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Health Insurance

Commonly Used Medical Billing& Insurance Terms Explained

Paper billing is outdated and time-consuming. Most medical facilities are now switching to electronic medical billing- and for a good reason. What’s more? You can use electronic billing software to perform a wide variety of tasks. Electronic billing services are indispensable in the healthcare sector. And understanding the common medical billing terminologies goes a long way.

Let’s begin by understanding medical billing:

Electronic medical billing is a paperless procedure that incorporates all the patient’s medical and insurance information. This includes the insurance provider, detailed treatment charges, detailed diagnosis, medicines, and any other expenses incurred at the health facility. The information is essential when claiming medical expenses incurred from the patient’s insurance provider.

Can I tell you more? Medical billing involves entering patient’s data in a centralized system using a software program. Electronic medical billing comes with numerous perks. It enhances efficiency, saves time, saves money, and allows health providers more time with patients. To get the best medical billing services, contact a reputed billing company, and learn more about the billing solutions available.

What are the common medical billing terminologies?

Are you seeking to outsource billing services and want to learn the terms used? Here are terminologies that you should know.

  1. Adjudication

Adjudication is a claim decision-making process. It involves reviewing, paying, or denying claims submitted to the health care facility or provider. The insurance firm, who is, in this case, the payer, evaluates the claim and determines whether it’s valid. The payer also determines the reimbursement amount to the health provider.

  1. Advance Beneficiary Notice

The Advance Beneficiary Notice is also referred to as waiver liability. It’s a notice or document issued by the health provider before offering the medical services. It informs the patient that they will be fully liable for the medical costs if the insurance provider denies the claim. The patient completes and signs the document before receiving the services.

  1. Accounts Receivable (AR)

AR denotes the amount of money owed to the health provider for services rendered and billed. It also shows the payments due from patients and payers. For instance, if you file claims regularly, the AR should show the actual value for the outstanding claims.

  1. Allowed amount

The allowed amount is the maximum plan that the insurance provider will pay for the health services offered. If the health provider charges a higher amount, you’ll be forced to cater to the additional expense.

Here’s how it works. When you file a claim with your insurance, the company will determine whether the care services offered are covered under your policy. They then determine the reimbursement amount.

  1. Credentialing 

Credentialing is a process of verifying the health provider’s credentials. It includes examining their professional background and education history. Why is this essential? It ensures that doctors possess the necessary licenses, certifications, and skills to offer appropriate medical services and care.

Final thought

There are various terms used in medical billing, and it’s important to understand their meaning. If you’re planning to outsource medical billing services, the professionals will help you understand most of the terms used. This way, you’ll find it easy to file claims with the payer.

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