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Industry Insights

Key Industry Terms in Laboratory Billing
ACO Accountable Care Organization: A model for patient population management
APC Ambulatory Patient Classifications: The government’s method for paying for outpatient services for the Medicare program.
APM Alternative Payment Model: These are the new payment models from CMS to tie value to care.  There are many new proposed models at this time.
ASC Ambulatory Surgery Center: A set of payment rules for surgery centers.
Appeal limit A time limit in a managed care contract stating how many days the provider has to appeal a denied claim.
CERT Comprehensive Error Rate Testing program: This program looks at a statically valid sample of Medicare claims to determine if they were paid properly.
RAC Recovery Audit Contractor: A program to recover improper payments to providers. These auditors work on a 20 percent commission.
MICs Medicaid Integrity Contractors: A program designed to ensure Medicaid payment compliance.
ZPICs Zone Program Integrity Contractors: This is a program to review payments to HME (Home Medical Equipment) providers.
DOS Date of Service: The date the service was actually performed.
Bundled payment A payment to a series of providers paid in a lump sum. See the Comprehensive Care for Joint Replacement (CJR) model, set to begin on April 1, 2016
Cadillac tax This is a tax (40 percent) on high cost private insurance, although it is currently under review. The goal of this tax is to force most people into the national health exchange.
CBO Central Billing Office
CLFS Clinical Laboratory Fee Schedule
Claims adjudication How a claim is paid by a payer
Batch total A total of charges, or payments which are batched before they are entered into a system. The goal is to match with the bank/originator to ensure 100 percent correct entry.
BCBS Blue Cross Blue Shield
Client Bill A bill from one provider who allows another provider to re-bill to a payer directly.
CMS Centers for Medicare and Medicaid Services
COB Coordination of Benefits: How the primary insurance coordinates payment with the secondary insurance
COLA Increase Cost of Living Increase: Commonly used for managed care contracts or Part A contracts.
DOB Date of Billing
CPT Current Procedural Terminology
Conversion Factor This is the factor the government uses to determine payments. The conversion factor is a multiplier for the relative value unit, which may change each year.
CMS 1500 The standard billing form for provider services
Credit balance The amount that is a credit or a refund.
Double dipping collections The practice of putting accounts from collections back into the billing service therefore paying both the collection agency and the billing services for the same piece of work.
DRG Diagnosis Related Group: The payment model for hospital services.
DX Diagnosis
EFT Electronic Funds Transfer: Refers to the deposit of insurance payments directly into a provider’s bank account vs. sending a hard copy check.
EOB Explanation of Benefits: The paperwork on a given claim that details how the claim was paid.
EP Eligible Provider: A term used for bundled payment and the new payment models being proposed.
Episode of care A bundled type of care. A distinct episode of care will be paid via a bundled payment. See the Comprehensive Care for Joint Replacement (CJR) model, set to begin on April 1, 2016
ERA Electronic Remittance Device: An electronic notice of payment.
Exchange Plan The state plans that cover Obamacare patients. They can be owned by private insurance companies or by governments.
FFS or Fee for Service The process of getting paid for each piece of work you do — you get a fee for each service.
Filing limit The timing limit in a managed care contract that notes how long from the date of service you have to file the claim.  Failing to meet this limit means the claim will be denied.
Front end edit The edit at the front of the billing cycle. Usually it includes simple things like Medicare volume numbers, etc.
Global billing This is a bill that includes both the technical component (TC) modifier and the professional component (26) modifier.
GPCI Geographic Pricing Cost Index: A modifier that is added to a payment from CMS to increase or decrease a payment due to the geographic area of the provider.
HCFA 1500 The standard billing form for professional services
HMO Health Maintenance Organization: An organized way to increase the cost of health by drowning it in administrative rules.  These plans require a PCP and there is no benefit coverage if you use an out of network provider.
PCP Primary Care Physician
HSA Health Savings Account: A private saving account which allows a patient to save money tax free to be used towards healthcare payments.
ICD-10 This is the 10th rendition of the International Statistical Classification of Diseases. It is a series of codes used to define a reason for the treatment.
IPA Independent Practice Association: A company usually composed of physicians which acts as an insurance company for their health population. They are NOT an actual insurance company and therefore not held under the regulatory rules of commercial insurance plans.
LMRP Local Medical Review Policy: An administrative and educational tool to assist providers, physicians, and suppliers in submitting correct claims for payment within a specified geographic area.
MACRA Medicare Access and CHIPs Reauthorization Act: This act ended the old process of the Standard Growth Rate formula and replaced it with a new path for payment.  Enacted in 2015, we don’t yet know its full potential impact.
MCD Medicaid
Modifiers Additions that can be added to CPT codes to denote work performed for that code.
