Glossary of Medical Billing and Coding Terminology

A

Allowed Amount: The amount an insurance company will reimburse to cover a healthcare service or procedure. An allowed amount should not be confused with co-pay, or deductibles owed by a patient.

American Medical Association (AMA): Founded in 1846, the AMA is the largest organization of physicians in the U.S. dedicated to improving the quality of healthcare administered by providers across the country. The Current Procedural Technology (CPT^®) code set is maintained and revised by the AMA in accordance with federal guidelines.

Aging: Insurance claims that haven’t been paid or balances owed by patients that are overdue by more than 30 days. Aging claims may become denied if they aren’t filed in time with a health insurance company although timeframes vary across Medicare, Medicaid, and Commercial lines.

Ancillary Services: Any service administered in a hospital or other healthcare facility that are not provided by a physician or nurse and are not financially covered by room-and-board costs, including biometrics tests, physical therapy, and physician consultations among other services.

Appeal: When a patient or a provider tries to convince an insurance company to pay for healthcare after it has decided not to cover costs for a patient on a claim. Medical billing specialists deal with appeals after a claim has been denied or rejected by an insurance company.

Applied to Deductible (ATD): The amount of money a patient owes to a provider that goes towards paying their yearly deductible. A patient’s deductible is determined by their insurance plan and provider and can range in price.

Assignment of Benefits (AOB): Insurance payments made directly to a healthcare provider for medical services received by the patient. AOB occurs after a claim has been successfully processed with an insurance company.

Application Service Provider (ASP): A digital network that allows healthcare providers to access quality medical billing software and technologies without needing to maintain it themselves. Providers who use ASP typically pay a monthly fee to the company that maintains the billing software.

Authorization: When a patient’s health insurance plan requires them to get permission from their insurance providers before receiving certain services, that permission comes in the form of an authorization. A patient may be denied coverage if they see a provider for a service that needed authorization without first consulting the insurance company.

B

Beneficiary: The person who receives benefits and/or coverage under a healthcare plan. The beneficiary of an insurance plan may not be the person paying for the plan, for example, young children covered under their parents’ plans.  This term relates to the terms eligible, member, and patient based on their relationship: individuals who are eligible for an entitlement program or insurance coverage become members when they enroll and patients when they are seen by a provider and thereby benefit from their coverage.

Blue Cross Blue Shield: A United States-based federation of 34 health insurance companies, some of which are non-profits, that offer health insurance options to eligible persons in their area. Blue Cross Blue Shield offers healthcare plans to over 100 million people in the U.S.

C

Capitation: Fixed payments that are generally made monthly by a patient to a health insurance company or provider to recoup costs incurred from various healthcare services. A capitation is different from a deductible or co-pay.

Centers for Medicare and Medicaid Services (CMS): Formerly known as the Healthcare Financing Administration (1977-2001), CMS provides health coverage to more than 160 million people through Medicare, Medicaid, the Children’s Health Insurance Program, and the Health Insurance Marketplace. This federal agency works in partnership with the entire healthcare community to improve quality, equity, and outcomes in the healthcare system.

Civilian Health and Medical Program of Uniform Services (CHAMPUS): Now known as TRICARE, CHAMPUS is a government-funded health insurance program for active and retired service members, their families, their widows and children, and dependent parents, and in-laws.

Charity Care: Healthcare services administered at a reduced or zero cost to patients who cannot afford healthcare. Providers may offer charity care at their discretion.

Clean Claim: A medical claim filed with a health insurance company that is free of errors that could cause a payment denial and processed in a timely manner. Some providers may send claims to organizations that specialize in producing clean claims, like clearinghouses.

Clearinghouse: Facilities that review and correct medical claims before sending them to insurance companies for final processing. This meticulous editing process for claims is known in the medical billing industry as “scrubbing.”

CMS 1500: The standard claim form used by a non-institutional provider or supplier to bill Medicare carriers and durable medical equipment regional carriers (DMERCs) when a provider qualifies for a waiver from the Administrative Simplification Compliance Act (ASCA) requirement for electronic submission of claims. It is also used for billing some Medicaid State Agencies.

