An entity is an individual, group of people, or corporation set up to corroborate and perform specific tasks. In medical billing, this can be any organization or business unit within a hospital, clinic, physician practice, health maintenance organization (HMO), or insurance plan. Each of the aforementioned is assigned an entity code.
The code can be issued by the billing office, provider, or payer. This ensures all claims submitted by that entity are correctly billed to the appropriate payer. Otherwise, issues can lead to the wrong entity being billed, resulting in the claim not being processed. Furthermore, if the correct entity code is not used, it may result in the incorrect amount being paid for services rendered and the patient receiving less than what was agreed upon.
The entity codes are also used when submitting claims to Medicare and Medicaid. They are needed because these programs have different rules and regulations regarding how claims should be submitted. For example, Medicare requires that the service date be included on each claim, while Medicaid does not require this information. However, using the entity code allows the provider to submit the claim with the correct information so that both programs will accept it.
Common Medical Billing Entity Code Errors
When a claim is rejected or denied, the form you receive should include the reason why and the entity involved in the issue. Typically, a checked box indicates the patient or client and supporting written information. If you’re unsure, you’ll need to contact the payer for clarification and any additional documentation. Additionally, if your claim was submitted electronically, it may have been sent directly to the payer’s electronic claims processing system.
Health Insurance Claim Number (HICN) Error Code
A HICN code notification indicates that the payer has been incorrectly identified. In this instance, the medical biller needs to go back and verify that the claim number is the one that was issued for the payer/patient. The medical billing company must also check its records to ensure they submit the correct HICN.
Contract Member Number Code Error Code
This error usually points out that information about the patient is missing. For example, the patient’s coverage was revised or not covered when healthcare services were provided, or a new patient, like a child, wasn’t yet added to the policy. This error code will also surface if the claim has been submitted to the incorrect payer, as the patient’s ID or member number wouldn’t match the bill recipient’s system. The first step in resolving this issue is to check your claims data for errors and ensure they are correct.
An Error Code Requiring the Use of an Entity Code
In this instance, the payer received the wrong entity code in the first place. The medical biller must go back and determine which entity wasn’t identified clearly by checking each box of the claim. In some cases, the patient and provider must be verified again in addition to any referring practitioner.
Postal or Zip Location Error Code
This error code shows up when the nine-digit zip code isn’t used or 0000 is used as the last four digits.
Entity Code Error General Solutions
The steps needed to resolve error code issues will depend on what caused them. What follows are a few general solutions that can be used when encountering entity code errors.
Check Your Entities
If you’re receiving an error code related to entities, it’s important to verify that all of your entities are correctly set up. If not, you’ll need to fix these before submitting a claim.
Make Sure You’ve Set Up All Entities Correctly
Ensure that every entity is correctly set up. Make sure that the patient’s name, address, phone number, and other contact information are entered into the appropriate fields. Also, make sure that the billing party (the person who receives the payment) is set up correctly.
Verify Patient Information
It’s possible that the patient’s information may have changed since the time the claim was created. It’s best to double-check the patient’s information to ensure everything is accurate.
Double Check Referring Provider Information
Sometimes providers will submit bills incorrectly. Double-checking the referring provider’s information should help eliminate this problem.
Check Billing Party Information
Another common reason why this error code surfaces is when the billing party hasn’t been set up correctly. Make sure that the correct billing party is selected.
After resolving the issues stated above, results from resubmission should result in a more favorable outcome.