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How to Build A Medical Billing Software: A Complete Guide

Healthcare providers charge their patients for medical services rendered. The final bill must capture every diagnosis, treatment, prescription, and administrative service patients receive. Hence, knowing how to build medical billing software allows you to streamline invoicing workflow in hospitals and clinics.

A healthcare billing system helps medical institutions reduce billing mistakes that frustrate patients and healthcare providers. According to a study, 80% of medical bills in the US contain errors. Patients are either underbilled or overbilled, resulting in financial discrepancies.

Integrating billing software helps you solve these problems. Yet, you might need helps as  billing is a complex process that requires technical, clinical, and regulatory considerations. That’s why some healthcare providers reach out to us.

I’m a Lead Product Manager at Uptech and I’ll guide you through the stages of developing medical billing software. I’ll explain how medical billing software works and what are your options as a healthcare solution provider.

Let's start!

medical billing software

What is a medical billing software?

Medical billing software is software that allows healthcare providers to automate invoicing workflow. Rather than risk human errors, medical billing apps integrate with electronic health record (EHR) systems to capture all billable services throughout the patient’s journey. Both hospitals and smaller clinics will benefit from installing a medical billing system.

How does medical billing software work?

Before I explain further about developing a medical billing system, let's look at how patients are billed in a hospital.

  1. Patients register their visits at the reception.
  2. Medical workers check if they are eligible for insurance claims.
  3. During the consultation, physicians note down the diagnosis and treatment rendered (if any).
  4. Medical staff assign appropriate medical codes to the patient’s invoice.
  5. A superbill, which itemizes all medical services and their codes, is issued.
  6. The healthcare provider sends the invoice to the patient or file a claim with the insurance provider.
  7. The patient’s insurer may approve, adjust, or reject the claim. Depending on the decision, medical workers may need to adjust and resubmit the claim.
  8. Upon approval, the billing department records the amount received and collects the remaining balance from patients.
  9. Financial records are updated to reflect the current status of outstanding receivables and approved claims.
how medical billing software works

When implemented without automated healthcare software, medical workers must coordinate each step to collect payment for services provided. This takes up precious time and focus that are better spent on patient care.

A medical billing system provides end-to-end automation in billing workflow, freeing up physicians and staff on redundant work. Hospitals that use the software can speed up payment collection, optimize insurance claims approval, and reduce costly errors that impact financial outcomes. Besides, you can use medical billing apps that use secure storage to comply with HIPAA, GPDR, and other data privacy regulations.

What are the types of medical billing apps?

There are three types of medical billing systems that healthcare practitioners can apply.

Open billing system

Open medical billing apps integrate with EHR to provide transparent and open access to patients’ status. It allows medical workers to access and share information across different medical departments.

Closed billing system

Closed medical billing software restricts information access to a specific practitioner. You can think of this approach as digitalizing patient’s paper charts. In this approach, physicians cannot share billing information with other practitioners.

Isolated billing system

An isolated billing system is exclusive only to the patients. Patients are responsible for tracking their own visits and bills incurred. Physicians, nurses, and healthcare institutions cannot access the information stored by patients.

How to Build Medical Billing Software: 6 Steps

So, how do you develop custom medical billing software from scratch? I share steps that we take at Uptech to build similar apps.

How to Build a Medical Billing Software

1. Run a discovery phase

Don’t build a medical billing app that users struggle to use. Conduct market research, analyze competing software, and seek feedback from the target audience to lay a strong foundation for subsequent development work.

Our Product team at Uptech can help you conduct a product discovery, so you'll end up with a ready roadmap for your product.

2. Define your requirements

Once you’ve received the initial research's feedback and results, list the technical requirements for the medical billing app. Usually, our development team documents the functional specifications, technological stacks, platforms, and third-party services the app should have.  

Most healthcare services incorporate artificial intelligence and machine learning (AI/ML) to improve efficiency and introduce innovative features. For example, you can include a conversational chatbot and enable personalized engagement with AI. Partnering with AI development companies like Uptech helps you to power your healthcare app with generative AI.

