The healthcare system in the United States is unique compared to other countries with medical billing representing itself as a critical component of it. For those new to the field, it is important to understand the basic terminologies related to it. This article provides the necessary information you need to know to navigate the world of medical billing effectively.
Defining Medical Billing
Medical billing, simply, is the process in which healthcare services are defined as medical codes that are then used to prepare a claim submitted to the insurance companies or payers. This process makes it possible for healthcare providers to receive payments against their performed services from the insurance companies.
Claim – Basic Terminologies
A claim is a request for payment submitted to the insurance. It contains all the necessary information that the insurance needs to approve and release the payment. It documents all the diagnoses, findings and procedures performed on a single visit.
CPT Codes (Current Procedural Terminology) – Basic terminologies
CPT codes are a set of codes used to represent a medical procedure. This procedure can be but is not limited to, medical or surgical services performed by a healthcare service provider. These are maintained and revised by the American Medical Association (AMA). For example, if a patient comes in to see a doctor and the visit goes for 10 minutes, that is a service provided by the doctor and will be represented by the code 99201.
ICD Codes (International Classification of Diseases) – Basic terminologies
ICD codes are maintained by the World Health Organization (WHO) which the organization uses to classify, categorize, and code all the possible diseases with diagnoses and symptoms. In the United States, currently the ICD-10 Clinical Modification is used for the coding of diseases and symptoms.
HCPCS Codes (Healthcare Common Procedure Coding System) –Basic terminologies
These are used to represent items and services not included in the CPT codes. This includes prosthetics, orthotics, durable medical equipment (DME), and other supplies. It is divided into two levels. Level I corresponds to the CPT codes, while Level II covers non-physician services and items.
Modifiers –Basic terminologies
These are two-digit codes appended to a CPT or HCPCS code to provide additional information regarding the service performed or the item used. It can provide information such as if a service is performed on both limbs or if an item was used separately to another item or service already used or performed. This also can provide information regarding the duration of a service.
Authorization –Basic terminologies
Authorization is the process of getting the insurance’s approval before getting a particular service. For a particular service or a set of services, the insurance may want to check if the service or the set of services is medically necessary and is covered under the patient’s plan.
Explanation of Benefits (EOB) –Basic terminologies
An Explanation of Benefits (EOB) is a document sent to the provider and the patient by the insurance company after the claim has been processed. It gives a summary of what was billed, how it was billed and how the claim has been processed. It is important to understand EOBs as they provide crucial information regarding payments or any discrepancies in the claim.
Deductible –Basic terminologies
This is the amount a patient has to pay out-of-pocket before the insurance starts to cover the patient’s healthcare visits. For example, if a deductible is $500.00, then the patient must pay the first $500.00 of their medical bills before the insurance company starts to cover the visits.
Copayment (Copay) –Basic terminologies
Copayment or copay is a fixed amount the patient pays at the time of service. For example, a patient’s plan may require a $20.00 copay for each doctor visit. These are generally lower than deductibles and are paid directly to the provider.
Coinsurance –Basic terminologies
Coinsurance is the percentage amount covered by the insurance company after the patient’s deductible has been met. For example, if a plan covers 80% of the medical bills, the patient will be responsible for the remaining 20% of the amount. The percentage may vary depending on the patient’s type of plan and the service.
Conclusion
Medical billing is a complex process that involves many intricate steps and regulations. You must familiarize yourself with these terminologies to better understand the US healthcare landscape. Whether you are a newcomer or just looking to refresh your knowledge, mastering these terms is the first step toward a successful career in medical billing
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