Identifiers are necessary for processing online information. An entity code is exactly that! This medical identifier labels different entities (individuals) involved in the billing process, including healthcare providers, such as doctors, hospitals or clinics, patients, insurance companies, or a third-party billing service.
If you are a healthcare or medical billing professional, you might already understand the importance of these codes. But for our beginners, we have covered everything about these entity codes in this blog, from their definition and benefits to their role in medical claims. Read on to understand their importance and avoid claim rejections.
Entities in Medical Billing
We are all familiar with the word entity, but if you are not, it refers to someone independent. Someone or something with a clear identity of its own! For example, a person, a business, and a corporation are all entities. But the real question is, does it have the same meaning in medical billing?
The simple answer is, yes, it does! However, an entity in medical billing’s language refers to a person or organization involved in healthcare transactions. In simple terms, “entity” in medical billing includes doctors, hospitals, patients, insurance companies, medical billing service providers, and every other person directly or indirectly involved in the billing process.
In short, it is a significant medical terminology. You can only code patients’ visits more accurately and get reimbursements on medical claims by understanding the important entities in medical billing.
Importance of Entity Codes in Medical Billing
Entity codes are an important part of medical billing, allowing insurance companies to process medical claims more accurately. They help insurance companies send the claims to the right entity. They also make it easier to identify healthcare providers, facilitating communication and coordination among all entities in the healthcare system.
Moreover, entity codes increase the approval rate of your medical claims and ensure compliance with regulations such as The Health Insurance Portability and Accountability Act of 1996 in the healthcare industry, consequently leading to more secure transactions. In short, they streamline the medical billing process while improving trust in the healthcare industry.
Updated List of Medical Billing Entity Codes
Entity Code Errors and Prevention Techniques
Correct entity codes make it easier to clear medical bills. However, entity code errors often become the biggest hurdle in the medical coding and billing process, slowing it down and resulting in revenue leakages. A medical claim with incorrect codes can have serious consequences, leading to claim denials and payment delays. Before understanding the prevention techniques, look at the most common errors.
Entity Code Errors
Missing or Incorrect Patient Member ID
This error usually happens due to insufficient or incorrect patient information, often stemming from a change in the patient’s insurance coverage or the lack of it when receiving a healthcare service. This entity code error can also occur if the claim is submitted to the wrong entity.
Outdated Entity Codes
This error arises when entity codes are not updated with the ongoing changes in the healthcare industry.
Mismatched HICN
A mismatched Health Insurance Claim Number (HICN) mistake usually occurs when a claim is corrected and resubmitted. You can fix this issue by writing the original HICN from the first claim.
Missing Entity Code
It is perhaps the most common entity code error. It commonly occurs when a medical biller fails to identify an entity – for example, a patient, healthcare provider, or someone else – in the medical claim.
So, what can you do to prevent these errors? The answer is quite simple! You can speed up your claim process by following these steps.
Prevention Techniques
Verify the Payer ID
Verify and edit the payer ID (unique ID assigned to each insurance company) if you have mistakenly submitted the medical claim to the wrong insurance provider. This step will guarantee that your claim is processed and paid by the right insurance company.
Gather Correct Information
Collecting complete and accurate information about a patient can help you avoid entity code errors. Make sure to gather all the relevant details about a patient, including member ID, address, and more. Double-check this information before entering it into your system.
Check Patient’s Insurance Coverage
It is a crucial proactive step to avoid entity code errors. Verify the patient’s insurance coverage status and other details. Look for any recent changes and check if the patient has acquired a new insurance policy to reduce the risk of claim rejection.
Cross-Check Your HICN
If you are resubmitting your claim, cross-verify your HICN to avoid mismatched errors. Make sure to write the original claim number in your new form.
Role of Entity Codes in Medical Claims
Entity codes have a significant role in medical billing, streamlining the whole process and saving you from unnecessary delays and headaches. In simple terms, entity coding speeds up the entire billing process and reduces the probability of claim denials.
Correct entity codes in medical claims provide necessary information to the insurance companies to process the claims more accurately, helping them identify the entities responsible for the provided healthcare services. In short, both patients and healthcare providers can benefit from efficient coding of all entities, allowing them to receive timely care and reimbursements.
Conclusion
Entity codes are a big deal in medical billing, especially if you want your claims to be accepted. They increase the efficiency of your medical billing process and specify the entity responsible for covering the bill on a medical claim. Therefore, entity coding should be efficient. However, the process is not as simple! Coding errors, incorrect or missing information, payment delays, and claim denials! Instead of facing these issues, let a professional service provider like Medibill MD handle your entire medical billing process. Our effective billing strategy involves proper coding, accurate documentation, and timely submission of your claims. Contact us and optimize your revenue cycle in a few days.
