Medical Billing – Easy Notes for

Beginners
Medical Billing – Easy Notes for Beginners

Medical Billing​
Medical billing is the process of entering a claim into the system and submitting it to the
insurance company to receive payment for healthcare services.

RCM (Revenue Cycle Management)​

Steps to get money from the patient’s visit — from start to finish.

Medicare​
Health insurance from the government for old people (65+) or disabled people.

Medicaid​
Health insurance from the government for poor or low-income people.

Commercial Payer​
Private insurance companies like Aetna, Cigna, or Blue Cross.

PR (Patient Responsibility)​
Money the patient has to pay. Insurance doesn’t pay this part.

Locum Tenens​
A physician, nurse, or other healthcare professional who temporarily fills in for another
professional who is absent due to vacation, illness, or other reasons.

Referral​
A doctor sends you to another doctor or specialist (like a heart doctor). Some insurances
need this.

Authorization​
Permission from the insurance company to get a service or test.

Prior Authorization​
Getting permission from insurance before service, test, or treatment.​
Example: Doctor asks insurance before an MRI.

Retro Authorization​
Permission from insurance after service was given.​
Example: Emergency surgery approval requested afterward.

Insurance Plans
HMO Plan

●​ Need referral
●​ Must use network doctors
●​ Lower cost
●​ No payment if out of network
●​ Need permission for tests​

PPO Plan

●​ No referral needed
●​ Can go out of network
●​ More freedom
●​ Higher cost
●​ Bigger network​

EPO Plan

●​ Use network doctors only

●​ No referral needed
●​ No out of network care
●​ Emergencies allowed
●​ Lower cost​

POS Plan

●​ Mix of HMO and PPO

●​ Referral needed sometimes
●​ Can go out of network
●​ Pay more outside
●​ Choose per visit​

Basic Terms

Claim​
A bill sent to the insurance company.

Coding​
Changing doctor’s work into number codes (like 99213).

Modifier​
Extra number or letter added to a code for more details.
CPT Code​
Code showing what the doctor did (check-up, surgery).

In-Network​
Doctor works with your insurance; you pay less.

Out-of-Network​
Doctor does not work with your insurance; you pay more.

Premium​
Money you pay monthly to keep insurance.

Hospice​
Care for very sick people near end of life.

Out-of-Pocket​
Money you pay yourself, not insurance.

Capitation​
Doctor paid fixed amount monthly regardless of visits.

Medical Necessity​
Doctor must prove why test or treatment is needed.

Insurance Payment Terms

Deductible​
Amount you pay before insurance starts to pay.

Copay​
Small fee you pay at doctor’s office.

Coinsurance​
Percentage you pay after deductible.

Allowed Amount​
Max price insurance will pay.

Write-Off​
Part doctor agrees not to collect.

Denial​
Insurance refuses to pay claim.

Rejection​
Claim returned due to errors or missing info.
Appeal​
Request to insurance to review denied claim.

Other Important Terms

Clearinghouse​
Service that checks and sends claims to insurance.

Superbill​
Paper listing patient’s services and codes.

CMS-1500​
Form doctors use to bill insurance.

UB-04​
Form hospitals use to bill insurance.

EOB (Explanation of Benefits)​

Statement showing insurance payments and patient charges.

ERA (Electronic Remittance Advice)​

Digital version of EOB.

NPI (National Provider Identifier)​

Unique ID for healthcare providers.

POS Code (Place of Service)​

Code showing where care happened.

Revenue Code​
Code explaining type of service.

HCPCS Code​
Code for medical items like crutches, drugs.

ICD Code​
Code for illness or diagnosis.

Fee Schedule​
List of service costs.

Patient Statement​
Bill sent to patient showing amount owed.

Balance Billing​
Doctor asks patient to pay more than insurance allowed.
Timely Filing Limit​
Deadline to send claim to insurance.

Authorization Number​
Number showing service approval.

Preventive Care​
Care to stop sickness before it starts.

Inpatient​
Patient stays overnight in hospital.

