1. What is medical billing process?
Ans: Medical billing is the process of submitting and following up on claims with health
insurance companies in order to receive payment for services rendered by a healthcare
provider. Medical billing translates a healthcare service into a billing claim. This process includes
Registration, establishment of financial responsibility for the visit, patient check‐in and check‐
out, checking for coding and billing compliance, preparing and transmitting claims, monitoring
payer adjudication, generating patient statements or bills, and assigning patient payments and
arranging collections.
2. What is medical claim?
Ans: Medical claims are medical bills submitted to health insurance carriers and other insurance
providers for services rendered to patients by providers of care. When you go to the doctor,
hospital or other provider, our service generates a bill. This bill then becomes a medical claim to
our insurance carrier to process for payment. A claim is a request to our insurance carrier for
payment for services and benefits we received.
3. What is rejected claim?
Ans: A rejected claim is one that contains one or many errors found before the claim is
processed. These errors prevent the insurance company from paying the bill as it is composed,
and the rejected claim is returned to the biller in order to be corrected.
4. What are the common reasons behind a claim get rejected?
Ans: For following reasons claim can be rejected,
Entering incorrect information for the provider (name, address, contact information,
etc.)
Entering incorrect information for the patient (name, sex, date of birth, insurance ID
information, etc.)
Entering incorrect information for the insurance provider (policy numbers, address,
contact information etc.)
Inputting the wrong codes or confusing codes such as CPT codes, point of service codes,
or ICD codes
Entering too few or too many digits for ICD codes
Inputting mismatched treatment and diagnostic codes
Forgetting to input codes at all for services performed by a physician or another
healthcare official
5. What is medical claim adjudication?
Ans: After a medical claim is submitted, the insurance company determines their financial
responsibility for the payment to the provider. This process is referred to as claims adjudication.
The insurance company can decide to pay the claim in full, deny the claim, or to reduce the
amount paid to the provider.
It goes for a review to check the claim against detailed items of the insurance payers’ payment
policies. The procedural and diagnostic codes are examined, and the physician's NPI designation
is checked. At this point, if the claim passes, it may be paid, and remittance advice may be
issued to the physician and patient.
Some claims are sent for a manual review by medical claim examiners, which may include
medical professionals and a check of the medical documentation. This is more likely to be
required for unlisted procedures in order to confirm that they were medically necessary. This
part of the process may take more time as it involves obtaining the medical records.
6. What are the outcomes of claim adjudication?
Ans: There are three possible outcomes of claim adjudication. They are,
One, The claim may be processed correctly or fully if it is determined that it is reimbursable.
(Look at pg )
Two, It can be reduced, having determined that the billed service level is appropriate for the
diagnosis and procedure codes. It is then paid at a lower level decided by the claim examiner.
(Look at pg )
Three, It can be denied it is determined that it is not reimbursable. (Look at pg )
7. What are the common reasons behind claim denial?
Ans: For following reasons claim can be rejected,
Incorrect patient identification number
Coverage terminated/ No record of membership
Requires prior authorization or precertification
Services excluded or not covered
Request for medical record
Coordination of benefit, COB
Bill liability carrier‐Workers compensation or Motor vehicle accident
Missing or invalid CPT or HCPCS codes
Timely filing
No referral on file
8. What is the difference between claim rejection and claim denial?
Ans: A claim rejection occurs prior to claim processing and is typically related to input errors or
invalid data. A denied claim is processed by the payer and determined to be unpayable.
9. What is a corrected claim?
Ans: A corrected claim is a replacement of a previously submitted claim (e.g., changes or
corrections to charges, clinical or procedure codes, dates of service, member information, etc.).
10. What is EOB and ERA?
Ans: An EOB (explanation of benefits) is a statement sent by a health insurance company to
covered individuals explaining what medical treatments and/or services were paid for on their
behalf. The EOB is commonly attached to a check or statement of electronic payment.
And ERA (Electronic Remittance Advice) is the electronic or digital version of EOB.
11. What does an EOB describe?
Ans: An EOB typically describes:
The payee, the payer and the patient
Claim and the Ticket number
The service performed—the date of the service.
The description and/or insurer's code for the service, *
The name of the person or place that provided the service, and the name of the patient.
Payment date/check date/EOB date/claim processed date.
The provider's fee, and what the insurer allows—the amount initially claimed by the
provider minus any reductions applied by the insurer.
The amount the patient is responsible for. Adjustment reasons, adjustment codes,
reason codes.
