, coders translate documentation into codes, and related specialists handle insurance verification and revenue cycle analysis.
Medical billing specialist
Prepares and submits claims, monitors their status, posts payments, works denials and answers patient billing questions.
Medical coder
Reviews clinical documentation and assigns diagnosis and procedure codes. Coders may specialize in professional, outpatient or inpatient coding.
Claims specialist
Focuses on claim accuracy and follow-up: resolving rejections, checking claim status with payers and preparing appeals.
Insurance verification specialist
Confirms patient coverage and benefits, obtains prior authorizations and flags coverage problems before services are provided.
Billing coordinator
Organizes billing work across a team or department, monitors workloads and deadlines, and is often the contact for vendors and payers.
Revenue cycle specialist
Looks across the whole revenue cycle to analyze trends such as denials and A/R aging and to improve processes between departments.
Entry-Level Medical Billing Careers
Many people start in a front-end or support position and move into billing or coding as they gain experience. Common starting points include:
- Billing clerk or billing assistant
- Patient account representative
- Charge entry specialist
- Insurance verification or prior authorization representative
- Patient registration or front-desk coordinator
Qualifications vary by employer. Some entry-level billing roles ask for a high school diploma and on-the-job training. Others prefer completion of a training program, familiarity with billing software or a credential. Medical coding positions more often expect formal training or certification.
Skills Employers Commonly Look For
Job postings vary, but these skills come up repeatedly across billing and coding roles.
- Medical terminology
- ICD-10-CM, CPT and HCPCS familiarity
- Insurance and payer rules
- Attention to detail
- EHR and billing software
- Spreadsheet skills
- Clear written and phone communication
- HIPAA privacy practices
- Problem solving and research
- Time management
Remote Medical Billing Jobs
Billing and coding work happens mostly in software, so remote medical billing jobs are common. If you're searching for medical billing and coding jobs, remote listings usually look much like on-site roles, but they come with extra expectations around experience, equipment and privacy.
- Types of remote work
- Remote roles may be fully remote, hybrid, or contract-based through billing companies and staffing firms. Some employers only hire remote staff in certain states.
- Typical responsibilities
- Remote work usually mirrors on-site back-office work: claim follow-up, denials, payment posting, coding, insurance verification and patient calls.
- Software and equipment
- Expect to need reliable high-speed internet and a quiet workspace. Employers often supply a computer, and many require a VPN, multi-factor authentication or a headset for calls.
- Privacy and security expectations
- You'll handle protected health information at home. That means a private workspace, screens others can't see, locked devices and following your employer's HIPAA policies on printing and storage.
- Experience requirements
- Because remote staff work with less direct supervision, many employers prefer applicants with prior billing or coding experience or a recognized credential. Requirements vary by employer.
Where to Find Medical Billing and Coding Jobs
Look beyond general job boards. Many employers post openings on their own career pages first, and professional associations such as AAPC and AHIMA offer career resources for the field. Typical employers include:
- Physician offices and group practices
- Hospitals and health systems
- Medical billing companies
- Outpatient surgery and imaging centers
- Laboratories
- Health insurers
- Government agencies
Medical Billing doesn't list job openings or recruit candidates. The resources here are independent public sources.
- CareerOneStopU.S. Department of LaborJob search, training finder and local workforce center locator. (opens in a new tab)
- USAJOBSU.S. Office of Personnel ManagementThe official site for federal government jobs, including medical records and billing roles. (opens in a new tab)
- O*NET OnLineU.S. Department of LaborDetailed tasks, skills and technology used in medical records and coding work. (opens in a new tab)
- Occupational Outlook HandbookU.S. Bureau of Labor StatisticsTypical education, work environment and job outlook for medical records specialists. (opens in a new tab)
Education
How to Learn Medical Billing and Coding Online
Online medical billing and coding programs make it possible to train around work and family commitments. The options range from short courses to college degrees, so it helps to understand what each pathway offers before you enroll.
Step 1
Foundational knowledge
Medical terminology, anatomy and how health insurance works.
