Charge: The dollar amount a facility sets for services rendered before negotiating any discounts. This charge can be different from the amount paid.
Cost: Facility cost is the direct and indirect expense to deliver services to patients.
- Insurer cost is the amount payable to the facility or reimbursed to the patient for services rendered.
- Reimbursement is the amount the facility expects to be paid by insurers and patients for services rendered.
- Patient cost, or “out-of-pocket payment,” is the amount payable out-of-pocket, which may include deductibles; copayments; coinsurance; amounts payable by the patient for services that are not included in the patient’s benefit design; and amount “balanced billed” by out-of-network facilities.
DRG: Diagnosis related group, which means any of the payment categories that are used to classify patients--especially Medicare patients--for the purpose of reimbursing hospitals for each case, in a given category, with a fixed fee, regardless of the actual costs incurred.
EAP: An internal reference code. While not important for you, it will help us cross reference any questions you may have.
CPT: Current Procedure Terminology or CPT® codes are a standardized list of alphanumeric procedure codes. All healthcare providers, payers and facilities in the United States use CPT codes.
Global billing: Some charges may be split into two components – facility/professional or technical/professional – for billing purposes. The charges for the individual components total the global charge. Component or global billing is determined by the patient’s specific insurance coverage.
Modifiers help tell the rest of the story. Some are self-explanatory, such as RT for right and LT for left.
Some modifiers that impact payment include:
FAC: Facility portion of a service (See also modifier PRO)
PRO: Professional portion of a service (See also modifier FAC)
TC: Technical component of a service that may require an interpretation, such as radiology (See also modifier 26)
26: Professional component of a service requiring an interpretation, such as radiology (See also modifier TC)