A comprehensive collection of Medical Billing Terms and acronyms used by the Medical Insurance Specialist and coder.
Here we’ve compiled a glossary of terms and acronyms commonly used in the healthcare reimbursement process. If you don’t see what you’re looking for or have a suggestion, please let us know here.
Terms are organized alphabetically. Just click on the links below for any term you are looking for based on the first letter of the term:
5010 – Version 5010 of the X12 HIPAA transaction and code set standards for electronic healthcare transactions. This standard includes transactions for claims, referrals, claim status, eligibility, and remittances. Mandatory compliance date was January 1, 2012. These standards are necessary for the new ICD-10-CM diagnosis codes.
ACA – Affordable Care Act. Also referred to as “ObamaCare”. A Federal law enacted in 2010 intended to increase healthcare coverage and make it more affordable. It also expands Medicaid eligibility and guarantees coverage without regard to pre-existing medical conditions.
Accept Assignment – When a healthcare provider accepts as full payment the amount paid on a claim by the insurance company. This excludes patient responsible amounts such as coinsurance or copay.
Adjusted Claim – When a claim is corrected which results in a credit or payment to the provider
Allowed Amount – The reimbursement amount an insurance company will pay for a healthcare procedure. This amount varies depending on the patients insurance plan. For 80/20 insurance, the provider accepts 80% of the allowed amount and the patient pays the remaining 20%.
AMA – American Medical Association. The AMA is the largest association of doctors in the United States. They publish the Journal of American Medical Association which is one of the most widely circulated medical journals in the world.
Aging – One of the medical billing terms referring to the unpaid insurance claims or patient balances that are due past 30 days. Most medical billing software’s have the ability to generate a separate report for insurance aging and patient aging. These reports typically list balances by 30, 60, 90, and 120 day increments.
Ancillary Services – These are typically services a patient requires in a hospital setting that are in addition to room and board accommodations – such as surgery, lab tests, counseling, therapy, etc.
Appeal – When an insurance plan does not pay for treatment, an appeal (either by the provider or patient) is the process of objecting this decision. The insurer may require documentation when processing an appeal and typically has a formal policy or process established for submitting an appeal. Many times the process and associated forms can be found on the insurance providers web site.
Applied to Deductible (ATD) – You typically see these medical billing terms on the patient statement. This is the amount of the charges, determined by the patients insurance plan, the patient owes the provider. Many plans have a maximum annual deductible that once met is then covered by the insurance provider.
Assignment of Benefits (AOB) – Insurance payments that are paid directly to the doctor or hospital for a patients treatment. This is designated in Box 27 of the CMS-1500 claim form.
ASP – Application Service Provider. This is a computer based services over a network for a particular application. Sometimes referred to as SaaS (Software as a Service). There application service providers that offer Medical Billing. The appeal of an ASP is it frees a business of the the need to purchase, maintain, and backup software and servers.
Authorization – When a patient requires permission (or authorization) from the insurance company before receiving certain treatments or services.
Beneficiary – Person or persons covered by the health insurance plan and eligible to receive benefits.
Medical Billing Terms – Medical Billing Glossary
Blue Cross Blue Shield (BCBS) – An organization of affiliated insurance companies (approximately 450), independent of the association (and each other), that offer insurance plans within local regions under one or both of the association’s brands (Blue Cross or Blue Shield). Many local BCBS associations are non-profit BCBS sometimes acts as administrators of Medicare in many states or regions.
Capitation – A fixed payment paid per patient enrolled over a defined period of time, paid to a health plan or provider. This covers the costs associated with the patients health care services. This payment is not affected by the type or number of services provided.
Carrier – Simply the insurance company or “carrier” the patient has a contract with to provide health insurance.
Category I Codes – Codes for medical procedures or services identified by the 5 digit CPT Code.
Category II Codes – Optional performance measurement tracking codes which are numeric with a letter as the last digit (example: 9763B).
Category III Codes – Temporary codes assigned for collecting data which are numeric followed by a letter in the last digit (example: 5467U).
CHAMPUS – Civilian Health and Medical Program of the Uniformed Services. Recently renamed TRICARE. This is federal health insurance for active duty military, National Guard and Reserve, retirees, their families, and survivors.
Charity Care – When medical care is provided at no cost or at reduced cost to a patient that cannot afford to pay.
Clean Claim – Medical billing term for a complete submitted insurance claim that has all the necessary correct information without any omissions or mistakes that allows it to be processed and paid promptly.
Clearinghouse – This is a service that transmits claims to insurance carriers. Prior to submitting claims the clearinghouse scrubs claims and checks for errors. This minimizes the amount of rejected claims as most errors can be easily corrected. Clearinghouses electronically transmit claim information that is compliant with the strict HIPPA standards (this is one of the medical billing terms we see a lot more of lately).
