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What Is A Technical Component In Medical Billing?

July 7, 2022

What Is A Technical Component In Medical Billing?

Medical billing is a complex field, and it requires a thorough understanding of the terminology involved.

In order to become a successful medical biller, you should know the difference between a technical component and a nontechnical component.

Medical billing is the process of collecting payments from insurance companies or other third-party payers.

This involves creating and submitting claims to these parties.

The claim itself consists of two parts: the technical component and the nontechnical component.

Technical components include information such as diagnosis codes, procedure codes, and dates.

Nontechnical components include patient demographic data, physician notes, and other details.

A technical component is a part of a claim that contains coded information.

For example, a code for a specific disease or procedure would be considered a technical component.

On the other hand, a note written by a doctor describing the condition of a patient would be considered a nontechnical component.

Learn more about the differences between technical and non-technical components.

A technical component can have multiple subcomponents. For example, a diagnosis code may consist of several codes.

Each of those codes could also have one or more subcodes.

Modifiers

In addition to coding, there are other ways to classify medical bills. One way is to use modifiers.

Modifiers help define how much reimbursement will be paid on a particular bill.

These modifiers can be used to determine whether a provider gets reimbursed at all, what percentage they get reimbursed, and even if the amount they receive is taxable.

Modifiers are not technically components.

They are simply additional information attached to a bill. However, some modifiers do contain coded information.

For example:

  • A modifier called “unusual” indicates that the service was provided outside normal hours.
  • A modifier called “out-of-network” means the service was performed outside your network.
  • A modifier named “preventable” means the service was preventable through better care.

The final type of classification system is called a CPT (Current Procedural Terminology) code.

CPT codes are assigned to each procedure performed.

You must use this code when submitting a claim to an insurer or health plan.

Definition Of A Technical Component

A medical doctor does most of the work, but there are other professionals involved such as nurses, technicians, and assistants.

There are many kinds of equipment used during procedures. Most of them are expensive, and some are very specialized.

Global service is a complete service or procedure, including both the professional and technical elements.

This code can be used when there is a need to bill separately for the professional and technical aspects of service.

Examples include diagnostic testing and medical imaging.

Modifier 26 can be used with this code if the professional component is billed separately.

Codes are used by professionals only. Modifiers 26 & TC cannot be used with this code.

Why Are Technical Components Important?

A global submission of a code means that you’re submitting the same code in more than one place.

You’ll get denied if you do this twice.

For example, if you submit a code for both a medical procedure and an office visit, you’ll get denied because you’ve submitted the same code twice.

A PC/TC indicator of 0 means that the service was performed by a physician.

A PC/TC indicator 1 indicates that the service was performed using diagnostic testing equipment.

A PC/TC 6 indicates that the service was provided by a laboratory technician.

If a code with a PC/TC indicator of either 1 or 6 is not charged with modifiers 26 or TC, the service will be considered as a global submission of the service, indicating that the provider performed both the professional and technical aspects of the service.

All other PC/TC flag codes (0, 2,3,4,7,8,9) are professional only. No modifier is necessary.

These codes are technical only, meaning they do not apply to professionals.

Billing them as such will result in denial of reimbursement.

Cross-functional editing should be performed to ensure the submission meets the PC/TC criteria.

What’s The Difference Between Professional, Global, And Technical Charges?

What's The Difference Between Professional, Global, And Technical Charges?

Medical practices are almost as diverse in terms of how they bill patients.

There are different levels of services provided by each practice.

Some charge more than others, but there are some that charge less.

In order to get paid, doctors need to understand the definitions of CPT-4 codes and modifiers.

This helps them know what to charge for their services. NHIC conducted independent audits for CMS.

Their findings showed that the medical community needs more training.

Specifically, their findings show that the medical industry continues incorrectly billing (or not billing) modifiers that are required for distinguishing between the global, professional, and technical components of services, including charges.

The modifier codes that differentiate these services are ‘TC’ for Technical Components, and ‘26′ for Professional Components.

The explanation provided by CMS is this: The professional service component of a charge covers only the cost of the physician’s services.

When billing for the doctor’s time and expertise, a TC modifier is added to certain ICD-9 codes.

For example, A patient has a CT scan, and the doctor interprets its results.

A biller might code 77014–TC to indicate that the claim is for the professional services alone and not the use of facilities, equipment, or other support staff services.

By adding the TC modifier, the biller alerts the insurance company that the charge is for the physician’s professional services only and not the facility, equipment, or other staff services used.

Charges include the use of equipment, facility, non-physician staff, supplies, etc.; however, they do not include the physician’s professional fees.

A biller will bill global costs when there is no division in the cost of providing a medical service because the medical service was provided by a singular entity.

The global charge requires no modifiers.

For example, a billing system may bill for a consultation with the doctor without any modifiers.

When CPT-4 codes do not specify what type of service was performed, they should always be billed using the modifier “GLOBAL”.

For example, if a physician has an agreement with a facility to bill for any radiation services provided, the physician should use the modifier “GLOB” to indicate that the radiation services were received at that facility.

Component billing is separating codes into their components.

Modifiers are used to describe an additional service or procedure performed during a medical encounter.

For example, if you had a colonoscopy and a biopsy, both billed separately, then the two procedures are considered separate services.

However, if you had a biopsy and the physician did a follow-up colonoscopy, the second procedure would be considered a modifier because it was done after the first procedure.

Final Thoughts

In conclusion, the medical billing process can be confusing.

It is important to have a good understanding of all aspects of medical coding so that your practice can maximize revenue while minimizing liability.

We hope that this article has given you a good insight into what technical components are in medical billing, the process is complex, however with our information on it, you should have no problem understanding the process!

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About the author 

Fred Hopkins

Fred has been connecting medical practices with qualified medical billing and coding professionals since 2016. Helping doctors, of all kinds, streamline patient operations along the way.

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