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Medical Billing and Coding Terms to Know

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Medical Billing and Coding Terms to Know

Medical billing and coding is vital to the healthcare industry. Without it, hospitals and doctors’ offices wouldn’t be able to request payment for services. If you’ve looked into joining the field, you’ve probably heard a few medical billing and coding terms over and over. But what do they mean, and how do they relate to the job?

Here’s a beginner’s guide to medical billing and coding terms. This list will give you a good start on what you need to know, and should help you as you navigate choosing a school and beginning your career education. ­

Allowed amount

This is the amount that insurance companies will actually pay, or reimburse, for a specific service or procedure. If the allowed amount is less than the overall cost, then the patient will usually be responsible for paying the balance.


When you start seeing wrinkles around your eyes and mouth. Just kidding! This term refers to when an insurance claim or patient bill passes the 30-day mark without being paid.

Assignment of Benefits (AOB)

Good job—if you hear this term, it means the insurance company has successfully processed the claim. Assignment of Benefits is payment that healthcare providers receive directly from insurance companies.


The beneficiary receives the benefits from a healthcare insurance plan. Sometimes the beneficiary is the actual holder of the plan, and sometimes it’s his or her spouse or children.

Clean claim

Another good term! This means that a medical claim is filed error-free and on time.


The root of the whole billing process. Coding is when you convert the physician’s documentation about a patient’s medical condition into medical codes. Then these codes are used to file a claim with the payer.


You’re probably familiar with the word deductible from your own insurance. This is the amount that a patient is required to pay before their insurance kicks in.

Electronic Claim

This probably seems pretty self-explanatory, but an electronic claim is a claim that is sent electronically to the payer.

Healthcare providers

This is perhaps one of the most frequently used words in the medical billing and coding industry. Providers refers to any facility, hospital or office that offers healthcare services to patients. Your doctor is a provider—and so is your local emergency room.

ICD-10 Codes

ICD-10 is short for “International Statistical Classification of Diseases and Health Related Problems, 10th revision.” There are about 68,000 codes within ICD-10, which are used to classify conditions, treatment and procedures. These are the codes you’ll use as a biller and coder.

Medical coder

A medical coder is the person responsible for coding patient information. These codes are then used in claims made to payers.

Medical billing specialist

A medical billing specialist fills claims to insurance companies so that the provider can be paid.


Medicare is a government insurance program for people over 65. Medicare can also expand to people with qualifying disabilities.


Have you ever gone to your primary doctor and been sent on to a specialist? Your primary doctor provided a referral for the specialist. This is when providers recommend other providers with specialized skillsets.


Surprisingly, this doesn’t refer to wearing scrubs. Instead, scrubbing is the process of checking claims for inaccuracies and errors before sending them for processing. Claims can be rejected for errors, so scrubbing is an important step.


This list of medical billing and coding terms should give you a foundation as you begin your career training. There’s much more to learn as you join this exciting field! What’s one of your favorite medical billing and coding terms? Let us know in the comments!

Originally posted: August 29, 2016
Last updated: August 29, 2016

The views expressed herein are those of the author and do not necessarily reflect those of Ultimate Medical Academy.