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Billing Terms Intro
| Term | Definition |
|---|---|
| Accounts Receivable (AR) | The balance of money due to the provider for services delivered. |
| Adjudication | The medical claim decision-making process once the claim reaches the insurance payer to determine if they will accept, deny, or reject the claim. |
| Advance Beneficiary Notice of Noncoverage (ABN) | A consent document that informs the patient they may be financially liable for the costs should their insurance carrier deny the claim |
| Aging Bucket or AR Aging | Insurance claims that haven’t been paid or balances owed by patients that are overdue more than 30 days. |
| Allowed Amount | The maximum dollar amount an insurance company will allow a provider to collect for an eligible healthcare service. Depending on the patient’s coverage, this amount may be paid by the insurance, the patient, or split between them. |
| Applied to Deductible (ATD) | The amount of charges the patient must pay before the insurance company will start paying. This is usually found on the patient insurance statement. |
| Assignment of Benefits (AOB) | Insurance payments that are paid directly to the provider for services performed. |
| Prior Authorization | when a patient requires permission (prior authorization) from the insurance payer BEFORE receiving certain treatments or services |
| Bundling (or Code Bundling) | When two or more healthcare services are listed under one billing code. |
| Claim Adjustment Reason Codes (CARCs) | Reason codes explain why the payment was adjusted and describe why the claim or service line was paid differently than it was billed. |
| Coordination of Benefits | When a patient is covered by more than one insurance plan—one is primary and the other is a secondary carrier. |
| Co-insurance | Amount (typically a percentage) a patient pays the healthcare provider once the patient’s insurance has paid its portion (based on their benefit contract). Oftentimes, the patient must meet their deductible before co-insurance kicks in. |
| Co-payment (Co-pay) | A fixed fee that the patient pays the healthcare provider for the services or treatment received. |
| Credentialing | Credentialing is gathering and authenticating (verifying) a doctor’s credentials (professional background and educational history) |
| Current Procedural Terminology (CPT®) Code | describe a medical, surgical, or diagnostic procedure that doctors and healthcare providers perform. |
| Date of Service | The treatment date |
| Diagnosis Code (ICD-10) | medical code that describes the condition and diagnoses of patients. A diagnosis code tells the insurance payer why you performed the service. |
| Denied Claim | A denied claim is a claim that has made it through the adjudication system—the insurance company or third-party payer received and processed the claim. |
| Effective Date | The date when a benefit contract for insurance coverage begins |
| Electronic Data Interchange (EDI) | A link between your billing system and the insurance company, and how billing transfers claim data to various insurance payers. |
| Explanation of Benefits (EOB) | The EOB lists the total charges (amount billed), allowed amount, non-covered charges, the amount paid to the provider, and any co-pay, co-insurance, and deductibles the patient pays. |
| Fee Schedule | fee schedule is included in the provider’s insurance company contract (except for Medicare and Medicaid) and states what the insurance company is willing to pay (allowed amount) for services the provider performs. |
| Guarantor | The person responsible for paying the bill. Also known as the responsible party. |
| Medicare Advantage Plans | Also known as Medicare Part C, these plans are an “all in one” alternative to traditional Medicare plans that are offered through private insurance companies. |
| National Provider Identifier (NPI) | A unique 10-digit identification number issued to healthcare providers and is required by HIPAA. |
| Secondary Insurance | A patient’s supplemental insurance that pays some deductibles, co-pays, and co-insurances after the primary insurance has paid. |
| Tax Identification Number | Nine-digit Federal tax identification number issued by the Internal Revenue Service (IRS) and used by individuals and businesses for filing taxes. A TIN is also referred to as an Employer Identification Number (EIN) |
| Third-Party Administrator (TPA) | A company that processes insurance claims or manages other claims administrative services for healthcare providers. |
| Third-Party Payer | an entity, such as insurance companies, government agencies, health maintenance organizations (HMOs), and employers, that pays medical claims on behalf of the insured. |
| Applied to Deductible | The amount of money a patient owes a healthcare provider that goes to paying their annual deductible (See “Deductible”). A patient’s deductible varies, and depends on that patient’s insurance policy. |
| Electronic Remittance Advice (ERA) | A digital version of the EOB, this document describes how much of a claim the insurance company will pay and, in the case of a denied claim, explains why the claim was returned. |
| Health Maintenance Organization (HMO) | A network of healthcare providers that offer coverage to patients for medical services exclusively within that network. |
| Independent Practice Association (IPA) | A professional organization of physicians or healthcare providers who have a contract with an HMO. HMOs contract IPAs to provide services to patients within the HMO’s network, but their individual practices do not have to be part of the HMO network. |
| Managed Care Plan | patients are only eligible to receive health care within the insurance company’s network. HMOs and IPAS (See “Health Maintenance Organization (HMO)” and “Independent Practice Association (IPA)”) are examples of the managed care system. |
| Medicare | A government insurance program, founded in 1965, that provides healthcare coverage for persons over 65 years old and for people with disabilities. |
| Medicaid | Medicaid provides insurance coverage to low-income families and individuals. It is essentially an insurance program for those who cannot afford full insurance coverage. funded at state and federal levels, but each state has it’s own version of Medicaid. |
| Preferred Provider Organization (PPO) | A plan similar to an HMO, except that the insurance company, rather than the HMO itself, decides who is in the acceptable provider network. This is a common, subscription-based type of managed care. |
Created by:
edenrowe
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