Step 2
Training
A structured online or classroom program in billing, coding or both.
Step 3
Practical skills
Hands-on practice with real-world style coding cases and billing software.
Step 4
Relevant certifications
An exam-based credential from a recognized certifying organization.
Step 5
Job applications
Applying to roles that match your training, credentials and experience.
Educational pathways
Online certificate programs
Self-paced or instructor-led courses from colleges, professional associations and private schools. Length and depth vary considerably.
Community college programs
Certificate and associate degree programs in medical billing, coding or health information technology, many offered fully online.
Professional association training
Organizations such as AAPC and AHIMA offer training aligned with their own credential exams.
On-the-job training
Some people move into billing from front-desk, registration or other healthcare administrative roles and learn with their employer.
Before enrolling, ask what the program covers, whether it uses the current year's code sets, how much hands-on practice it includes, and whether its graduates are eligible to sit for the credential exam you're interested in. Eligibility requirements for some credentials are tied to specific education or experience, so check directly with the certifying organization.
Common course subjects
- Medical terminology
- Anatomy and physiology
- ICD-10-CM diagnosis coding
- CPT and HCPCS Level II coding
- Health insurance and reimbursement
- Claim forms and electronic claims
- Denials and appeals
- HIPAA and compliance
- EHR and billing software practice
| Factor | Online | Classroom |
|---|---|---|
| Schedule | Flexible; often self-paced. | Fixed class times. |
| Structure | Requires self-discipline to keep moving. | Built-in pace and deadlines. |
| Interaction | Discussion boards, video sessions or email. | Face-to-face with instructors and classmates. |
| Practice | Simulated software and coding exercises. | Lab sessions; sometimes local externships. |
Practical experience
Employers value the ability to apply knowledge, not just recall it. Practicums and externships, simulated billing software, practice coding cases from real-world style records, and volunteer or entry-level administrative work all help bridge the gap between coursework and the job.
Continuing education
Code sets change every year and payer rules change constantly, so learning doesn't stop after the first job. Professional credentials from AAPC and AHIMA require ongoing continuing education to stay active. Many employers also provide annual coding and compliance training.
Recognized billing and coding certifications
AAPC and AHIMA are two of the most established certifying organizations in the field. Billing and coding credentials test different knowledge, so choose based on the work you want to do. Check each organization's website for current eligibility, exam format and renewal requirements.
Medical billing credential
- CPBAAPC
Certified Professional Biller
A billing-focused credential covering the claims process, payer rules, collections and compliance.
CPB details from AAPC (opens in a new tab)
Medical coding credentials
- CPCAAPC
Certified Professional Coder
A widely recognized credential for coding physician and other professional services.
CPC details from AAPC (opens in a new tab) - CCAAHIMA
Certified Coding Associate
An entry-level coding credential intended to show foundational coding competence.
CCA details from AHIMA (opens in a new tab) - CCSAHIMA
Certified Coding Specialist
A credential associated with coding in hospital settings, including inpatient and outpatient records.
CCS details from AHIMA (opens in a new tab)
Salary
Medical Billing and Coding Salary: What Determines Earnings?
There's no single medical billing salary. Pay depends on what the job involves, where it's located and what the employer requires. The factors below explain most of the variation, and the government data that follows shows typical national ranges.
Professional experience
Experienced staff can handle complex claims, specialties and appeals with less supervision.
Certifications
Some employers require or prefer credentials, particularly for coding roles, and may pay more for them.
Geographic location
Wages differ by state and metropolitan area, often tracking local living costs and demand.
Employer type
Hospitals, physician offices, billing companies and insurers structure pay differently.
Job responsibilities
Supervisory, auditing and analyst responsibilities generally carry higher pay than entry-level tasks.
Industry specialization
Complex areas, such as inpatient coding, surgery or oncology, can require deeper expertise.
Remote versus on-site
Some employers set remote pay by the employee's location; others use one rate for the role.
The short answer
Experience, credentials and location usually matter most, but every employer weighs them differently.
