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assignment of benefits

The transfer of the patient's legal right to collect benefits for medical expenses to the provider of those services; the patient authorizes sending of the payment directly to the provider.


A process done before claims submission to examine claims for accuracy and completeness. An audit can be preformed manually, or it can be done electronically with computer billing software.

audit trail

The path left by a transaction when it has been completed; often referred to when tracking medical services used by patients or researching claims.

clean claim

An insurance claim form that has been completed correctly (no errors or omissions); clean claims can be processed and paid promptly if they meet the restrictions on covered services and blocks.


A centralized facility to which insurance claims are transmitted. Clearinghouses separate, check, and redistribute claims electronically to various insurance carriers and may offer additional services to the physician.

direct billing

A method of electronic claims submission in which computer software allows a provider to submit an insurance claim directly to an insurance carrier for payment.

dirty claim

A claim form that contains errors or omissions; dirty claims must be corrected and resubmitted to an insurance carrier to obtain reimbursement.

electronic claim

A claim submitted to an insurance procession facility through a computerized medium, such as direct data entry, direct wire, dial-in telephone digital fax, or personal computer download or upload.

electonic data interchange (EDI)

The transfer of data back and forth between two or more entities using an electronic medium.

elecronic (or digital) signature

A scanned signature or other such mark that is accepted as proof of approval of and/or responsibility for the content of an electronic document.

employer identification number (EIN)

The number used by the Internal Revenue Service to identify a business or individual functioning as a business entity for income tax reporting.

intelligent character regcognition (ICR)

The electronic scanning of printed blocks as images and the use of special software to recognize these images (or characters) as ASCII text for upload into a computer database.

National Provider Identifier (NPI)

A lifetime number consisting of 10 digits that Medicare uses to replace the Provider Indentification Number (PIN) and the Unique Physician Identification Number (UPIN).

paper claim

A hard copy of an insurance claim, which is completed and sent by surface mail.

rejected claims

Claims returned unpaid to the provider for clarification of any question; rejected claims must be corrected before resubmission.

Unique Provider Identification Number (UPIN)

A number assigned by fiscal intermediaries to identify providers on claims for services.

universal claim form

The form used to submit all government sponsored claims; also know as the CMS-1500 form. It was developed by the agency that became the Centers for Medicare and Medicaid Services (CMS) and approved by the American Medical Association (AMA).

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