Medical billing basic terms

EOB​ - Explanation of Benefits. One of the medical billing terms for the statement that comes with the insurance company payment to the provider explaining payment details, covered charges, write offs, and patient responsibilities and deductibles. 

ERA​ - Electronic Remittance Advice. This is an electronic version of an insurance EOB that provides details of insurance claim payments. These are formatted in according to the HIPAA X12N 835 standard. 

ERISA​ - 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. 

Fee For Service​ - 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. 

Fee Schedule​ - Cost associated with each treatment CPT medical billing codes. 

Financial Responsibility​ - The portion of the charges that are the responsibility of the patient or insured. 

Fiscal Intermediary (FI)​ - A Medicare representative who processes Medicare claims. 

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

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

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

Group Name​ - Name of the group or insurance plan that insures the patient. 

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

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

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

HCPCS​ - Health Care Financing Administration Common Procedure Coding System. (pronounced "hick-picks"). Three level system of codes. CPT is Level I. A standardized medical coding system used to describe specific items or services provided when delivering health services. May also be referred to as a procedure code in the medical billing glossary. The three HCPCS levels are:

● Level I - American Medical Association's Current Procedural Terminology (CPT) codes. 

● Level II - 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. 

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

Healthcare Insurance​ - 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. 

Healthcare Provider​ - Typically a physician, hospital, nursing facility, or laboratory that provides medical care services. Not to be confused with insurance providers or the organization that provides insurance coverage. 

Health Care Reform Act​ - 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. 

HIC​ - 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. 

HIPAA​ - Health Insurance Portability and Accountability Act. Several federal regulations intended to improve the efficiency and effectiveness of health care. HIPAA has introduced a lot of new medical billing terms into our vocabulary lately. 

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

Hospice​ - Inpatient, outpatient, or home health care for terminally ill patients

ICD-9 Code​ - Also known as ICD-9-CM. International Classification of Diseases classification system used to assign codes to patient diagnosis. This is a 3 to 5 digit number. 

ICD 10 Code​ - 10th revision of the International Classification of Diseases. Uses 3 to 7 digit. Includes additional digits to allow more available codes. The U.S. Department of Health and Human Services has set an implementation deadline of October, 2013 for ICD-10.