12. What is Processed Date/EOB Date/Payment Date/Check Date?
Ans: On which date insurance company is done with the adjudication of claim/claim processing,
it publishes EOB or makes payment is Processed date or EOB date or Payment date.
13. What is patient’s responsibility?
Ans: This refers to the amount a patient owes a provider after an insurance company pays for
their portion of the medical expenses. Copay, Deductible and Coinsurance are patient
responsibility.
Copay is the fixed amount you must pay for a covered health care service. Copays are
due at the time you receive a health care service. Most often, you will be asked to
deliver your copay when you check in for your doctor's visit or diagnostic test. Copay
amounts vary depending on your health insurance plan. For example, some patients will
be required to copay $15 for a regular check up, whereas other patients might have a
$20 (or a lower or higher) copay for the same appointment
Deductible is the amount you must pay for a health care service before your health
insurance plan begins paying. For example, if you visit an emergency department and
your deductible amount is $500, you must pay the $500 deductible amount before your
insurance company will cover the remaining health care charges associated with your
emergency visit. Deductibles do not always apply to all health care services. For this
reason and to avoid unwanted billing surprises, you should ask your insurance company
for a list of covered services
Coinsurance refers to your share of the costs of a health care visit. Coinsurance is
calculated as a percentage of the amount of a service. You are responsible for paying
the full amount of your coinsurance and your deductible charge. For example, if your
health insurance plan allows $100 for a health care checkup and you have paid your
deductible, your coinsurance payment of 20 percent (or whatever percent applies to
your insurance plan) would be $20. Your health insurance plan will pay the remaining
$80 due for your visit
14. What is Claim Number?
Ans: A number assigned by your insurance company to an individual claim
15. What is contractual adjustments?
Ans: A Contractual Adjustment is a part of a patient's bill that a health care provider must write‐
off (not charge for) because of billing agreements with the insurance company. Adjustments, or
write‐off's, are the dollars that are adjusted off a patient account for any reason.
16. What is denial/reason code?
Ans: Denial reason codes is standard messages, which are used to describe or provide
information to the medical provider or patient by insurance companies regarding why the claims
were denied and why the payment is what it is per procedure.
Reason codes are found in EOB.
17. What is collection in term of medical billing?
Ans: Medical bill collection is a function of accounts receivable. It is the process of recovery of
money from medical insurances to which medical claim is submitted. This process starts with
the claim submission and ends with insurance adjustment. To collect the money of patient
share/responsibility from patients is also a part of medical collection.
18. What is appeal process?
Ans: The process by which a patient or provider attempts to persuade an insurance payer to pay
for more (or, in certain cases, pay for any) of a medical claim. The appeal on a claim only occurs
after a claim has either been denied or not been processed/adjudicated correctly.
19. What is claim reconsideration/recon?
Ans: A "Reconsideration" is defined as a request for review of a claim that a provider feels was
incorrectly paid or denied because of processing errors by insurance company.
For BCBS it is called "claim review".
20. What is In‐network provider?
Ans: This term refers to a provider’s relationship with a health insurance company. A group of
providers may contract with an insurance company to form a network of healthcare
professionals that a person can choose from when enrolled in that insurance company’s health
plan. Contracted provider.
21. What is Out‐of‐Network provider?
Ans: Out‐of‐network refers to providers outside of an established network of providers who
contract with an insurance company to offer patients healthcare at a discounted rate. People
who go to out‐of‐network providers typically have to pay more money to receive care.
22. Who is a participating provider?
Ans: A participating provider is one who voluntarily and in advance enters into an agreement in
writing to provide all covered services for all Medicare Part B beneficiaries on an assigned basis.
‐ Agrees to accept Medicare‐approved amount as payment in full.
23. Who is a Non Participating provider?
Ans: Non‐Par or non‐participating providers are physicians or other health care providers that
have not agreed to enter into an agreement with a particular insurance payer, unlike
participating providers. They do not accept Medicare’s approved amount for health care
services as full payment. They may also be called out‐of‐network providers.
24. Who is Opt‐Out provider?
Ans: Opt‐Out providers do not accept Medicare at all and have signed an agreement to be
excluded from the Medicare program. This means they can charge whatever they want for
services but must follow certain rules to do so.
25. What are Self‐funded and Fully‐Funded Insurance?
Ans: Fully‐insured Health Plan:
Fully‐insured plans are more traditional than self‐funded plans. However, fully‐insured plans are
generally more expensive for employers, as the name implies. The employer pays the premium
directly to the insurance company, and the premium is set on an annual basis. The premium is
based on the number of employees that the employer has, and those rates could change if the
number of employees also changes. The premiums will also vary depending on the type of policy
that the employer chooses as well.
