You will frequently hear the following common terms when dealing with an acupuncture billing company or communicating with your acupuncture billing team at Holistic Billing Services. Make sure to keep this sheet handy when you have no idea what the heck we are talking about!
Allowed Amount: This is the amount an insurance company will reimburse you for services rendered. When billing in-network, the allowed amount will be the rate negotiated by contract; when billing out-of-network, the rate is usually unpublished.
Aging, A/R, or Accounts Receivable: These terms refer to insurance claims that have not paid within the normal processing period. The average insurance claim pays in 30–45 days; any unpaid claims beyond that range are reviewed, revised, and resubmitted.
Annual Year Max: This term is commonly used with insurance benefits verifications and represents the maximum an insurance company will pay for your services. The annual year max may either be a financial sum, such as “$1,000 for acupuncture services,” or it could be a maximum number of treatments in the time period, such as “24 visits per year.”
Based on Medical Necessity (BMN): This term refers to procedures that patients require for treatment of serious medical conditions or illnesses. Sometimes insurance companies will deny an insurance claim and request a letter of medical necessity from you. This criterion for BMN varies across insurance companies. For example, one insurance company may think acupuncture treatment is medically necessary for limb pain, while others may feel it is only medically necessary for back pain.
Co-Insurance: You will see this term on most insurance verifications; it is usually expressed as a percentage. It refers to the portion of your service fee that the patient is responsible for paying after an insurance company pays. For example, when the insurance pays 55% of the allowable, the patient will be charged the other 45%. Thus, if the allowed amount from the payer is $100 for 30 minutes of acupuncture, the insurance will pay you $55 on the insurance claim and you will charge the patient $45.
Co-Pay: This term refers to the amount the patient pays you at the time of service for each treatment. The amount should be identified by your biller when verifying insurance benefits. The amount will vary depending on a patient’s insurance plan. Usually, this will be identified in an insurance verification as an exact amount, such as $10, $25, or $50.
Credentialing: This term refers to the application and negotiation process for a provider to be included in an insurance company panel or going in-network. Once you are credentialed with an insurance company, you are typically listed on the company’s collateral materials as a participating provider.
Current Procedural Technology (CPT): These numbers represent treatments and procedures performed by you as the provider during a given visit. When billing for insurance you will need to express the services rendered in CPT codes for your superbills. Any codes billed should then be reflected in the narrative of your medical note for the visit.
Date of Service (DOS): This is the date you performed a given procedure.
Deductible: This term refers to the amount patients have to pay out of pocket before their insurance benefits will subsidize payment; the amount should be identified when verifying insurance benefits. Patients’ deductibles are determined by their insurance plan and can range in amount.
When your client has an unmet deductible you will typically charge the patient a fee at the time of service. Then you bill the claim to “run down” the deductible. Pay special attention to deductibles the first couple of months of the year because many deductibles are recalculated at the beginning of each calendar year. However, not all plans go by calendar year; some “contract year” plans use deductibles that are recalculated on a date other than January 1.
Demographics: This refers to patient information required for filing a claim, such as date of birth, sex, address, and family information. An insurance company will deny a claim if it contains inaccurate demographics.
Explanation of Benefits (EOB): This is a document attached to the payment or processed medical claim wherein the insurance company explains the services it will cover for a patient’s health-care treatments. EOBs also explain what is wrong with a claim if it’s denied. Therefore, you always want to remit your EOBs to your biller as soon as you receive them so that any issues can be resolved as quickly as possible.
Fee Schedule: This is a document that outlines the fees used by the insurance carrier to reimburse you for services designated by a CPT code.
ICD-9 Codes: These are Western medicine diagnosis codes of patients’ medical conditions. You would only use an ICD-9 code for visits on dates of service prior to October 1, 2015.
ICD-10 Codes: These are Western medicine diagnosis codes of patients’ medical conditions. ICD-10 codes are mandatory for insurance claims for most insurance companies on dates of service starting October 1, 2015.
In-Network: This term refers to a contractual relationship you establish with an insurance company. In order to be in-network you will need to go through the credentialing process. Plan on 90–120 days for your application to be processed by the insurance company. In-network reimbursements tend to be about a third of out-of-network reimbursements, but more patients should have in-network acupuncture benefits.
Insurance Verification Form: This is one of two primary forms used in acupuncture billing (The other is the superbill.) It is used to document information about patients’ insurance information to verify coverage and benefits. The verification form must include patients’ name and date of birth, policy holder name, insurance ID number, and insurance telephone number. After this information is gathered, your acupuncture insurance biller contacts the insurance company directly and confirms the patients’ benefits.
Maximum Out of Pocket: This amount represents the max a patient will have to pay per year (calendar or contractual) from their own funds. Once the max is met, insurance pays 100% for the remainder of the year.
National Provider Identifier (NPI) Number: This is a unique ten-digit number ascribed to every health-care provider in the United States as mandated by HIPAA. Each provider in your practice will need a Type 1 Individual NPI number to bill insurance claims. If your practice has a Tax ID (TIN) or Employer ID (EIN) number, you will also need a Type II Organizational NPI number.
You can apply for either number at: https://nppes.cms.hhs.gov/NPPES/Welcome.do.
Out-of-Network: “Out-of-network billing” refers to a relationship with an insurance company where you are considered to be outside the established network of providers that contract with an insurance company. Typical out-of-network reimbursements are three times higher than those for in-network rates.
Superbill: This is the second of the two primary forms used in acupuncture billing; it is used to document information about a patient and the services rendered in a given visit. The superbill can contain demographic information and insurance information, and it must include a diagnosis (ICD10 code) and procedures (CPT codes). Your medical biller translates information found in the superbill into an insurance claim.
Taxonomy Code: This is a ten-character code that identifies your provider type and area of specialization when issuing a claim to the insurance company:
- Acupuncture: 171100000X
- Chiropractic: 111N00000X
- Massage Therapist: 225700000X
Tax Identification Number (TIN): This is a number assigned by the IRS for use when billing insurance and receiving payment. This number assists in keeping your business and personal income separate when filing income taxes. When you receive this number, it replaces your SSN when billing.
Write-Off: This term refers to the difference between your fee for services and the amount that an insurance company is willing to pay for those services for which, nevertheless, a patient is not responsible. The write-off amount may be categorized as a “not covered” amount for billing purposes.
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