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What Is an Entity Code in Medical Billing?

what is an entity code in medical billing

At times, the field of medical billing is confusing. While navigating Medicare, Medicaid, private insurance, and other healthcare RCM challenges, there is always more to learn about reimbursement and payment options.

However, as a medical provider, you likely don’t have time to waste figuring out medical billing lingo when an error occurs. Thus, the experts at PracticeForces present the following to quickly answer the question, “what is an entity code in medical billing?” 

What Is an Entity in Medical Billing?

When discussing medical billing terminology, an entity refers to a healthcare provider, patient, or third-party billing service. Thus, an entity code defines which party should cover the medical bill on a claim. This ensures that every entity receives and pays the correct part of the bill and that no party pays double or fails to pay their share of the statement. 

When creating a medical bill, using the correct entity code is vital, as failing to do so could result in a rejection of the claim.

What Is an Entity Code Error?

After discussing “what is an entity code in medical billing,” we will next define what an entity code error is. Most bills explain why they rejected a claim, which may include an entity code. Some common errors include:

  • Problem with Billing NPI: A NPI (National Provider Identifier) is a unique number connected to healthcare providers throughout the United States. If you or a third-party payer submits a claim with the wrong NPI (or Tax ID), your claim may face rejection. Make sure that your information always matches.  
  • Incorrect HCIN (health insurance claim number): When you resubmit a claim, it is important to write the number from the original claim. If you record this number incorrectly, your claim will face denial.
  • Change in Patient’s Health Insurance: Sometimes, the entity code error refers to the patient’s member number. These entity code errors typically indicate a change in the patient’s insurance, such as a change in their coverage or a lack of coverage on the date a healthcare provider performed a service. The patient may have also changed insurance or policies, meaning that the provider submitted their claim to the wrong entity.    
  • Missing Entity Code: If the explanation states that the code requires the use of an entity code, you forgot to identify one entity on the bill. All you need to do is determine which entity you either misidentified or forgot and fix the error.  

Looking for Extra Help with Medical Billing?

If you are sick of wasting your time billing handling issues, such as figuring out “what is an entity code in medical billing,” PracticeForces can help. We guarantee that we will improve your cash flow almost instantly. Our expert team can streamline the process of claims and payment and increase your revenue by 15-40% in the first 90 days after beginning to use our services.  

For more information on hassle-free medical billing in Florida, contact PracticeForces at (727) 499-0351. Alternatively, if you would like to know what Health Information Exchange is all about and other topics, check out our blog!

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