Why medical coding and billing salary figures differ
When people ask what the medical billing and coding salary is, they're usually asking about two different jobs. Coding positions often require deeper clinical knowledge, formal training and a credential, particularly in hospital and specialty settings. Billing positions range from entry-level claims and payment work to experienced appeals and A/R roles.
The federal government doesn't publish one statistic for “medical billing and coding.” The U.S. Bureau of Labor Statistics (BLS) includes medical coders within Medical Records Specialists. The closest category for billing roles is Billing and Posting Clerks, which covers billing clerks in every industry, not only healthcare. The two categories aren't a perfect match for any job title, so treat them as reference points rather than exact salaries.
Setting matters too. BLS publishes separate industry estimates, and pay for records and coding work is often higher in hospitals than in physicians' offices. Use the BLS industry-specific OEWS tables (opens in a new tab) for the current figures in a given setting rather than treating the national median as a typical medical billing salary.
The same figures are listed in the table that follows.
| Measure | Medical Records SpecialistsSOC 29-2072 | Billing and Posting ClerksSOC 43-3021 |
|---|---|---|
| Median annual wage | $51,140 | $48,500 |
| Median hourly wage | $24.59 | $23.32 |
| Mean annual wage | $56,790 | $51,070 |
| 10th percentile | $37,000 | $37,290 |
| 90th percentile | $81,150 | $67,710 |
| U.S. employment | 194,720 | 404,060 |
Source
U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS), May 2025 national estimates. Employment, mean wages and median hourly wages are from the official OEWS national table (opens in a new tab). Median annual wages and percentile ranges match O*NET's republished BLS figures. Confirmed October 3, 2026.
- Medical Records Specialists: BLS groups medical coders in this occupation, along with other health records roles that compile, process and maintain patient information. O*NET (opens in a new tab) · BLS profile (opens in a new tab)
- Billing and Posting Clerks: This occupation covers billing clerks in every industry, not only healthcare. BLS does not publish a separate category exclusively for medical billers. O*NET (opens in a new tab) · BLS profile (opens in a new tab)
Pay varies. These are statistical estimates, not offers or guarantees. Actual compensation depends on the employer, location, experience, credentials and the specific responsibilities of the role.
Software
Medical Billing Software: Features, Uses and Selection Guide
Medical billing software is the system billing teams use to create claims, send them to payers, record payments and track what's still outstanding. In many practices it's part of a larger practice management system that also handles scheduling and registration.
Day to day, staff use it to review charges coming from the EHR, scrub and submit claims, check eligibility, import electronic remittances, work denial queues and send patient statements. Managers use its reports to see where claims are getting stuck.
Core features of medical billing software
Electronic claim submission
Builds claims in standard formats and sends them to payers or a clearinghouse.
Coding assistance
Code lookup, edit checks and alerts for code combinations payers may not accept.
Eligibility checks
Verifies coverage and benefits electronically before or at the time of service.
Payment posting
Imports electronic remittances and applies payments and adjustments to accounts.
Denial tracking
Flags denied claims, groups them by reason and creates follow-up work queues.
Reporting and analytics
A/R aging, collections, denial trends and productivity reports.
Patient billing
Patient statements, online payment options and balance tracking.
EHR integration
Receives charges and clinical data from the EHR to reduce duplicate entry.
Security and admin controls
User roles, access permissions, audit logs and authentication settings.
Billing software vs. practice management vs. EHR
These terms overlap, and many vendors sell them as one combined product. The difference is what each system is primarily responsible for.
Medical billing software
Manages claims and payments.
Charge entry, claim submission, remittance posting, denial work queues, patient statements.
Practice management (PM) system
Runs the business side of a practice.
Scheduling, registration, insurance details and, in most systems, the billing functions above.
Electronic health record (EHR)
Holds the clinical record.
Visit notes, problem lists, orders, results, prescriptions and clinical decision support.
How to Choose Medical Billing Software
Start with your workflow, not a feature list. Use the questions below to compare products on equal terms, and ask vendors to demonstrate each answer rather than describe it.
Practice size
How many providers, locations and users must it support now and in a few years?
