Medical Billing & Coding Glossary

Money owed to the provider; the team that follows up on unpaid/denied claims.

The payer's decision to approve, reduce, or deny a claim.

The unpaid insurance claims or patient balances that are due past 30 days. Most medical billing software's have the ability to generate a separate report for insurance aging and patient aging. These reports typically list balances by 30, 60, 90, and 120 day increments.

American Medical Association — maintains the CPT code set.

These are typically services a patient requires in a hospital setting that are in addition to room and board accommodations - such as surgery, tests, counseling, therapy, etc.

When an insurance plan does not pay for treatment, an appeal (either by the provider or patient) is the process of objecting this decision. The insurer may require documentation when processing an appeal and typically has a formal policy or process established for submitting an appeal. Many times the process and associated forms can be found on the insurance providers web site.

This is the amount of the charges, determined by the patients insurance plan, the patient owes the provider. Many plans have a maximum annual deductible that once met is then covered by the insurance provider.

Application Service Provider. This is a computer based services over a network for a particular application. Sometimes referred to as SaaS (Software as a Service). There application service providers that offer Medical Billing. The appeal of an ASP is it frees a business of the the need to purchase, maintain, and backup software and servers.

Insurance payments that are paid to the doctor or hospital for a patients treatment.

When a patient requires permission (or authorization) from the insurance company before receiving certain treatments or services.

Person or persons covered by the health insurance plan.

An organization of affiliated insurance companies (approximately 450), independent of the association (and each other), that offer insurance plans within local regions under one or both of the association's brands (Blue Cross or Blue Shield). Many local BCBS associations are non-profit BCBS sometimes acts as administrators of Medicare in many states or regions.

A fixed payment paid per patient enrolled over a defined period of time, paid to a health plan or provider. This covers the costs associated with the patients health care services. This payment is not affected by the type or number of services provided.

Civilian Health and Medical Program of the Uniformed Services. Recently renamed TRICARE. This is federal health insurance for active duty military, National Guard and Reserve, retirees, their families, and survivors.

When medical care is provided at no cost or at reduced cost to a patient that cannot afford to pay.

The documented record of a patient's treatment, submitted to the insurer for payment.

A complete submitted insurance claim that has all the necessary correct information without any omissions or mistakes that allows it to be processed and paid promptly.

An electronic intermediary that scrubs claims for errors and routes them to the correct payer.

A number issued under the Clinical Laboratory Improvement Amendments (CLIA); a lab must be CLIA-certified before accepting samples for diagnostic testing, and the valid CLIA number must appear on claims containing lab procedures.

Centers for Medicare & Medicaid Services — runs Medicare and Medicaid.

The claim form used for professional/office (non-facility) claims.

This is health insurance coverage available to an individual and their dependents after becoming unemployed - either voluntary or involuntary termination of employment for reasons other than gross misconduct. Because it does not typically receive company matching, It's typically more expensive than insurance the cost when employed but does benefit from the savings of being part of a group plan. Employers must extend COBRA coverage to employees dismissed for a. COBRA stands for Consolidated Omnibus Budget Reconciliation Act which was passed by Congress in 1986. COBRA coverage typically lasts up to 18 months after becoming unemployed and under certain conditions extend up to 36 months.

Medical Billing Coding involves taking the doctors notes from a patient visit and translating them into the proper diagnosis (ICD-10 code) and treatment medical billing codes such as CPT codes. This is for the purpose of reimbursing the provider and classifying diseases and treatments.

A shared percentage after the deductible (e.g., insurer 80% / patient 20%).

This is in reference to the providers accounts receivable. It's the ratio of the payments received to the total amount of money owed on the providers accounts.

The amount of charges a provider or hospital agrees to write off and not charge the patient per the contract terms with the insurance company.

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.

A fixed amount a patient pays per service (e.g., $30 office visit).

Current Procedural Terminology — a 5-digit code maintained by the AMA that reports a procedure or service performed by a provider. Each CPT has a corresponding ICD-10 diagnosis code.