Coding: The process of translating a physician’s documentation about a patient’s medical condition and health services into medical codes that are then plugged into a claim for processing with an insurance company. This practice involves accessing patient records, reading for diagnosis names and related symptoms that might qualify as modifiers, and then choosing the most appropriate CPT code to apply to the conditions.  Coding is typically performed by licensed Certified Professional Coders who have earned the designation CPC.

Consolidated Omnibus Budget Reconciliation Act (COBRA) Insurance: A federal health insurance program that allows eligible employees and their dependents the continued benefits of health insurance coverage when an employee loses their job or experiences a reduction of work hours.

Co-Insurance: The percentage of coverage that a patient is responsible for paying after an insurance company pays the portion agreed upon and the policy deductible is satisfied. Co-insurance percentages vary depending on each health plan.

Collection Ratio: The ratio of payments received relative to the total amount owed to providers.

Contractual Adjustment: Reductions in the number of billed charges that a healthcare provider receives from payers. This is often used to account for differences between the healthcare provider’s negotiated rate with the payer and the actual billed charges for services rendered. 

Coordination of Benefits (COB): When a person is covered by two health plans, COB is the process the insurance companies use to decide which plan will pay first for covered medical services or prescription drugs and what the second plan will pay after. Coordination of Benefits allows multiple insurance carriers to determine their fair share of the cost for covered services.

Co-Pay: The fixed dollar amount that must be paid upfront to a provider before they receive any treatment or services. Co-pays are separate from a deductible, and they will vary in price depending on a person’s insurance plan and the service they are receiving.

Current Procedural Technology (CPT^®) Code: CPT^® codes represent treatments and procedures performed by a physician in a 5-digit format. They are always entered with ICD-9 or ICD-10 codes to explain a patient’s diagnosis. Medical billing specialists will enter CPT^® codes into claims, so insurance companies understand the nature of healthcare a patient receives with a provider.

Credentialing: The application process for a provider to coordinate with an insurance company. Once providers have become credentialed with an insurance company, they can work with that company to provide affordable healthcare to patients.

Credit Balance: The sum shown in the “balance” column of a billing statement that reflects the amount due for healthcare services rendered.

Crossover Claim: The transfer of processed claim data from Medicare operations to Medicaid or state agencies and private insurance companies that sell supplemental insurance benefits to Medicare beneficiaries.

D

Date of Service (DOS): If services last more than one day, the DOS is the day when a service based on CPT® code description is concluded. The clinical documentation should reflect both the start and end date of the services.  Data tables will often carry both the start date and end dates of service and in the case of hospitalizations, from these Length of Stay can be computed. See Length of Stay (LOS).

Day Sheet: A document that summarizes the services, treatments, payments, and charges that a patient receives on a given day.

Deductible: The predetermined amount a patient must pay out-of-pocket before an insurance carrier starts sharing the costs. Deductibles range in price according to terms set in a person’s health plan.

Demographics: The patient’s most-basic information that’s required for filing a claim, such as age, gender, race, ethnicity, address, and family information. An insurance company may deny a claim if it contains inaccurate patient demographics.

Durable Medical Equipment (DME): Reusable medical equipment such as stretchers, wheelchairs, canes, crutches, and bedpans, that has been deemed medically necessary by a doctor or healthcare provider based off a patient’s health condition.

Date of Birth (DOB): The exact date a patient was born.

Downcoding: When an insurance company finds there is insufficient evidence on a claim to prove that a provider performed coded medical services and so they reduce or remove those codes. Downcoding usually reduces the cost of a claim.

Duplicate Coverage Inquiry (DCI): A formal request typically submitted by an insurance carrier to determine if other health coverage exists for a patient.

Dx: The abbreviation for diagnosis codes, typically recorded as ICD-10 codes.

E

Electronic Claim: A medical claim generated and sent electronically to an insurance carrier from a provider’s billing software. The format of electronic claims must adhere to medical billing regulations set forth by the federal government.

Electronic Funds Transfer (EFT): An umbrella term for any method of transferring money electronically from a patient’s bank account to a provider or an insurance carrier to pay for healthcare services.