Medical specialty
Does it handle your specialty's common codes, modifiers, workflows and payers?
Existing software
Will it replace or work alongside your current EHR and practice management system?
User experience
Can your staff complete everyday tasks quickly? Ask for a live demo using your own scenarios.
Integration requirements
Which clearinghouses, labs, payment processors and patient portals does it connect with?
Pricing models
Is pricing per provider, per user, per claim or a percentage? What do implementation and support cost?
Data migration
How will patient demographics, open balances and claim history move from your old system?
Customer support
What are support hours and channels? Is training included, and for how long?
Reporting functionality
Can you build the reports you need without exporting everything to a spreadsheet?
Security and regulatory requirements
Will the vendor sign a BAA? How does it handle access control, encryption, backups and audit logs?
A note on “HIPAA-compliant” claims. HIPAA compliance depends on how an organization uses a system and on its policies, safeguards and agreements, not on the software alone. Ask vendors to sign a business associate agreement and explain their security controls. Verify any certification claim independently. EHR products certified under the federal Health IT Certification Program, for example, are listed on the Certified Health IT Product List (opens in a new tab).
Problems and solutions
Common Medical Billing Challenges and How They Are Addressed
Most billing problems start earlier in the process than where they're discovered. These are the issues billing teams encounter most often, along with the general approaches organizations use to prevent or correct them. Results depend on each organization's payers, specialty and processes.
Incorrect or incomplete patient information
Misspelled names, wrong birth dates or outdated insurance IDs cause claims to be rejected.
Approach: Verify demographics and scan insurance cards at every visit, not just the first. Use registration checklists and correct errors at the source.
Coding errors
Incorrect, outdated or unsupported codes and missing modifiers lead to denials or improper payment.
Approach: Keep code sets current each year, use claim edits, conduct periodic coding audits and provide feedback to coders and clinicians.
Missing documentation
Services can't be coded or defended in an audit if the record doesn't support them.
Approach: Hold charges until documentation is complete, query providers when notes are unclear and track unsigned notes.
Eligibility problems
Coverage has ended, the patient has a different primary payer or a service isn't covered.
Approach: Check eligibility before each appointment, confirm coordination of benefits and discuss expected costs with patients beforehand.
Claim denials
Payers refuse claims for reasons such as missing authorization, medical necessity or timely filing.
Approach: Categorize denials by reason, fix the root cause upstream and appeal well-supported claims within payer deadlines.
Delayed reimbursements
Claims sit unpaid because of payer backlogs, requests for more information or unnoticed rejections.
Approach: Monitor claim status and clearinghouse reports routinely and respond quickly to payer requests.
Payer-specific requirements
Each payer has its own rules for authorization, modifiers, filing limits and documentation.
Approach: Maintain an up-to-date payer reference, review payer bulletins and build payer rules into claim edits where possible.
Outstanding accounts receivable
Older balances become harder to collect, and some may pass payer filing deadlines.
Approach: Review A/R aging regularly, prioritize by age and amount, and set clear patient financial policies.
Manual administrative processes
Re-keying data and checking portals one by one is slow and prone to error.
Approach: Use electronic eligibility, claims and remittance transactions, and automate routine posting with human review of exceptions.
Data security considerations
Billing data includes protected health information that attracts cyberattacks and must be safeguarded.
Approach: Limit access by role, train staff, require multi-factor authentication, sign BAAs with vendors and perform regular security risk assessments.
Glossary
Essential Medical Billing Terms Explained
Billing conversations are full of acronyms and terms that sound alike. These definitions cover the ones you'll encounter most often, with notes on the pairs that are easiest to mix up. For patient-facing insurance terms, the HealthCare.gov glossary (opens in a new tab) is a helpful companion.
Showing 14 terms.
- Accounts receivable(A/R) Revenue cycle
- Money owed to a provider for services already delivered that hasn't been collected yet, from payers or patients. Teams usually track it by age, such as 0–30 or 31–60 days.
- Adjudication Claims & payment
- The payer's process of reviewing a claim against coverage, policy and coding rules to decide whether to pay, reduce or deny it.