3. Design a proof of concept

Before developing the solution, start with a proof of concept (PoC). A PoC consists of a design blueprint that you can use to get immediate user feedback. When building a PoC, apply UI/UX best practices to create layouts that mimic how the final product might look.

You might also want to demonstrate basic functionality and in-app navigation in the PoC. Present the PoC to stakeholders involved and use it to get feedback from the target users. Use the feedback to refine the app specifications before proceeding.

4. Develop the software

The next phase, also the most essential part of the development, begins. App developers, backend/frontend programmers, UI/UX designers, and project managers work closely to integrate the necessary components to develop medical billing software.

At Uptech, software development occurs in weekly sprints – where we write codes, test, and refine them to meet predetermined milestones. When developing software, it’s important to stay focused on the design specifications, integrations, security considerations, and compliance requirements.

For example, development teams use a secure, encrypted payment gateway to meet HIPAA requirements. Likewise, your software team must carefully choose private or public cloud providers for deploying the medical billing app. The medical billing software must also integrate seamlessly with insurance and other service providers.

Check out software developement services we offer. Take your software to the next level with our professional team.

5. Prelaunch testing

Before releasing the software to medical users, test it thoroughly to identify bugs and other issues.

  • Create several use cases and run the software to ensure it performs according to the designed workflow.
  • Test the software for performance issues, particularly when user traffic surges.
  • Collect the test results, evaluate them, and make necessary changes to the software.
  • Perform regression tests to ensure new changes don’t negatively impact the software’s functionality and prepare for production release.

Also, ensure the software is certified by regulatory bodies and complies with privacy laws like HIPAA.

6. Software release and support

Launch the software and monitor for issues that may arise in the first few weeks. Ensure that your support team is available 24/7 to assist users. Remember, you might need to train medical staff and physicians for a smoother onboarding.

What Are The Tech Stacks For Developing Medical Billing Apps?

Medical billing software requires multiple layers of software components that work collaboratively in a secure and scalable environment. At Uptech, we use these tech stacks to interconnect frontend, backend, database, mobile apps, cloud infrastructure, and third-party components.

Development Techstack
Backend Node.js, Nest.js/Express.js, Typescript.
Frontend JavaScript, HTML5, CSS, Next.js, React + Redux / MobX, TypeScript, Next.js, Cypress, Storybook, Jest.
iOS Swift, RxSwift, MVVM/Redux, SnapshotTesting, XCTest.
Android Kotlin, Coroutines/RxJava, Dagger, Retrofit, Room, Clean Architecture.
Cloud AWS Cloud, Google Cloud


Custom vs. Ready-Made Solutions: What to Choose?

Ready-made medical billing apps allow you to automate invoicing in medical establishments almost immediately. They are often offered as licensed software or through recurring subscriptions. For example, Kareo, Amazon Comprehend Medical, and DrChrono are off-the-shelf solutions that hospitals and clinics can use to support their revenue cycle management.

Meanwhile, custom-made healthcare billing software is developed from scratch. Rather than offering a generic solution, you tailor the medical billing app around the invoicing workflow. Each medical establishment has unique requirements, billing practices, and existing healthcare systems, which require custom automation and integrations.

If you’re starting out a practice with a low budget, getting a ready-made solution is a reasonable choice. However, most medical establishments outgrow generic software when they offer more services to a broader range of patients. They cannot customize off-the-shelf solutions to meet changing and complex business requirements.

Choose custom medical billing solutions if you need flexibility, customization, and integration for a larger practice. By developing your own app, you have complete control over data security, user experience, billing workflow, and more. Despite the initial investment, a custom solution offers a better return on investment, particularly for medical establishments with multiple departments or physical premises.

medical billing software

Key Features of Medical Billing Software

Some medical billing software provides a wide range of features to automate invoicing practices. However, you’ll only need a handful when developing a minimum viable product (MVP).

Automation of billing processes

A hospital billing system aims to free medical workers from invoicing workload by automating most of the workflow. From patient registration to claim reimbursement, the software passes information it captures from one department to another without manual intervention. You can set up billing rules once, and the app will automatically apply the same medical code and charges to each registered patient. For example, Nextgen is a medical billing app that allows users to enforce rule-based billing across clinical workflows.