This is an application process for a provider to participate with an insurance carrier. Many carriers now request credentialing through CAQH. CAQH credentialing process is a universal system now accepted by insurance company networks.

The balance thats shown in the "Balance" or "Amount Due" column of your account statement with a minus sign after the amount (for example $50-). It may also be shown in parenthesis; ($50). The provider may owe the patient a refund.

When claim information is automatically sent from Medicare the secondary insurance such as Medicaid.

Date that health care services were provided.

Summary of daily patient treatments, charges, and payments received.

A registration number assigned by the U.S. Drug Enforcement Administration that allows a provider to write prescriptions for controlled substances.

Amount a patient pays each year before insurance begins to pay.

Patient identity, guarantor and insurance details — the 'face of the claim.'

A claim the payer refuses to pay; worked in A/R follow-up.

Durable Medical Equipment - Medical supplies such as wheelchairs, oxygen, catheter, glucose monitors, crutches, walkers, etc.

Abbreviation for Date of Birth.

When the insurance company reduces the code (and corresponding amount) of a claim when there is no documentation to support the level of service submitted by the provider. The insurers computer processing system converts the code submitted down to the closest code in use which usually reduces the payment.

Request by an insurance company or group medical plan by another insurance company or medical plan to determine if other coverage exists.

Abbreviation for diagnosis code (ICD-10 code).

Evaluation and Management section of the CPT codes. These are the CPT codes 99201 thru 99499 most used by physicians to access (or evaluate) a patients treatment needs.

Claim information is sent electronically from the billing software to the clearinghouse or directly to the insurance carrier. The claim file must be in a standard electronic format as defined by the receiver.

An electronic paperless means of transferring money. This allows funds to be transferred, credited, or debited to a bank account and eliminates the need for paper checks.

Confirming a patient's insurance coverage is active before service.

Electronic Medical Records. Also referred to as EHR (Electronic Health Records). This is a medical record in digital format of a patients hospital or provider treatment.

Individual covered by health insurance.

Explanation of Benefits (and its electronic form, ERA) — shows what the payer paid, adjusted, or denied.

Employee Retirement Income Security Act of 1974. This law established the reporting, disclosure of grievances, and appeals requirements and financial standards for group life and health. Self-insured plans are regulated by this law.

Insurance where the provider is paid for each service or procedure provided. Typically allows patient to choose provider and hospital. Some policies require the patient to pay provider directly for services and submit a claim to the carrier for reimbursement. The trade-off for this flexibility is usually higher deductibles and co-pays.

The provider's customised list of charges for each procedure.

The portion of the charges that are the responsibility of the patient or insured.

A Medicare representative who processes Medicare claims.

A list of prescription drug costs which an insurance company will provide reimbursement for.

When a provider receives payment or a patient obtains services by deliberate, dishonest, or misleading means.

Group Health Plan. A means for one or more employer who provide health benefits or medical care for their employees (or former employees).

Name of the group or insurance plan that insures the patient.

Number assigned by insurance company to identify the group under which a patient is insured.

A responsible party and/or insured party who is not a patient.

Health Care Financing Administration. Now know as CMS (see above in Medical Billing Terms).

Healthcare Common Procedure Coding System (pronounced 'hick-picks'). A standardized coding system for items and services. Level I is CPT; Level II covers non-physician items such as supplies, drugs, and ambulance services.

Health care legislation championed by President Obama in 2010 to provide improved individual health care insurance or national health care insurance for Americans. Also referred to as the Health Care Reform Bill or the Obama Health Care Plan.

Insurance coverage to cover the cost of medical care necessary as a result of illness or injury. May be an individual policy or family policy which covers the beneficiary's family members. May include coverage for disability or accidental death or dismemberment.

Health Insurance Claim. This is a number assigned by the the Social Security Administration to a person to identify them as a Medicare beneficiary. This unique number is used when processing Medicare claims.

Health Insurance Portability and Accountability Act — the U.S. law protecting PHI.