Outpatient​
Patient goes home same day.

Telehealth​
Doctor visit by video or phone.

DME (Durable Medical Equipment)​

Medical items used at home (walkers, oxygen).

Home Health​
Care provided at patient’s home.

Lab Billing​
Billing for blood or urine tests.

Mental Health​
Care for emotional or psychological problems.

Split Claim​
Bill divided into parts (different dates or providers).

Bundled Payment​
One payment for many services together.

Global Period​
Time after surgery when follow-ups are included.

Provider Contract​
Agreement between doctor and insurance on payment.

Network​
Group of doctors and hospitals working with insurance.

Guarantor​
Person responsible for paying the bill.

Coverage​
Services insurance will pay for.
Limitations​
Services insurance will not pay for.

Copay Card​
Card that helps lower copay cost.

Case Management​
Team organizing patient care.

Diagnosis​
Name of illness or condition.

Treatment​
What doctor does to fix illness.

Service Date​
Date patient got care.

Authorization Required​
Insurance must approve care before given.

Top 50 Medical Billing Abbreviations with Simple Definitions

●​ DOS – Date of Service: The day a patient gets care.​

●​ DOB – Date of Birth: Patient’s birth date.​

●​ DX – Diagnosis: Medical condition.​

●​ TX – Treatment: Doctor’s care.​

●​ CPT – Current Procedural Terminology: Codes for services.​

●​ ICD – International Classification of Diseases: Codes for illnesses.​

●​ HCPCS – Healthcare Common Procedure Coding System: Codes for supplies and
some services.​

●​ HCFA – Health Care Financing Administration: Old name for CMS-1500 form.​

●​ CMS – Centers for Medicare & Medicaid Services: Government agency.​

●​ EOB – Explanation of Benefits: Statement of insurance payments.​

●​ ERA – Electronic Remittance Advice: Digital EOB.​

●​ NPI – National Provider Identifier: Unique provider ID.​

●​ PTAN – Provider Transaction Access Number: Medicare provider ID.​

●​ TIN – Taxpayer Identification Number: Employer or provider tax ID.​

●​ EIN – Employer Identification Number: IRS business ID number.​

●​ LCD – Local Coverage Determination: Medicare’s local coverage rules.​

●​ NCD – National Coverage Determination: Medicare’s national coverage rules.​

●​ PPO – Preferred Provider Organization: Flexible insurance plan.​

●​ HMO – Health Maintenance Organization: Insurance requiring network doctors.​

●​ EPO – Exclusive Provider Organization: Only network doctors covered.​

●​ POS – Point of Service: Mix of PPO and HMO.​

●​ PCP – Primary Care Provider: Main doctor.​

●​ PR – Patient Responsibility: Amount patient pays.​

●​ DME – Durable Medical Equipment: Wheelchairs, oxygen tanks.​

●​ HIPAA – Health Insurance Portability and Accountability Act: Law protecting privacy.​

●​ COB – Coordination of Benefits: Decides which insurance pays first.​

●​ TFL – Timely Filing Limit: Deadline to send claim.​

●​ PA – Prior Authorization: Insurance approval before service.​

●​ RA – Remittance Advice: Insurer’s payment report.​

●​ WC – Workers’ Compensation: Insurance for work injuries.​

●​ EMR – Electronic Medical Record: Digital patient history.​

●​ EHR – Electronic Health Record: Complete digital health record.​

●​ FFS – Fee For Service: Payment per service.​

●​ RFA – Request For Authorization: Ask insurance permission.​

●​ QMB – Qualified Medicare Beneficiary: Help for low-income Medicare patients.​

●​ SLMB – Specified Low-Income Medicare Beneficiary: Help paying Medicare Part B
premiums.​

●​ SNF – Skilled Nursing Facility: Nursing care facility.​

●​ MAC – Medicare Administrative Contractor: Company processing Medicare claims.​

