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Understanding the Language of Billing

Medical billing terminology can be like coming across a sign in a foreign country and wondering what it all means. The key to learning billing terminology is repetition and real life experience. After you interact with the terms and what they mean in action, do they become palatable. Otherwise the terminology are a letter salad with no real meaning.

In this blog, we will go over some of the most common medical billing terminology. Some of these terms may be familiar and some may be more obscure. In any case, the terms listed here is just a sampling and not a comprehensive list of terms that are important to know. Below are some helpful resources when learning the terminology.

Explanation of Benefits (EOB) - This is a statement provided by the insurance payer that provides a detailed explanation of the charges, write-offs, adjustments, patient responsibilities, and deductibles in relation to a specific date of service.

Remittance Advice (R/A or ERA) - An ERA is an electronic version of an EOB. Before fancy software, EOBs were mailed to the providers office. In our modern day, EOBs are transformed into an ERA in accordance with HIPAA regulations. These are sent to clinicians after a claim is paid out by insurance and they include an explanation of why that specific value was paid.

Electronic Data Interchange (EDI) - This is the action of submitting a claim electronically. This process is HIPAA compliant to allow for the security of Protected Health Information (PHI). The cost savings of an EDI versus paper claims are substantial.

Scrubbing - The process that a software vendor employs to check for any inconsistencies or abnormalities within a claim before submission to the insurance company.

SaaS - This is an acronym that stands for "Software As A Service". Any provider of software services is engaged in SaaS. There are specific security items that SaaS vendors need to have in place in order to protect your patient information.

Superbill - This is a document that is used to record a date of service, treatment, and diagnosis for a patient visit. This is one of the most frequently used billing terms because traditional models of the biller-provider relationship involves sending the biller a superbill for each patient visit. Today, billers and providers frequently share access to the same cloud-based software portal.

Clearinghouse - This is a service that takes an EDI claim and repackages the information, so the insurance payer can read it and make the appropriate allocations. Most of the scrubbing takes place in this step. This step drastically reduces the amount of rejected and denied claims.

Hopefully this list of terms is a helpful start down the road of learning medical billing terminology. Below are a list of resources that are very helpful when navigating the medical billing world. For the most part medical billing terminology is fairly static with changes occurring few and far in between, but it is always a good idea to ask your biller of any changes.



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