Medical billing and coding are the most essential methods of the healthcare industry where the entire system of the healthcare organization depends. Because they rely on the reimbursement of the services they provide, it becomes impossible to run a practice or an organization’s revenue cycle management efficiently without robust medical billing and coding.
This can only be achieved if as a practice owner, you know the specific medical billing terminology abbreviations that billers, insurance payors, federal healthcare authorities, and third-party payers use to bill for diagnoses and treatment rendered.
This beginner’s guide about medical and coding abbreviations and terms will help you understand not only the basics of medical billing and coding but to resolve the complexity of understanding your medical acronyms. This guide also includes the terminology used in medical coding and billing and the most commonly used acronyms and abbreviations.
Medical billing terminology abbreviations and acronyms
No matter what level of healthcare practitioner you are, knowing the following medical and billing terms will come in handy at every stage of your career.
Accept assignment – Accept assignment is the term referred to the acceptance of the payment claims provided by the insurance companies to a healthcare provider.
Adjusted claim – When a claim is updated or modified after an under or overpayment schedule to a healthcare physician, the claim is referred to as an adjusted claim.
Aging – when a patient bill or insurance claim passes the date and duration of the 30-day mark, and it is not being paid, it is called a claim aging.
Allowed amount – Allowed amount term is used when the insurance company allows you to pay for a certain type of healthcare service and procedure on a patient. It is also essential to see how much amount will be paid by the insurance company and whether the patient will cover the remaining cost of the procedure (if any).
Ancillary services – Services that patients receive in the hospital facility other than the board and room. These services include tests, scans, physiotherapy, procedures, etc.
Applied to Deductible (AD) – Patients need to pay a certain amount of deductible before they get eligible to receive insurance coverage. If a procedure or a part of a patient’s treatment falls into AD, they will be listed as ‘Applied to deductible’ in the insurance statement.
Assignment of benefits (AOB) – An Assignment of Benefits (AOB) is an arrangement between a policyholder and another party – typically a contractor – allowing the contractor to be paid directly by their insurance company for repairs or services provided to the policyholder.
Capitation – Many insurance companies bind an agreement with the providers to follow a capitation plan where a fixed amount for a specific period of time for a specific number of patients is set to cover a list of procedures and treatments.
Clean claim – When medical billers and coders file a claim without errors and common mistakes, and it gets reimbursed without delays, it would be referred to as a clean claim.
Clearinghouse – Clearinghouses are secure electronic organizations that work to scrub, maintain, file, and submit claims on behalf of medical providers to insurance companies. Also, they make certain that all the information regarding medical billing, providers, and patients is secure and protected.
Credentialing – The medical industry needs providers to get credentialed before starting their healthcare career in the field. This will allow them to receive insurance coverage covered by federal and other insurance companies. Through credentialing, providers need to verify their qualifications, licenses, training, and certifications which help patients be aware that they will be treated by a qualified professional.
Current Procedural Terminology – Usually called CPT, are alphanumeric codes that providers use to bill diagnostic services. They are also referred to as service codes.
Duplicate coverage inquiry (DCI) – Patients often have more than one insurance coverage putting than on primary and secondary coverage options for medical services. When one insurance company wants to know if the services billed were also covered by another insurance company, they may need to submit a DCI.
Explanation of benefits – Once the insurance company receives medical claims for healthcare services, they send an EOB to the patient listing the claims they receive in the given period of time, the cost they cover, and the portion of claims that the patient needs to cover.
Financial responsibility – When patients receive their EOB, their portion of the payment becomes their financial responsibility.
Fiscal intermediary (FI) – A person who process claims and works for Medicare.
Health Common Procedure Coding System (HCPCS) – A standardized coding system used for coding medical procedures and associated services in a medical claim. CPT codes are also included in HCPCS level I codes, while HCPCS level II codes are for billing non-healthcare physician services and products. HCPCS Level III codes are for private insurers, Medicare, and Medicaid insurance parties.
Health Insurance Portability and Accountability Act (HIPAA) – A federal law approved in 1996 to protect patients’ information and history. Healthcare providers need to comply with HIPAA regulations and the information cannot be shared or disclosed without the patient’s consent.
Health Maintenance Organization (HMO) – It points to a network of providers that enable themselves to provide a specific number of services at a pre-decided rate. In cases where a patient goes out of HMO for a service, they have to pay an increased amount as the insurance coverage for these providers’ services is restricted.
