Medical Insurance Billing and Coding Terminology Explained

Like all career fields, Medical Insurance Billing andHIPPA - The "Health Insurance Portability and
Coding uses language and terms all professionalsPrivacy Act" is the federal law that allows people
need to understand. If you are thinking aboutto take insurance with them after they leave a
medical billing and coding training, here's somejob and also establishes strict privacy standards
basic terminology with which you need to befor the handling of medical records.
familiar:HMO - "Health Maintenance Organization," a group
Allowed Expenses - This is the most an insurancethat provides medical services to members at a
plan will pay for a particular service.fixed price.
AOB - "Assignment of Benefits," the form thatICD-9-CM - "International Classification of Disease
allows an insurer to pay benefits directly to the- 9th Edition (Clinical Modification) - The list of
provider (doctor, hospital, etc.) instead of theillnesses and corresponding codes used to "code"
patient.medical records and insurance claim forms.
Assignment & Authorization - The form theNetwork - A group of doctors, hospitals and
patient signs that allows the medical provider toother healthcare providers who have contracted
directly bill an insurance company and receivewith a particular insurance plan (HMO, PPO, etc.)
payment.Out-of-Network Provider - Also known as a
Claim - Notice that a service has been performed"Non-Participating Provider," this is a doctor or
along with a request for payment.hospital not signed with a particular network.
Coding - Using industry-recognized numbersPreauthorization - Permission from an insurance
abbreviations to represent various diagnoses andcompany to proceed with a specific procedure,
treatments.PEC - "Pre-Existing Condition," which is a condition
COB - "Coordination of Benefits," the provisionor illness a person has before buying insurance,
used when a patient is covered by one or moreand is therefore usually not covered by the plan
health plans.for a specified period of time.
Co-Payment - A small amount of money patientsPPO - "Preferred Provider Organization," a group
are required to pay up-front when they visit aof healthcare providers (doctors, hospitals, etc.)
healthcare provider.who have contracted with an insurance company
Coverage - Those treatments and services ato provide services at set, usually less-expensive
particular plan does - and does not - cover.rates.
DOS - "Date of Service."PCP - "Primary Care Physician," the doctor -
Deductible - The amount a patient must first payusually an internist or family practice doctor - who
out-of-pocket before insurance coverage evenis the first person a patient goes to for an
begins. This is usually based on a calendar year.examination. If necessary, the PCP may then
DRGs - "Diagnosis-Related Groups," a way ofrefer the patient to a specialist.
matching illnesses with related treatments forUCR - "Usual, Customary and Reasonable," a
billing purposes.phrase used to describe service rates that are in
ERISA - "Employee Retirement Income Securityline with those charged for similar services by
Act" of 1974, which sets standards for groupother providers in the area.
health plans.These are just a few of the basic terms Medical
EPO - "Exclusive Provider Organization," which is aInsurance Biller and Coders encounter daily. As in
group of healthcare providers (doctors/hospitals)any industry, there are dozens if not hundreds of
who have contracted with an insurance carrier toother terms, acronyms and slang used by those
deliver services at a set rate. Standards andin the field, "lingo" one picks up through exposure
credentials for an EPO member tend to be higherand repetition over time.
than those in a PPO (see below).