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Glossary of Billing Terms
ABN (Advanced Beneficiary Notice) - a document indicating that the supplier has reason to believe that Medicare will not cover the piece of equipment or supply being given to a patient. It must list the item(s) and the reason(s) it will not be covered and be signed and dated by the patient (or a representative) before delivery of the item.
ANSI (American National Standards Institute) - responsible for the standard remark codes that are used on all Medicare Explanations of Benefits.
AOB (Assignment of Benefits) - a document that must be signed and dated by a patient before a supplier can bill Medicare for an assigned claim. It allows Medicare to pay the supplier directly and indicates that the supplier will not bill any more to the patient than his/her deductible and/or copay.
Appeal - request to Medicare to reconsider their decision on a particular claim.
ARU (Automated Response Unit) - automated telephone system used by DMERC's to help the caller obtain claim status information.
Assigned - the supplier agrees to accept Medicare's allowable.
Beneficiary - a patient receiving Medicare benefits.
Capped Rental - type of rental specific to Medicare.
CMN (Certificate of Medical Necessity) - a document required by Medicare for certain items. It is signed by the patient's physician and indicates what the item(s) is/are and has questions that the doctor answers about the patient's medical condition and need for the item.
COB (Coordination of Benefits) - HCFA's program to help correctly determine what each patient's insurers are in order to avoid incorrect payments by Medicare.
Cover letter - a letter written by a supplier describing the attached CMN or doctor's order.
CSI (Claims Status Inquiry) - on online system provided by the DMERC where suppliers can check the status of claims that they have billed.
CWF (Common Working File) - HCFA's database of information on their beneficiaries, including insurance specifics, date of death and CMN's.
DCN (Document Control Number) - a reference number assigned to each claim by the DMERC. This should be included in all correspondence about each particular claim.
DME (Durable Medical Equipment) - the DMERC has certain criteria for what DME (or HME) is: it must be able to be used repeatedly; it must be used for a medical purpose, and is something that is not usually used if the patient is not sick or injured; and it must be used in the home.
DMERC (Durable Medical Equipment Regional Carrier) - one of four different insurance companies that has contracted with HCFA to process claims for durable medical equipment.
Doctor's order - a prescription written (or signed) by a physician.
EDI (Electronic Data Interchange) - system through which claims can be submitted electronically to DMERC's.
EFT (Electronic Funds Transfer) - payments from the DMERC are automatically transferred to the supplier's bank account.
EGHP (Employer Group Health Plan) - health insurance coverage through the patient's employer or the patient's spouse's employer.
EOMB (Explanation of Medicare Benefits) - a report of claims that have processed by the DMERC, including payment amounts and denial codes.
ERN (Electronic Remittance Notice) - a report of processed claims that can be downloaded electronically to your software system, eliminating manual posting of payments.
Fair Hearing - the second step in the DMERC appeals process. Claims must total more than $100 and must have already gone to review before a fair hearing can take place. Can be held in person, on the telephone or based on what's in the patient's file.
HCFA (Health Care Finance Administration) - the federal administration that administers Medicare, Medicaid and the State Children's Health Insurance Program.
HCPCS (HCFA Common Procedure Coding System) - developed by HCFA to standardize the codes used for processing Medicare claims. Each piece of equipment or supply is to be billed with a specific code that must be used when billing the DMERC.
HME (Home Medical Equipment) - see durable medical equipment (DME).
Medicare HMO - a contracted health maintenance organization that enrolls Medicare patients and provides benefits to them, instead of traditional Medicare. Patient may enroll and withdraw from HMO's at any time. The HMO and not the DMERC processes claims.
Medigap - insurance secondary to Medicare that covers the patient's Medicare copay and/or deductible.
MOA (Medicare Outpatient Adjudication) - "M" codes listed on EOMB's - represent general Medicare remark codes and are defined at the end of each EOMB.
Modifier - two letter code that indicates something specific about a code to the DMERC.
MSN (Medicare Summary Notice) - report sent to beneficiaries indicating what claims have been submitted and how these claims were processed.
MSP (Medicare as Secondary Payer) - type of processing done when the patient has other insurance primary to Medicare. HCFA is responsible for determining when Medicare is primary or secondary.
Nonassigned - the supplier has not agreed to accept Medicare's allowable and patient is responsible for payment to the supplier.
Nonparticipating provider/supplier - provider that has not signed a contract with the NCS to accept assignment on all claims. This provider may choose whether to accept assignment on a claim-by-claim basis.
NSC (National Supplier Clearinghouse) - the HCFA division that assigns supplier numbers to DME suppliers so that they may bill DMERC's. Also responsible for maintaining data on suppliers, reenrolling providers and helping with the investigation of fraud and abuse.
OIG (Office of Inspector General) - part of the Department of Health and Human Services responsible for working with Medicare's fraud units to investigate fraud and abuse of the Medicare system.
Participating provider/supplier - provider that has signed an agreement with the NSC indicating that he will accept assignment on all claims that he bills for that particular year.
Prior Authorization - Medicare will authorize the payment on certain items based on a completed CMN and medical necessity.
Review - the first step in the appeals process; a written request for a second examination of a denied claim.
SADMERC (Statistical Analysis Durable Medical Equipment Regional Carrier) - performs data analysis on Medicare claims and helps suppliers in using the HCPCS system. It is the place to call when you do not know the correct code to use for a product.
SSA (Social Security Administration) - Social Security office. Visit www.ssa.gov.
UPIN (Unique Physician Identification Number) - individual number assigned to each provider for billing Medicare.
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