Common Claims Terms

Navigating the world of insurance billing can feel overwhelming, especially for doulas new to submitting claims. Understanding common claim terms is the first step to making the process smoother and ensuring timely reimbursement for your services. In this article, we’ll break down essential terms like CPT codes, ICD-10 codes, modifiers, EOBs, and more. Whether you’re submitting your first claim or looking to refine your knowledge, this guide is designed to help you feel confident and informed.

Common Terms:

Here is a list of common billing terms you may encounter when working with insurance companies, and other payer organizations, as a doula:

• NPI (National Provider Identifier): An NPI is a 10-digit number that is assigned to an individual or a business entity used for billing purposes. A doula needs a NPI to submit claims to insurance companies for reimbursement of their services. This unique identifier is essential for electronic healthcare transactions, enabling doulas to bill for their services and be recognized as healthcare providers in the claims process. You can register through the National Plan and Provider Enumeration System (NPPES).

• Payer: A payer is the company or organization you are submitting your claims to. It can be a private insurance company, state funded health insurance program or other payment organizations.

• EOB (Explanation of Benefits): A statement provided by the insurer detailing how a claim was processed, including the services covered, amounts paid, and any balance the client may owe. It explains how the insurance company handled the claim, and may be mailed, or electronically sent once the claim is fully processed.

• CPT Codes (Current Procedural Terminology): Codes are standardized five-digit codes used by healthcare providers to describe the specific services they provide. They communicate the type of service provided, such as prenatal visits, labor support, or postpartum care, and ensure that the claim is processed accurately.

• ICD-10 codes (International Classification of Diseases, 10th Edition codes): ICD-10 Codes are standardized codes used to describe a patient's diagnosis or reason for receiving care. For doulas, these codes are not about the services you provide but about the medical condition or situation of the person you are supporting. When submitting claims to insurance companies, ICD-10 codes work alongside CPT codes. While the CPT code tells the insurer what service you provided (like labor support or postpartum care), the ICD-10 code explains why the service was needed (such as a normal pregnancy or a specific childbirth-related condition). Using the correct ICD-10 code is crucial because it ensures that the claim aligns with the client's medical circumstances, helping the insurance company process and approve the claim.

• Modifier: Modifiers are two-character codes (letters, numbers, or a combination) that are added to CPT codes to provide extra details about the services you provided. They help payers better understand unique circumstances related to the care, such as whether a service was performed differently than usual or if additional services were included. When submitting claims, check the payer's specific requirements to confirm if a modifier is needed and which one applies to your situation.

  For example, a modifier might indicate:

  • That a service was provided on the same day as another related service.
  • That a doula provided two distinct services during the same encounter, such as labor support and a postpartum visit, to indicate that these services are separate and not bundled together.
  • Special circumstances, like services delivered virtually (telehealth).

• Claim: A claim is a formal request sent to an insurance company to get paid for the services you provided. For doulas, submitting a claim means providing detailed information about the care you delivered to a client, so the insurance company can process it and reimburse you.

• Prior Authorization (PA): Prior authorization is a requirement from an insurance company to approve a service before it’s provided to ensure the service is medically necessary and covered under the client’s plan. If prior authorization is required and not obtained, the insurance may deny the claim. Some Medicaid programs or private insurance plans may require prior authorization for doula services, especially if they are considered part of a broader care plan. It is best to call the payer or review the client’s policy to confirm.

• Fee Schedule: A list of the approved payment rates for services provided under a specific insurance plan or Medicaid.

• Reimbursement: Reimbursement is the payment that a payer (such as an insurance company, Medicaid, or another third-party payer) makes to a doula for the services provided to a client. This payment is based on several factors, including the terms of the client’s insurance plan, the specific services performed by the doula, and the correct submission of service codes.

  
  
• Managed Care Organization (MCO): A type of Medicaid plan where services are provided through a network of contracted healthcare providers.

• EDI (Electronic Data Interchange): EDI is a system used for submitting claims electronically to insurance companies for processing in a standardized format. It replaces the use of manual claim submission, making the process faster and more efficient. Doulado uses EDI to submit claims through the platform which is why HIPPA Compliance is a required feature in order to protect client health information as it interchanges through platforms.

  
  
• Rejection: A claim that contains incorrect or missing information, that can be determined quickly. A rejected claim simply means it wasn't accepted for processing by the payer. Usually a simple fix and re-submission will get the claim accepted. Read more about common rejections in this article.

Examples of common rejections are:

• The place of service is missing or set to a location that doesn't make sense with the service provided
• Missing or incorrect patient information, like patient DOB or things like hospital dates
• Incorrect billing codes, modifiers or diagnoses

• Denial: A claim that has been initially accepted by a payer for processing, but results in a non-payment for another reason that wasn't immediately determined to cause a rejection. Denials typically require corrections or appeals before they can be processed or reimbursed.

  Examples of common denials:

  • Using procedure codes or modifiers that don't apply to the patient's specific circumstance
  • The claim needs additional documentation to establish medical necessity
  • The service billed is not covered by the patient's plan

• Provider Contracting: The process of negotiating and signing agreements with insurance companies, and other payment organizations to establish terms for service reimbursement and is usually required for doulas to submit claims to that company or program. Signing a contract does not automatically make the doula an in-network provider; it depends on the specific terms of the agreement.

• Credentialing: The process of verifying a provider’s qualifications and eligibility to be a participating provider with Medicaid, Medicaid Managed Care Plans, or insurance companies.

• Eligibility Verification: The process of confirming that a client is covered by insurance or Medicaid for specific services before rendering care. This can be done by contacting the payer customer service to verify that client's coverage.

• Remittance Advice (RA): A document sent by the insurer outlining the payment made on a claim, including any adjustments, denials, or co-payments due by the client.

• In-Network Vs. Out-of-Network: In-Network providers have an agreement with the insurance company to be part of their network. They often agree to lower, negotiated rates in exchange for greater access to clients covered by that insurance.

  
  

  Out-of-Network providers may still have a contract with the insurance company for reimbursement purposes but are not officially listed in the insurer’s network. Clients may have to pay more out-of-pocket for out-of-network services. The insurance company or organization may not include doulas as in-network providers for a specific policy or region, or the doula might not meet the insurance company’s requirements for being included in the network (e.g., licensing or credentialing standards). Sometimes, the doula may prefer to remain out-of-network to retain flexibility in setting their own rates, as in-network providers are often required to accept lower reimbursement rates.

  
  

  If you’re a doula considering contracting with an insurance company, it’s essential to clarify whether the agreement will place you in-network or out-of-network, as this can affect your reimbursement rates, client volume, and administrative responsibilities. Always review the terms carefully and consult with the payer if you have questions.

• Coordination of Benefits (COB): Coordination of Benefits determines which insurance plan is the primary payer and which is secondary when a client has multiple insurance policies. You can gather information about all insurance plans the client has, and confirm if they have primary and secondary coverage. If they have secondary coverage, you can encourage your client to check their plan documents for any COB rules.

  
  
• ERA (Electronic Remittance Advice): A digital version of the Remittance Advice, which is used to inform providers of how claims have been processed and paid, helping to streamline billing and payment processes. Click here to view the help article on claims payments to explain this further.

• EFT (Electronic Funds Transfer): The electronic transfer of funds from the insurer to the provider, typically used for payments of claims, ensuring faster and more efficient payment processing. This process is similar to a direct deposit, as a way to receive your claims earnings.