USA Healthcare/Medical Billing abbreviations

In the journey of USA healthcare or medical billing process, we have to know the abbreviations which are commonly used in this sector. This will help everyone to understand the entire process, their language, and the basic things of medical billing.We go as per alphabetical order A to Z.


In this chapter, we cover A to D.

Allowed Amount: The sum an insurance company will reimburse to cover a healthcare service or procedure. The patient typically pays the remaining balance if there is any amount left over after the allowed amount has been paid.
American Medical Association (AMA): The AMA is the largest organization of physicians in the America. dedicated to improving the quality of healthcare administered by providers across the country.

Aging: A formal medical billing term that refers to insurance claims that haven’t been paid or balances owed by patients overdue by more than 30 days.

Ancillary Services: Any service administered in a hospital or other healthcare facility other than room and board, including biometrics tests, physical therapy, and physician consultations among other services.

Advance Beneficiary Notice(ABN): A notice that a doctor or supplier should give a Medicare beneficiary when furnishing an item or service for which Medicare is expected to deny payment. … They do not apply if you are in a Medicare Managed Care Plan or Private Fee-for-Service Plan.

Appeal: Appeal occurs when a patient or a provider tries to convince an insurance company to pay for healthcare after it has decided not to cover costs for someone on a claim. Medical billing specialists deal with appeals after a claim has been denied or rejected by an insurance company.

Assignment of Benefits (AOB): ABN refers to insurance payments made directly to a provider for medical services received by the patient. If AOB is not signed by patient, claim payment paid to patient directly.

Application Service Provider (ASP): ASP is an advanced system that enables social insurance suppliers to get to quality medicinal charging programming and advances without expecting to buy and keep up it themselves. Suppliers who utilize ASP ordinarily pay a month to month expense to the organization that keeps up the charging programming.

Authorization: This term refers to when a patient’s health insurance plan requires them to get permission from their insurance providers before receiving certain healthcare services. This term used when a patient’s medical coverage design expects them to get consent from their protection suppliers before getting certain medicinal services administrations. A patient might be denied scope in the event that they see a supplier for an administration that required approval without first counseling the insurance agency.


Beneficiary: The beneficiary is the person who receives benefits and/or coverage under a healthcare plan.


Capitation: A fixed payment that a patient makes to a health insurance company or provider to recoup costs incurred from various healthcare services. A capitation is different from a out of pocket expense.

Civilian Health and Medical Program of Uniform Services (CHAMPUS): CHAMPUS (now known as TRICARE) is the federal health insurance program for active and retired service members, their families, and the survivors of service members.

Charity Care: This type of care is administered at zero cost to patients who cannot afford healthcare services.

Clean Claim: This refers to a medical claim filed with a health insurance company that is free of errors and processed in a timely manner.

Clearinghouse: Clearinghouses are working as a barrier between provider/hospital and insurance company. They stop the claim before submitting to the insurance company if found any appropriateness in claim. The clearinghouse also known as “Scrubber”.

Centers for Medicare and Medicaid Services (CMS): The CMS is the federal entity that manages and administers healthcare coverage through Medicare and Medicaid. CMS coordinates with providers and enrollees to provide healthcare.

HCFA or CMS 1500: The CMS 1500 is a paper medical claim form used for transmitting claims based on coverage by Medicare and Medicaid plans.

COBRA Insurance- Consolidated Omnibus Budget Reconciliation Act: A federal program that allows a person terminated from their employer to retain health insurance they had with that employer for up to 18 months, or 36 months if the former employee is disabled.

Co-Insurance: The percentage of coverage that a patient is responsible for paying after an insurance company pays the portion agreed upon in a health plan. Co-insurance percentages depending on the health plan.

Contractual Adjustment: This refers to a binding agreement between a provider, patient, and insurance company wherein the provider agrees to charges that it will write off on behalf of the patient.

Coordination of Benefits (COB): COB occurs when a patient is covered by more than one insurance plan. In this situation patient decide and update which one is primary insurance and which one secondary or tertiary.

Co-Pay: A patient’s co-pay is the amount that must be paid to a provider before they receive any treatment or services. Co-pays are separate from a deductible, and will vary depending on a person’s insurance plan.

Current Procedural Technology (CPT) Code: CPT codes represent treatments and procedures performed by a physician in a 5-digit format. CPT codes are entered together with ICD-9 codes that explain a patient’s diagnosis. Medical billing specialists will enter CPT codes into claims so insurance companies understand the nature of healthcare a patient received with a provider.

Credentialing: The application process for a provider to coordinate with an insurance company. Once providers have become credentialed with an insurance company, they have the opportunity to work with that company in providing affordable healthcare to patients.

Credit Balance: Refers to the sum shown in the “balance” column of a billing statement that reflects the amount due for services rendered.

Crossover Claim: When claim information is sent from a primary insurance carrier to a secondary insurance carrier electronically it is called crossover.


Date of Service (DOS): The date when a provider performed healthcare services and procedures or patient get treatment is called DOS.

Day Sheet: A document that summarizes the services, treatments, payments, and charges that received on a given day.

Deductible: The amount a patient must pay before an insurance carrier starts their healthcare coverage.

Demographics: The patient’s information required for filing a claim, such as age, sex, address, and family information.

Durable Medical Equipment (DME): This refers to medical implements that can be reused such as stretchers, wheelchairs, canes, crutches, and bedpans.

Date of Birth (DOB): The patient date of birth as per documents.

Downcoding: Downcoding occurs when an insurance company finds there is insufficient evidence on a claim to prove that a provider performed coded medical services and so they reduce or remove those codes. Downcoding usually reduces the cost of a claim.

Duplicate Coverage Inquiry (DCI): A request submitted by an insurance carrier to determine if other health coverage available for a patient.

Dx: The abbreviation for diagnosis codes, also known as International classification of disease.

…………to be continued.

The next post we will know the abbreviations from alphabet  E onward so keep learning and stay connected.

Best Wishes

Picture source-Google


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