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Medical Billing and Insurance Glossary

Written by: Leslie Ballentine

A job as a medical biller involves reviewing medical claims and submitting them to insurance companies and other payers, such as Medicare, for payment. You'll need careful attention to detail to work as a medical biller, and you also have to be able to meet deadlines reliably. A medical billing specialist might work in a doctor's office, a hospital, or a nursing home or even from home. Part of a medical billing job involves a full understanding of medical terms as well as health insurance guidelines.

Allowable: An allowable limit is imposed by insurance companies, limiting the maximum amount paid for a service based on a specific insurance policy. Allowable charges may also be called reasonable and customary charges.

Allowed Amount: The allowed amount is the maximum amount of payment based on a customer's covered health-care services. Allowed amounts may also be called negotiated rates or payment allowances.

Ambulatory Care: Ambulatory care is the care provided for patients at a physician's office or a surgical center not involving an overnight stay.

Authorization: An insurer or health plan provides authorization to approve care such as a hospital stay or a surgical procedure.

Balance Billing: Balance billing is when the care provider bills patients for all charges that have not been paid for by their insurer.

Claims Review: A claims review is the review of a claim by an insurer prior to paying the care provider or reimbursing the patient. A claims review validates the appropriateness of the medical care.

Coordination of Benefits: Coordination of benefits involves an agreement between multiple insurers, which prevents double payments for care received.

Copayment: A copayment is the portion of a medical expense paid out of pocket by the patient.

Covered Charges: Covered charges are the services that would be covered under an insurance policy. Covered charges may be subject to a deductible.

Current Procedural Terminology Codes: CPT codes are the five-digit codes used for medical billing and the authorization of services.

Deductible: A deductible is the part of a person's health-care expenses that they must pay prior to the insurer paying.

Denial: A denial is the decision by an insurer not to cover medical services received. The patient is responsible for payment if coverage is denied.

DOS: DOS stands for date of service.

Elective Services: Elective services are any services that are not rendered in an emergency situation.

Explanation of Benefits: An explanation of benefits informs the insured about how a claim was paid or the reasons for it not being covered.

Hospice: A hospice program provides care for terminally ill patients.

In-Network Provider: An in-network provider may also be called a preferred provider. These providers have a contract with the insurer to provide care for patients.

International Classification of Disease Codes: ICD codes are included in the international disease classification system.

Itemized Statement: An itemized statement lists all services provided to a patient.

Medicaid: Medicaid is a health-care program financed by the federal government and each state that provides health coverage for residents with low income.

Medicare: Medicare is a federal program that provides health insurance for people age 65 and older and for people of any age with disabilities.

Medicare Assignment: A Medicare assignment involves a health-care provider agreeing to accept Medicare-approved reimbursement as the full payment for covered services provided.

Medicare Non-Assignment: Health-care providers who do not accept assignment are known as non-participating providers.

Medigap: A medigap plan is private insurance that supplements patients' Medicare reimbursement.

Non-Covered Charges: Non-covered charges are incurred for services that an insurance company does not cover as a part of the benefits of a policy.

Out of Network: Providers who do not have a contract with an insurer are known as out-of-network providers. Patients pay more to see these providers.

Per Diem Reimbursement: Hospitals may receive a set rate per day instead of a reimbursement for charges for services provided. Per diem reimbursements often vary by service.

Point-of-Service Plan: A point-of-service plan requires the patient to get a referral from their primary care provider to see a specialist. These plans have different sets of benefits for in-network and out-of-network providers.

Pre-Admission Certification: A pre-admission certification may also be called a pre-admission review or pre-certification. This is the process of reviewing requests for hospital admission before patients enter the hospital.

Preferred Provider Organization: A PPO has a contract with independent providers to provide services.

Primary Care Physician: A PCP is generally the first doctor a patient sees for an illness or injury. The PCP may treat the patient fully or may refer them to a specialist.

Prior Authorization: A health plan may need to provide prior authorization before a patient receives a covered health service.

Reasonable and Customary: Reasonable and customary refers to the predetermined allowable limit used by insurers to limit the amount paid for a service based on an insurance policy.

Referral: A referral is a written order from a PCP for a patient to see a specialist.

Self-Pay Visit: A self-pay visit is a doctor's visit that a patient pays for independently, without having it billed to an insurer.

UB92/UB04: This form is required by both Medicare and Medicaid and is also sometimes used by private insurance companies for billing.

Utilization Limits: Medicare sets utilization limits that cap how many times some services can be provided to patients in one year.

Visit Number: A visit number is assigned to identify every care episode.

Workers' Compensation Coverage: Workers' compensation coverage is a type of insurance that employers must carry to cover any medical care needed by employees who become sick or injured while working or because of their job.

Additional Helpful Resources

USCI Medical Billing and Insurance Glossary
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