●​ DRG – Diagnosis-Related Group: Hospital payment system.​

●​ ICD-10 – 10th edition of ICD codes.​

●​ CPT-4 – 4th edition of CPT codes.​

●​ NCCI – National Correct Coding Initiative: Rules to prevent wrong coding.​

●​ UB-04 – Hospital claim form.​

●​ CLIA – Clinical Laboratory Improvement Amendments: Lab testing standards.​

●​ HSA – Health Savings Account: Tax-free medical savings.​

●​ FSA – Flexible Spending Account: Pre-tax medical expenses.​

●​ IPA – Independent Practice Association: Group of doctors.​

●​ COBRA – Law to continue health insurance after job loss.​

●​ ROI – Release of Information: Permission to share medical records.​

●​ MUE – Medically Unlikely Edit: Prevent billing errors.​

●​ NCCI Edits – Coding rules to avoid duplicates.​

●​ POS Code – Place of Service code.​

●​ ICD-9 – Old version of ICD codes.

HCFA Boxes (CMS-1500 Form)

●​ Box 1: Insurance Type (Medicare, Medicaid, Private)​

●​ Box 2: Patient’s Name​

 ●​ Box 3: Patient’s DOB and Sex​

●​ Box 4: Insured’s Name​

●​ Box 5: Patient’s Address​

●​ Box 6: Patient’s Relationship to Insured​

●​ Box 7: Insured’s Address​

●​ Box 8: Patient’s Phone Number​

●​ Box 9: Other Insurance Info (if any)​

●​ Box 10: Is condition related to work, accident?​

●​ Box 11: Insured’s Policy or Group Number​

●​ Box 17: Referring Provider Name​

●​ Box 21: Diagnosis (ICD codes)​

●​ Box 24: Procedures/Services (CPT codes, dates, charges)​

●​ Box 28: Total Charge​

●​ Box 29: Amount Paid​

●​ Box 31: Provider’s Signature & Date​

●​ Box 33: Billing Provider Info (Name, Address, NPI)​

Modifiers

22 – Increased Procedural Services: Extra work done than usual​

23 – Unusual Anesthesia: Emergency or unusual anesthesia situation​
24 – Unrelated Evaluation & Management (E/M): Doctor visit unrelated to surgery​
25 – Significant, Separately Identifiable E/M: Doctor visit on same day as procedure​
26 – Professional Component: Only the professional part of service (e.g., reading X-ray)​
27 – Multiple Outpatient Hospital E/M Encounters: Multiple visits on same day​
50 – Bilateral Procedure: Procedure done on both sides of the body​
51 – Multiple Procedures: More than one procedure done at the same session​
52 – Reduced Services: Service was partially done or reduced​
53 – Discontinued Procedure: Procedure stopped after it started for a valid reason​
57 – Decision for Surgery: Doctor decides to do surgery during visit​
59 – Distinct Procedural Service: Procedure is separate and distinct from others​
76 – Repeat Procedure by Same Physician: Procedure repeated on same day by same
doctor​
77 – Repeat Procedure by Another Physician: Procedure repeated same day by different
doctor​
78 – Return to OR for Related Procedure: Patient returned to surgery for related issue​
79 – Unrelated Procedure by Same Physician: New procedure unrelated to previous one​
93 – Laboratory/Pathology Service: Application of lab tests in outpatient setting​
95 – Synchronous Telemedicine Service: Telehealth service done in real-time​
GT – Via Interactive Audio and Video Telecommunication System (Telehealth)​
LT – Left Side of Body​
RT – Right Side of Body​
XE – Separate Encounter, Different Session or Patient​
GW – Service not related to the illness or injury​
GV – Service provided by resident without attending​
Q6 – Service provided under Medicare demonstration project​
TC – Technical Component: Equipment or facility part of service only

Cardiology E/M Codes (Evaluation & Management)

