Reference
Medical billing glossary.
The dense terms on hospital bills + insurance EOBs, in plain English. Audra cites these directly in every audit — read here, decode there.
Category
Coding
CPT, ICD-10, HCPCS — the standardized identifiers hospitals and clinics use to describe what was done and why.
- CPT codealso: CPT, CPT codes, Current Procedural Terminology
- A 5-digit code identifying a specific medical service or procedure. Hospitals submit these to insurers; each code maps to an expected payment range.
- Current Procedural Terminology codes are maintained by the AMA. Audra checks these against published price ranges + bundling rules to spot when the wrong code was applied.
- DRGalso: Diagnosis Related Group, MS-DRG
- Diagnosis Related Group. The bundled flat-rate code Medicare uses for inpatient hospital stays — covers ALL services during a single admission.
- Instead of itemizing every line of an inpatient stay, Medicare pays a single DRG-based flat rate. If the hospital ALSO sends you a long itemized list of charges adding up to more than the DRG payment, that's upcoding or unbundling. Common DRG: 470 (major joint replacement without complications), 871 (severe sepsis without ventilator).
- HCPCSalso: HCPCS code, Level II code
- Codes for things CPT doesn't cover — ambulance rides, durable medical equipment, certain drugs. CPT + HCPCS together cover most billable services.
- ICD-10also: ICD-10 code, diagnosis code
- The international diagnosis code system. ICD-10 codes describe the condition; CPT codes describe what was done about it.
- ICD-10 codealso: ICD-10, ICD code, diagnosis code
- International Classification of Diseases (10th revision) diagnosis code. Five-to-seven character codes (e.g. J45.901 for unspecified asthma) that tell the insurer WHY you got the service.
- ICD-10 codes describe what's wrong with the patient (the diagnosis); CPT codes describe what was done about it (the procedure). The two have to align — an ICD-10 code for a sprained ankle paired with a CPT for an MRI of the knee is a common upcoding flag. Audra cross-checks every CPT/ICD-10 pair against CMS's published medical-necessity rules.
- Modifier 25also: modifier-25, -25 modifier
- A code appended to a procedure that claims a separately-identifiable E/M (evaluation) service was provided the same day. Frequently misapplied to inflate charges.
- When a doctor sees you for one issue and the same visit involves a procedure (like a joint injection), Modifier 25 can be added to bill BOTH. The rule: the E/M must be significantly separate from the procedure. Casual misapplication is one of the most common billing audit findings.
- Revenue codealso: rev code
- A 4-digit code on hospital bills (UB-04 forms) that groups charges by department, like "ER room" or "operating room". Different from CPT, which describes the service.
Category
Billing rules
Federal rules + CMS guidance that govern HOW services can be billed. Most billing errors come from rule violations, not arithmetic.
- Allowed amountalso: allowable, contracted rate
- The dollar amount your insurer has contractually agreed to pay an in-network provider for a service. The hospital can't bill you more than this.
- When in-network providers bill more than the allowed amount, the difference is called a "contractual adjustment" and the provider must write it off. If you see a balance for the difference between the chargemaster and the allowed amount, that's an illegal balance bill. Audra flags it.
- Chargemasteralso: CDM, charge description master
- The hospital's internal price list — the "sticker prices" before any insurance negotiation. Notoriously inflated; rarely what anyone actually pays.
- Hospitals must publish their chargemaster under the CMS hospital price transparency rule (2021+). The actual amounts insurers pay are usually 25-40% of chargemaster prices. If you're uninsured, you can often negotiate down to those insurer rates. Audra compares any billed amount to the published chargemaster + benchmarked insurer rates.
- Facility fee
- A separate charge for the OVERHEAD of where care happens (the building, the equipment, the staff). Hospital-owned outpatient clinics often add hefty ones.
- When your doctor's office gets bought by a hospital system, the same visit now generates TWO bills: one for the physician service, one for the "facility" — even though the physical location didn't change. Facility fees can double or triple the cost of a routine visit. Some states (CT, OH, IN, MN) ban or limit them; others require disclosure. Audra flags any facility fee on outpatient services and points you at your state's rules.
- Itemized bill
- Line-by-line breakdown of every charge. Always request this — summary bills hide the errors most audits catch.