Health Maintenance Organization. A type of health care plan that places restrictions on treatments.

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

ICD stands for the International Classification of Disease. The ICD provides a method of classifying diseases, injuries, and causes of death.

The 10th revision of the International Classification of Diseases (ICD-10-CM in the U.S.). Uses 3–7 character alphanumeric codes for far greater specificity than ICD-9. Mandatory for U.S. Claims since October 1, 2015.

An insurance plan in which a provider signs a contract to participate in. The provider agrees to accept a discounted rate for procedures.

Charges for hospital nursing services in addition to basic room and board.

Also referred to as fee-for-service. This is a type of commercial insurance were the patient can use any provider or hospital.

Hospital stay of more than one day (24 hours).

Hospital care unit providing care for patients who need more than the typical general medical or surgical area of the hospital can provide. May be extremely ill or seriously injured and require closer observation and/or frequent medical attention.

Independent Practice Association. An organization of physicians that are contracted with a HMO plan.

American Medical Association's Current Procedural Terminology (CPT) codes — the first level of HCPCS.

The alphanumeric codes which include mostly non-physician items or services such as medical supplies, ambulatory services, prosthesis, etc. These are items and services not covered by CPT (Level I) procedures.

Local codes used by state Medicaid organizations, Medicare contractors, and private insurers for specific areas or programs.

Medicare Administrative Contractor.

Insurance plan requiring patient to see doctors and hospitals that are contracted with the managed care insurance company. Medical emergencies or urgent care are exceptions when out of the managed care plan service area.

Joint federal/state program covering low-income patients.

A health care worker who performs administrative and clinical duties in support of a licensed health care provider such as a physician, physicians assistant, nurse, nurse practitioner, etc.

Processes insurance claims for payment of services performed by a physician or other health care provider. Ensures patient medical billing codes, diagnosis, and insurance information are entered correctly and submitted to insurance payer. Enters insurance payment information and processes patient statements and payments. Performs tasks vital to the financial operation of a practice. Knowledgeable in medical billing terminology.

Analyzes patient charts and assigns the appropriate codes — ICD-10 diagnosis codes and corresponding CPT treatment codes plus any related modifiers.

Medical service or procedure that is performed on for treatment of an illness or injury that is not considered investigational, cosmetic, or experimental.

A unique number assigned by the provider or health care facility to identify the patient medical record.

Tax exempt account for paying medical expenses administered by a third party to reimburse a patient for eligible health care expenses. Typically provided by employer where the employee contributes regularly to the account before taxes and submits claims or receipts for reimbursement. Sometimes also referred to in medical billing terminology as a Medical Spending Account.

The conversion of voice recorded or hand written medical information dictated by health care professionals (such as physicians) into text format records. These records can be either electronic or paper.

Federal program for people 65+ and certain conditions (Parts A, B, C, D).

Inpatient hospital coverage from day 61 to day 90 of a continuous hospitalization. The patient is responsible for paying for part of the costs during those days. After the 90th day, the patient enters "Lifetime Reserve Days.."

The gap or difference between the initial limits of insurance and the catastrophic Medicare Part D coverage limits for prescription drugs.

Hospital coverage.

Physicians visits and outpatient procedures.

Medicare insurance for prescription drug costs for anyone enrolled in Medicare Part A or B.

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.

Modifier to a CPT treatment code that provide additional information to insurance payers for procedures or services that have been altered or "modified" in some way. Modifiers are important to explain additional procedures and obtain reimbursement for them.

Medicare Secondary Payer.

Non-Covered Charge. A procedure not covered by the patients health insurance plan.

A unique 10–11 digit, 3-segment identifier (labeler, product, package) assigned to each medicine for human use in the U.S.; reported on claims for immunizations, injections, or vaccines.

Not Elsewhere Classifiable. Used in ICD when information needed to code the term in a more specific category is not available.

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

When a healthcare provider chooses not to accept Medicare-approved payment amounts as payment in full.