●​ 99201-99205: New patient office visits (10 to 60 minutes)​

●​ 99211-99215: Established patient office visits (5 to 40 minutes)​

●​ 99221-99223: Initial hospital care (25 to 70 minutes)​

●​ 99231-99233: Subsequent hospital care (15 to 35 minutes)​

●​ 99238-99239: Hospital discharge management​

●​ 99281-99285: Emergency department visits (based on complexity)​

Common Cardiology Procedure CPT Codes

●​ 93000: Electrocardiogram (ECG/EKG) with interpretation (15-30 minutes)​

●​ 93010: ECG only, no interpretation (5-10 minutes)​

●​ 93306: Transthoracic echocardiography (complete) (30-60 minutes)​

●​ 93307: Limited transthoracic echocardiography (15-30 minutes)​

 ●​ 93350: Stress echocardiography (45-60 minutes)​

●​ 93454: Right heart catheterization (30-60 minutes)​

●​ 93458: Left heart catheterization with coronary angiography (45-90 minutes)​

●​ 93600: Intracardiac electrophysiological study (1-2 hours)​

Stent Placement CPT Codes

●​ 92928: Percutaneous coronary intervention (PCI) with drug-eluting stent (DES)

placement (1-3 hours)​

●​ 92929: PCI with bare-metal stent placement (1-3 hours)​

Cardiac Monitoring CPT Codes

●​ 93224: External ECG recording up to 48 hours (Holter monitor)​

●​ 93225: Analysis and report of Holter monitor data​

●​ 93268: Evaluation and management of pacemaker or defibrillator device​

●​ 93279: Remote monitoring of cardiac device​

Cardiac Stress Test CPT Codes

●​ 93015: Cardiovascular stress test with ECG on treadmill or bicycle​

●​ 93016: Stress test with continuous ECG monitoring​

●​ 93017: Interpretation and report of stress test

●​ ​

CO-4 – Invalid Modifier

Why it comes:
 ●​ Wrong or disallowed modifier used with the code​

●​ Modifier not allowed with certain services​

Action to take:

●​ Check which modifier is wrong​

●​ Remove or replace modifier with correct one​

●​ Resubmit claim with correct modifier​

CO-5 – Invalid Place of Service (POS)

Why it comes:

●​ POS code doesn’t match the service location​

●​ Service done in place not allowed by insurance​

Action to take:

●​ Verify correct POS for the service​

●​ Correct POS code on claim​

●​ Resubmit claim with valid POS​

CO-11 – Diagnosis Code Missing or Invalid

Why it comes:

●​ Diagnosis code is missing or incorrect​

●​ Invalid or outdated ICD code used​

Action to take:

●​ Check patient chart for correct diagnosis​

 ●​ Use updated ICD code​

●​ Add missing diagnosis on claim​

●​ Resubmit claim​

CO-16 – Claim Lacks Information

Why it comes:

●​ Missing required info (DX, modifier, NPI)​

●​ Referral or authorization number missing​

●​ Patient DOB or gender missing​

●​ Claim incomplete or blank fields​

Action to take:

●​ Identify missing info from EOB/ERA​

●​ Check patient records for correct info​

●​ Add missing data (CPT, DX, modifier etc.)​

●​ Attach supporting docs if needed​

●​ Resubmit claim​

CO-18 – Duplicate Claim or Service

Why it comes:

●​ Same service billed more than once​

●​ Claim already paid or processed​

Action to take:

●​ Confirm if claim is duplicate or new​

 ●​ Remove duplicate claims​

●​ If service is different, add modifier to explain​

●​ Resubmit claim if valid​

CO-22 – Coordination of Benefits (COB)

Why it comes:

●​ Another insurance plan is primary​

●​ Claim sent to wrong payer first​

Action to take:

●​ Verify primary and secondary insurance​

●​ Send claim to primary insurer first​

●​ After primary pays, send secondary claim with payment info​

CO-24 – Capitation Payment

Why it comes:

●​ Service covered under capitation payment​

●​ No separate payment for this service​

Action to take:

●​ Confirm if provider is on capitation plan​

●​ No additional claim submission needed​

●​ Contact insurance if unsure​

CO-26 – Expenses Incurred After Coverage Terminated

Why it comes:

●​ Service date after insurance ended​

●​ Patient not covered at time of service​

Action to take:

