October 26, 2026

You see a doctor for 20 minutes, and weeks later a statement arrives from your insurer, then a bill from the office. A lot happens in between. The medical billing process is the chain of checks, codes and approvals that turns a visit into a payment, and most delays and surprise paperwork trace back to one of its steps.

Knowing those steps helps you ask better questions and spot mistakes. This guide walks through what your doctor's office does behind the scenes, how long prior authorization can take, why claims get denied and what you can do when one is. If you are new to terms like deductible or coinsurance, start with our guide to how health insurance works.

The medical billing process, step by step

Most visits and procedures move through the same five stages:

• Checking your coverage before you are seen
• Getting prior authorization when your plan requires it
• Coding the visit with standard diagnosis and procedure codes
• Sending the claim to your insurer
• Paying what you owe after your insurer sends an explanation of benefits

A problem at any stage can hold up the rest. The sections below explain each one.

Step 1: checking your coverage before the visit

The medical billing process starts before you are seen. The office confirms that your plan is active, that the doctor is in your network and what your plan covers for the visit. This is why staff ask for your insurance card at every visit, even when nothing has changed. A plan change, a new employer or a typo in your member ID can send a claim to the wrong place.

Some plans also need a referral from your primary care doctor before you see a specialist. If you are planning surgery, ask early whether your plan sees it as an outpatient or inpatient service, because that can change what you pay. Our guide to outpatient vs inpatient surgery explains the difference.

Step 2: prior authorization for some services

Prior authorization is approval from your plan before you get certain care. HealthCare.gov defines preauthorization as a decision by your plan that a service, treatment, drug or piece of equipment is medically necessary. Plans can require it for some services, except in an emergency. It is also not a promise that your plan will pay.

In the medical billing process, this step often means a wait while your doctor's office sends records and notes to your plan.

How long does prior authorization take?

It depends on your plan and how urgent the request is. Under the federal prior authorization rule, beginning in 2026 Medicare Advantage plans, Medicaid and CHIP must decide urgent requests within 72 hours and standard requests within seven calendar days. That timeline does not apply to plans sold on HealthCare.gov. For those plans, the insurer must tell you in writing within 15 days if it denies a prior authorization request, or within 72 hours for urgent care.

Step 3: coding your visit

After your visit, the office translates your care into standard codes. Diagnosis codes and procedure codes tell your insurer two things: ICD-10-CM codes explain why you needed care, and CPT or HCPCS codes describe what was done.

Coding is a big reason the medical billing process feels complicated. One visit can carry several codes, and the diagnosis has to support the procedure. If a code is missing or does not match the notes, the claim can come back for correction or be denied.

Step 4: the claim goes to your insurer

The claim is the center of the medical billing process. A claim is a request for payment sent to your insurer, usually by your doctor's office. The insurer checks it against your plan, applies its allowed amount and decides what it will pay.

What you owe depends on where you are in your plan year. Before you meet your deductible, you may pay most of the allowed amount yourself. After that, copays or coinsurance usually apply until you reach your out-of-pocket maximum.

Why claims get denied

Denials are a common snag in the medical billing process. A KFF analysis of claims denials in HealthCare.gov plans found insurers denied 20% of in-network claims in 2023, with rates from 1% to 54% depending on the insurer. Missing prior authorization or referral made up 9% of in-network denial reasons, and medical necessity about 6%.

A claim denied as not medically necessary means the insurer decided the care did not meet its standard. HealthCare.gov describes medically necessary care as services needed to diagnose or treat a condition that meet accepted standards of medicine. In the KFF data, consumers appealed fewer than 1% of denied claims.

Appealing a denial and the letter of medical necessity

A denial is not the end of the medical billing process. For most private plans, you can file an internal appeal within 180 days of the denial notice. The plan must decide within 30 days for a service you have not received yet, or 60 days for one you already received.

HealthCare.gov suggests sending any extra information you want considered, such as a letter from your doctor. A letter of medical necessity explains your diagnosis, what has already been tried and why the treatment is needed. Keep copies of every letter, form and phone call, with dates and names.

If the internal appeal fails, you can ask for an external review by an independent reviewer within four months, and your insurer must accept that decision. Medicare has its own appeals process, which generally has five levels.

Reading your explanation of benefits

The last step of the medical billing process is the paperwork you receive. Once the claim is processed, your insurer sends an explanation of benefits, or EOB. The CMS guide to reading an EOB notes that it is not a bill. It shows the provider's charges, the allowed amount, what the plan paid and what you owe.

Wait for the EOB before paying a large bill, then compare the two. Your bill should not be higher than the patient balance on the EOB. If it is, call the office and ask why before you pay.

Ask questions before the bill arrives

The medical billing process has a lot of steps, but you can head off many problems early. Ask whether your care needs prior authorization, confirm the doctor is in network and keep every EOB until the bill is settled. Our list of questions to ask your surgeon before surgery covers what to raise at a consultation. When you are ready, find a doctor near you and confirm with your plan that they are in network.