26 A CPT modifier that informs the payer a charge is for professional services. Ie: reading test results.
GB A modifier that tells the payer a charge is for both professional services and technical services.
TC A modifier that tells the payer a charge is for the technical or equipment part of a treatment. Ie: using equipment to run a test.
MPPS Multiple Prospective Payment System:  A payment program where payers pay a tiered payment. Ie: payers would pay the first CPT code billed at 100 percent, the second one at 75 percent and the remaining ones at 50 percent.
MIPS Merit-Based Incentive Payment System:  The newest of the government payment plans that will reward providers with incentives on Medicare payments if they met the needed metrics, or will level penalties if they fail to do so. We are still awaiting final word from CMS as to how those payments will be made.
Narrow Network A network of providers that is very limited. Limited or narrow networks only cover certain treatments. If patients go outside these networks, they will face a higher co-pay or deductible.
NCCI edit National Correct Coding Initiative: A series of edits built by Medicare. Totaling more than 7 million, these edits prevent certain CPT codes from being billed with other exclusive CPT codes.
OIG Office of Inspector General: An arm of the U.S. Department of Health and Human Services, the OIG investigates cases of potential fraud and abuse.
OPPS Medicare hospital Outpatient Prospective Payment System: The rules for hospital outpatient payments.
PAMA Protecting Access to Medicare Act of 2014: A set of rules CMS utilizes to look at payments from non-government providers and help build rates closer to these private payer rates. It also includes a stair-step process to lower payments to providers using CMS’s own managed care contracts as a template.
Part A contract The contract a provider may use to get payment for Part A services that CMS pays to their hospital.
PECOs Medicare Provider Enrollment Chain and Ownership System: A process in which every CMS provider must be registered.  If somehow a referring MD is not enrolled, the actual provider of the service may get their claim denied.
Population health management This is the latest buzz word on how to lower utilization and lower healthcare costs. See Kaiser Permanente
POS Place of service where care was provided.
PPO Preferred Provider Organization: A mellower version of an HMO, although many have failed. An insurance plan where a PCP is not required and you can use out of network providers.
Professional Component When a medical provider utilizes their medical decision making or expertise services.
PQRS Physician Quality Reporting System:  A quality metric for providers to help track utilization. Failure to satisfactorily report measures results in CMS taking a percentage of a providers Medicare Part B reimbursements… up to 1.5 percent in 2016 based on your compliance in 2014.  It’s important to understand this and get it right or you’ll get paid less each year.
Prior authorization An authorization for treatment, prior to the treatment being performed. Commonly used for large procedures, however, it is becoming more common for simple tests. Look up United Health Care’s Beacon LBS program for more on this.
Provider Someone who provides medical service to patients
Remit A payment notification from a payer.
RUC Committee Special Society Relative Value Scale Update Committee: A group of physicians who help CMS value services.
RVU Relative Value Unit: A number combining the Work Effort RVU, Malpractice RVU and Practice Expense RVU. These three are added together to get the total RVU, which in then is multiplied by the latest conversion factor to get the actual payment per CPT code.
SGR Standard Growth Rate formula: The old way providers did not get paid for services…the new way will be via MIPS and other alternative payment models.
Small balance write off A smaller dollar amount that may be written off by a biller. Usually this is around $5.00, roughly the cost of sending out a bill.
Surprise law A law that requires all providers to know all the insurance carriers other providers may be using. The gist: You cannot refer work to an out of network provider or you may be responsible. Currently in effect in New York.
TAT or Turnaround Time The time it takes to turn around a piece of work. Usually used in reference to anatomic pathology specimens.
Technical Component The price of work provided by the technical machinery in a treatment process. This does not include the cost of medical decision making.
Time value of money The longer money is owed to you, the less likely you are to receive it. Hence it is important to have an active revenue cycle.
U3 vs U6 unemployment rate The U3 unemployment rate is what the government reports as the official rate, while the U6 rate is the rate actual rate as it includes those who have given up looking for work. Usually the U6 is twice the U3.
UB04 The standard billing for hospital services.
UHC United Health Care
UPIN Unique Physician Identification Number: A directory of all the providers in the CMS nation.
Accounts Receivable The amount that is in the universe that owed to a provider. Usually this is 1 to 1.5 times the average monthly charges.
Adjudicated A claim that has been paid to fruition.
Adjustment The amount “adjusted” off the payment due to a contractual arrangement.
Bad Debt An amount that cannot be collected and therefore is sent to collections. Usually this is a small percentage of the overall claims. These claims should go to collections within 120 days.
Balance billing The practice of billing an amount over the allowed amount to a patient for the total they owe on a bill. Usually used in out-of-network conversations.
Beacon LBS A UHC that is trying to get providers to pre-authorize lab tests using their proprietary software. This is currently in the Florida legislature.
