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Medical Billing and Insurance Terminology

Interested in becoming a medical billing and coding specialist? Enjoy learning new terms and working in the medical industry? A medical billing and coding specialist must become familiar with insurance terminology that is used on a day-to-day basis.

The medical billing and coding specialist will process claims for different health insurance plans and needs to understand coding for claims processing and charting. Working as a medical billing and coding specialist can be interesting and rewarding.

Medical Insurance Terminology

There are many different insurance terms used by a medical billing and coding specialist when performing day-to-day tasks. Some of the most common include

Actuary – professional trained in the mathematical and statistical aspects of the insurance industry

Ambulatory Care – medical care on an out-patient basis for diagnosis, some treatments, minor surgery, and rehabilitation

Coordination of Benefits (COB) – process of a health insurance company that determines whether it should be the primary or secondary payer of a medical claim for a patient who is covered by more than one health insurance policy

Copayment – the amount owed by a patient after the benefit plan has paid the medical fee

Deductible – the amount of money that the patient must pay for medical services before the insurance company pays benefits

Out-of-Pocket Costs – the amount the patient is responsible for paying above the annual maximum

Drug Formulary – a list of prescription drugs covered by a medical insurance prescription drug plan

Health Insurance Portability and Accountability Act (HIPAA) of 1996 – a federal law that includes Administrative Simplification provisions that require all health plans to use a standard format for electronic exchange, privacy and security of health information

Medical Savings Account (MSA) – a tax advantaged savings account used for health services in conjunction with a high-deductible plan

Occupational Safety and Health Administration (OSHA) – requires employers to keep their work environment safe for workers

Medical Insurance Plan Terminology

The application of government, medical, disability, and accident insurance plans apply plan policies and regulations for programs including HMO, PPO, EPO, POS, hospice care, collaborative care, Medicare, and Medicaid.

Health Maintenance Organization (HMO) – An HMO gives the patient access to in-network doctors and hospitals. The patient must pick an in-network primary care physician.

Preferred Provider Organization (PPO) – A PPO allows patients to visit whichever in-network physician or health care provider they like without first requiring a referral from a primary care physician.

Exclusive Provider Organization (EPO) – EPOs allow the patient to use the doctors and hospitals within the EPO network with no out-of-network benefits.

Point-of-Service Plan (POS) – A POS is a type of managed care plan that is a hybrid between an HMO and a PPO. Participants in a POS plan designate an in-network primary care provider, and they may go outside of the provider network for health care services.

Hospice Care – A hospice involves end-of-life care to help patients who are dying have peace, comfort, and dignity.

Collaborative Care Model – This is a model for integrating mental health care into primary care medical settings. Collaborative care works to improve the physical and mental health of people with mental illness.

Medicare – Medicare is the federal health insurance program that provides health benefits to Americans age 65 and older. Medicare Part A covers hospital services, and Medicare Part B covers doctor services.

  • Advance Beneficiary Notice (ABN) – An Advance Beneficiary Notice is a written notice of possible non-coverage by Medicare for services rendered by a doctor or health care provider prior to any treatment given.

Medicaid – Medicaid is a health insurance program, funded by federal and state governments, that provides health benefits to low-income individuals who cannot afford Medicare.

Medical Benefit Terminology

Medical billing and coding specialists will need to be familiar with different types of medical benefits that patients may use for the cost of medical services. Medical costs may be supplemented by short-term or long-term disability, workers’ compensation, COBRA, or military service benefits.

Short-Term Disability – This type of disability insurance pays a percentage of an employee’s salary if he or she becomes temporarily disabled and is unable to work for a short period of time due to sickness or injury.

Long-Term Disability – This type of disability insurance protects an employee from loss of income in the event that he or she is unable to work due to illness, injury, or accident for a long period of time.

Workers’ Compensation – Workers’ comp provides wage replacement and medical benefits to employees injured on the job. The benefits include damages for pain and suffering and punitive damages for employer negligence.

COBRA – The Consolidated Omnibus Budget Reconciliation Act of 1985 is a federal law that allows patients to temporarily keep health coverage after employment termination.

Tricare – Tricare is a US federally funded health program that provides beneficiaries with medical care for those who serve in the military or for public health services.

CHAMPVA – The Civilian Health and Medical Program of the Department of Veterans Affairs is a comprehensive health care benefits program for which the VA shares the cost of covered health care services and supplies with eligible beneficiaries of US veterans.

Family Medical Leave Act (FMLA) – This is a US labor law requiring employers to provide employees with job protected and unpaid leave for qualified medical and family reasons.

Medical Insurance Coding Terminology

There are some additional terms that the medical billing and coding specialist will need to be familiar with while performing normal tasks for patient charting and patient medical records, including EHR, EMR, ICD-10, CPT, and HCPCS.

Electronic Health Records (EHR) – EHR is a comprehensive electronic version of a patients’ complete medical history.

Electronic Medical Records (EMR) – EMR is an electronic version of one physician’s medical records and notes.

Medical Coding – Using the ICD-10-CM, CPT, and HCPCS coding standards allows physicians, health care facilities, and insurance companies to properly treat patients and process claims.

  • ICD-10-CM – The International Classification of Diseases, Tenth Revision, Clinical Modification, is a system used by health care providers to classify and code all diagnoses, symptoms, and procedures in conjunction with hospital care.
  • CPT – Current Procedural Terminology is a medical code set used to report medical, surgical, and diagnostic procedures to physicians and health insurance companies.
  • HCPCS – Healthcare Common Procedure Coding System provides coding for health care services such as ambulance, durable medical equipment, prosthetics, orthotics, and other supplies used outside of a physician’s office.

Ready to learn more about medical billing and insurance terminology? The Medical Billing Specialist program at Hunter Business School prepares billing and coding students to obtain entry-level employment specializing in medical related billing and coding in hospitals, medical insurance companies, and physicians’ offices. The Medical Billing Specialist diploma program utilizes a current software product for managing medical practices.

Contact us today to find out more about how to become a medical billing and coding specialist on Long Island.