Not Otherwise Specified. Used in ICD for unspecified diagnosis.

National Provider Identifier — a provider's unique 10-digit ID.

Office of Inspector General - Part of department of Health and Human Services. Establish compliance requirements to combat healthcare fraud and abuse. Has guidelines for billing services and individual and small group physician practices.

A provider that does not have a contract with the insurance carrier. Patients usually responsible for a greater portion of the charges or may have to pay all the charges for using an out-of network provider.

The yearly cap on patient cost; once reached, insurance pays 100%.

Typically treatment in a physicians office, clinic, or day surgery facility lasting less than one day.

Hiring an outside party (like ERG) to perform a service such as billing.

An administrator of Medicare health insurance for the Centers for Medicare & Medicaid Services (CMS) in the US and its territories. A wholly owned subsidiary of BlueCross BlueShield of South Carolina based in Columbia, South Carolina.

The amount a patient is responsible for paying that is not covered by the insurance plan.

An insurer or government program that pays providers on a patient's behalf.

A unique identifier assigned to each insurance company, used to submit claims electronically. Typically a 5-character code; also called the 837 payer ID or electronic media claim number.

Primary Care Physician -- The doctor you see first for most health problems and may talk with other doctors and health care providers about your care and refer you to them.

Protected Health Information — patient data that must be kept private and secure.

Two-digit code on a claim indicating where a service was provided.

Point-of-Service plan. A flexible type of HMO (Health Maintenance Organization) plan where patients have the freedom to use (or self-refer to) non-HMO network providers. When a non-HMO specialist is seen without referral from the Primary Care Physician (self-referral), they have to pay a higher deductible and a percentage of the coinsurance.

Preferred Provider Organization. Commercial insurance plan where the patient can use any doctor or hospital within the network. Similar to an HMO.

Software used for the daily operations of a provider’s office. Typically used for appointment scheduling and billing.

Sometimes required by the patients insurance company to determine medical necessity for the services proposed or rendered. This doesn't guarantee the benefits will be paid.

A medical condition that has been diagnosed or treated within a certain specified period of time just before the patients effective date of coverage. A Pre-existing condition may not be covered for a determined amount of time as defined in the insurance terms of coverage (typically 6 to 12 months).

When insurance coverage is denied for the insured when a pre-existing medical condition existed when the health plan coverage became effective.

Requirement of insurance plan for primary care doctor to notify the patient insurance carrier of certain medical procedures (such as outpatient surgery) for those procedures to be considered a covered expense.

Maximum payment insurance will pay towards surgery, consultation, or other medical care determined before treatment.

What the policyholder pays (monthly/yearly) to keep insurance coverage active.

The HIPAA privacy standard establishes requirements for disclosing what the HIPAA privacy law calls Protected Health Information (PHI). PHI is any information on a patient about the status of their health, treatment, or payments.

A doctor, hospital, or clinic that delivers care and bills for it.

A Medicare-only number issued to providers by Medicare Administrative Contractors (MACs) upon enrollment; the legacy Medicare identifier.

Older provider identifiers (PIN, NSC, OSCAR, or UPIN) issued before the NPI. For Medicare, the PTAN replaced the PIN; private carriers may still assign a PIN for additional validation.

When one provider (usually a family doctor) refers a patient to another provider (typically a specialist).

The payment an insurer sends in response to a claim.

A document supplied by the insurance payer with information on claims submitted for payment. Contains explanations for rejected or denied claims. Also referred to as an EOB (Explanation of Benefits).

The person responsible for paying a patients medical bill. Also referred to as the guarantor.

A 3-digit number used on hospital bills to tell the insurer where the patient was when they received treatment, or what type of item a patient received.

Also called the billing cycle — managing a patient's account from scheduling to final payment.

Relative Value Amount. This is the average amount Medicare will pay a provider or hospital for a procedure (CPT-4). This amount varies depending on geographic location.

Process of checking an insurance claim for errors in the health insurance claim software prior to submitting to the payer.

