Billing Basics: Learn the Lingo

Medical and billing terminology can sound like a foreign language to those who are unfamiliar with it. Trying to discuss a bill with a patient can be frustrating for both parties. It is important to ensure your front desk and billing staff, or whoever will be speaking with patients, are able to explain in simple terms. Below are some of the most common terms and phrases used in billing:

• CPT, or procedure code: Every procedure a provider performs is assigned a code for billing purposes. For example: code 80061 is a lab test for a lipid panel.

• ICD-10, or diagnosis code: Every diagnosis is assigned a code for billing purposes. For example: code I10 is hypertension.

• Remittance Advice (RA) or Explanation of Benefits (EOB): This is what the insurance sends to the provider, and the patient, showing what was billed, paid, adjusted and put to the patient responsibility.

• Billed Amount: How much the provider charges for each procedure/CPT code.

• Allowable Amount: How much the insurance allows for each procedure/CPT code.

• Contractual Amount: The difference between what the provider billed and what the insurance allows. In-Network providers must adjust this amount off and cannot bill the patient.

• Copay: The amount set by the patient's insurance plan indicating how much they need to pay at each visit. This may vary for PCP's and specialists.

• Co-Insurance: The percentage set by the patient's insurance plan indicating how much they need to pay for each procedure/CPT code. Most co-insurances are between 10-20%. The amount due from the patient is derived from the allowable. For example: the patient has a 10% co-insurance and sees a Registered Dietitian for 15 minutes. The allowable amount would be $37.48, the insurance would pay $33.74 and the patient would have to pay $3.74.

• Deductible: The amount set by the patient's insurance plan that the patient must pay out of pocket before the insurance will pay for services. Many plans have limits regarding what applies to the deductible, but labs and diagnostic testing almost always apply.

• Contracted, or in-network provider: This means that the provider has a contract with a specific insurance and accepts it. They cannot bill the patient for more than the allowable.

• Out of network: This means the provider does not have a contract with the specific insurance and can bill the patient for the full billed amount of the procedure.

It is always recommended that patients understand their policies prior to getting medical treatment, but many don't. They are easily confused by the terminology and cost of medical care, which, quite often, leads to angry calls. Make sure your staff are explaining the above terms, and not just dictating facts. Compassion, understanding and manners go a long way in your patient relationships.

Premiermbma.com