- Business associate agreement(BAA) Coverage rules
- A HIPAA-required contract between a covered entity, such as a practice, and a vendor that handles protected health information on its behalf, such as a billing company.
- Claim denial Claims & payment
- A claim the payer received and processed but decided not to pay, in whole or in part, for a stated reason.Don't confuse: A denied claim was processed. It usually requires a corrected claim or a formal appeal.
- Claim rejection Claims & payment
- A claim that fails initial checks by the clearinghouse or payer, often because of missing or invalid data, so it never enters processing.Don't confuse: A rejected claim was never processed. It can usually be corrected and resubmitted.
- Clearinghouse Claims & payment
- An intermediary that receives claims from providers, checks them for errors, converts them to standard formats if needed and forwards them to payers. Under HIPAA, healthcare clearinghouses are a type of covered entity.
- Coinsurance Patient costs
- The patient's percentage share of the cost of a covered service, usually after the deductible has been met. For example, the plan pays 80% and the patient pays 20%.
- Copayment(Copay) Patient costs
- A fixed dollar amount a patient pays for a covered service, such as an office visit, typically at the time of service.Don't confuse: A copayment is a set dollar amount. Coinsurance is a percentage.
- Deductible Patient costs
- The amount a patient pays for covered services in a plan year before the health plan begins to pay.Don't confuse: The deductible is paid first. Copayments and coinsurance are the patient's share of costs.
- Electronic remittance advice(ERA) Claims & payment
- The electronic payment explanation a payer sends to the provider, known as the HIPAA standard 835 transaction, detailing payments, adjustments and reason codes for each claim.Don't confuse: The ERA is the provider's version of payment details. The EOB is the patient's.
- Explanation of benefits(EOB) Claims & payment
- A statement from a health plan, usually sent to the patient, showing what was billed, what the plan paid and what the patient may owe.Don't confuse: An EOB is not a bill. The patient's bill comes from the provider.
- Medical necessity Coverage rules
- Whether a service is reasonable and needed to diagnose or treat a patient's condition, based on accepted standards of medicine and the payer's coverage criteria.
- Revenue cycle management(RCM) Revenue cycle
- The administrative and clinical processes a provider uses to capture, bill and collect payment for patient services, from scheduling and registration through final payment.
FAQs
Medical Billing Frequently Asked Questions
Short answers to the questions people ask most about medical billing and coding. Each answer links to the section of this guide that covers the topic in more depth.
What is medical billing?
Medical billing is the process of creating claims for healthcare services, submitting them to insurance companies and government programs, and following up until the provider is paid. It also includes recording payments, resolving denials and billing patients for any balance they owe.
Read more: What is medical billing?What is medical billing and coding?
Together, they're the process of turning a patient visit into payment. Coding translates the provider's documentation into standardized diagnosis and procedure codes. Billing uses those codes to prepare claims, submit them and manage payment.
Read more: Medical billing and coding explainedIs medical billing different from medical coding?
Yes, although they're closely connected. Coders focus on reading clinical documentation and assigning accurate codes. Billers focus on claims, payers, payments and patient accounts. In small practices, one person often does both. Larger organizations usually separate the roles.
Read more: Compare billing and codingHow does medical billing work?
A typical workflow starts with patient registration and insurance verification. Then comes documentation of the visit, coding and charge entry, claim creation and submission, and payer review. Finally, payments are posted, denials are worked and the patient is billed for any remaining balance. The exact steps vary between organizations.
Read more: The medical billing process step by stepWhat do medical billing companies do?
Medical billing companies handle billing work on behalf of healthcare providers. Depending on the contract, that can include claim submission, insurance verification, payment posting, denial management, accounts receivable follow-up, reporting, patient billing support and coding services.
Read more: Medical billing services explainedWhat are medical billing services for small practices?
They're outsourced billing arrangements suited to practices with small administrative teams. A vendor may manage the entire billing process or specific parts of it, such as denials or old accounts receivable. Practices should compare fees, contract terms, reporting, software compatibility and data security, and should sign a business associate agreement with any vendor that handles patient information.
