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Medical Billing and Coding Terminology You Should Know: P-R

March 10, 2015

Medical Billing TerminologyThis part of our terminology series on the medical billing and coding terminology you should know covers the letters P and R.  Learning the technology and keeping abreast of the developments in the medical billing industry takes as much time as keeping up with the new information on treating patients. The progress never stops. You don’t want to get behind, so pay attention to the information below, and ensure you are fully informed about all of the terms in the industry.

Pathology –

Examination in the lab of tissues or samples for diagnostic purposes.  

Patient Responsibility –

The amount that the patient pays, as opposed to the insurance 

company.  It can be to meet a deductible, as copay, or for a non-covered service.

Personal Injury Protection (PIP) –

This is part of car insurance in many states.  Treatments of injuries that are a direct result of a car accident typically are paid by the car insurance, not the medical insurance. 

Place of Service (POS) –

This refers to the answer needed for CMS 1500 block 24B.  This two digit code indicates where the service was provided, such as in-office, in the patient’s home, or in an inpatient hospital setting.

Point of Service Plan (POS Plan) –

This type of health plan is more flexible than a HMO.  It allows a patient to self-refer to a provider not in the network at a cost of a higher deductible and/or copay amount.

Practice Management Software –

This can be any of several brands of software that a provider uses to manage practice scheduling, billing, and potentially patient records.

Preauthorization –

A process in which someone from the provider’s office contacts the insurance company before a procedure is done to get an okay from the insurance company.  Typically the insurance will refuse to pay for a non-emergency procedure, assistance device, or product that was done without a preauthorization on file if it was a procedure that requires preauthorization on that particular plan.  

Pre-Certification –

A requirement for the insurance company to be notified before certain procedures take place.  This does not guarantee they will be covered, only that they will not be covered if this process is skipped.

Predetermination –

Before a treatment takes place, the insurance determines how much it will pay as a maximum benefit for that specific surgery, procedure, or consultation.

Pre-Existing Condition (PEC) –

A condition that was diagnosed or treated prior to getting a specific insurance.  This usually precludes coverage for that condition for six to twelve months after the start of a new insurance.  

Pre-Existing Condition Exclusion –

Coverage for a condition that is denied because of its status as pre-existing.  With the new health care laws, there are some circumstances where pre-existing condition exclusion clauses in insurance contracts are no longer deemed lawful or valid.  

Preferred Provider Organization (PPO) –

This is a network of doctors, clinics, and hospitals participating with the patient’s insurance.  Typically they have a contract with the insurance that allows a lower payment rate.  

Prevailing Charge –

This is the normal charge for a specific product or service where the patient lives.  It is used by Medicare to determine benefit amounts for a procedure.

Primary Care Provider (PCP) –

This is the physician responsible for the initial and routine care of the patient.  The PCP refers out more specialized care to the appropriate provider.

Protected Health Information (PHI) –

A patient’s identifying information combined with their diagnosis and treatment information.  This information is protected by HIPPA.

Provider Transaction Access Number (PTAN) –

This is also sometimes called a legacy Medicare number.  When doing an NPI search, this is typically listed at the bottom of the detail screen.  It is used for claims processing and to authenticate the provider to access certain information.

Reasonable and Customary (R&C) –

The R&C fee is the range of fees typically charged for a specific item or service within the patient’s geographic region.  Charges exceeding the R&C fee are typically either not paid or paid the lower amount.

Referral –

When one provider sends the patient to another provider.  Typically this goes from generalist to a specialist such as from primary care doctor to cardiologist or general cardiologist to cardiac surgeon.  

Relative Value Amount (RVU) –

This is the average amount Medicare will pay a provider for equipment or a service.  It is based on geographic region.  

Remittance Advice (RA) –

This is also sometimes called an Explanation of Benefits (EOB).  The insurance company sends this document to accompany payments or sometimes ahead of payments to show what part of each procedure is paid by the insurance, what is due from the patient, and what the insurance company has decided is not allowed.

Resource-Based Relative Value Scale (RBRVS) –

This complicated formula is used by Medicare and most HMO insurances to determine how much they will pay for a specific procedure.  It is based heavily on geography.  Other factors taken into account are the work of the physician, practice expenses, and malpractice expenses.  There is a lot of criticism for this system.

Responsible Party –

Person responsible for paying the patient’s medical bill.  If the patient is a healthy adult, they are probably their own guarantor. For a child, it is likely to be a parent or guardian.  

Revenue Code –

This is a 3-digit number used on hospital bills to specify where the patient received treatment (i.e. emergency room) or what items the patient received.  

If keeping up with the terminology to successfully bill for your services is taking up too much time that could be spent with your patients, perhaps you should reach out for help. If your business could use a hand managing their medical billing systems, please feel free to contact us at any time.


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