Common Terminology

Health Industry Terminology

HIPAA - The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996. According to the Centers for Medicare and Medicaid Services (CMS) website, Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

Medical Compliance - the act adhering to, and demonstrating adherence to, a standard or regulation.

Medical Necessity - Justified as reasonable, necessary, and/or appropriate, based on evidence-based clinical standards of care. Medicare pays for medical items and services that are "reasonable and necessary" for a variety of purposes. By statute, Medicare may only pay for items and services that are "reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member", unless there is another statutory authorization for payment.

Advance Beneficiary Notice (ABN) - is a notice given to Medicare beneficiaries to let the Patient know that Medicare is not likely to pay for certain services. The notice must be given to the Patient before services are performed.

Cancer Screening Procedures - Screening can be defined as the application of diagnostic tests or procedures to asymptomatic people for the purpose of dividing them into two groups: those who have a condition that would benefit from early intervention and those who do not. The importance of screening is deeply embedded in primary care: family physicians believe in the value of detecting disease at an early, asymptomatic stage when it is more likely to be amenable to treatment and cure. However, it is important to recognize that the ultimate purpose of screening is to reduce morbidity and mortality. If improved outcomes cannot be demonstrated, the rationale for screening is lost. Early diagnosis by itself does not justify a screening program. The only justification for a screening program is early diagnosis that leads to a measurable improvement in outcome.

Compliance Terminology

Abuse - Abuse is defined as questionable billing patterns and practices of a physician or practice that unintentionally misrepresented facts in order to secure claims reimbursement. (i.e. service is not medically necessary; service fails to meet professionally recognized standard of care.)

Beneficiary - Individual who is either using or eligible to use insurance benefits, including health insurance benefits, under an insurance contract; A beneficiary is any person eligible as either a subscriber or a dependent for managed care service in accordance to a contract; or, an individual who receives benefits from or is covered by an insurance policy or other health care financing program.

Carrier - An insurer, or an underwriter of risk, that finances healthcare. The term carrier also refers to any organization that underwrites or administers life, health or other insurance programs.

CMS- The Center for Medicare and Medicaid Services is the federal agency that administers the Medicare, Medicaid, and specific state Child Health insurance programs. The HCFA 1500 is the standard form developed by the administration, and is used to bill Third Party companies or insurance carriers.

Coding - The mechanism for identifying and defining physicians' and hospitals' services. Coding provides universal definition and recognition of diagnoses, procedures and level of care.

CPT/Current Procedural Terminology - The coding system for healthcare services developed by the CPT Editorial Panel of the AMA.

Coordination of Benefits - A coordination of benefits is a provision regulating payments to eliminate duplicate coverage when a claimant is covered by multiple group health plans. This assures that not more than 100% of cost is covered. Standard rules determine which of the two or more plans, each having COB provisions, pays its benefit in full (primary) and becomes the supplementary payer (secondary) on a claim.

Credentialing - Providers must be credentialed with the various insurance carriers in order for claims to be produced and paid. It is incorrect to bill an uncredentialed provider's services under a credentialed provider's billing number.

DMERCs - (Durable medical equipment regional carriers) The DMERCs are special contractors hired by CMS to process claims for durable medical equipment.

Encounter Forms - Forms developed by departments and providers to indicate services rendered, and diagnoses treated, and charges incurred during a patient encounter for the purpose of billing and claims submission. These forms should be updated once a year when changes are made to the CPT book.

EOB An Explanation of Benefits - is a printed correspondence from a health care insurance company or administrator. An EOB is sent to the healthcare provider in response to a claim submitted to the insurer for professional medical services. In most cases, the EOB accompanies the payment for that particular service. Outlined in the EOB is the original charge for the service, the reasonable and customary or contractual payment made for that service, the expected co-payment from the patient, the provider's contractual write-off or the patient's balance due. In some cases, the EOB does not accompany a payment. Instead, it outlines the reasons a claim is being suspended or rejected.

Filing Limits - The contractual time limit set by an insurance carrier in which a physician can submit a claim for the medical services rendered to a covered member. The filing limit for Medicare is 27 months.

Fraud - is willfully and knowingly executing or attempting to execute a scheme or deception to deceive any health care benefit program. (i.e. Billed services were not provided; provider knowingly applied for duplicate payment; unbundling of services).

Fraud and Abuse Laws - An umbrella term that applies to a series of statutes and regulations designed to prevent government health programs from paying excessive and inappropriate claims. Penalties for health care fraud and abuse violations are burdensome. Thus, compliance programs and processes for internal reviews have been developed to help physicians and billing personnel identify problems and determine strategies for correction.

Global Surgery - A national definition of a global surgical package has been established to ensure that payment is made consistently for the same services across all carrier jurisdictions, thus preventing Medicare payments for services which are more or less comprehensive than intended. This national global policy for surgical procedures is a long established concept under which a "single fee" is billed and paid for all services furnished by the surgeon before, during, and after the procedure.

Global surgery payment rules apply to major surgeries (postoperative period of 90 days) and minor surgeries/endoscopies (postoperative period of 0 or 10 days).

Services included in the Global Surgery Fee:

The Medicare approved amount for the surgery or procedure includes payment for the following services related to the surgery, when furnished by the physician who performs the surgery. The services included in the global surgical package may be furnished in any setting, for example, hospital, ambulatory surgical center (ASC), or physician’s offices.

