chapter 15 Medical Billing and Reimbursement Essentials

adjudicate

To settle or determine judicially.

Advance Beneficiary Notice (ABN)

A document signed by the patient that authorizes a provider to bill the patient for services that Medicare may consider not medically necessary and may decline to cover.

allowed amount

The maximum amount that an insurance company will pay for covered health services.

audit

A process completed before claims submission in which claims are examined for accuracy and completeness.

capitation

A payment arrangement for healthcare providers. The provider is paid a set amount for each enrolled person assigned to him or her, per period of time, whether or not that person has received services.

claims clearinghouse

An organization that accepts the claim data from the provider, reformats the data to meet the specifications outlined by the insurance plan, and submits the claim.

claim scrubbers

Software that finds common billing errors before the claim is sent to the insurance company.

CMS-1500 Health Insurance Claim Form (CMS-1500)

The standard insurance claim form used for all government and most commercial insurance companies.

copayment (copay)

A set dollar amount the patient must pay for each office visit. There can be one copayment amount for a primary care provider and a different copayment amount (usually higher) to see a specialist or be seen in the emergency department.

eligibility

Meeting the stipulated requirements to participate in the healthcare plan.

endoscopy

A nonsurgical procedure that uses an endoscope to view inside the body.

explanation of benefits (EOB)

A document sent by the insurance company to the patient explaining the allowed charge amount, the amount reimbursed for services, and the patient's financial responsibilities.

medical necessity

Services or supplies (Current Procedural Terminology [CPT] and Healthcare Common Procedure Coding System [HCPCS] codes) used to treat the patient's diagnosis (International Classification of Diseases [ICD]codes) that meet the accepted standard of medical practice.

National Provider Identifier (NPI)

An identifier assigned by the Centers for Medicare and Medicaid Services (CMS) that classifies the healthcare provider by license and medical specialties.

precertification

The process of determining if a procedure or service is covered by the insurance plan and what the reimbursement is for that procedure or service.

provider web portal

A secure online website that gives contracted providers a single point of access to insurance companies. This allows the provider to determine patient eligibility and deductible status, submit preauthorizations/precertifications, and check the status of claims.

release of information

A form completed by the patient that authorizes the medical office to release medical records to the insurance company for health insurance reimbursement.

remittance advice (RA)

A document sent by the insurance company to the provider explaining the allowed charge amount, the amount reimbursed for services, and the patient's financial responsibilities.