Read more: Billing services for small practicesCan you learn medical billing and coding online?
Yes. Many community colleges, professional associations and private schools offer online medical billing and coding programs. Look for programs that cover current code sets, include hands-on practice and prepare you for a recognized credential exam if you plan to pursue one. Completing a course is not the same as earning a professional certification.
Read more: Learning medical billing and coding onlineWhat qualifications are needed for medical billing jobs?
Requirements vary by employer. Many entry-level billing positions ask for a high school diploma or equivalent, along with knowledge of medical terminology, insurance and billing software. Some employers prefer or require postsecondary training, prior experience or a credential such as the CPB or CPC.
Read more: Medical billing and coding careersAre remote medical billing jobs available?
Yes. Much of billing and coding work happens on computers, so many employers offer remote or hybrid roles. Remote positions often prefer candidates with experience, and they require a secure, private workspace. Be cautious of listings that ask you to pay for training or equipment.
Read more: Remote medical billing jobsWhat is the medical billing and coding salary?
BLS doesn't publish one category for "medical billing and coding." In its May 2025 wage estimates, the median annual wage was $51,140 for medical records specialists, the occupation that includes medical coders. It was $48,500 for billing and posting clerks across all industries. Actual pay depends on experience, credentials, location and employer.
Read more: Medical billing and coding salary dataWhat software do medical billing specialists use?
Billing specialists typically work in practice management or medical billing software, the practice's electronic health record, clearinghouse portals and individual payer portals. They also use spreadsheets for tracking and reporting. Specific products vary by employer.
Read more: Medical billing software guideIs medical billing and coding difficult to learn?
It takes steady study but is approachable for beginners. The main challenges are learning medical terminology, understanding coding guidelines and keeping up with changing payer rules and annual code updates. Coding generally requires more clinical knowledge than billing, and most people improve significantly with hands-on practice.
Read more: How to learn billing and codingEditorial standards
Our Editorial Approach
Medical Billing aims to publish clear, accurate and independently researched information about medical billing. Our goal is to explain how the system works, not to sell billing services, training or software.
- How we select sources
- We rely first on primary sources: federal agencies such as CMS, HHS, CDC and the Bureau of Labor Statistics, the organizations that maintain code sets, and the professional bodies that administer credentials. Secondary sources are used only for context and are never the sole basis for a factual claim.
- How salary information is verified
- Wage figures come directly from the BLS Occupational Employment and Wage Statistics program. We publish the occupational category, release period and retrieval date alongside every figure and explain where a BLS category doesn't map neatly onto a job title. We don't publish salary figures we can't trace to a source.
- How educational content is reviewed
- Explanations of coding systems, claims processes, privacy rules and credentials are checked against the official documentation listed below. When rules differ by payer or organization, we say so rather than presenting one approach as universal.
- How corrections are handled
- When an error is identified, we verify it against the relevant primary source, correct the content and update the review information on this page. Material corrections are not made silently.
Review status
- Salary data verified
- Salary data release
- BLS OEWS, May 2025
- Published by
- Medical Billing
Authorship and expertise
We name individual authors and reviewers only when we can show their real credentials and relevant professional experience. Until then, content is published under the Medical Billing name and supported by the primary sources cited below.
This guide is general educational information. Coding, billing, compliance and legal questions about a specific situation should be answered using official payer and government guidance or a qualified professional.
References and further reading
Primary sources used to research this guide. Links open the official publisher's website in a new tab.
Medical coding systems
- ICD-10-CM: International Classification of Diseases, Clinical Modification (opens in a new tab)
CDC National Center for Health Statistics
Official U.S. source for the ICD-10-CM diagnosis code set and browser tool.
- ICD-10 Codes (opens in a new tab)
Centers for Medicare & Medicaid Services
Annual ICD-10-CM and ICD-10-PCS files, guidelines and updates.
- CPT® (Current Procedural Terminology) (opens in a new tab)
American Medical Association
The AMA maintains the CPT code set used to report medical services and procedures.
