Key Billing Terminology
Accept Assignment means that the provider agrees to accept the amount paid by the insurance company as payment in full (excluding patient responsibility amounts like copays and coinsurance). This is common with Medicare and in-network commercial insurance arrangements.
Allowed Amount is the maximum amount an insurance company will pay for a particular service. This amount is typically lower than the provider’s billed charges and is determined by the payer’s fee schedule or contract with the provider.
Aging refers to the age of unpaid claims or patient balances, typically categorized into 30, 60, 90, and 120-day buckets. Monitoring aging is crucial for identifying claims that need follow-up and maintaining healthy cash flow.
Appeal is the formal process of disputing a claim denial or reduced payment. Appeals typically require additional documentation and must be submitted within specific timeframes established by the payer.
Clean Claim refers to a claim that has all required information, no errors or omissions, and can be processed promptly without additional investigation or development. Submitting clean claims is the goal of every billing department.
Clearinghouse is a service that acts as an intermediary between providers and payers, checking claims for errors and transmitting them in the correct electronic format. Using a clearinghouse reduces rejections and streamlines the claims submission process.
Coordination of Benefits (COB) applies when a patient has coverage under multiple insurance plans. COB rules determine which payer is primary (pays first) and which is secondary, ensuring that claims are processed in the correct order and preventing duplicate payments.
Credentialing is the process by which providers apply to participate in insurance networks. Once credentialed, providers can bill the insurance company directly and receive contracted payment rates for covered services.
Modifier is a two-digit code added to a CPT code to provide additional information about the service performed. Modifiers indicate circumstances like bilateral procedures, multiple procedures, or services performed by different providers.
Superbill (also called encounter form or charge ticket) is the document used to record diagnoses and procedures for each patient visit. It typically includes commonly used codes for the practice’s specialty, making it easy for providers to indicate what was done.