medical terminology chrm

It seems every industry has their own language, so to speak. From acronyms that bring to mind other things you know to words that mean one thing to you but  are completely different to medical billers, medical billing is no exception when it comes to having their own language.

Comprehensive Healthcare Revenue Management (CHRM) offers the best medical billing services for your hospital, physician’s practice, free-standing emergency services, oncology billing, orthopedic billing, and more. We are guided by our values, which include transparency, integrity, honesty, and excellence in everything that we do. Our mission is to make your life as a physician easier by providing you with exceptional outsourced medical billing services. In this blog post, we’ll examine some important terminology you should know inside the medical billing cycle. Contact us today to learn more!


Allowed Amount

The allowed amount is the amount of money an insurance company will pay the healthcare provider for a particular service. If the healthcare provider charges more than the allowed amount by the insurance company, then the patient is responsible for the difference.

Applied to Deductible (ATD)

Applied to deductible refers to the amount of money that is applied toward a patient’s annual deductible for physician’s services rendered.

Assignment of Benefits (AOB)

Assignment of benefits is when the insurance company pays the healthcare provider directly for services rendered for a patient. This happens after a medical billing claim has been processed.

Clean Claims

Clean claims are what every medical billing company strives for. A clean claim is a medical billing claim free from errors, thus eliminating the time-consuming and payment-delaying appeals process. Everyone loves clean claims, including the insurance company, the medical billing company, and, of course, the medical provider who gets paid sooner. Clearinghouses specialize in ensuring clean claims.


A clearinghouse is used by medical providers and medical billing services so that they can “scrub” claims. This means that they review, edit, and format claims specific to each insurance provider in order to expedite payment, eliminate errors, and be clean and scrubbed.

Centers for Medicare and Medicaid Services (CMS)

If you are a healthcare practitioner who accepts Medicare and Medicaid, then you will most definitely interact with the Centers for Medicare and Medicaid Services (CMS). This center oversees the healthcare coverage for all Americans who use Medicare and Medicaid for healthcare claims. Currently, this number is at 100 million and rising by the day. CMS also maintains their own medical billing codes, known as HCPCS codes.

CMS 1500

One of medical billers’ best friends due to the number of times a day a CMS 1500 crosses their desk. A CMS 1500 is the form used for Medicare and Medicaid claims. Furthermore, some insurance companies outside of Medicare and Medicaid also require a CMS 1500, making this a daily form medical billers use.

COBRA Insurance

COBRA Insurance is insurance the federal government offers for those who have lost their job. It mandates that your former employer continues to offer you healthcare insurance. This can be either voluntary or involuntary. It has to be purchased, but it will cover you for 18 months, or, in some cases, up to three years until you get a new job.


Co-insurance is not the same as a co-pay that many Americans are familiar with. Co-insurance is where the insurance company pays a certain percentage of healthcare bills and the individual pays their portion as well. This is an agreed upon percentage. Thus, when you see 70-30 co-insurance agreement, 70% is what the insurance company will pay, and you will pay 30% of any healthcare expenses.


A co-pay is an agreed upon fixed amount that the insured individual will pay with every healthcare provider’s visit. For instance, for any office visit, you may be required to pay $30, while the insurance company will pay the rest. This amount usually varies with the individual service offered, with hospital visits being more.

Explanation of Benefits (EOB)

Explanation of benefits is just that: an explanation of the benefits covered that is usually in printed form that is given to the patient and the medical provider after a doctor’s visit. This is usually mailed by the insurance provider once receipt of the medical billing claim is received. This form explains the benefits, what was covered and what wasn’t and why. If a claim is denied, this is usually where it will explain why, which is important for medical billers to understand so that they can correct the errors and resubmit the medical billing claim.

Electronic Remittance Advice (ERA)

In the digital age, a lot of medical billing now takes place via email and data processing programs that submit medical billing claims electronically. An ERA is a digital EOB that for the vast majority of claims, is the communication tool of choice between insurance companies and healthcare providers and medical billers. This is a boon for medical billing services because it cuts down on the claim processing time and makes denials and resubmittals easier and faster.

Health Insurance Portability and Healthcare Act (HIPAA)

One of the most significant changes made that affects the healthcare industry, the Health Insurance Portability and Healthcare Act (HIPAA) was put into place in 1996 is designed to protect the privacy of patients’ information when in digital form and when shared with other healthcare providers. It also affects workers’ health insurance when they change or lose a job. HIPAA has provisions that affect the medical billing industry since we deal with patients’ personal information as part of our job. There are severe penalties and fines involved if a medical provider violates HIPAA’s rules and regulations.


Comprehensive Healthcare Revenue Management offers the best medical billing services to many healthcare providers, including hospitals, physicians, free-standing emergencies services, orthopedic billing, and oncology billing, amongst others. We hold ourselves to the highest standards and work diligently to insure your revenue cycle is maximized. Our outsourced medical billing and coding services are top-notch. We are transparent in all that we do and honest in our approach to medical billing.

CHRM wants to ensure a good fit, which is why we offer a free assessment of your healthcare practice, which will tell us if we can help save you money. We also offer medical practice audit services and practice consulting services, which offers custom solutions to your healthcare practice that can help take it to the next level. When you partner with CHRM for medical billing, you can rest assured that you are getting a partner who will ensure your medical billing claims are processed expeditiously. With quarterly reports, you’ll be able to see the benefits to your healthcare practice. Contact us today to get started!