Integration with electronic health records (EHR)

EHR integration allows healthcare providers to manage patient care and improve workflow efficiency. They can also reduce billing errors by consolidating data accurately from other healthcare systems with standards like HL7. For example, DrChrono provides EHR features like telehealth, video visits, and practice management on mobile.

User-friendly interface and customization options

Applying the best UI/UX practices, such as using appropriate descriptions for the intended audience, is important for a functional medical billing app. Besides, providing medical staff the flexibility to customize billing workflows improves adoption. CureMD is a medical billing and coding software that lets users customize invoicing automation to meet their operational needs.

Reporting and analytics capabilities

Reporting features allow medical staff to generate reports, visualize patient payment trends, and identify actionable insights. They provide healthcare and financial teams with transparency and oversight of revenue growth, expenses, and profitability. For example, Kareo provides billing analytics that healthcare providers can easily access to support decisions they make.

Thinking of developig a Healcthare CRM? Read our guide to learn how to develop a healthcare CRM software that adds value to your users, how much money it takes to build one, and what features are a must-have.

Compliance, Compliance, Compliance

Prioritize regulation compliance when developing medical billing apps. Such apps collect, process, store, and exchange sensitive patient information with other systems. Security oversight in software architecture, data storage, third-party integations and other development modules might result in data breaches. In such cases, healthcare providers may face heftly penalties for failing to safeguard health data.

Depending on where you market the medical billing solution, these regulations may apply.

  • HIPAA, FDA, HITRUST( US)
  • GPDR, IVDR, MDR ( Europe)
  • PCI DSS (Worldwide)
  • Local and regional regulations.
  • CMS Regulations (Centers for Medicare & Medicaid Services)
Medical Billing Software

Medical software used for billing must adhere to specific regulations set by CMS, to ensure accurate billing practices and compliance with government healthcare programs.

When we develop medical software, we help you determine which act and what are procedures to be compliant-certified for your solution. Most regulatory bodies require companies to submit an application and specific documentations for review. For example, you’ll need to submit security policy, risk assessment reports, mitigation plans and technical specifications for security measures when applying for HIPAA accreditation.

The Average Cost to Build a Custom Medical Billing Software

So, how much does it cost to build a custom medical billing software? There's no fixed price, but it’s safe to say that building medical billing software from scratch can cost anything from $80k to $190k or higher.

So what does make this price?

App Complexity

Development costs vary when building a medical invoicing solution. Depending on the features, complexities, supported platforms, customizable options, and more, the price might differ. For example, you’ll pay more for hospital billing apps that take more hours to build than a simple one for small clinics.  

Outsourcing partner rates

Also, the cost to build medical billing apps is influenced by the fee you pay when engaging the development team. If you hire developers from developed economies like US and UK, you’ll pay for the higher fee they charge. Conversely, working with developers from Eastern Europe like Uptech is more affordable.

Check out our comprehansive guide to software development rates.

Compliance requirements

Compliance requirements also play a crucial role in determining the overall price. Healthcare software, including medical billing applications, must adhere to various compliance standards, which can vary significantly from country to country. This aspect alone can have a substantial impact on the project cost. It's important to consider these compliance standards, especially since they differ based on the nature of the healthcare software.

Third-party Providers

Additionally, third-party involvement, research, and integration may impact the project cost. For instance, you might need third-party services for automatically verifying a user's eligibility for insurance coverage or facilitating doctor scheduling, especially if the platform doesn't include a custom solution for these purposes. These integrations and research efforts are crucial for a seamless and efficient billing process but do add to the overall cost.

If you need an accurate quote, reach out to our team.

How Medical Billing Software Benefits Your Business

Automating the process with software benefits healthcare providers in several areas.

Increased patient satisfaction

Patients visiting medical institutions expect their bills to be precise, prompt and transparent. Therefore, healthcare providers must ensure all expenses they charge for services provided are paid with minimum fuss. This is important to ensure patient satisfaction because 87% prefer to pay their medical bills online.