- Federal law requires hospitals to provide an itemized bill within 30 days of a written request. Charge-only summaries (the kind you usually see first) hide the line items where errors hide.
- Itemized billalso: itemized statement, detailed bill
- A line-by-line breakdown of every charge — every aspirin, every gauze, every minute of operating-room time. Your legal right to receive on request.
- Hospitals routinely send "summary" bills with one or two line items totaling thousands. By law you can request the itemized version. It almost always reveals errors: phantom services (charges for things that didn't happen), duplicate charges (same item billed twice), and unbundled services (one procedure billed as five sub-procedures). Ask for it every time.
- MUEalso: Medically Unlikely Edit, MUE limit
- CMS-published upper bound on how many units of a procedure a single patient could reasonably receive in one day. Exceeding the MUE usually means a billing error.
- NCCI editalso: NCCI, National Correct Coding Initiative
- CMS-published rule that pairs two procedure codes and says only one can pay when billed together. Catches double-dips.
- Phantom chargealso: phantom billing
- A line item for a service that wasn't actually performed. Often involves supplies (gloves, gowns) or quick procedures that didn't happen.
- UB-04also: CMS-1450
- The standard hospital billing form. Has revenue codes, dates, totals — but is summary-level. Ask for the itemized bill that backs it up.
- Unbundlingalso: unbundled charges, fragmented billing
- Billing two services separately when CMS or CPT rules require them combined. Almost always increases the patient's bill.
- CMS's NCCI (National Correct Coding Initiative) publishes edits that say "if you bill code A and code B together, only the higher one pays." Hospitals sometimes split bundled services into individual charges anyway. Audits flag this against the live NCCI table.
- Upcoding
- Submitting a higher-paying code than the service actually warranted. Common on ER visits — billing a Level 5 visit (highest) when the documentation supports Level 3.
Category
Insurance
The terms that show up on your Explanation of Benefits + member portals.
- Coinsurance
- The percentage of a covered service you pay AFTER your deductible is met. E.g. 20% coinsurance means the insurer pays 80%, you pay 20%.
- Coinsurancealso: co-insurance
- The PERCENTAGE of the cost you owe after your deductible is met (e.g. 20% coinsurance = you pay 20%, insurer pays 80%).
- Coinsurance kicks in after you've met your deductible. It applies to the insurer's NEGOTIATED rate, not the chargemaster price. So if a hospital bills $1,000 but your insurer's contracted rate is $400 and you have 20% coinsurance, you owe $80, not $200. Frequent error: hospitals coinsuring against the chargemaster (sticker price) instead of the contracted rate. Audra catches this.
- Coordination of benefitsalso: COB, primary insurance, secondary insurance
- When you have two insurance plans, COB rules decide which pays first. The "primary" pays first, then the "secondary" picks up some of the remainder.
- Copayalso: copayment, co-pay
- A fixed DOLLAR amount you pay for a covered service (e.g. $30 PCP visit, $75 specialist), regardless of the underlying cost.
- Copays are flat fees that apply per visit/prescription. They DON'T count toward your deductible in most plans but DO count toward your out-of-pocket maximum. If you're billed coinsurance on something that should have been a flat copay, that's a billing error.
- Deductible
- The amount you pay out-of-pocket before insurance kicks in. Resets every plan year.
- Deductible
- The amount you have to pay out of pocket each year before your insurance starts covering costs (e.g. $3,000 deductible = first $3,000 of bills is on you).
- Two important nuances: (1) Preventive care (annual physicals, screenings) under the ACA is covered BEFORE the deductible. If you got charged for a preventive visit, that's a coding error — it should have been billed as preventive, not diagnostic. (2) Deductibles reset every plan year (January for most plans). Bills for service near year-end might apply differently than service in January.
- EOBalso: Explanation of Benefits
- The document your insurer sends explaining what they paid, what they didn't, and why. Not a bill — but the foundation for comparing against the hospital's bill.
- Always reconcile your EOB with the hospital bill BEFORE paying. Discrepancies between the two are one of the strongest grounds for an appeal.
- In-network
- A provider that has a negotiated rate with your insurance plan. In-network care is dramatically cheaper than out-of-network.
- In-networkalso: in network, INN
- A provider that has a contract with your insurance company at agreed-upon rates. You pay much less for in-network care.
