Entity Code are used in medical billing to identify the type of entity billed for a service. Entity codes are used to ensure that the entity is billed correctly and not charged by Medicare or Medicaid for the same service. Providers, billing agencies, and payers can assign entity codes.
Entity codes are needed because they help ensure that the entity is billed correctly for the service. If entity codes are used incorrectly, a bill will be issued to the wrong entity, which can cause problems for Medicare and Medicaid.
Each entity has its own code, called an entity ID number, and it is important to make sure the correct code is used when billing. If you are unsure which entity code to use, you can always ask your provider, billing office, or payer for help.
There is a lot of terminology for health care billing services, but most are easy to understand with some research and knowledge of medical practice. Unfortunately, entity coding errors in claims are not a mystery that is easy to solve.
Learn about entity codes:
Entity codes are a part of healthcare billing and are unique identifiers for the types of entities that provide healthcare services. These codes ensure that the entity being billed is the correct entity so that claims are not denied. Health care billing entities can be patients, service providers, health insurance companies, or insurance companies. Each entity has its code that identifies the type of entity being billed for that service. By using the correct entity codes, health insurance companies can streamline the billing process and avoid confusion.
Entities in Health Care Billing
In general, an entity is defined as a person or entity that exists independently, so that an individual, company, or small business can be considered an entity. As with medical billing, the entity specified can be a patient, a provider, or a medical billing service (if an outside billing company is used as a third-party biller).
Each entity is assigned a unique entity ID number, such as a National Provider Identifier (NPI) and Taxpayer Identification Number (TIN), which is important for billing accuracy and claims processing.
This is why the issue of “entity” errors is so confusing for medical billing professionals trying to resolve invalid or denied claims. At different points in the form, the entity ID or input query may refer to one of the various entities involved in the transaction.
Entity code requirements:
Entity codes are important for billing accuracy and to avoid errors in the billing process. Medical billing services use these codes to identify which entity is billing for a service. When using entity codes, you must provide accurate and complete information, including the entity name, address, and ID number. Failure to provide the correct entity code will result in claim denials and late fees, which will affect your revenue cycle. Therefore, medical billing services must ensure that all entity information is accurate to process claims.
Errors related to the entity in coding and declaration
If a claim is denied or rejected, an explanation must be provided stating that the entity being charged is the patient/client, or a box on the form indicating what the problem is. If it is not clear, you should contact the payer for clarification.
Different computers have different definitions, but the problem is common to all computers. Here are some common code errors you may encounter.
- Health Insurance Company Claim Number (HICN) – This error occurs after a claim has been corrected and resubmitted. In this case, the payer and the biller are responsible for ensuring that the claim number assigned to the payer’s original claim is used.
- Entity/Member ID Contract – The error on this reference indicates that the entity is missing information. If the claim information is filled in, the problem could be that the patient’s coverage has changed, is no longer covered since the date the service was provided, or the newborn patient is not enrolled in the policy. This error can also occur if a claim is submitted to the wrong payer because the member ID and patient ID do not match in the system.
- This code should have an entity code – in this case, the biller should try to determine which entities are not identified by checking each claim box. In addition to the patient and provider, be sure to check that the health insurance company and referring physician (if any) are correctly identified.
- Service Location Entity Vertical Code – This refers to the provider. If an error occurs, please enter the last four digits of the nine-digit ZIP code (not just 0000).
In most cases, you can identify the entity represented by the required information or location on the form. If the situation is unclear, you may want to contact the payer to find out what is needed.
Medical billing is becoming increasingly complex. If you’re still working on your medical billing, request a free demo. Our customer case studies demonstrate the benefits of MedEx MBS management of credit and revenue cycle management (RCM), and we’re happy to answer any questions you may have.