Evaluation and Management (E/M): The section of CPT^® codes that represent services provided by a physician or other qualified healthcare professional. E/M services include office and outpatient visits, hospital visits, home services, and preventive medicine services.

Electronic Medical Records (EMR): A digitized version of a patient’s medical record that is managed onsite at a clinician’s office. EMRs let providers access clinical information easily, print charts and graphs, create patient alerts, and more.

Enrollee: An eligible person who can be covered by a health insurance plan.

Explanation of Benefits (EOB): A document that describes what costs it will cover for medical care or products a patient has received. EOBs may also explain what is wrong with a claim if it’s denied.

Electronic Remittance Advice (ERA): The digital version of an EOB that supplies information about the payment to the health care provider, including any adjustments to claims and other payments based on factors like contract agreements and secondary health plans.

Employee Retirement Income Security Act of 1974 (ERISA): A federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

F

Fee-for-Service (FFS): Also known as traditional indemnity insurance, FFS is a system of health insurance payment in which a doctor or other health care provider is paid a fee for each service rendered, essentially rewarding medical providers for the volume and quantity of services provided, regardless of the outcome.

Fee Schedule: A detailed document that outlines the costs associated with each medical service designated by a CPT^® code.

Financial Responsibility: An insurance company or patient who owes a healthcare provider money has a financial responsibility for the services rendered. These fees include deductibles, copayments, and coinsurance, all of which are determined by the patient’s specific insurance plan and the healthcare provider’s billing policies.

Fiscal Intermediary (FI): Also known as a Medicare Administrative Contractor (MAC), FI is a private company contracted by Medicare that pays bills and processes Medicare claims for Medicare Part A and B.

Formulary: A table or list provided by an insurance carrier that explains what prescription drugs are covered under a patient’s health plan.

Fraudulent: Providers, patients, or insurance companies may be found fraudulent if they are deliberately deceiving the healthcare system through misrepresentation, dishonesty, and general illegal activity to receive unlawful benefits or payments.

G

Group Health Plan (GHP): A plan provided by an employer, union, or association to provide healthcare options to a large group of employees.

Group Name: The name of the group, insurance carrier, or insurance plan that covers a patient. The group name is typically found on a patient’s insurance card.

Group Number: An important identifier given to a patient by their insurance carrier that helps providers and insurance companies determine the specific benefits and coverage details associated with their plan.

Guarantor: The party paying for an insurance plan who is not the patient. Parents, for example, would be the guarantors for their children’s health insurance.

H

Healthcare Financing Administration Common Procedure Coding System (HCPCS): Produced by the Centers for Medicare and Medicaid Services (CMS) and is a collection of standardized codes that represent medical procedures, supplies, products, and services. The codes are used to facilitate the processing of health insurance claims by Medicare and other insurers.

Healthcare Insurance: Also referred to as medical insurance, refers to insurance that covers a portion of the cost of a policyholder’s medical costs. How much health insurance covers (and how much the policyholder pays via copays, deductibles, and coinsurance) depends on the details of the policy itself, with specific rules and regulations that apply to some plans.

Healthcare Provider: A person or entity that offers healthcare services to patients, including doctors, nurse practitioners, midwives, radiologists, labs, hospitals, urgent care clinics, medical supply companies, and other professionals, facilities, and businesses that provide such services.

Health Insurance Claim: A formal request by a healthcare provider to an insurance company for payment of medical services rendered to a patient. This document lists all the services and procedures done, serving as a detailed invoice.

Health Insurance Portability and Accountability Act (HIPAA): A federal law passed in 1996 that required the creation of national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge.

Health Maintenance Organization (HMO): A health insurance plan that only provides coverage for services from in-network doctors or hospitals, except for emergency care. HMOs typically require patients to work with a primary care physician and usually expect a patient to have a referral from a primary care doctor to see a specialist to receive cost coverage.

Hospice: Care that focuses on the comfort and quality of life of a person with a serious illness that is approaching the end of life. It often includes emotional and spiritual support for both the patient and their loved ones.

I

ICD-9 Codes: An international set of codes that classify a patient’s diagnoses, symptoms, procedures, and a wide variety of abnormal findings, complaints, social circumstances, and external causes of injury or disease determined by a physician. Medical billing specialists translate a physician’s diagnoses into ICD-9 codes and then input those codes into a claim for processing.

