HCR/201 v6

Medical Billing Terminology

Complete Parts A and B of this worksheet.

Part A

Resource: Medical Insurance: A Revenue Cycle Process Approach (7th ed.)

Complete the following table by defining each term. Be clear and concise, use complete sentences, and
define the terms in your own words.

Term Definition
Accounts receivable (AR) A term used to refer to money that is owed to a medical practice.
Accounts payable (AP) A term which encompasses a medical practice’s expenses.
A fixed prepayment which covers a provider’s services for a plan member for a
Capitation
specific period.
Electronic health record A lifelong healthcare record for an individual that uses data from all sources
(EHR) and is computerized.
Encounter form A list of diagnoses, procedures, and charges for a patient’s office visit.
The mobilization of healthcare information electronically across organizations
Health information exchange
within a specific region, community, or hospital system. HIE may also refer to
(HIE)
the organization which is facilitating the exchange of information.
Health information A computer information system that records, stores, and manages patient
technology (HIT) information.
Diagnosis code A number that is assigned to a specific diagnosis.
A statement that is sent to a patient on behalf of the health insurance company
Explanation of benefits explaining payment for medical treatments or services that were paid for on
behalf of the insurance company.
A comprehensive form of insurance compensation for loss or damages and
Indemnity
refers to an exemption from liability for damages, in a legal sense.
Personal health record A health record that a patient maintains which includes health data and other
(PHR) information related to the patient’s care.
Practice management Software used in a medical practice for scheduling appointments, billing, and
program (PMP) financial record keeping.
Protected health information Any health-related information about a specific individual or payment for health
(PHI) care that is created or collected by a Covered Entity under the US law.
A letter that is sent by a patient to a medical facility or provider stating the
Remittance Advice (RA)
charges has been paid.
A process that is used by US healthcare systems to track revenue from
Revenue cycle management
patients beginning from the initial encounter with the healthcare provider to the
(RCM)
final payment of balances due.
A unique ten-digit identification number that is issued to identify US healthcare
NPI numbers
providers by the Centers for Medicare and Medicaid Services (CMS).

Copyright© 2019 by University of Phoenix. All rights reserved.

 Medical Billing Terminology
HCR/201 v6
Page 2 of 2

A two-digit code that is used on healthcare professional claims to indicate the

Place of service codes
Secondary insurance
Birthday rule
Primary insurance
setting in which a medical service was provided and is used to determine the
acceptability of direct billing by a provider.
Insurance that is available in addition to a primary insurance policy that an
insured individual my carry and is often used to cover any gaps in insurance
coverage.
A rule that states the insurance of the parent whose birth month is first in the
calendar year is the primary insurance for dependent children.
The health plan will pay benefits first when more than one plan is in effect.

Part B

Write a 50- to 150-word response to the following question. Be clear and concise, use complete
sentences, and explain your answers using specific examples.

 Explain why, in terms of job performance and efficiency, knowing medical billing terms is critical
for working in the health care field. Explain situations where encounter forms should be reviewed
with the physician.

Knowing and understanding medical billing terms is imperative in healthcare because, without this
knowledge, a person would not be able to understand how to handle a billing situation that may arise with
a patient or insurance company. It is also critical to ensure that diagnoses, procedures, and charges are
correctly entered for reimbursement and compliance purposes. If an encounter form has items that are
unclear to the individual who is reviewing them, it would be necessary to review the form with the physician
to ensure that the correct diagnosis codes or procedure codes are used which will assist with any prior
authorization and reimbursement issues.

Cite any outside sources. For additional information on how to properly cite your sources, utilize the
Reference and Citation Generator resource.

References:

Valerius, J., Bayes, N., Newby, C., Blochowiak, A. Medical Insurance: A Revenue Cycle
Process Approach. [University of Phoenix]. Retrieved
from https://phoenix.vitalsource.com/#/books/125994753X/

Copyright© 2019 by University of Phoenix. All rights reserved.