This section defines the basic vocabulary any private practice needs to know in order to understand billing.
Print off this list of billing terms as an easy and convenient cheat sheet for your office to have handy when billing questions arise (and if you have questions as you are going through our Billing 101 eBook).
Aging: In billing, this refers to an overdue balance for self-pay clients or an insurance claim that has not been paid.
Applied to Deductible (ATD): The amount of money your insured client pays that goes towards paying their annual deductible. The amount of the deductible can vary, depending on insurance plan and provider.
Assignment of Benefits (AOB): Insurance payments paid directly to the provider (that is you). This transaction happens after you have submitted a claim and it is been successfully processed by the insurance company.
Authorization: An insurance company may require those covered to get permission before receiving specific services. If a patient does not get authorization from their insurance provider before receiving the service, the insurance company reserves the right to deny coverage.
Beneficiary: This is the name for the person who receives the benefits of an insurance plan. He or she is not necessarily the person paying for the insurance plan.
Clearinghouse: This is a third party company that acts as an intermediary between you (the provider) and the insurance company. A clearinghouse checks your bills for errors, also known as claims scrubbing. They also verify that you have used the correct diagnosis and procedural codes.
CMS-1500 (HCFA forms): This is a standard paper claim form used to bill Medicare and Medicaid.
Coding: In insurance billing, coding refers to the process of translating the services rendered to a patient into a standard set of medical codes. These codes make it easy for insurance companies to process claims.
Coordination of Benefits (COB): For patients covered by more than one insurance plan, it is important to understand which insurance company to bill for which services.
Co-Pay: This is the amount of money your client pays you before receiving treatment or services. A co-pay is not included in the deductible. It will vary, depending on the insurance provider and plan.
Current Procedural Terminology (CPT): CPT is a standard set of codes maintained by the American Medical Association (AMA). It contains five digit numerical representations for every type of service. In fact, there are almost 10,000 codes in circulation. But do not get overwhelmed — you will likely use less than 100 codes on a consistent basis.
Deductible: This describes the amount your client must pay on their own before their insurance plan kicks in.
Downcoding: This happens if the insurance company suspects that you did not provide a service, and decides to reduce the cost of the claim or get rid of it altogether.
Diagnostic and Statistical Manual of Mental Disorders (DSM 5): DSM is a handbook used to diagnosis mental disorders. It is a standard language for healthcare professionals to describe and diagnose mental disorders. In works hand in hand with ICD-10. On TheraNest, we have also provided a valuable resource to help you convert DSM-IV and DSM 5 codes to ICD-10. Check it out our DSM 5 code converter.
Electronic Claim: This is a type of claim sent to an insurance company electronically via a billing software, like TheraNest.
Enrollee: This refers to the person covered by an insurance plan.
Fee Schedule: This is your list of fees for each service you provide.
Financial Responsibility: Outlined in your contract with your client and their provider, sets clear expectations on who is responsible for what before and after services are rendered.
Healthcare Common Procedure Coding System (HCPCS): HCPCS, pronounced Hick Picks, is divided into two different levels. Level I is identical to CPT codes. Level II is used to identify services and products that were not included in CPT. It is used primarily by Medicare and Medicaid, but can also be used by other insurance providers.
International Classification of Diseases ICD-9 Codes: Now expired, these codes were the international standard used to identify a disease or diagnosis.
International Classification of Diseases ICD-10 Codes: Released in October 2015, ICD-10 codes are the current international standard for identifying a disease or diagnosis. You may be confused about how this differs from CPT. A CPT is a code that represents what service you provide. An ICD is a code that represents the diagnosis of a medical condition.
In-Network: This describes if you have contracted with an insurance company to provide services to their enrollees.
Maximum Out of Pocket: This describes the absolute max amount of money your client will pay on their own annually.
Medicare: This is a government insurance program provided to seniors over the age of 65 and persons with disabilities.
Medicaid: This is a government insurance program (a joint venture between federal and state) that provides coverage to people with low or no income.
Not Otherwise Specified (NOS): You may come across a condition without a specified diagnosis. This comes in handy when using ICD-10.
National Provider Identifier Number (NPI): As a healthcare provider, this is your unique 10 digit number.
Out of Network: Defined by individual insurance companies, this term refers to providers who are not in a contract with the insurance company.
Pre-certification: This is when your client must check with their insurance provider first to certify that a specific treatment is covered by their plan.
Premium: This is the amount a person pays their insurance company to receive health coverage. It is usually paid on a monthly, quarterly, or annual basis.
Provider: This is you.
Scrubbing: This is the process done by your clearinghouse. Scrubbing checks your bills for errors before sending the payment through for processing.
Self-pay: This term describes clients who pay for their own services, instead of through insurance providers.
Superbill: This is an itemized form that describes all pertinent information, including procedure codes (CPT) and diagnosis codes (ICD-10).
Upcoding: This is the practice of using a higher ICD-10 code in order to get more from a client or an insurance company. It is illegal.
Write Off: The difference between your fee and what the insurance company will pay you for your services. It is not the amount your client is responsible for paying