Insurance 101
This monthly payment keeps your insurance policy active.
What is a premium?
These 5-digit numeric codes describe medical procedures and services billed on a claim.
What are CPT codes?
An insurer's formal written refusal to pay all or part of a submitted claim.
What is a claim denial?
This landmark 1996 federal law established national standards for protecting the privacy and security of patients' health information.
What is HIPAA?
The federal health insurance program for Americans aged 65 and older, as well as certain younger people with disabilities.
What is Medicare?
The annual amount you must pay out-of-pocket before your insurance begins covering most medical costs.
What is a deductible?
This alphanumeric coding system classifies diagnoses, diseases, and health conditions on insurance claims.
What is ICD-10?
Before certain costly procedures or specialty medications can be covered, insurers require this advance approval.
What is prior authorization?
Under HIPAA's Breach Notification Rule, covered entities must notify affected patients within this many calendar days of discovering a breach.
What is 60 days?
This joint federal-state program provides free or low-cost health coverage to millions of low-income Americans.
What is Medicaid?
Now largely prohibited by the No Surprises Act, this billing practice occurs when an out-of-network provider charges a patient the difference between their billed amount and what the insurer paid.
What is balance billing?
This HIPAA-mandated electronic transaction set is the industry standard for submitting professional claims digitally - the electronic equivalent of the paper CMS-1500.
What is the 837P (EDI 837 Professional)?
This revenue cycle KPI measures the percentage of claims paid on the very first submission - without any rejection, denial, or resubmission - and is the single most important indicator of billing team efficiency.
What is the first-pass (clean claim) rate?
Before a billing company, IT vendor, or cloud provider can legally access or handle protected health information on behalf of a covered entity, both parties must sign this legally required document.
What is a Business Associate Agreement (BAA)?
Introduced by CMS for Medicare in 1983, this hospital payment system groups inpatient stays by diagnosis and pays a fixed amount per admission regardless of actual costs — fundamentally incentivizing hospitals to discharge patients faster.
What is the DRG (Diagnosis-Related Group) system?
In this arrangement, an employer bears direct financial risk for employee health claims rather than paying fixed premiums to a carrier - typically hiring a TPA to administer the plan and purchasing stop-loss coverage for catastrophic claims.
What is a self-funded (self-insured) plan?
Published by CMS, these edit tables flag pairs of CPT codes that cannot be billed together because one service is considered already included in the other - violating them results in automatic claim denial.
What are NCCI (National Correct Coding Initiative) edits?
This federal program uses private contractors to identify and recover improper Medicare payments through post-payment audits — and can use statistical extrapolation to multiply a finding from a small sample into a multi-million dollar repayment demand.
What is the RAC (Recovery Audit Contractor) program?
This HHS division is responsible for enforcing HIPAA - it investigates complaints, conducts audits, issues civil monetary penalties, and has collected over $130 million in settlements since 2003.
What is the Office for Civil Rights (OCR)?
This 2003 federal law created Medicare Part D prescription drug coverage and established the tax-advantaged savings account now paired with high-deductible health plans across the country.
What is the Medicare Modernization Act (MMA)?
Under this payment model used by many HMOs, a primary care physician receives a fixed dollar amount per enrolled patient per month - regardless of whether or how often that patient is actually seen.
What is capitation?
This fraudulent billing practice — a federal crime under the False Claims Act — involves submitting a CPT code for a more expensive or complex service than was actually documented or performed.
What is upcoding?
When a patient is a dependent child covered by both parents' insurance plans, this rule determines which plan pays primary — based on which parent's birthday falls earliest in the calendar year.
What is the birthday rule?
The HITECH Act established four tiers of HIPAA penalty severity. Under the most serious tier — 'willful neglect not corrected' — this is the minimum civil monetary penalty assessed per individual violation.
What is $50,000 (per violation)?
Signed in 1986, this federal law requires any hospital receiving Medicare funding to perform a medical screening exam and provide stabilizing treatment to anyone seeking emergency care — regardless of their ability to pay — prohibiting the practice known as 'patient dumping.'
What is EMTALA (Emergency Medical Treatment and Labor Act)?