Covered Service

Health benefits which are allowed per a contract with a health insurance company or a health benefit allowed by Medicare, Medicaid, Tricare or Workers Compensation.

CPT – Current Procedural Terminology: 

CPT is a list of procedure codes owned, copyrighted and developed by the American Medical Association. A procedure is something that the doctor does to a patient during a visit. For example, if you cut your finger and the doctor repairs the cut, there is a procedure code to put on the claim form. The code is recognized by coders, and insurance company claims software. Let’s look at the cut on the  finger. To convert the repair to a CPT code, you need to know the length of the wound, in centimeters so you can select the correct CPT code. For the purpose of this example. You have a 1cm simple cut on your index finger. The repair of this cut would be 12001. Every procedure performed MUST be supported by a correct diagnosis code or ICD-9 code. The diagnosis or ICD-9 code for an unspecified wound of the finger would be 883.0. Now, if you saw ICD-9 code 042 used with CPT code 12001, you would be confused. That would be like saying the doctor sutured the patient’s finger cut because the patient had AIDS. Therefore it doesn’t make sense to suture a wound if there is no open wound diagnosis.

Deductible:

A deductible is a contractual amount that the patient is required to pay as an out of pocket expense before the insurance company pays any claim sent to them. The amount of deductible varies per patient and per insurance policy. Commercial insurance and Medicare deductibles start in January of each year. Tricare deductibles start in October each year. A patient may have a $1,000 deductible. The patient is seen by the doctor on January 5th. The claim is for $250.00. The insurance company allows $100 for the benefit or covered service. The patient hasn’t met their deducible yet. The $100 is applied to the deductible. Now the patient has a $900 deductible to meet before the claim is paid by the insurance company. The patient comes in each month for the next 9 months. The claim is sent in September. The $100 is applied to the remaining deductible. If the patient comes in the next month (October), the deducible has been satisfied, so now a check will be sent by the insurance company. Whether the patient actually pays the deductible is between the provider and patient. The insurance company doesn’t care if the patient doesn’t actually pay the deductible. All this means is that with a $1,000 deductible, with $100 allowed for the visit it will take 10 visits before the insurance company will release any money to pay the patient’s claim. Medicare does care if the provider collects the deductible from the patient.

Dependents: 

A Spouse and/or an unmarried child (whether natural, adopted or step) of an insured person. When looking at the insurance card (other than Medicare) you may see the policy number and at the end, you may see 01, 02, 03, 04 or another 2 digit number. These numbers have meaning, but could vary per insurance company.

00: Insured or member (Some insurance companies may have 01 as the insured)

Medical billing basic definitions like copay, coins, deductible, write off

Benefit Period—

The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit  period ends when you haven’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins.

 Coinsurance—

An amount you may be required to pay as your share of the costs for services, after you pay any plan deductibles. Coinsurance is usually a percentage (for example, 20%).

Copayment—

An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit or a prescription. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.

Deductible—

The amount you must pay for health care or prescriptions, before Original Medicare, your prescription drug plan, or other insurance begins to pay.

Excess Charges (Write off)—

If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge.

Medical Billing and Coding

PPO (Preferred Provider Organization)

A combination of traditional fee-for-service and an HMO. When use the doctors and hospitals that are part of the PPO, you can have a larger part of your medical bills covered. can use other doctors, but at a high expensive. 

Maximum Out-of-Pocket Expenses

The most money you will be required pay a year for deductibles and coinsurance. It is fixed by the insurance company, in addition with  regular premiums. 

 

Managed Care

It is to manage costs, use, and quality of the health care system. All HMOs and PPOs, and many fee-for-service plans, have managed care. 

 

HMO (Health Maintenance Organization)