Claim for insurance coverage paid after the primary insurance makes payment. Secondary insurance is typically used to cover gaps in insurance coverage.

When a second CPT procedure is performed during the same physician visit as the primary procedure.

Provides guidance for developing and implementing policies and procedures to guard and mitigate compromises to security. The HIPAA security standard is kind of a sub-set or compliment to the HIPAA privacy standard. Where the HIPAA policy privacy requirements apply to all patient Protected Health Information (PHI), HIPAA policy security laws apply more specifically to electronic PHI.

Patient will be the responsible for the charges rendered. Payment made at the time of service by the patient.

When a patient sees a specialist without a primary physician referral.

A nursing home or facility for convalescence. Provides a high level of specialized care for longterm or acutely ill patients. A Skilled Nursing Facility is an alternative to an extended hospital stay or home nursing care.

Signature on File.

A software application that is hosted on a server and accessible over the Internet. SAAS relieves the user of software maintenance and support and the need to install and run an application on an individual local PC or server. Many medical billing applications are available as SAAS.

Physician who specializes in a specific area of medicine, such as urology, cardiology, orthopedics, oncology, etc. Some healthcare plans require beneficiaries to obtain a referral from their primary care doctor before making an appointment to see a Specialist.

The number on the occupational license that permits a healthcare provider to legally practice medicine, issued by the state medical licensing board after approval.

A unique value identifying a billing service provider, assigned by payers and clearinghouses at sign-up (often the organization's TIN); also called a trading partner ID.

The employee for group policies. For individual policies the subscriber describes the policyholder.

The provider's form listing the diagnoses (DX) and procedures (CPT) for a visit; raw material for the claim.

Additional insurance policy that covers claims for deductibles and coinsurance. Frequently used to cover these expenses not covered by Medicare.

Treatment Authorization Request. An authorization number given by insurance companies prior to treatment in order to receive payment for services rendered.

A 9-digit number issued by the IRS to companies and organizations for tax purposes. When used for employment, it is called an Employer Identification Number (EIN).

A unique 10-character alphanumeric administrative code identifying a provider's type and area of specialization, so a payer knows the provider's specialty when a claim is received.

Date the insurance contract expired or the date a subscriber or dependent ceases to be eligible.

Claim for insurance coverage paid in addition to primary and secondary insurance. Tertiary insurance covers gaps in coverage the primary and secondary insurance may not cover.

An independent corporate entity or person (third party) who administers group benefits, claims and administration for a self-insured company or group.

Tax Identification Number. Also known as Employer Identification Number (EIN).

Triple Option Plan. An insurance plan which offers the enrolled a choice of a more traditional plan, an HMO, or a PPO. This is also commonly referred to as a cafeteria plan.

Type of Service. Description of the category of service performed.

Health program for U.S. military members and families.

The claim form used for facility/hospital claims.

Submitting several CPT treatment codes when only one code is necessary.

Medical claim submitted after the time frame allowed by the insurance payer. Claims submitted after this date are denied.

An illegal practice of assigning an ICD-10 diagnosis code that does not agree with the patient records for the purpose of increasing the reimbursement from the insurance payor.

Unique Physician Identification Number. 6 digit physician identification number created by CMS. Discontinued in 2007 and replaced by NPI number.

The allowable coverage limits (fee schedule) determined by the patients insurance company to limit the maximum amount they will pay for a given service or item as defined in the contract with the patient.

The limits that Medicare sets on how many times certain services can be provided within a year. The patients claim can be denied if the services exceed this limit.

Review or audit conducted to reduce unnecessary inpatient or outpatient medical services or procedures.

Legacy ICD-9-CM codes for encounters not due to injury or illness (e.g., routine exams). Replaced by Z codes under ICD-10-CM.

Insurance claim that results from a work related injury or illness.

Typically reference to the difference between what the physician charges and what the insurance plan contractually allows and the patient is not responsible for. May also be referred to as "not covered" in some glossary of billing terms.