Billing Audit Our 686 step process where we look at how a practice generates revenue. It follows the revenue cycle from charge entry and charge capture down to collections.  It is NOT a coding audit.
CARC Codes Claim Adjustment Reason Codes: A good list can be found here.
NCCI Edits National Correct Coding Initiative Edits:  These control improper coding for Part B claims
CLIA Clinical Laboratory Improvement Amendments
Commercial Insurance An insurance plan that is not part of a government plan.
Compliance Audit An audit of a group’s compliance with billing and HIPPA rules.
Crossover Claim A claim that is paid by one payer and then “crossed over” to another payer. Usually this is done electronically.
Denial Management A report that denotes denials by type. These reports are used to fix problems on the front end of the billing process. If you do not get a denial report each month, ask for it.
EOM End of Month
EPO Exclusive Provider Organization: A type of product offered by an insurance carrier that is used for exchange products.
ERISA Rights Employee Retirement Income Security Act: This law establishes minimum standards for pension plans in private industry.
Gapfill A process where payment determination for clinical lab tests is made by “filling the gap” between the test and other known tests because a price has yet to be set.
OCR Optical Character Recognition
Insurance Refunds A refund to insurance plans. FYI: CMS requires refunds within 60 days. Private plans do not have these rules, BUT it may be mandated by the individual insurance contract.
Interface The process of giving a set of information to another. For example, there will be a charge interface for billing.
Local Coverage Determination (LCD) Local Medical Review Policy: An administrative and educational tool to assist providers, physicians, and suppliers in submitting correct claims for payment within a specified geographic area.
Locum Tenens A part-time MD who is hired to cover another MD.  The rules state you cannot have a locum more than 60 days in a row.
MAC (Medicare Administrative Contractor) Private contractors who administer CMS plans in a given area. They all have variations on their payment rules, hence LCDs etc.
Medicaid Advantage Plan A private Medicaid plan usually run in a certain state. They pay LESS than Medicaid and make a point or two off the difference.
Medicare Advantage Plan A private Medicare plan, they pay LESS than regular Medicare and make a profit.
Medicare Approved Clinicals A list of approved clinical lab tests that are on the PFS (physician fee schedule) but not on the CLFS (Clinical Laboratory Fee Schedule). Often, pathology groups forget to bill these and see them as “clinical lab” tests. In essence, they lose hundreds of thousand of dollars because they don’t know the rules here.  Many times, they try to argue these codes are not billable.
MolDX Molecular / Diagnostic Tests
National Coverage Determination (NCD) National rules for Medicare
National Lab A large lab such as Labcorp, Quest or Sonic that has a national presence.
Next Gen Sequencing Also known as High Throughput Sequencing. These tests are used in DNA testing
Pass Through Billing Allowing another provider to bill for your services with the correct agreements.
PTAN Provider Transaction Access Number: A Medicare only number provided by MAC’s upon enrollment.
RARC Codes Remittance Advice Remark Codes: Codes used to provide more explanation for a  CARC codes. Read more here.
RCO Regional Care Organization: Locally led managed care systems that will provide health care services to most Medicaid enrollees at an established cost under the supervision and approval of a State Medicaid Agency
Recoupment Refund where the carrier takes back monies by short paying on a current payment
Reference lab A laboratory that gets work from other labs. Usually highly specialized.
Revalidation The process of validating something that has already been validated. Usually a ploy to make billers jump through hoops.
Revenue Cycle The medical billing process. It is long and incredibly complex.
Sanger Sequencing A method of DNA testing
Timely Filing The process of filing a claim to a payer within a certain time limit. This is a contractual number individual to each managed care plan.
Transmittal The process of transmitting something electronically.
Value Based Payment Model  or VBPM This is a new process of measuring MD quality via value.  It is still undeveloped.
Magic 20 This is another term for the Medicare clinical codes
POS Place of Service
VCCs Virtual Credit Cards: A way some insurance plans utilize to pay for their claims.
ACH Automated Clearinghouse: A standard form of electronic payment.
CCD+ Cash Concentration and Disbursement Plus Addenda: A payment method that allows health plan payments to be directly deposited into a group’s bank account. The cost is $.34 per payment.
KPI KPI: Key Performance Indicators: Measurements that are used to meet goals. Usually used in Part A negotiations.
Days in AR The time it takes for a claim to get paid.  In total, this is usually less than 1.5 times the current month charge.
Clean Claim Claim submitted without complications that would normally cause a delay in payment.
Days to Payer Receipt The length of time between filing a claim to getting the payment in house.
Demographic delay The length of time it takes to get the correct patient demographic information for clean billing.
Cost Sharing Disbursement of responsibility for claim payment between the carrier and the patient.
At risk procedures Procedures that have a high chance for denial by a carrier.
At risk payers Insurance carriers that have a longer turnaround for payment and/or are likely to deny many claims erroneously.

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