Are you navigating the complexities of medical billing and insurance? For healthcare professionals, understanding medical billing and insurance terms isn’t just a matter of compliance—it’s the key to your practice’s financial health.
Key Medical Billing and Insurance Terms
- Accounts Receivable (AR)
- The total amount of money owed to your practice for services provided. Efficient AR management is critical for maintaining cash flow.
- Adjudication
- The final stage of a claim’s journey, where the insurance payer reviews and decides to accept, reject, or deny the claim.
- Advance Beneficiary Notice of Noncoverage (ABN)
- A signed document that informs a patient they may be financially responsible for a service their insurance might not cover.
- Aging Bucket or AR Aging
- A system for categorizing unpaid claims or patient balances by their overdue duration (e.g., 30, 60, or 90+ days).
- Allowed Amount
- The maximum dollar amount an insurance company will pay for a service.
- Applied to Deductible (ATD)
- The portion of a claim a patient must pay before their insurance begins to cover services.
- Assignment of Benefits (AOB)
- An agreement that authorizes the insurance company to pay the provider directly.
- Authorization
- The process of getting pre-approval from an insurance payer for specific treatments.
- Bundling/Unbundling
- The practice of submitting multiple services under one code (bundling) or separate codes (unbundling). Improper unbundling can lead to audits and denials.
Understanding Claims and Reimbursement
- Claim Adjustment Reason Codes (CARCs)
- Codes that explain why a payment was adjusted on an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA).
- Claim Scrubbing
- The automated process of verifying claims for errors before submission to prevent rejections.
- Clearinghouse
- A secure intermediary that transmits electronic claims from your practice to various payers in bulk, ensuring HIPAA compliance.
- CMS-1500 02/12 Form
- The standard, red-ink paper form for submitting professional medical claims.
- Coordination of Benefits (COB)
- The protocol for managing claims when a patient has more than one insurance plan.
- Denied Claim vs. Rejected Claim
- A denied claim has been processed and denied by the payer. A rejected claim was never accepted for processing due to a submission error, making it easier to fix and resubmit.
- Electronic Funds Transfer (EFT)
- A secure method for receiving claim payments directly into your bank account.
- Explanation of Benefits (EOB) / Electronic Remittance Advice (ERA)
- A statement from the insurance company detailing what was billed, the allowed amount, the amount paid, and the patient’s remaining responsibility.
The Role of Codes and Compliance
- Current Procedural Terminology (CPT®) Code
- Five-digit codes that describe medical services and procedures.
- Diagnosis Code (ICD-10)
- A code that explains why a service was performed, essential for validating medical necessity.
- HCPCS Codes
- Alphanumeric codes for services and equipment not covered by CPT® codes, primarily for Medicare and Medicaid.
- Modifier
- A two-digit code added to a CPT® or HCPCS code to provide additional information about a service.
- HIPAA
- The federal law governing the privacy and security of patient health information (PHI).
- National Provider Identifier (NPI)
- A unique 10-digit number assigned to every healthcare provider.
- Provider Enrollment / Credentialing
- The process of authenticating a provider’s credentials and enrolling them with insurance payers to become “in-network.”
- Revenue Cycle Management (RCM)
- A comprehensive financial process that manages every stage of revenue, from eligibility and benefits verification to claims processing and payment.
How CareCode Billing Empowers Your Practice
Understanding this terminology is the first step. Applying it correctly, however, is a full-time job. That’s where CareCode Billing comes in.
We are experts in medical billing and specialize in navigating this complex landscape. Our team handles everything from claim scrubbing and denial resolution to provider enrollment, so you can focus on your patients.
With our specialized knowledge and commitment to HIPAA compliance, we help you:
- Streamline your Charge Entry and Eligibility and Verification processes.
- Accelerate payment posting through efficient use of ERAs and EFTs.
- Expertly manage coding modifiers and NCCI edits to ensure clean claims.
- Reduce your AR aging and improve your overall Revenue Cycle Management (RCM).
Ready to take the stress out of your finances? Our team of certified medical billers and coders speaks the language of insurance. **Contact CareCode Billing today** to learn how our expertise can lead to fewer denied claims and a healthier revenue cycle. 🤝