Not sure what an EOB is? Wonder what a deductible is and why the insurance was not paid because of it? There is an abundance of vocabulary in the medical billing world, so to help, we have compiled a list of some common medical billing vocabulary to get you started!

1. Superbill

A superbill is a form with a complete documentation of the patient’s visit and everything that can be billed from that visit. The diagnosis and procedures are translated into codes and documented on the superbill (we will go over a bit more about these codes next). When billing, this superbill tells you the individual items that that need to be included in the claim form you generate and submit.

2. International Classification of Disease (ICD)/ Current Procedural Terminology (CPT)

It is the medical coder’s job to know these codes to translate the written words on a patient record to a numerical code, but it will help to have a general understanding of what these are.

The International Classification of Disease (ICD) codes are used to classify the patient diagnosis after a visit. It is an international, standardized mechanism for classifying diseases, monitored by the World Health Organization (WHO). Currently, the version used is ICD-10-CM and according to the WHO’s website, the updated ICD-11 will come into effect January 1, 2022.

Meanwhile, the CPT codes or Current Procedural Terminology codes, developed by the American Medical Association, classify different procedures that were performed during the patient visit. In more detail, there are 3 categories of CPT codes. If you are curious, you can read about them here.

As an example, a urinalysis (the procedure) would be classified with a CPT code while a resulting diagnosis, a urinary tract infection, for instance, would be classified by an ICD code. The CPT codes show up on Explanation of Benefits to specify the procedures performed and billed for.

3. Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act of 1996, or HIPAA for short, is a set of rules governing the protection of patients’ health information. Anyone dealing with patient records, from healthcare providers to healthcare clearinghouses, need to comply with these regulations to guarantee that patient information are kept safe and private. For more information on how to stay compliant, you can visit the United States Department of Health & Human Services website.

4. Clearinghouse

A clearinghouse is a third-party organization that acts as an intermediary between two parties, helping to facilitate payment between the two. In this case, between healthcare providers and insurance companies. Some providers may choose to work with a clearinghouse. Once the claim is generated, it is sent to a clearinghouse where it will be checked and edited (or scrubbed) and then sent to the insurance company.

5. Explanation of Benefits (EOB) & Electronic Remittance Advice (ERA)

After the insurance provider adjudicates a claim, they will send an Explanation of Benefits (EOB). These forms show information about the claim, whether it was paid, the amount paid, the deductible amount, etc. Not all claims will be paid, and an EOB will give information as to why it was not. Pay attention to what is on the form as it can give important information that may help when re-submitting and getting the claim paid. For example, there could be reasons with the patient’s deductible not being met yet.

An Electronic Remittance Advice (ERA) and Electronic Funds Transfers (EFT) are used in the process of transferring payment from the insurance payor to the healthcare provider via electronic methods. The ERA provides basically the same information as an EOB, but it is for EFTs. Meanwhile EOBs correspond with physical checks via traditional mail.

6. In Network Provider

Insurance companies have contracts with different healthcare providers and depending on whether the provider is in or out of network, it will affect the patient’s insurance payment. An in-network provider is in contract with the patient’s insurance company. If a patient visits your office and you are in-network with the patient’s insurance provider, then the insurance will usually pay a certain contracted amount back to you.

7. Out-of-Network Provider

An out-of-network provider is one that is not in contract with the patient’s insurance plan. In this case, the insurance company may pay less than an in network provider. The remaining amount not covered by insurance needs to be paid by the patient (out of pocket).

Be sure to check whether the patient is in or out-of-network when billing.

8. Deductibles

A deductible is the amount the patient must pay before their insurance starts paying. If the patient’s deductible is $1000, then they must pay $1000 themselves first, before their insurance plan starts playing. Sometimes when claims are rejected, it is because the patient has not yet met their deductible.

9. Copay

Copay is the amount that patients pay at the healthcare provider’s office after every visit. It is a flat fee that they pay right away for the appointment.

10. Coinsurance

Coinsurance is the amount the patient pays after the deductible has been met. The insurance plan pays out part of the billed charges while the patient pays the other part.

 

 

If understanding these terms seems daunting, do not worry. We will be publishing other resources to help you in your medical billing journey so keep checking back to our website for more updates!

You can also contact us to hear more about how Americare Network can help you with your medical billing needs. Our team of highly trained professionals will help this process be as efficient as possible for all medical specialities from individual physician practices to telemed and virtual practices. Our experienced team understands these terms in detail, so you don’t have to.