Health Saving Account (HSA) – Patients maintain an HSA to cover their annual healthcare expenses. They maintain tax-free deferred monies in these accounts, which are allowed to be $3,650 and $7,300 maximum for individuals and a family, respectively.
International Classification of Disease (ICD codes) – A short abbreviation for “International Statistical Classification of Diseases and Health Related Problems.” Presently, healthcare providers are using the latest 11th version of classification, referred to as ICD-11. These codes are upgraded annually, and many other diagnostic and procedural healthcare procedures are added every year.
Medical transcription – When medical providers speak notes from their patients and convert them into medical records in writing, they are called medical transcriptions.
Modifier – When a service is provided at a healthcare facility, providers bill the service with CPT and HCPCS codes to receive insurance compensation. To help providers add detailed information about a service in a claim, modifiers are used.
Not Elsewhere Classifiable (NEC) – When there’s no specific code available for a condition that exists in a patient or a group of patients, a not Elsewhere Classifiable code is used. It is different from the Not Otherwise Specified (NOS) code, where the condition isn’t known. In NEC, the medical condition and treatment are known to providers; it’s just the code that does not exist.
Some other commonly used terminologies include; COB -Co-ordination of Benefits
MSP – Medicare as a Secondary Payer
POS – Place of service
TOS – Type of Service
DOS – Date of service
ICD – -International Statistical Classification of Diseases and Related Health Problems
HCPCS – Healthcare Common Procedure Coding System
CPT – Current Procedural Terminology
RBRVS – The Resource-Based Relative Value Scale
RVU – Relating Value Unit
CHAMPUS – Civilian Health and Medical Program of the Uniformed Services
CHAMPVA – Civilian Health and Medical Program for the Veteran Administration
EIN – Employer Identification Number
ESRD – End-Stage Renal Disease
FICA – Federal Insurance Contributions Act
HICN – Health Insurance Claim Number
OBRA – The Omnibus Budget Reconciliation Act
CF – Conversion Factor
EGHP – Employer Group Health Plan
QMB – Qualified Medicare Beneficiaries
UCR – Usual, customary, and reasonable
PCP – Primary Care Physician
HMO – Health Maintenance Organization
PPO – Preferred Provider Organization
TPA – Third-Party Administrators
ABN: Advance Beneficiary Notice of Non-coverage
ADA: American Dental Association
ALJ: Administrative Law Judge
AMA: American Medical Association
ANSI: American National Standards Institute
ASA: American Society of Anesthesiologists
ASC: Ambulatory Surgical Center
BBA: Balanced Budget Act
CAH: Critical Access Hospital
CCI: Refer to NCCI
CCN: Correspondence Control Number
CDE: Certified Diabetic Educators
CLIA: Clinical Laboratory Improvement Amendments
CMD: Contractor Medical Director
CMHC: Community Mental Health Center
CMN: Certificate of Medical Necessity
CMR: Comprehensive Medical Review
CMS: The Centers for Medicare & Medicaid Services
CNM: Certified Nurse Midwife
CNMW: Certified Nurse Midwife
CNS: Certified Nurse Specialist
COB: Coordination of Benefits
CORF: Comprehensive Outpatient Rehabilitation Facility
CPT: Current Procedural Terminology
CRD: Chronic Renal Disease
CRNA: Certified Registered Nurse Anesthetist
CWF: Common Working File
DHHS: Department of Health & Human Services
DME: Durable Medical Equipment
DOB: Date of Birth
DOS: Date of Service
ECF: Extended Care Facility
EDI: Electronic Data Interchange
EIN: Employer Identification Number (Tax ID)
E/M: Evaluation and Management
EOB: Explanation of Benefits
ERA: Electronic Remittance Advice
ESRD: End Stage Renal Disease
FDA: Food and Drug Administration
HICN: Health Insurance Claim Number
HIPAA: Health Insurance Portability and Accountability Act
HMO: Health Maintenance Organization
HPSA: Health Professional Shortage Area
ICD-9-CM: Internal Classification of Diseases-9th Edition
ICU: Intensive Care Unit
LMRP: Local Medical Review Policy
MSN: Medicare Summary Notice
MSP: Medicare Secondary Payer
NCCI: National Correct Coding Initiative
NON-PAR: Non-Participating Provider
NPI: National Provider Identifier
POS: Place of Service or Point of Service Option
PPO: Preferred Provider Organization
PQRI: Physician Quality Reporting Initiative
RA: Remittance Advice
SNF: Skilled Nursing Facility
SSN: Social Security Number
TOS: Type of Service