The only thing that the employees would be responsible paying for are deductible amounts or
co‐pays according to the policy. Of course, the employer can also require the employee to pay a
portion of the premium, which can be common.
Advantages of Fully‐insured Plans:
Ans: The following are a few advantages of this type of plan:
Less risk because the insurance company deals with the claims
No need to deal with the administrative expenses related to a health plan
Works best for smaller employers that do not have the time or finances needed to deal
with having their own insurance plan
26. Self‐funded (self‐insured) Health Plan:
Ans: Larger employers are much more likely to have a self‐funded plan. This option is cheaper
for employers because they do not have to pay for the separate insurance carrier. Removing the
insurance carrier also means that the employer is open to much higher risk than they would
have been under a fully‐insured plan. This is because that the company is essentially acting as
their own insurance company.
To curb what could be very high, unexpected expenses, employers occasionally take out an
additional insurance, such as an excess coverage plan. A stop‐loss insurance program would
“kick in” once an insurance claim hits a certain limit.
An essential part in the decision‐making process is to understand the differences and similarities
between fully‐insured and self‐funded plans.
Advantages of Self‐funded Plans:
Ans: The following are few advantages of this type of plan:
Employers can customize the plans that they offer to their employees
There are few state regulations that you need to worry about
Potentially lower costs for both you and your employees
Additionally, a major advantage to a self‐funded plan is that you have a lot more control
over not only what kind of coverage that you offer to your employees, but also the
administrative aspects of the plan. There is no more waiting for the insurance company
to get back to you because you can do everything in‐house.
For some larger companies that can handle that type of responsibility, using a self‐
funded plan makes sense. Generally, when your company moves things like insurance
in‐house, they are less expensive as well. However, it is worth noting that managing this
process in‐house is much easier said than done.
27. What is medical record?
Ans: A chronological written account of a patient's examination and treatment that includes the
patient's medical history and complaints, the physician's physical findings, the results of
diagnostic tests and procedures, and medications and therapeutic procedures.
28. What is Itemized bill in medical billing?
Ans: An itemized bill from the health care provider, with a line for every service and medical
supply a patient received along with the price of each.
29. What is COB?
Ans: COB (Coordination of Benefits) occurs when a patient is covered by more than one
insurance plan. In this situation one insurance company will become the primary carrier and all
other companies will be considered secondary and tertiary carriers that may cover costs left
after the primary carrier has paid.
30. What is AOB?
Ans: The acronym AOB stands for Assignment of Benefit. It is a legal contract form, which is
signed by patients requesting their healthcare insurance providers to directly send the
reimbursement checks to the medical practice or physician, for the medical services utilized.
Signing the AOB contract would simplify payment process for the patients since it permits
healthcare practices to directly get paid by the patient’s insurance provider without involving
the patient’s direct intervention. This enables the patients to focus on their medical treatment
rather than worrying about the payment process. It also enables the medical practice to appeal
claim denials and underpayments from the patient’s insurance service provider.
31. What is Term date?
Ans: The end date for an insurance policy contract, or the date after which a person no longer
receives or is no longer eligible for health insurance with company. Term dates are typically
determined on a case‐by‐case basis.
32. What is insurance adjustment and when does it occur?
Ans: This is the amount the healthcare provider has agreed not to charge the insurance
company and the patient. It occurs when,
* The insurance company pays as per expected amount or correctly.
* All the collection efforts exhausted.
33. If insurance company processed the claim with both payment and patient responsibility, we just
need to collect the money of patient’s responsibility from patient and rest amount will be
adjusted off if any after making expected payment. If patients share can't be collected, we need
to adjust off the patient’s responsibility also.
34. What is write‐off?
Ans: This term refers to the discrepancy between a provider’s fee for healthcare services and
the amount that an insurance company is willing to pay for those services that a patient is not
responsible for. The write‐off amount may be categorized as “not covered” amounts for billing
purposes.
35. Abbreviations:
COB: Coordination of benefit MRN: Medical record number
AOB: Assignment of benefit TDI: Texas department of insurance
DOS: Date of service MVA: Motor vehicle accident
DOB: Date of birth WC: Worker compensation
EOB: Explanation of benefit NPI: National provider identifier
ACA: Affordable care act OON: Out of network
