10 Medical and Billing Acronyms You Should Know

By Karen Smiley

The world of medical billing and coding is like one big bowl of alphabet soup. Just about any term that comes up in your daily dealings has a corresponding acronym. Every office becomes familiar with the abbreviations specific to that particular practice, but some acronyms are known industry-wide and are familiar to everyone who works in the healthcare business.

ACA: Patient Affordable Care Act

The Affordable Care Act refers to the federal statute signed into law by President Barack Obama on March 23, 2010 (for this reason, the slang term is Obamacare). This statute represents one of the most significant revisions of the U.S. healthcare system since the passage of the Social Security Amendments in 1965, which resulted in Medicare and Medicaid.

The ACA is intended to provide access to healthcare coverage for all, with a goal of ­lowering the number of uninsured citizens and thus reducing overall healthcare costs. This law also requires insurance companies to cover all applicants within mandated standards regardless of preexisting conditions. The policies are marketed through the government website.

OON: Out‐of‐network

Out‐of‐network (OON) refers to insurance plan benefits. An out‐of‐network provider is one who does not have a contract with the patient’s insurance company and, therefore, is not obligated to accept whatever discounted reimbursement the insurance company was able to negotiate with its in‐­network providers. Every commercial insurance plan outlines the benefit level for members.

Usually when a non‐contracted provider treats the patient, the benefits are lower. Your patient may have a fairly inexpensive copay for an in‐­network provider and a much larger copay for an out‐of‐network provider. Some carriers may not cover out‐of‐network providers at all!

INN: In‐network

An in‐network (INN) provider is one who has a contract with either the insurance company or the network with whom the payer participates. Patients who go to in‐network providers usually have to pay less in co‐insurance and deductibles. In addition, INN office visits may require that the patient make a copayment at the time of the visit.

CDI: Clinical documentation improvement

CDI is a program dedicated to facilitate the accuracy of a patient’s clinical status when it’s translated into coded data. This data is then used to track physician performance, reimbursements, public health, disease tracking, and so on. As a coder, accurate and thorough documentation are essential to maintain correct coding. ICD‐10 implementation has been a driving force for improvement of clinical documentation due to the specificity of individual­codes.

CMS: Centers for Medicare & Medicaid Services

The Centers for Medicare & Medicaid Services (CMS) is a division of the United States Department of Health & Human Services. CMS administers Medicare, Medicaid, and the Children’s Health Insurance Program — ­programs that serve the most vulnerable segments of the population. In addition to serving these populations, CMS also sets the standard for healthcare, and many commercial payers follow CMS payment guidelines.

ACO: Accountable Care Organization

An Accountable Care Organization (ACO) is intended to tie provider reimbursements to quality metrics that are tracked for patients. In other words, providers coordinate care of patients by using a strong base of primary care services complimented by specialists and hospitals who work together.

Part of the ACA includes a provision that allows ACOs to be rewarded for demonstrating savings when caring for Medicare populations. Some commercial payers are also supporting this concept by offering similar incentives or by purchasing providers in an attempt to improve patient care and control cost.

NCCI: National Correct Coding Initiative

NCCI is the CMS development intended to promote national correct coding methodologies and discourage improper medical coding that may lead to incorrect payment for Medicare Part B claims. It involves two categories of edits: Physician Edits, which apply to physician and non‐physician providers in addition to ambulatory surgery centers; and Hospital Outpatient Prospective Payment System Edits (Outpatient Edits), which apply to other providers such as hospitals.

Both sets of edits are maintained to identify codes that bundle together and indicate when unbundling may be permissible with the proper use of a particular modifier. They also indicate when unbundling is never appropriate. NCCI edits are maintained and revised if necessary on a quarterly basis.

EOB: explanation of benefits

An explanation of benefits (EOB) is the document that the insurance company issues in response to a claim submission. The EOB reflects how the claim was processed and shows the billed charges, any reductions applied (either by contract, fee schedule, negotiation, or arbitrarily assigned), the allowed amount, and, finally, any remaining patient liability. Patients are billed as indicated by the EOB, meaning that providers can’t bill them any additional amount to make up for any discounts applied to the claim.

HIPAA: Health Insurance Portability and Accountability Act

The Health Insurance Portability and Accountability Act (HIPAA) was approved by Congress to protect the privacy of patients and insure that patients have access to their medical files. All patients must sign a notice stating that the provider made them aware of their rights, and all employees must sign a confidentiality agreement that states they understand the need to protect patient confidentiality and the penalties involved if they violate HIPAA. In addition, HIPAA requires patients to identify others (such as a spouse or parent) who can have access to their healthcare information.

Under HIPAA, any conversation between a physician and patient is confidential, and information regarding that interaction cannot be left in a voice mail or on an answering machine unless specifically instructed to do so by the patient in writing.

EHR: Electronic Health Record

The EHR is a digital record that may be shared by providers from more than one practice or entity such as a hospital. It is a key provision of the American Recovery and Reinvestment Act of 2009, which went into effect January 1, 2014, and required all public and private healthcare providers to adopt the use of electronic health records in order to avoid penalties that affect reimbursement.

Financial incentives were also created for healthcare providers who demonstrate proof of “meaningful use,” which is industry‐speak for improving patient care. EHR implementation is the foundation of meaningful use; without EHR adoption, it is not possible to progress through the stages of meaningful use. The EHR differs from the EMR (electronic medical record), which is simply a digital version of a paper chart and is not shared outside the practice.