Whether you’re an experienced practitioner, a small practice owner, or someone related to the medical field, you know that the medical billing industry can be confusing and stressful.
While navigating through everyday RCM challenges and going through Medicare, Medicaid, and private insurance guidelines, we get to learn more about reimbursement options and the challenges that lie ahead.
One of these is the Entity Code.
However, as a healthcare provider, you must not spend time on technical things like these. The industry jargon combined with technical aspects that arise every day is making the day-to-day processes complicated.
Figuring out the complexities can be time-consuming. Your main job is to focus on patient care. However, if you are still interested in knowing what an entity code is and all about it, we have shared a lot of helpful information below. Just stay put!
What Is an Entity Code in Medical Billing?
Before talking about entity cards in medical billing, let’s tell you what exactly an entity is.
In the medical field, an entity is basically used to refer to a healthcare provider, a patient, or any medical billing services company. So, the use of the entity code tells us which of these entities should cover the medical bill on the claim.
By doing so, the medical billing companies align all involved to receive and pay the exact part of the bill. More importantly, it ensures no one of the stakeholders fails to pay their share or pays more than their share.
Using the exact entity code while creating a medical bill is of immense importance. Not being able to do so can result in repercussions and severe consequences like claim denials and delayed payments.
Significance of Entity Codes in Medical Billing
For those who do not know, entity codes play a significant part in accurate and efficient medical billing and coding. The reason behind it is that it clearly classifies and identifies between different stakeholders in the healthcare system. These include healthcare providers’ patients and insurance companies.
Simply saying, the use of entity code in medical billing ensures that each of these parties is correctly identified and they pay the correct amount on their part. This aspect helps in correct creation and payments against claims.
The usage of entity code correctly identifies and classifies each entity and helps avoid confusion during the billing process. Healthcare providers, by using and implementing the entity code in the correct way, can lower the risk of claim denials, enhance the efficiency of RCM, and collect more revenue than before.
The best part is timely and complete reimbursements without any risk of denials. Properly integrating the entity codes plays a vital part in the success of medical billing operations. Moreover, it also emphasizes the significance of entity codes and their vitality in the modern healthcare industry.
Types of Entity Codes
Following are the main types of entity codes
Subscriber
This entity represents the person or individual protected under the health insurance policy.
Dependent
This entity is used when the patient is someone other than the policyholder, i.e., a child or spouse.
Provider
A doctor, physician, nurse, or any healthcare professional responsible for providing medical services.
Payor
It stands for the insurance company from which the subscriber buys a health insurance plan.
Entity Code Error Leads to Claims Denials
Identifying and rectifying the entity code error is one of the toughest tasks for medical billers, and even the most experienced guys find it difficult. There’s a lot of uncertainty involved, and due to this, the medical vendors spend a lot of time finding the actual coding error.
The frequent efforts to find out the exact error mean this is a time-consuming and resource-draining job. Moreover, by spending a lot of time on these pesky issues, they are unable to submit all claims on time. And even if there is a denial, they cannot appeal against it within the given timeframe.
All these factors lead to a loss in revenue, lowered profitability, and also result in a negative impact on the practices’ credibility.
Entity Code Errors
Even the tiniest mistake can have some serious consequences on your practice’s revenue generation. This is because they result in claim denials and you have to spend a lot of time and resources to identify errors before resubmitting them to collect your revenue. Some of the common entity code mistakes experienced by leading medical billing companies in the US are:
- Failing to mention the correct entity code for a specific healthcare provider
- Not updating the entity codes while changes occur within the healthcare facility
- Documenting wrong or incomplete entity code information
- Mixing between entity codes and various types of healthcare entities
The Most Common Denial Reasons Related to Entity Codes
According to a survey, one of the most common reasons for claim denials on account of entity codes is that healthcare specialists submit incorrect National Provider Identifier numbers or tax identification numbers. This is seen in box 33 on the CMS claim for 1500. Want to go through some other major reasons? Read on!
HICN not matching
When there’s a slight error or lapse in concentration, you or your staff member may enter the wrong Health Insurance Claim Number HICN). Most times, this mistake persists when the rejected claim is sent back for correction, and it is resubmitted by the practice after going through it.
To avoid this mistake, the person responsible for resubmission must ensure the exact claim number provided by the insurance company for the first submission.
Incorrect Member ID
When the person responsible for documenting misses information regarding the patient or adds a wrong piece of information, they have to face a claim rejection based on the wrong member ID. It could also happen if the person’s insurance changed or the policy plan didn’t cover the specific ailment during the treatment.
Mostly, the medical billing companies or in-house staff face this mistake when the claim is sent to the wrong insurance company. This could happen if the patient’s ID doesn’t match.
Entity Code Needed
This denial reason is also prevalent, and practices face it when the biller doesn’t include the patient’s missing information. So, to ensure an error-free claim, the biller has to be very careful and verify all aspects of the documentation.
These include all parts of the claim like patient, provider and other healthcare providers involved in the treatment process. Only this way can they stay clear of such errors.
Service Location Zip Code
This error arises when there’s a problem with the provider’s address. The medical coder or biller must enter the correct last four digits of the zip code instead of ‘0000’. If the insurance company finds it, they’ll definitely deny the claim and send it back for correction.
Ways to Avoid These Mistakes
Avoiding entity code errors means avoiding claim denials and avoiding claim denials means more revenue and profit in your account. Hence, you should be very careful when it comes to identifying errors and rectifying them.
You can consult any leading medical billing company in the US and outsource your billing and other RCM operations to them.
Here’s how to avoid common entity code errors
- Be sure to update entity code information to show changes in the healthcare practice.
- To ensure accuracy and error-free documentation, cross-verify your identity codes with HICNs and NPIs.
- Integrate the latest medical billing software that helps you validate entity codes before submitting claims.
- Invest in arranging training for your staff members and educate them on the significance of adding correct entity codes.
Conclusion
Knowing the significance of entity codes in the medical billing world is of utmost importance. Not only does it safeguard the credibility of your healthcare practice, but it also ensures that claims submitted by you are passed in the first attempt.
Only careful consideration and a close eye to detail ensure that your claims are accepted and you receive complete and timely reimbursements without any hiccups. On the contrary, not being careful leads to denials and other complications.
It is important for healthcare providers and their in-house staff to be on their toes to prevent any issues resulting in payment stoppages. One of the best ways to ensure that all your claims are submitted correctly and paid correctly is by outsourcing your medical billing services to I-Med Claims.
We’ll turn complicated claims and complex coding into dollars without you having to worry one bit. We have a large team of highly experienced and AHIMA-certified medical billers and coders who’ll enhance your billing accuracy as well as your revenue.
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