Enhanced Risk Mitigation

Medical billing software plays a crucial role in mitigating risks associated with legal compliance and data security. By maintaining legal compliance, healthcare providers can avoid hefty penalties for non-compliance. The software ensures that all transactions are secure and patient data is safeguarded, adhering to stringent standards like HIPAA in the U.S. or GDPR in Europe.

This not only protects the institution from legal and financial repercussions but also builds trust with patients, who are increasingly concerned about the privacy and security of their medical information.

Improved revenue growth and cash flow

Automating medical billing with software improves medical provider’s financial stability. According to a published report, 77% of healthcare providers took more than 1 month to collect payment, citing heavy patient responsibility as one of the causes. Medical billing is simpler with automation. It reduces patient confusion, and enables healthcare practitioners to be paid in a shorter duration.

Streamlined financial audit

Medical institutions, large or small alike, must keep proper financial records for audit purposes. A billing software ensures that all invoices, reimbursements, and payments are correctly filed and recorded. It also strengthens efforts to meet HIPAA, GPDR, and other regulatory requirements.

How Uptech Can Help You Develop a Medical Billing Software

Uptech believes in delivering value to clients with great software – and that includes medical billing apps. Rather than focusing on writing codes, we turn our attention to the medical users and patients.

Our project team studies the target users and uses their feedback to adjust and enhance the UX of the app, and as a result – better meet user needs and expectations. We solve real problems, and in this case, billing issues that all healthcare providers face.

Besides adopting a user-centric approach, our team applies field-proven skills to integrate techstacks required for healthcare software development. More importantly, we’re aware with HIPAA and other regulatory requirements. In each medical and billing app we built, our team applied stringent security practices to store and process patient data securely.

Our compliant approach allowed us to deliver several healthcare and financial apps to clients worldwide. These are some notable examples.

Medical Billing Apps
  • Sprent is an on-demand delivery app that lets customers order, ship and track items. We took great care when integrating the app with external payment gateways to enable secure credit card processing.
  • We created a neobanking app for fintech client that engages customers with gamification features. During development, our team complied with legal and regulatory requirements that govern financial products.
  • Uptech is the software development partner for a mental health app that target the US market. We ensure the app meets HIPAA and other compliance checks to protect user’s privacy.
Medical Billing Software

Conclusion

Medical billing apps automate invoicing workflows to reduce reimbursement discrepancies and allow prompt payment. Physicians, patients and healthcare providers benefit when medical bills issued are precise and concise. With such software, you can reduce time wasted on patient registration, asigning medical codes, insurance claims and other processes to collect payment for medical services provided.

Developing custom medical billing apps is the sensible choice for healthcare provider that require control, flexibility and tailor-made solutions. Uptech’s experience in healthcare and financial space puts us in a strong position as a software partner.

Reach out, and work with our team to build your medical billing app.

FAQs

How to create a medical billing software?

So, how do you develop custom medical billing software from scratch? Here are the steps that we take at Uptech to build such apps.

  1. Run a discovery phase
  2. Define your requirements
  3. Design a proof of concept
  4. Develop the software
  5. Run prelaunch testing
  6. Make a software release and support the app

How much does it cost to build a medical billing software?

It’s safe to say that building medical billing software from scratch can cost anything from $80k to $190k or higher.

What tech stack is needed for medical billing and coding?

Here is the tech stacks to interconnect frontend, backend, database, mobile apps, cloud infrastructure, and third-party components when buildig a medical billing software.

  • Backend: Node.js, Nest.js/Express.js, Typescript.
  • Frontend: JavaScript, HTML5, CSS, Next.js, React + Redux / MobX, TypeScript, Next.js, Cypress, Storybook, Jest
  • iOS: Swift, RxSwift, MVVM/Redux, SnapshotTesting, XCTest
  • Android: Kotlin, Coroutines/RxJava, Dagger, Retrofit, Room, Clean Architecture
  • Cloud: AWS Cloud, Google Cloud

How do you create a billing system?

To create a billing system for a medical software, app developers, backend/frontend programmers, UI/UX designers, and project managers work closely to integrate the necessary components to develop the software.

At Uptech, software development occurs in weekly sprints – where we write codes, test, and refine them to meet predetermined milestones. We stay focused on the design specifications, integrations, security considerations, and compliance requirements.

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