What Is an Entity Code in Medical Billing?

what is an entity code in medical billing

The field of medical billing can be confusing at times. 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. However, take note that it’s important to know the difference between a rejected and a denied claim.

What Is an Entity Code Error?

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

  • Problem with Billing NPI: An 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 be rejected. Make sure that your information always matches.  
  • Incorrect HICN (health insurance claim number): When you resubmit a claim, you must write the number from the original claim. If you record this number incorrectly, your claim will be denied.
  • Change in Patient’s Health Insurance: The entity code error sometimes 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 coverage or a lack of coverage on the date a healthcare provider performed a service. The patient may also have 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 an entity code, you must identify one entity on the bill. All you need to do is determine which entity you misidentified or forgot and fix the error.

Looking for Extra Help with Medical Billing?

If you are sick of wasting your time handling billing issues, such as figuring out what an entity code is in medical billing, PracticeForces can help. We guarantee that we will improve your cash flow almost instantly. Our expert team can streamline the claims and payment process 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) 732-2831. Alternatively, if you would like to know about Health Information Exchange and other topics, check out our blog!

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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