Working with a medical billing company can be a game-changer for healthcare providers, but the industry comes with its own set of jargon that can be confusing for those new to the field. At Thrive Medical Billing, we understand that clear communication with our clients is key to efficiency and trust. Familiarity with common terms not only helps providers understand billing processes but also allows them to make informed decisions about their revenue cycle management. In this article, we’ll break down the most frequently used terminology in the medical billing industry.
What Is a Medical Billing Company?
Before diving into jargon, it’s important to understand the basic function of a medical billing company. These companies handle the entire revenue cycle for healthcare providers, including claim submission, coding, payment posting, denial management, and reporting. By outsourcing these tasks to experts like Thrive Medical Billing, practices can focus on patient care while ensuring accurate and timely reimbursement.
Claim
A “claim” is a request for payment submitted to an insurance company for services provided to a patient. Properly submitted claims include detailed information about the patient, provider, and services rendered. At Thrive Medical Billing, claim accuracy is a top priority to reduce denials and speed up payments.
CPT Code
CPT stands for Current Procedural Terminology. These codes are used to describe the medical, surgical, and diagnostic services provided by a healthcare professional. Using the correct CPT code is critical, as errors can lead to denied claims or reduced reimbursement. Our coders at Thrive Medical Billing ensure that every procedure is coded accurately according to the latest standards.
ICD-10 Code
The International Classification of Diseases, 10th Revision, or ICD-10, is a system used to code diagnoses. These codes are paired with CPT codes on claims to justify the medical necessity of services. Incorrect or outdated ICD-10 codes can result in claim denials. Thrive Medical Billing stays up-to-date with coding changes to ensure compliance and accuracy.
HCPCS Code
Healthcare Common Procedure Coding System (HCPCS) codes are used for supplies, equipment, and certain services not covered by CPT codes. These codes are often critical for billing durable medical equipment or certain injectable medications.
EOB
Explanation of Benefits (EOB) is a statement sent by an insurance company to both the provider and the patient after a claim has been processed. It details what was covered, what was paid, and what the patient may owe. At Thrive Medical Billing, we review EOBs carefully to reconcile payments and address discrepancies.
Denial
A “denial” occurs when an insurance company refuses to pay a claim, often due to coding errors, missing information, or coverage issues. Denial management is a crucial function of a medical billing company, and our team at Thrive Medical Billing works diligently to resolve denials quickly through appeals or corrections.
AR (Accounts Receivable)
Accounts Receivable refers to the outstanding payments owed to a provider by patients or insurance companies. Monitoring AR helps practices track revenue flow. Thrive Medical Billing regularly analyzes AR to identify bottlenecks and ensure timely collections.
Clean Claim
A clean claim is a claim that has been reviewed and contains all necessary information for smooth processing. Submitting clean claims reduces denials and accelerates payment. At Thrive Medical Billing, we prioritize submitting clean claims for every client to maximize efficiency.
Reimbursement
Reimbursement is the payment received from an insurance company for services provided. Proper coding, documentation, and claim submission directly affect reimbursement rates. Our team at Thrive Medical Billing works to optimize reimbursement for every claim.
Pre-Authorization
Some medical procedures require prior approval from the insurance company before they are performed. This process is called pre-authorization and is essential to prevent claim denials. Thrive Medical Billing assists providers in obtaining necessary authorizations before patient services are delivered.
Copayment and Deductible
A copayment is a fixed amount a patient pays for a service, while a deductible is the amount a patient must pay out-of-pocket before insurance coverage begins. Understanding these terms helps providers communicate financial responsibilities to patients. Thrive Medical Billing ensures patient statements are clear and accurate.
Fee Schedule
A fee schedule is a list of standard charges for services provided. Insurance companies use these schedules to determine reimbursement rates. At Thrive Medical Billing, we analyze fee schedules to optimize revenue while staying compliant with payer contracts.
Revenue Cycle Management (RCM)
Revenue Cycle Management encompasses all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue. A medical billing company manages RCM to ensure a smooth flow from appointment scheduling to final payment. Thrive Medical Billing offers comprehensive RCM services that streamline operations and increase financial efficiency.
Write-Off
A write-off occurs when a provider forgives a portion of a patient’s bill, often due to contract agreements with insurance companies or patient inability to pay. Thrive Medical Billing carefully tracks write-offs to maintain accurate financial reporting.
Patient Responsibility
Patient responsibility refers to the portion of a bill that a patient must pay after insurance has processed the claim, including deductibles, coinsurance, and copayments. Clear communication of this responsibility is essential to avoid billing disputes.
Charge Capture
Charge capture is the process of recording services provided to a patient so they can be billed. Accurate charge capture ensures that providers are compensated fully for their work. At Thrive Medical Billing, we focus on precise charge capture to maximize revenue.
AR Aging Report
An Accounts Receivable Aging Report breaks down outstanding claims by the length of time they have been unpaid. Monitoring this report helps identify slow-paying insurers or problematic accounts. Thrive Medical Billing uses AR aging reports to prioritize collections and improve cash flow.
Compliance
Compliance in medical billing means adhering to federal, state, and payer regulations, including HIPAA. A non-compliant claim can lead to penalties, audits, or denied payments. Thrive Medical Billing maintains strict compliance protocols to protect both providers and patients.
Final Thoughts
Understanding industry jargon is essential for healthcare providers who work with a medical billing company. Terms like CPT, ICD-10, AR, and denial are more than just buzzwords—they represent critical components of the billing process. At Thrive Medical Billing, we believe that educating our clients about these terms fosters better communication, reduces errors, and improves overall financial performance. By familiarizing yourself with this language, you can confidently partner with a medical billing company to ensure your practice thrives in today’s complex healthcare landscape.