• Preoperative visits, beginning with the day before a surgery for major procedures and the day of surgery for minor procedures.
• Intraoperative services that are normally a usual and necessary part of a surgical procedure.
• Complications following surgery, which do not require additional trips to the operating room.
• Postoperative visits (follow up visits) during the postoperative period of the surgery that is related to recovery from the surgery.
• Postoperative pain management provided by the surgeon.
• Supplies, except for a few specific supplies provided in a physician’s office.
• Miscellaneous services: items such as dressing changes; local incision care; removal of operative pack, removal of cutaneous sutures and staples, line wires, tubes, drains, casts and splints; replacement lines, nasogastric and rectal tubes, and changes or removal of tracheostomy tubes.

Services not included in the Global Surgery Fee:

The following services are not included in the payment amount for the global surgery fee and may be paid separately. In some instances, providers will need to bill with the appropriate modifier(s) to be reimbursed for the service. The following are separately payable services:

• The initial consultation or evaluation of the problem by the surgeon to determine the need for surgery.
• Services of other physicians, except where the surgeon and other physician(s) agree on the transfer of care. This agreement can be in the form of a letter or an annotation in the discharge summary, hospital record or ASC record.
• Visits unrelated to the diagnosis, for which the surgical procedure is performed, unless the visits occur due to complications of the surgery.
• Treatment for the underlying condition or an added course of treatment, which is not part of the normal recovery from surgery.
• Diagnostic tests and procedures, including diagnostic radiological procedures.
• Clearly distinct surgical procedures during the postoperative period, which are not reoperations or treatment for complications. (A new postoperative period begins with the subsequent procedure.) This includes procedures done in two or more parts, for which the decision to stage the procedure is either planned or made at the time of the first procedure.
• Treatment for postoperative complications, which requires a return trip to the operating room. An operating room, for this purpose, is a place of service specifically equipped and staffed for the sole purpose of performing procedures. The term includes cardiac catherization suite, laser suite, and an endoscopy suite. It does not include a patient’s room, a minor treatment room, a recovery room, or an intensive care unit (unless the patient’s condition was so critical there would be insufficient time for transportation to the operating room).
• If a less extensive procedure fails and a more extensive procedure is required, the second procedure is separately payable.
• For certain services performed in a physician’s office, separate payment may be made for a surgical tray (code A4550). In addition, drugs, splints, and casting supplies are separately payable under the reasonable charge payment methodology.
• Immunosuppressive therapy for organ transplants.
• Critical Care services (codes 99291 and 99292) unrelated to the surgery, when a seriously injured or burned patient is critically ill and requires constant attendance by the physician.

HCPCS Codes/Health Care financing Administration Common Procedure Coding System - A Medicare coding system for describing services based on the AMA, CPT descriptors, but supplemented with additional codes. It includes three levels of codes as well as modifiers. This coding system is designed to incorporate all medical services, to be universal, and to be consistent with the AMA's CPT coding system.

ICD 9 /International Classification of Disease, Ninth Edition - A national coding method to enable providers to effectively document the medical condition, symptom, or complaint which is the basis for rendering a specific service. This coding system consists of three to five digit numeric or alphanumeric codes for reporting purposes.

Medicare, title XVIII - Administered by CMS, Medicare is the nation's largest health insurance program. Medicare covers 37 million Americans. Individuals who qualify for Medicare benefits are those who are 65 years old; people who are disabled; and people with permanent kidney failure. Medicare has two parts: Hospital Insurance (Part A) and Medical/Professional Insurance (Part B).

• Medicare Part A - provides coverage of inpatient hospital services, skilled nursing facilities, home health services and hospice care. . Contractors that process Part A claims are called intermediaries. The Part A intermediary for the state of Connecticut is EMPIRE BLUE CROSS AND BLUE SHIELD, (d.b.a. Empire Medicare Services) One World Trade Center, New York , New York 10048-0682
• Medicare Part B - helps pay for the cost of physician’s services, diagnostic tests such as lab work and x-rays, physical therapy, out patient hospital services, medical equipment and supplies and other health services and supplies. Contractors who process Part B claims are called carriers. The Part B carrier for the State of Connecticut is First Coast Service Options, Meriden, CT. First Coast Service Options, Inc. is affiliated with Blue Cross Blue Shield of Florida.

Medigap - Private health insurance plans that supplement Medicare benefits by covering some costs, such as co-insurance and deductible and services not paid for by Medicare.

Office of the Inspector General - When Medicare determines that fraud potentially exists in a medical practice; the case in question is developed, researched and investigated. Then the case is referred to the OIG. The Office of the Inspector General is responsible for auditing and evaluating criminal and civil activities for the Department of Health and Human Services. It coordinates its activities with other federal and state law enforcement agencies to decide on the evidence or extent of criminal activity, and to what extent these crimes are punishable.

Primary Payer - The primary payer is always the first line of reimbursement to the healthcare provider for the policyholder's/subscribers health care claims. The primary payer is the insurance plan that pays its expenses without consideration of other insurance plans under the coordination of benefits rules. The birthday rule decides which parent's insurance is the primary payer in the case of claims made for dependent children.

Secondary Payer - Health plan that pays costs not covered by the primary insurer (payer), under the coordination of benefits rules. This includes any insurance that supplements Medicare coverage and privately purchased Medigap plans.

Subscriber - The person responsible for the ownership and payment of premiums to an insurance company for a health care coverage or a person whose employment is the basis for membership in a group health plan.

Third Party Payment - Payment by a financial agent such as an HMO, insurance company or government rather than direct payment by the patient for medical care services.

TRICARE - Formerly known as Champus, Tricare is a health care program overseen by the Department of Defense in cooperation with regional civilian contractors.

Workers Compensation - Payments required by law to be made to an employee who is injured or disabled in connection with work. Balances after payment by a worker’s compensation carrier should be adjusted and never billed to the patient. Documentation is required along with the submission of a claim for these services.