ICD-10 Codes: ICD-10 codes are the updated international set of codes based on the preceding ICD-9 codes. ICD-10 codes are a global system for coding causes of death and help users better understand human mortality through consistent classification.

Incremental Nursing Charge: The fee a patient is charged after receiving nursing services and treatment. This charge can cover various nursing activities, such as administering medications, monitoring vital signs, and providing personal care. It’s typically added to the overall cost of healthcare services to account for the specialized care and attention that nurses offer.

Indemnity: Also known as fee-for-service, this type of health insurance plan is flexible and allows a patient to receive care from any provider they choose in exchange for higher deductibles and co-pays.

In-Network: A healthcare provider or facility that has a contract with a health insurance plan to provide services to its plan members at a pre-negotiated rate. Because of this relationship, patients pay a lower cost-share when they receive services from an in-network doctor.

Inpatient Care: When a patient is kept overnight, or for more than 24 hours, in a healthcare facility. Inpatient care may include treatment-related admittance, observation, or both.

Intensive Care Unit (ICU): The ICU is the area of a hospital reserved for patients who need immediate treatment and close monitoring by healthcare professionals for serious illnesses, conditions, and injuries. Similarly intensive units dedicated to clinical specialties like cardiac care (CCU) or post-surgical care (SICU) are staffed with specially trained nurses familiar with the necessary equipment and special care needs of those patients.

Independent Practice Association (IPA): A business entity that helps independent practitioners support each other. By joining an IPA, physicians can participate in health plan contracting efforts with peers and providers in other specialties jointly with greater bargaining power.  Such organizations also help providers share the cost of accessing resources that improve patient outcomes or process efficiency.

L

Length of Stay (LOS): The duration of hospitalization, computed as the number of days between the start date and the end date, or counting the number of days in the hospital minus one since the day of discharge is not counted.

M

Medicare Administrative Contractor (MAC): A private healthcare insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or DME claims for FFS beneficiaries.

Managed Care Organization (MCO) or Plan: A health insurance plan with the goal of managing healthcare costs and quality. Managed Care Plan operators sign contracts with certain health care providers and facilities to provide care for their members based on defined networks and a Model of Care which helps to deliver lower cost to the plan sponsors, typically government entities. These plans vary from Preferred Provider Organizations (PPO) based on the network availability and the conditions under which members can access network providers like referrals or authorizations.

Medical Assistant: A professional who provides support to physicians and other medical staff by performing a wide range of duties in administration, nursing, and other ancillary care.

Medical Coder: A professional who plays an essential role in healthcare by ensuring accurate and efficient communication between healthcare providers, insurance companies, and regulatory agencies. Medical coders turn detailed medical information into standardized codes for medical billing, reimbursement, research, and improving quality.

Medical Billing Specialist: A professional who helps healthcare facilities manage insurance claims, invoices, and payments. Medical Billing Specialists will take the proper diagnosis and treatment codes and use them to submit patient claims to insurance companies for reimbursement, then bill the patient for any expenses that are not covered in full.

Medical Necessity: Healthcare services or treatments that a physician deems necessary for a patient to treat a serious medical condition or illness. This does not include cosmetics or investigative services.

Medical Record Number: A unique identifier assigned to a patient’s medical record so it can be differentiated from other medical records. Medical record numbers are also used to keep track of medical history, diagnoses, treatments, and other important information related to patient care.

Medicare Secondary Payer (MSP): When the Medicare program does not have primary payment responsibility, another entity is responsible for paying before Medicare.

Medical Savings Account (MSA): Optional health insurance payments plan where a person puts aside a set amount of their untaxed earnings to an account reserved for healthcare expenses. A person with an MSA can only contribute a certain amount of their earnings per year. Any unused funds in an MSA at the end of the year will roll over to the next.

Medical Transcription: The process of converting voice recordings or handwritten instructions, observations, and documentation into digital text formats.

Medicare: A federal health insurance program for those ages 65 and older or those under the age of 65 with disabilities.

