What is the first step in the typical medical billing and collections workflow?

• A. Obtain prior authorization for every service before scheduling.
• B. Verify patient identity and demographics; confirm insurance eligibility and benefits before or at the time of service.
• C. Prepare patient payment estimates before service.
• D. Verify patient identity and demographics only after service.

Answer: (B)

The first step in medical billing and collections is to verify the patient’s identity and demographics and to confirm insurance eligibility and benefits before or at the time of service. This sets the foundation for accurate billing because you’re capturing who the patient is, making sure the payer knows who’s being billed, and confirming what the plan covers, including copays, deductibles, and any specific benefits. With verified information and confirmed eligibility, you can determine the patient’s financial responsibility upfront, avoid data errors, and reduce the likelihood of claim denials or delays.

Prior authorization is important for many procedures, but it isn’t required for every service and isn’t universally the first step. Some services don’t need preauthorization, and delaying verification to obtain authorization first can slow down scheduling and patient access. Preparing payment estimates depends on having verified benefits and the patient’s eligibility details, so it follows after you confirm who’s covered and what’s covered. Verifying identity and demographics only after service would make it impossible to bill correctly and would lead to more post-service edits and denied claims.