- Healthcare Common Procedure Coding System (HCPCS) (opens in a new tab)
Centers for Medicare & Medicaid Services
Background on HCPCS Level I and Level II codes and quarterly updates.
- National Correct Coding Initiative (NCCI) Edits (opens in a new tab)
Centers for Medicare & Medicaid Services
Medicare coding edits that identify code pairs that generally should not be billed together.
Claims, transactions and payment
- Electronic Billing & EDI Transactions (opens in a new tab)
Centers for Medicare & Medicaid Services
Medicare guidance on electronic claim submission and related transactions.
- HIPAA Administrative Simplification: Transactions (opens in a new tab)
Centers for Medicare & Medicaid Services
Standard electronic transactions for claims, eligibility, remittance and claim status.
- Medicare Claims Processing Manual (opens in a new tab)
Centers for Medicare & Medicaid Services
Detailed Medicare claims processing instructions, organized by chapter.
- Physician Fee Schedule (opens in a new tab)
Centers for Medicare & Medicaid Services
How Medicare sets payment amounts for physician and practitioner services.
- No Surprises Act: Ending Surprise Medical Bills (opens in a new tab)
Centers for Medicare & Medicaid Services
Federal patient billing protections, including good faith estimates for uninsured or self-pay patients.
Privacy and security
- HIPAA Privacy Rule (opens in a new tab)
U.S. Department of Health & Human Services
Standards for protecting individuals' health information, including business associate requirements.
- HIPAA Security Rule (opens in a new tab)
U.S. Department of Health & Human Services
Administrative, physical and technical safeguards for electronic protected health information.
- Security Risk Assessment Tool (opens in a new tab)
HealthIT.gov (ASTP/ONC and HHS OCR)
A free tool designed to help small and medium-sized practices conduct a HIPAA security risk assessment.
- Certified Health IT Product List (CHPL) (opens in a new tab)
Assistant Secretary for Technology Policy / ONC
Searchable list of health IT products certified under the ONC Health IT Certification Program.
Careers, salary and certification
- National employment and wage data by occupation, May 2025 (Table 1) (opens in a new tab)
U.S. Bureau of Labor Statistics
Official OEWS national employment, mean wage and median hourly wage table used to confirm salary figures on this page.
- May 2025 National Industry-Specific Occupational Employment and Wage Estimates (opens in a new tab)
U.S. Bureau of Labor Statistics
Industry tables for comparing wages by setting, such as physician offices and hospitals.
- Occupational Employment and Wages: Medical Records Specialists (29-2072) (opens in a new tab)
U.S. Bureau of Labor Statistics
National, state and industry wage estimates for the occupation that includes medical coders.
- Occupational Employment and Wages: Billing and Posting Clerks (43-3021) (opens in a new tab)
U.S. Bureau of Labor Statistics
Wage estimates for billing clerks across all industries, including healthcare.
- Occupational Outlook Handbook: Medical Records Specialists (opens in a new tab)
U.S. Bureau of Labor Statistics
Duties, typical education, work environment and job outlook.
- O*NET OnLine: Medical Records Specialists (opens in a new tab)
U.S. Department of Labor, O*NET
Tasks, skills, technology and related occupations.
- O*NET OnLine: Billing and Posting Clerks (opens in a new tab)
U.S. Department of Labor, O*NET
Tasks, tools and skills for billing clerk roles.
- Certifications (opens in a new tab)
AAPC
Overview of AAPC credentials, including the CPC and CPB.
- Certifications Overview (opens in a new tab)
AHIMA
AHIMA coding and health information credentials, including the CCA, CCS and RHIT.
- Job Scams (opens in a new tab)
Federal Trade Commission
How to recognize and report fraudulent job offers, including work-from-home scams.
Patient cost terminology
- Health Coverage Glossary (opens in a new tab)
HealthCare.gov
Plain-language definitions of deductibles, copayments, coinsurance, prior authorization and more.
CPT® is a registered trademark of the American Medical Association. Medical Billing is not affiliated with, endorsed by or sponsored by AAPC, AHIMA, the AMA or any government agency cited on this page.