Medicare Advantage (MA): Also known as Medicare Part C, MA is an alternative way to receive Medicare benefits. This capitated program bundles Medicare Part A, B, and D coverage that’s usually provided through Medicare and provides patients plans through a private health insurer approved by Medicare.

Medicare Coinsurance Days: When a patient receives inpatient hospital services for more than 60 days, they’re responsible for a coinsurance amount equal to one-fourth of the inpatient hospital deductible per day for the 61st-90th day in the hospital.

Medicare Donut Hole: The coverage gap and discrepancy between the limits of healthcare insurance coverage and the Medicare Part D coverage limits for prescription drugs.

Medicaid: A joint federal and state assistance program started in 1965 to provide free or low-cost health insurance to individuals and families. Both state and federal governments fund Medicaid programs, but each state is responsible for running its own version of Medicaid within the minimum requirements established by federal law.

Medigap: Also known as Medicare Supplement Insurance, Medigap is a private supplemental health insurance plan that is sold by private companies to help cover original Medicaid costs for eligible patients. Medigap was designed to cover some or all the out-of-pocket costs that a beneficiary would otherwise have to pay for services covered by original Medicare.

Modifiers: Two-character codes (either numeric or alphanumeric) added to the end of a CPT^® code. Modifiers provide additional details about a medical procedure, service, or supply that has been provided without altering the basic meaning of the CPT code itself.

N

Non-Covered Charge (N/C): A healthcare service or procedure not eligible for reimbursement by an insurance company or government payer.

Not Elsewhere Classifiable (NEC): A specific procedure or service that can’t be described within the available code set.

Non-participation: When a provider accepts Medicare but does not agree to take assignment in all cases. This means that while non-participating providers have signed up to accept Medicare insurance, they do not accept Medicare’s approved amount for health care services as full payment.

Not Otherwise Specified (NOS): When using ICD-9 codes, NOS may be selected because there isn’t enough documentation to select a more specific code.

National Provider Identifier (NPI) Number: A unique 10-digit number issued to every healthcare provider in the U.S. as mandated by HIPAA.

O

Office of Inspector General (OIG): The organization responsible for establishing guidelines and investigating fraud and misinformation within the healthcare industry. The OIG is overseen by the Department of Health and Human Services.

Out-of-Network: Providers outside of an established network who don’t have a contract with an insurance company to offer patients healthcare at a discounted rate. Patients who go to out-of-network providers typically must pay more money to receive care.

Outpatient Care: Also known as ambulatory care, outpatient care is any healthcare treatment that doesn’t require an overnight hospital stay, including a routine visit to a primary care doctor or a non-invasive surgery.

Out-of-Pocket Maximum: The maximum amount a patient is required to pay. After a patient reaches their predetermined out-of-pocket expenses, the health insurance company picks up all in-network covered healthcare costs.

P

Palmetto GBA: One of the nation’s largest providers of high-volume claims and transaction processing, contact center operations, and technical services to the federal government and other commercial customers.

Patient Responsibility: The amount a patient owes a provider after an insurance company pays for their portion of the medical expenses.

Primary Care Physician (PCP): A physician trained to provide the basic healthcare services for a patient and can prevent, diagnose, and treat a wide range of illnesses and injuries. In a managed care model, PCPs are assigned panels of patients through automatic assignment or member election, and their role is to manage referral services for those members.

Point of Service (POS) Plans: A health insurance plan that combines features of HMO and Preferred Provider Organization (PPO) plans. Like an HMO, POS plans require members to choose a PCP who coordinates their care and provides referrals to specialists within the network. However, unlike an HMO, POS plans also give members the option to seek care outside of the network, but at a higher cost.

Place of Service Code: Two-digit codes reported on health care professional claims to indicate the setting in which a service was provided. Each billable line item should have a Place of Service Code listed to identify where the service was rendered.

Preferred Provider Organization (PPO): A managed-care health insurance plan that allows eligible patients to freely use the services of any provider within their network. They are encouraged, but not required, to name a primary care physician, and don’t need referrals to visit a specialist.

Practice Management Software (PMS): A comprehensive digital solution designed to streamline and optimize the operational aspects of medical practices. This encompassing tool integrates various functions, including appointment scheduling, billing, electronic health records (EHR) management, and staff coordination.