CMS – Centers for Medicaid and Medicare Services. Federal agency which administers Medicare, Medicaid, HIPPA, and other health programs. Formerly known as the HCFA (Health Care Financing Administration). You’ll notice that CMS it the source of a lot of medical billing terms.
CMS 1500 – Medical claim form established by CMS to submit paper claims to Medicare and Medicaid. Most commercial insurance carriers also require paper claims be submitted on CMS-1500’s. The form is distinguished by it’s red ink.
Coding – Medical Billing Coding involves taking the doctors notes from a patient visit and translating them into the proper diagnosis (ICD-9 or ICD-10 code) and treatment medical billing codes such as CPT codes. This is for the purpose of reimbursing the provider and classifying diseases and treatments.
COBRA Insurance – This is health insurance coverage available to an individual and their dependents after becoming unemployed – either voluntary or involuntary termination of employment for reasons other than gross misconduct. Because it does not typically receive company matching, It’s typically more expensive than insurance the cost when employed but does benefit from the savings of being part of a group plan. Employers must extend COBRA coverage to employees dismissed for a. COBRA stands for Consolidated Omnibus Budget Reconciliation Act which was passed by Congress in 1986.
COBRA coverage typically lasts up to 18 months after becoming unemployed and under certain conditions extend up to 36 months.
Co-Insurance – Percentage or amount defined in the insurance plan for which the patient is responsible. Most plans have a ratio of 90/10 or 80/20, 70/30, etc. For example the insurance carrier pays 80% and the patient pays 20%.
Collection Ratio – This is in reference to the providers accounts receivable. It’s the ratio of the payments received to the total amount of money owed on the providers accounts.
Contractual Adjustment – The amount of charges a provider or hospital agrees to write off and not charge the patient per the contract terms with the insurance company.
Coordination of Benefits (COB) – When a patient is covered by more than one insurance plan. One insurance carrier is designated as the primary carrier and the other as secondary.
Co-Pay – Amount paid by patient at each visit as defined by the insured plan.
CPT Code – Current Procedural Terminology. This is a 5 digit code assigned for reporting a procedure performed by the physician. The CPT has a corresponding ICD-9 diagnosis code. Established by the American Medical Association. This is one of the medical billing terms we use a lot.
Credentialing – This is an application process for a provider to participate with an insurance carrier. Many carriers now request credentialing through CAQH. The CAQH credentialing process is a universal system now accepted by insurance company networks.
Credit Balance – The balance thats shown in the “Balance” or “Amount Due” column of your account statement with a minus sign after the amount (for example $50-). It may also be shown in parenthesis; ($50). The provider may owe the patient a refund.
Crossover claim – When claim information is automatically sent from Medicare the secondary insurance such as Medicaid.
Date of Service (DOS) – Date that health care services were provided.
Day Sheet – Summary of daily patient treatments, charges, and payments received.
Deductible – amount patient must pay before insurance coverage begins. For example, a patient could have a $1000 deductible per year before their health insurance will begin paying. This could take several doctor’s visits or prescriptions to reach the deductible.
Demographics – Physical characteristics of a patient such as age, sex, address, etc. necessary for filing a claim.
DME – Durable Medical Equipment – Medical supplies such as wheelchairs, oxygen, catheter, glucose monitors, crutches, walkers, etc.
DOB – Abbreviation for Date of Birth
Downcoding – When the insurance company reduces the code (and corresponding amount) of a claim when there is no documentation to support the level of service submitted by the provider. The insurers computer processing system converts the code submitted down to the closest code in use which usually reduces the payment.
Duplicate Coverage Inquiry (DCI) – Request by an insurance company or group medical plan by another insurance company or medical plan to determine if other coverage exists.
Dx – Abbreviation for diagnosis code (ICD-9 or ICD-10 code).
Electronic Claim – Claim information is sent electronically from the billing software to the clearinghouse or directly to the insurance carrier. The claim file must be in a standard electronic format as defined by the receiver.
Electronic Funds Transfer (EFT) – An electronic paperless means of transferring money. This allows funds to be transferred, credited, or debited to a bank account and eliminates the need for paper checks.
E/M – Medical billing terms for the Evaluation and Management section of the CPT codes. These are the CPT codes 99201 thru 99499 most used by physicians to access (or evaluate) a patients treatment needs.
EMR – Electronic Medical Records. Also referred to as EHR (Electronic Health Records). This is a medical record in digital format of a patients hospital or provider treatment. An EMR is the patient’s medical record managed at the providers location. The EHR is a comprehensive collection of the patients medical records created and stored at several locations.
Encryption – Conversion of data into a form that cannot be easily seen by someone who is not authorized. Encrypted emails may be used when sending patient info to comply with HIPAA requirements for protection of patient information.
Enrollee – Individual covered by health insurance.
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.
Errors and Omissions Insurance – Liability insurance for professionals to cover mistakes which may cause financial harm to another part.
Medical Billing Terms
Medical Billing Terms – Medical Billing Glossary
Medical Billing Terms A thru E