Basic Billing definitions.

Medical billing.

Medical billing is a process of creating and submitting medical claim to insurance companies and after that follow up these claims to get maximum payment for the provider.

Entities in medical billing.

There are three main entities in medical billing.

Patient, Provider and Insurances.

Insurance and its major types.

Medical insurance is a type of coverage that helps pay for healthcare expenses.

There are two major types of insurance:

Public Insurances like Medicare, Medicaid, Tricare etc.
Private insurance like BCBS, Cigna, Aetna, UHC etc.

Beneficiary.

Person or persons covered under Health Insurance Plan and eligible to receive services.

Copay.

It is a set Price (Portion of bill) patients pays when they visit doctor. This amount is in contract with insurance and depends of the type of plan patient hold.

Deductible.

It is a fixed amount patient have to pay before insurance start to pay. This amount is in contract with insurance and depends of the type of plan patient hold.

Coinsurance.

Patient’s share of the costs for covered healthcare services, calculated as a percentage of the allowed amount is coinsurance.

Premium.

A health insurance premium is an upfront payment made by an individual or family to insurance in order to keep their health insurance policy active

It is the maximum a patient could be responsible for paying for, during the insurance plan year for covered expenses. (Copay + Coins + Deductible).

Maximum Out Of Pocket.

Hospice.

Inpatient, outpatient, or home healthcare for terminally ill patients.

Demographic form.

It is a form used by healthcare facilities to collect personal attributes of a patient for the purpose of patient registration and identification.

Inpatient and Out patient.

If a patient stays in hospital more than 24 hours than he/she will considered as inpatient else Outpatient.

Network Provider.

Health care provider who is contracted with an insurance provider to provide care at a negotiated cost in called network provider with that insurance.

Clean Claim.

A claim that submitted perfectly such that insurance pay this claim without any rejection or denial is called clean claim.

Capitation.

It is a agreement between Health care provider and insurance in which insurance pays fixed sum to the provider in order to perform services to a certain number of patients(subscribers), in a certain region for a certain time period.

Credentialing.

Scrubbing.

A process by which insurance claims are checked for errors before being sent to an insurance company for final processing. Providers scrub claims in an attempt to reduce the number of denied or rejected claims.

Day sheet is a summary of daily patient treatments, charges, and payments received.

This is an application process for a provider to participate with an insurance carrier.

Day Sheet.

New patient.

For certain medical treatment, provider need to gets approval from insurance company, and this approval is known as authorization.

If provider gets approval before performing services then it would be pre-authorization and if provider gets approval after performing services for any reason it would be retro-authorization.

Patient is considered as new patient is he/she didn't receive services with in last three years. Else he/she would be considered as established patient.

Referral.

Authorization and types.

The physician who provides initial care and coordinates additional care if necessary is called primary care physician PCP.

Referral is a recommendation to a patient from Primary Care Physician to receive medical services from another health care provider or medical specialist.

Primary Care Physician.

Coordination of benefits.

When a patient is covered by more than one insurance plan. One insurance carrier is designated as the primary carrier and the other as secondary, this is called coordination of benefits.

Pre-existing condition.

A medical condition that is diagnosed or treated in a certain period of time just before a patient’s insurance coverage start.

Electronic Fund Transfer.

An electronic transfer of money, eliminating the need for paper checks

Medical record number.

A unique number assigned to patient’s medical record, by the provider or health care facility, to identify patient’s medical record when required.

Social security number.

This is a number assigned by the government to all the citizens.

Procedure codes, CPT codes.

Procedure codes are special numbers or letters (5 digit) used by doctors and insurance companies to describe exactly what medical service was given to a patient.

Denial.

Rejection and its types.

When claim process through the insurance adjudication system and after that insurance deny to pay claim due to any mistake or problem then it is known as denial.

A rejection means the claim could not be processed as-is due to some problem.

There are three types of rejection.

First level rejection: when claim rejected by clearing house due to any problem.
Second level rejection: when claim pass through clearing house and rejected by insurance.
Direct rejection: in case of direct submission and insurance reject the claim then it is known as direct rejection.

Medicare.

Appeal.

In medical billing, appeal is a process to challenge the decision of insurance about a claim.

Medicare is a federal health insurance program for people age 65 or older. People younger than age 65 with certain disabilities may also be eligible for Medicare.

Part A covers Inpatient, skilled nursing and Hospice.

Part B covers Outpatient.

Part C covers services covered in part A and B along with some additional services

Part D covers prescription drugs

Medicaid.

Medicaid is a joint federal and state program that helps cover medical costs for certain low-income people.

Durable Medical Equipment.

Tricare.

Medical supplies such as wheelchairs, oxygen, catheter, glucose monitors, crutches, walkers, etc

Tricare is a government managed health insurance program for military members, their dependents, retirees, and survivors.

A diagnosis code is a standardized alphanumeric code used in healthcare to represent a specific disease, condition, injury, or symptom.

EOB (Explanation of benefits) is a document from the insurance to health care providers contains information about payment, denial or how the claim processed while electronic version of EOB is called ERA(electronic remittance advice).

Diagnosis Code Dx.

Evaluation and Management codes.

ERA and EOB.

It is the Amount charged for each service performed by the provider and collectively the total charge value of the claim. Billed amount depends on provider fee schedule.

Evaluation and Management section of the CPT codes from 99202 through 99499, most used by physicians to access (or evaluate) a patients treatment needs.

Billed amount.

Allowed amount.

It is the maximum reimbursement the member's health policy allows for a specific service to the provider.

Paid amount.

The dollar amount paid by the Insurance to the provider.

Patient responsibility.

The amount of money that is the responsibility of the patient. Sum of copay, coinsurance, and deductible amounts. In most of cases Patient responsibility = Allowed amount - Paid amount.

EDI is the electronic interchange of business information using a standardized format or a process which allows one company to send information to another company electronically instead of paper.

Medigap.

Electronic data interchange.

Medicare supplemental health insurance for Medicare beneficiaries which may include payment of Medicare deductibles, co-insurance and balance bills, or other services not covered by Medicare.

Rendering provider.

Modifier.

Modifiers are two characters, numeric or alpha-numeric, that are reported with a CPT code, provide more information.

Direct Submission.

When claims are submitted directly to the payer by the billing company, using their submitter number us called direct submission. It mainly done to governmental payers.

In-direct Submission.

When claims first submitted to a clearing house which then forwards the claim to respective payers, after performing first level testing of claims is indirect submission. It mainly done in commercial payers.

Patient billing.

NPI is 10 digits numeric, unique identification number for health care providers.

Patient billing is the process in which patients are notified to pay for their portion (Patient Responsibility).

NPI; National Provider Identifier.

TIN; Tax Identification number.

Taxonomy codes are unique ten character alphanumeric administrative codes used to identify the provider type and area of specialization for health care providers.

TIN is the 9-digit number issued by the Internal Revenue Service (IRS) to companies and organizations for income tax purpose.

Taxonomy code.

Billing physician.

Referring physician.

NDC; National Drug Code.

NDC is a unique 10-11 digit, 3-segment (Labeler, product and package code) numeric identifier assigned to each medicine intended for human use in the United States.

Name of the provider who attended, performed and rendered the service(s).

A physician (usually PCP) who refers the patient to another physician or specialist for specialized treatment.

A physician whose name is used on the claim and payments are also issued to that provider.

Supervising physician.

A physician who supervises services which are performed by a Nurse Practitioner or Physician Assistant under his/her supervision.

Locum tenens is a provider who temporarily fulfills the duties of another provider. Contract must not exceeds 60 days.