It’s more difficult to understand medical billing without common terms. When you completely know common terms, these can help you understand your financial obligations and rights. Not just this, you can also save you both time and money.
In this blog, we’ll explore common medical billing terms. You’ll learn the explanation behind these terms and methodology to decode your medical bills.
A co-pay is a fixed amount that you pay for a covered medical service. Generally, a co-pay is a standard requirement of a patient insurance plan. This amount can vary because it depends on what service you are receiving.
Coinsurance is the calculated percentage of the medical bill that you get after paying your deductible amount. A company must pay the remaining amount as it’s legally your amount. The coinsurance percentage can be different with the health care plan that you have chosen.
A deductible is the amount that you pay for medical services before your insurance begins to contribute. You must reach your deductible amount every year as your insurance plan begins. The high-deductible plan is mostly less premium but requires more out-of-pocket expenses.
The Out-of-Pocket Maximum is the amount you pay for the covered medical expenses in one year. Basically, it includes payments, deductibles, and coinsurance. Whenever you reach the one-year limit, this health plan will provide 100% covered benefits.
EOB is an outline-based document that mentions the insurance coverage for a medical service. This document describes the service you are receiving and the bill amount that you are paying. This means it is all about your financial responsibility. Patients receive this document in one case whenever healthcare providers submit a patient’s claim.
This is about the approval that you require from your insurance before you receive services of your chosen medical plan. This process makes sure that these medical services are necessary for your health purpose. If you fail to get your preauthorization, you may have to face the issue of non-payment by your insurance healthcare providers.
Mainly, this process is used to check medical claims errors before the claim submission. This checks that the claim is following the mentioned rules and regulations that your insurance company sets for your claim. All the accurate claim scrubbing helps you get quick reimbursements and lower the claim denials as well.
CPT is a set of codes that are used to describe medical procedures. Healthcare providers use these codes when they bill insurance companies. Each CPT basically highlights a specific medical service.
ICD is a system that is for diagnosing diseases and health conditions. These are the best medical systems that are counted as a global standard for identifying and analyzing health conditions and diseases. Furthermore, healthcare providers use these ICD codes to keep medical billing and patient records.
These codes have a major purpose in describing patient visits and care levels. They provide an easy route for billing records and management of patients. Moreover, physicians use the codes to get reimbursement for their services.
This system refers to different medical billing services and service items that are provided to patients. HCPCS mostly complements the CPT codes and provides its classifications. The healthcare providers just use it to measure reimbursement rates for provider services.
Balancing billing occurs when a healthcare provider bills for services not covered in the insurance policy. This often happens when you are getting services from an out-of-network provider. Patients must pay this balance as external charges to copays and coinsurance.
The document is often sent by the insurance company after processing a claim. It outlines the services billed and the amounts paid or denied. Healthcare providers use this information to update their accounts receivable.
A/R refers to the money that patients or insurers repay a healthcare provider. Efficient A/R management is a key appliance for the financial stability of a healthcare provider. Healthcare providers review A/R daily to identify delinquent accounts and facilitate timely payments.
The amount that healthcare providers remove from accounts receivable. This happens when a debt is uncollectible, and the insurer denies the claim. Write-offs affect the healthcare provider’s reputation and revenue cycle as well.
The Day Sheet keeps the financial record of all transactions on a daily basis in healthcare practice. This sheet lists things like payments, charges, and adjustments. It helps healthcare providers to handle financial activities and make accounting and audits.
A Claim is a formal request sent to an insurance company for service payment. Healthcare providers submit claims after providing medical services to a specific person who is getting your insurance services. Timely and accurate claims are essential for proper reimbursement.
The process is to put the medical services details into a medical billing system. Charge entry focuses on procedure codes, diagnosis codes, and information related to the billing. Accurate charge entry is key in submitting claims and getting proper reimbursement.
The payment model through this healthcare provider receives a specific amount per patient. This amount is determined earlier and paid regardless of the number of services you receive. In addition, capitation encourages healthcare providers to set up effective strategies to reduce overall costs.
It’s a fee payment that the healthcare provider receives for each given service. This differs from capitation as a flat fee is paid per patient. Fee-for-service can provide the best option for healthcare providers to increase their revenue.
A Superbill is a detailed invoice that healthcare providers give to patients after treatment. It manages the procedure codes and diagnosis codes to deliver treatment plans. Patients use superbills to file claims with their insurance providers.
CMS-1500 is the standard form used for outpatient medical billing metrics. Healthcare providers fill it out to receive payment from insurance companies. Accuracy on the CMS-1500 form is mandatory for proper reimbursement.
UB-04 is the form used for billing inpatient medical services. Hospitals and other inpatient healthcare providers use it to get paid. You must fill the UB-04 correctly as the same CMS-1500 for timely payment.
The system that determines Medicare reimbursement rates. It considers the resources and time needed for each medical coding service. This scale aims to standardize payments across different types of healthcare services.
It’s a type of insurance plan that limits coverage to in-network providers. HMOs often require a primary care physician and referrals for specialists. These plans usually have lower premiums but less flexibility in choosing healthcare providers.
This is another insurance plan that offers more healthcare provider choices. You pay less when you use in-network doctors. However, PPO plans generally have higher premiums than HMOs.
GRG is a system used for billing inpatient hospital stays. It groups patients by diagnosis and treatment for billing purposes. Hospitals receive a flat rate payment based on the assigned DRG.
In-network refers to healthcare providers that have a contract with an insurance company. You will be charged less for using in-network. Insurance companies often cover a larger portion of the bill for in-network providers.
It refers to healthcare providers without a contract with your insurance. You usually pay more for using these services. Some insurance plans don’t cover out-of-network providers at all.
An Encounter is a single interaction between a patient and a healthcare provider. Each encounter generates a set of billing codes and charges. Accurate documentation of encounters is essential for appropriate billing and reimbursement.
The knowledge about medical billing terminology provides you confidence to make informed decisions about your healthcare finances. This explanation streamlines your interactions with healthcare providers and insurance companies.
CloudRCM stands as the leading competitor for medical billing services. Explore and join our services today to experience highly advanced billing solutions.
Medical billing terminology comprises the jargon and codes used to describe healthcare services. It standardizes the billing process. This helps data analytics identify trends in denial management.
EOB stands for Explanation of Benefits. It outlines services provided and costs incurred. Data analytics use EOBs to spot inconsistencies that lead to claim denials.
HB in billing refers to Hospital Billing. It focuses on inpatient and outpatient charges. Data analytics tools scrutinize HB data to detect frequent causes of claim rejections.
IP billing means Inpatient Billing, charges for services given to admitted patients. Analytics assess IP billing data to recognize patterns contributing to payment denials.
Medical coding terms include diagnoses, treatments, and medical procedures. Accurate coding is critical for analytics to track denial rates effectively.
Terminology in medical billing information includes various codes, abbreviations, and phrases used to facilitate billing. These terms are essential for analytics to detect denial patterns effectively. Understanding this terminology improves your ability to manage denials.
Yes, understanding medical terminology is essential for accurate medical coding. Your analytics will be more reliable in pinpointing reasons for claim denials.
Are you uncertain about the potential benefits our customized solutions can bring to your healthcare business? Why not give our Revenue Cycle Management (RCM) solutions a try? For the first 15 days, it's absolutely free! Witness the transformation we can bring to your medical billing operations.Schedule a meeting!