- Out-of-network
- A provider without a negotiated rate with your plan. Usually billed at full charge, of which you pay a large share.
- Out-of-networkalso: out of network, OON
- A provider WITHOUT a contract with your insurance. You typically pay more, and the provider can balance-bill you (unless protected by the No Surprises Act).
- Common OON traps: ER doctors, anesthesiologists, radiologists, pathologists, and ambulance services are often out-of-network even when the HOSPITAL is in-network. The No Surprises Act (2022+) protects you from surprise OON bills in most ER, in-hospital, and air-ambulance situations — but NOT ground ambulance and NOT pre-scheduled care where you signed a consent. Audra checks every OON charge against NSA eligibility.
- Out-of-pocket maximumalso: OOP max, OOP maximum, MOOP
- The most you'll pay out of pocket in a year for in-network covered services. After hitting it, insurance covers 100%.
- The ACA caps the OOP max for marketplace plans ($9,200 individual / $18,400 family for 2025). After you hit it, you should pay $0 on additional in-network care. If you're still getting charged after hitting your OOP max, the hospital is billing wrong — flag it.
Category
Consumer protections
Laws — federal and (sometimes) state — that limit what providers can charge you for.
- Balance billing
- When a provider bills you for the difference between their full charge and what the insurer paid. Often illegal under the No Surprises Act.
- Charity carealso: financial assistance
- Required (under the ACA for non-profit hospitals) free or discounted care for low-income patients. Most patients don't know they qualify.
- Non-profit hospitals must offer financial assistance under IRS 501(r). Eligibility often goes up to 400% of the federal poverty level. If your bill is large + your income is modest, ask for the financial assistance application BEFORE paying.
- EMTALA
- Emergency Medical Treatment and Labor Act. Requires hospitals with ERs to evaluate AND stabilize anyone in an emergency, regardless of ability to pay.
- EMTALA means a hospital can't refuse to see you in an emergency. It does NOT mean care is free — you'll still get billed. But charges for the initial screening exam (the federally-required portion) often have legal limits that few patients know about.
- Good Faith Estimatealso: GFE
- A required written estimate (under the No Surprises Act) of expected charges for uninsured / self-pay patients, given BEFORE service.
- If you're paying cash, the provider is legally required to give you a Good Faith Estimate at least 3 business days before any scheduled service. If the final bill is $400+ MORE than the GFE, you can dispute it through the Patient-Provider Dispute Resolution process. Many providers forget this requirement — ask for the GFE in writing.
- No Surprises Actalso: NSA, surprise billing law
- Federal law (2022) that bars out-of-network providers at in-network facilities from balance-billing you above your in-network rate.
- If you went to an in-network ER and were seen by an out-of-network ER doctor, the No Surprises Act protects you. The provider must bill your insurer at the in-network rate; any "balance bill" sent to you is generally illegal.
Category
Appeals
How to dispute charges + how long the insurer has to respond.
- Appealalso: internal appeal, first-level appeal
- A formal request for your insurer or provider to reconsider a denial or charge. Most disputes are won in writing, not on the phone.
- Insurers must respond to written appeals within specific timeframes (15-60 days depending on type). Always appeal in writing first; phone calls are not legally binding records.
- Independent Dispute Resolutionalso: IDR, NSA arbitration
- The federal arbitration process for out-of-network billing disputes under the No Surprises Act. Patients aren't party to it — it's between the provider and the insurer.
- Under NSA, if you get a surprise out-of-network bill, your patient cost-share is capped at the in-network rate. The provider and insurer then go to IDR if they disagree on the remaining amount. You're a bystander to that — you should pay your in-network share and nothing more.
- Medically necessaryalso: medical necessity
- A service deemed essential under accepted medical standards. Insurers can deny coverage for services they consider "not medically necessary."
- Denials for "not medically necessary" are appealable. The hospital should have documentation supporting the necessity (referral notes, symptom records, prior treatments tried). Request that documentation as part of your appeal — many "not necessary" denials reverse once the records are reviewed.
See it in action
Audra cites these rules directly on every audit.
Upload a hospital bill. We'll surface the exact federal rule, CMS edit, or state law each finding rests on — and draft the appeal letter for you.