●​ Verify coverage dates​

●​ Correct service dates if wrong​

●​ Inform patient about responsibility​

●​ Resubmit claim if corrected​

CO-27 – Expenses Incurred Before Coverage Started

Why it comes:

●​ Service date before insurance started​

●​ Patient not covered yet​

Action to take:

●​ Confirm coverage start date​

●​ Correct service dates if needed​

●​ Inform patient​

●​ Resubmit if valid​

CO-29 – Timely Filing Limit Exceeded

Why it comes:

●​ Claim sent after insurance deadline​

●​ Late claim submission​

Action to take:

●​ Check insurance filing deadlines​

●​ Request extension or appeal if possible​

●​ Inform patient provider may not get paid​

CO-31 – Payment Adjusted Because Patient Has Another Payer

Why it comes:

●​ Patient has other insurance​

●​ Payment adjusted based on coordination of benefits​

Action to take:

●​ Verify other insurance details​

●​ Submit claim to primary payer first​

●​ Send secondary claim with primary payment info​

CO-39 – Authorization/Referral Missing

Why it comes:

●​ No prior authorization or referral provided​

●​ Required permission not on file​

Action to take:

●​ Check if authorization or referral needed​

●​ Obtain missing authorization from insurance​

●​ Add number to claim and resubmit​

CO-45 – Charge exceeds fee schedule/maximum allowable or contracted/legislated
fee arrangement

Why it comes:

●​ Billed amount is higher than insurance allows​

●​ Service fee more than contracted rate​

Action to take:

●​ Check fee schedule limits​

●​ Adjust billed amount to allowed fee​

●​ Resubmit claim with corrected charges​

CO-50 – Medical Necessity

Why it comes:

●​ Insurance says service not needed medically​

●​ Service not supported by patient’s diagnosis​

Action to take:

●​ Get more detailed doctor notes or reports​

●​ Provide medical reasons for service​

●​ Submit appeal with supporting documents​

CO-96 – Non-Covered Charges

Why it comes:

●​ Service is not covered by insurance​

●​ Patient or provider billed for non-covered service​

Action to take:

●​ Confirm if service is covered under plan​

●​ Inform patient about responsibility​

●​ Remove non-covered service from claim or appeal if possible​

CO-97 – Service Included in Another Service

Why it comes:

●​ Service is part of another paid service​

●​ Not paid separately​

Action to take:

●​ Verify if service is bundled​

●​ Remove service or combine with main claim​

●​ Resubmit claim if needed​

CO-J146 – Diagnosis Code Missing or Mismatch

Why it comes:

●​ Diagnosis code missing or doesn’t match procedure​

●​ Incorrect DX for the service​

Action to take:

●​ Check and correct diagnosis code​

●​ Match diagnosis to service performed​

●​ Resubmit claim​
CO-N196 – Referral Missing

Why it comes:

●​ Referral required but not on claim​

●​ Missing referral number​

Action to take:

●​ Obtain referral from primary doctor​

●​ Add referral info to claim​

●​ Resubmit claim​

CO-197 – Authorization Missing

Why it comes:

●​ Prior authorization required but missing​

●​ No approval on file​

Action to take:

●​ Get authorization from insurance​

●​ Add authorization number to claim​

●​ Resubmit claim​

PR-1 – Patient Responsibility: Deductible

Why it comes:

●​ Patient must pay deductible amount​

●​ Insurance has not paid this part​

Action to take:
 ●​ Inform patient of deductible amount​

●​ Collect payment from patient​

PR-2 – Patient Responsibility: Copay

Why it comes:

●​ Patient must pay copay at visit​

●​ Small fixed fee insurance doesn’t cover​

Action to take:

●​ Inform patient of copay amount​

●​ Collect copay from patient​

PR-3 – Patient Responsibility: Coinsurance

Why it comes:

●​ Patient must pay percentage of cost​

●​ After deductible, patient shares cost​

Action to take:

●​ Inform patient of coinsurance amount​

●​ Collect payment from patient