Pre-authorization: Also known as prior authorization or pre-certification, this is a health plan cost-control process that requires physicians and other health care providers to get approval from a health plan before a specific service is delivered to the patient to qualify for payment coverage.

Pre-existing Condition (PEC): PEC is a medical condition a patient had before receiving coverage from an insurance company. A person might become ineligible for certain healthcare plans depending on the severity and length of their PEC.

Pre-existing Condition Exclusion: A patient with a PEC could be denied and excluded from certain coverage depending on the health insurance plan.

Premium: The amount of money an individual or policyholder pays to the insurance company in exchange for health insurance coverage. A premium is typically paid monthly or annually.

Privacy Rule: The HIPAA Privacy Rule provides federal standards to protect the privacy of personal health information and gives patients an array of rights, including the right to examine and obtain a copy of their health records and to request corrections. The U.S. Department of Health & Human Services’ OCR oversees compliance with HIPAA privacy requirements.

Provider: A person or entity that provides medical care or treatment to an individual. Physicians, clinics, and hospitals are all considered providers.

Provider Transaction Access Number (PTAN): A Medicare-issued six-digit number given to providers based on the type of service and the location of their office upon enrollment.

R

Referral: A formal recommendation from one healthcare provider to another because a patient needs to see a specialist or receive a particular type of treatment.

Remittance Advice (RA): Also known as the EOB, RA is a document that healthcare providers receive from insurance companies after submitting a claim. It provides information on the payment status of the claim, including the amount paid, the patient’s responsibility, and the reason for any denials or adjustments.

Responsible Party: Also known as the guarantor, the responsible party in healthcare is the person responsible for paying the bill.

Revenue Code: A three or four-digit universal code that holds information concerning a patient’s medical care or other services performed by healthcare providers. These codes need to match with procedure codes for insurers to accept the claim.

Relative Value Units (RVU): A method for calculating reimbursement for services provided by healthcare providers. RVUs are also the basis for many provider compensation plans based on fee-for-service volumes.

S

Scrubbing: A process during claim preparation performed by medical billers or coders who check claims for errors before being sent to an insurance company for final processing. Scrubbing helps generate clean claims and prevents denials.

Self-Referral: When a patient does their own research to find a provider and acts outside of their primary care physician’s referrals.

Self-Pay: A patient who pays for their healthcare expenses out-of-pocket rather than relying on insurance or third-party payers to cover the costs. Self-paid patients are typically uninsured, but this distinction may also apply to those who have insurance but opt to pay for certain services themselves.

Secondary Insurance Claim: An additional insurance plan a patient may have on top of their primary insurance. The claim is filed with the secondary insurance company only after the primary insurance company pays for its portion of healthcare costs.

Secondary Procedure: When a provider performs another procedure on a patient covered by a CPT code after first performing a different CPT procedure on the patient.

Security Rule: Established by HIPPA, the Security Rule is a national standard set to protect individuals’ electronic personal health information that is created, received, used, or maintained by a covered entity.

Skilled Nursing Facility (SNF): Also known as nursing homes, SNFs are licensed and certified by each state to provide a broad range of health-related services for people 65 years or older or younger, disabled individuals who need care.

Signature on File (SOF): A patient’s official signature that is kept on record by a healthcare provider to use for billing and claims processing.

Software as a Service (SAAS): A cloud-based software distribution model that provides healthcare organizations with access to third-party hosted software applications and services over the internet.

Specialist: A healthcare provider with expertise in a specific area of medicine. Oncologists, pediatricians, and neurologists are among the many specialists in the medical field.

Subscriber: A person who owns and controls an insurance policy. Subscribers are often referred to as policyholders. They pay premiums to an insurance company in exchange for coverage against specific risks or losses, as stipulated in the policy agreement.

Superbill: An itemized list used by healthcare staff and physicians as a primary source of data for creating claims to calculate reimbursements for a healthcare service Superbills can contain demographic information, insurance information, and especially any diagnoses or healthcare plans written by the physician.

