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.

Medicare EOB - Detailed Review 1

Detail Fields:

Serv Date: This field provides the service from and to dates as well as the patient's responsibility.

POS: The place of service field contains a two digit number that references where the services were rendered.

NOS: The number of service field shows how many services were billed per procedure code.

Proc: The procedure code is located in this column as well as the patients Health Insurance Claim number (HIC) or the Medicare number.

MODS: If any modifiers were billed, they will be located in this field.

Medicare EOB - Detailed Review

Claim Total Fields:

Medicare EOB - Detailed Review

An ANSI Group Code is always shown with each ANSI reason code to indicate when you may or may not, bill a beneficiary for the non-paid balance of the services or equipment you furnished. Group codes are not used with Medicare Reference (REF) or Medicare Outpatient Adjudication (MOA) remark code entries.

PR - Patient Responsibility

A PR group code signifies the amount that may be billed to the beneficiary or to another payer on the beneficiary’s behalf. For example, PR would be used with the reason code for patient deductible or coinsurance, if the patient assumed financial responsibility for a service not considered reasonable and necessary, for the cost of therapy or psychiatric services after the coverage limit had been reached, for a charge denied as result of the patient’s failure to supply primary payer or other information, or where a patient is responsible for payment of excess non-assigned physician charges. Charges that have not been paid by Medicare and/or are not included in a PR group, such as a late filing penalty (reason code B4), excess charges on an assigned claim (reason code 42), excess charges attributable to rebundled services (reason code B15), charges denied as result of the failure to submit necessary information by a provider who accepts assignment, or services that are not reasonable and necessary for care (reason code 50 or 57) for which there are no indemnification agreements are the liability of the provider. Providers may be subject to penalties if they bill a patient for charges not identified with the PR group code.

b. CO - Contractual Obligations