Insurance Hacks Part I: Learn the Lingo

Who couldn’t use a few insurance hacks? The team here at Healthy Bytes wants to make your experience with insurance as smooth and efficient as possible. Let’s be real, the insurance landscape is a complicated one. But it doesn’t have to be! Today we’re getting started by going back to the basics and sharing insurance language with you. Time to cut through the jargon! 

Allowable Charge: The maximum amount that an insurance company will reimburse compared to the provider's specific service rate. In-network providers may be required to accept a discounted amount as payment (say $90 instead of the full $100) and the remaining ($10) will be considered provider write-off. If the provider is not an in-network provider, then the patient is held responsible for the full charge ($100).

Allowable Costs: Costs that are covered by a health insurance plan.

Balance Billing: When you bill for the difference between the charge and amount paid by insurance. Many contracts restrict this, so read over your contract!

Business Associate Agreement (BAA): is a contract between a provider (HIPAA-covered entity) and a business associate (such as Healthy Bytes). The contract protects clients' personal health information according to HIPAA guidelines.

Business Structure: determines how a business is organized, who owns it, how profits are distributed, as well as liability and tax rules. Types of business structures to consider include:

  • Sole Proprietorship: The simplest, cheapest, and most common structure in which sole owners have complete control over the business, and tax rates are the lowest. That said, because there is no legal separation between the owner and the business, owners can be held liable for the business's debt and employee action. For more information, click here.
  • Corporation: The most complex, costly and time-consuming structure. The main advantage to a corporation is that the owner personal assets are protected from any liability incurred by the business. Corporations can potentially generate capital by selling stock and benefit from the corporate tax rate. For more information, click here.
  • Limited Liability Company (LLC): A hybrid legal structure that provides the limited liability protection of a corporation, and the operational flexibility and tax efficiency of a sole proprietorship. An LLC will require additional paperwork in the beginning, and net income will be subject to the self-employment tax. For more information, click here.

Council for Affordable Quality Healthcare (CAQH): is used to enter and maintain provider credentials. Insurance companies use the CAQH during the credentialing stage and to confirm that providers stay up to date on CME. 

Continuing Education Unit (CEU): refers to a specific form of continuing education that the Academy uses to help those in the nutrition field maintain competence and learn about developments in the field. In the medical field, these credits are referred to as CMEs.

Claim: An invoice sent to an insurance company by the provider (or billing service) for medical services rendered.

CMS 1500 Form: is used to submit claims to insurance. Find a sample form here. Our goal at Healthy Bytes is to never make you fill one out again! 

Coinsurance: After the copay and deductible have been paid, a coinsurance may still be required. This is where a patient is required to pay a percentage of the total bill (e.g. 20%) and the insurance company will cover the difference.

Copayment: A set charge that is paid by the patient for each visit or prescription (e.g. $15).

CPT Codes: are common procedure codes that tell the insurance company what services the client received. The CPT codes most commonly used by dietitians are:

  • 97802 Medical Nutrition Therapy Initial Visit (Billed in 15-minute increments)
  • 97803 Medical Nutrition Therapy Follow Up Visit (Billed in 15-minute increments)
  • 97804 Medical Nutrition Therapy Group Visit (Billed in 30-minute increments)

As a Healthy Bytes customer, you can leave the trouble of figuring these out to us. 

Health Care Common Procedure Coding System (HCPCS):  is an alternative to CPT codes.

Deductible: A specific out-of-pocket amount that a patient must reach before health insurance payments begin (e.g. A patient must spend $3000 before health insurance will start covering the costs).

Doing Business As (DBA): a trade name for a sole proprietorship.

Electronic Funds Transfer (EFT): a way to receive direct deposit from insurance companies.

Electronic Health Records (EHR): are an alternative to paper health records and often have handy features such as referral management and progress note delivery to other providers.

Employer Identification Number (EIN): see SSN and TIN. Get one here

Explanation of Benefits (EOB): a summary of what insurance will cover that is sent out when a claim is filed. 

Explanation of Payment (EOP):  a summary of what insurance paid for a claim.

Health Insurance Portability and Accountability Act (HIPAA): a set of industry-wide standards established in 1996 that mandate the protection and confidential handling of health information.

ICD-9 and ICD-10 Codes: a set of diagnosis codes that describe why a client is being treated. ICD-10 codes are an updated version of ICD-9 codes, effective October 2015. Healthy Bytes is built for ICD-10. 

Medical Nutrition Therapy (MNT): is the most commonly covered type of nutrition counseling, and is often used as an acronym in benefits explanations.

National Provider Identifier (NPI):  a unique 10-digit number assigned to an individual health care provider or organization by the National Plan and Provider Enumeration System (NPPES). The HIPAA Administration Simplification Standard requires it for all healthcare providers to bill insurance. For more information, visit NPPES website or apply for one through Healthy Bytes.

  • Individual NPI: for individual providers which can be used across multiple organizations. Each provider only needs one individual NPI. 
  • Organization NPI: an NPI which covers a private practice as a whole. An organization can have one or more providers who each have an individual NPI.

Out-Of-Pocket Maximum: The maximum amount a patient has to pay before the health insurance kicks in (i.e. pays 100%).

Physician Quality Reporting System (PQRS): is a reporting program for eligible professional and group practices who wish to assess and report their quality of care to Medicare. PQRS falls under Medicare Part B.

Protected Health Information (PHI): is any information about health status, provision of health care, or payment for health care that is created or collected by an entity covered by HIPAA, and can be linked to a specific individual. This includes any part of a patient's medical record or payment history.

Provider Write Off: Difference between the actual charge and the allowable charge.

Provider Transaction Access Number (PTAN):  is a Medicare-specific number assigned to authenticate a dietitian when using local Medicare Administrative Contractor (MAC) resources. This number is required to file Medicare claims.

Social Security Number (SSN): is a tax identification number. Although it can be used for business purposes, it is strongly discouraged. Insurance companies will not communicate electronically with providers who use SSNs instead of EINs. See TIN and EIN.

Taxonomy Code: a unique 10-character alphanumeric code that enables healthcare providers to identify their specialty. A Registered Dietitian should use '133V00000X'.

Tax Identification Number (TIN): is sometimes referred to colloquially as a Tax ID number. Depending on the business structure, it can be a Social Security Number (SSN) or Employer Identification Number (EIN). We highly recommend using an EIN rather than an SSN. 

W-9 Form: an IRS form also known as a “Request for Taxpayer Identification Number and Certification” that verifies the name, address and Tax Identification Number (EIN or SSN) of a practice. A W-9 form is necessary for credentialing with insurance companies.

What is missing from this list? What terms have you puzzled? Please let us know and we’ll add to this list!