Supplemental Insurance: Also known as Medigap, Supplemental Insurance is sold by private insurance companies and pays medical costs not covered by Medicare. This type of insurance covers common gaps in standard Medicare Coverage including out-of-pocket costs like copays, coinsurance, and deductibles.

T

Treatment Authorization Request (TAR): A unique number the insurance company gives a provider for billing purposes. All providers must receive the insurance company’s TAR number before administering healthcare to a patient covered by the company.

Taxonomy Code: Healthcare provider taxonomy codes are unique, ten-character alphanumeric identifiers organized into three distinct levels: Provider Grouping, Classification, and Area of Specialization.

Term Date: The end date for an insurance policy contract, or the date after which a person no longer receives or is no longer eligible for health insurance with the company. Term dates are typically determined on a case-by-case basis.

Tertiary Insurance Claim: A claim filed by a provider after they have filed claims for primary and secondary health insurance coverage on behalf of a patient. Tertiary insurance claims often cover the remaining healthcare costs such as deductibles and co-pays left over after the primary and secondary claims have been processed.

Third-Party Administrator (TPA): An organization or individual that manages healthcare group benefits, claims, and administrative duties on behalf of a group plan or a company with a group plan.

Tax Identification Number (TIN): Also known as an Employee Identification Number (EIN), a TIN is a unique number assigned to entities like patients or companies for billing purposes. Healthcare providers often require a TIN to process payments and ensure proper billing and insurance claims.

Triple Option Plan (TOP): Also referred to as the cafeteria plan, TOP gives an enrolled individual the option to choose between an HMO, a PPO, or a traditional point-of-service plan for their health insurance. Some companies offer triple option plans to their employees to accommodate the needs of a diverse staff.

Type of Service (TOS): A field on a claim describing what kind of healthcare services or procedures a provider administered. This system generates procedure code that helps categorize and process a claim accurately.

TRICARE: See Civilian Health and Medical Program of Uniform Services (CHAMPUS).

U

Uniform Medical Billing Form (UB-04): The standard claim form that institutional providers use, such as hospitals and community mental health care centers. It is used to bill Medicare, Medicaid, and other health insurance companies for inpatient or outpatient services.

Unbundling: Also known as fragment billing codes, unbundling is a method of billing fraud that uses multiple procedure codes to bill separately for components that are typically covered under a single comprehensive code. Using multiple codes often results in higher reimbursements from Medicare and Medicaid.

Untimely Submission: Claims have a specific timeframe they can be sent off to an insurance company for processing. If a provider fails to file a claim with an insurance company in that timeframe, it is marked for untimely submission and will be denied by the company.

Upcoding: A type of healthcare fraud where a provider submits codes to Medicare, Medicaid, or a private insurer for more severe and more expensive conditions than the patient was diagnosed with to receive a higher reimbursement.

Unique Physician Identification Number (UPIN): A unique six-digit alphanumeric identifier given to all Medicare physicians, medical groups, and non-physician practitioners., which has subsequently been replaced by an NPI number.

Usual, Customary, and Reasonable (UCR): The usual, customary, and reasonable rates charged for medical services and procedures within a specific geographic area. UCR establishes a benchmark for pricing in the healthcare industry.

Utilization Limit: The maximum amount of coverage Medicare provides for certain healthcare services within a year. Once a patient exceeds this limit, Medicare may stop covering those services and the patient might have to pay out-of-pocket for any additional care.

Utilization Review (UR): A pivotal tool used as a proactive approach to ensuring patients get the care they need, that it’s administered via proven methods, provided by an appropriate healthcare provider, and delivered in an appropriate setting.

V-Z

V, Y, and Z-Codes: A codeset under ICD-9 and ICD-10 is used when encounters for circumstances other than a disease or injury are recorded as a diagnosis or problem related to the illness. FRG’s favorite: Y93.G2 Look it up!

Worker’s Compensation: Money paid by an employer when an employee becomes ill or injured while performing routine job duties. Most states have laws requiring that companies provide workers’ compensation.

Write-Off: The discrepancy between a provider’s fee for healthcare services and the amount that an insurance company is willing to pay for those services that a patient is not responsible for. The write-off amount may be categorized as “not covered” amounts for billing purposes.