What is an Entity Code in Medical Billing Claims?

What is an Entity Code in Medical Billing Claims?

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Understanding the entity code error and rectifying the claims is the most difficult and challenging task during in-house medical billing. Due to its complication, this procedure leads medical billers to spend much time identifying the real issues with the claims. As a result, they generally fail to submit and appeal claims within the given time period to the payers. This all results in a significant loss of time, revenue for the medical practitioners and impacts their bottom-line negatively.

Before going into further details of Entity Code in Medical Billing Claims, let’s discuss what is an Entity? entities involved in medical billing services and Entity Code Error in a Billing Claim.

What is an Entity Code in Medical Billing Claims?

What is an Entity in Medical Billing?

An entity is a person or thing with an independent existence—hence an individual, or a corporation, would be an entity. The same is for medical billing, where the entity mentioned could be the patient, the provider, or even the medical billing service if the third-party biller medical billing company is used.

The entity in medical billing implies a relationship, any controlled liability company, that is directly or indirectly involved in the medical billing process. It involves the information of entities such as hospitals, doctors, patients, insurance companies, etc. The information on these factors is used in generating medical bills and codes for the patient’s visit and collecting payments for healthcare practitioners.

A healthcare center accentuates gathering the information of each entity and verifying this information before medical billing services. Because the authenticity of this information helps medical billers to file clean claims (reimbursable claims) and collect payments for professional medical technician services on behalf of an affiliated medical group or a subordinate.

Entity Code Error in a Billing Claim

The entity code error is probably due to submitting a medical claim with the wrong billing NPI (the equivalent of Box 33 on the CMS-1500). Most payers have the NPI shared with them on file. After receiving a medical claim, they verify the NPI in their system to see if they have the billing NPI on file. If they don’t record it on file, then it would result in claim denials. In addition, to the Tax ID, there is also an NPI, on file. This error also occurs when a claim is submitted with the wrong Tax ID reported in Box 25 on the claim.

One should always submit claims to the payer using the same NPI and Tax ID that the third party or secondary party payer has recorded on file for you. While submitting a claim if you can find anything that stands out as being wrong or you may not find appropriate information, you need to call the third-party payers to get additional information.

The different types of ‘Entities codes error’ that can be on a medical claim are given below.

Billing Provider

  • Rendering Provider address, phone, do not go on claim, even so, they may be referencing the NPI.
  • Insured.
  • Patient.
  • Referring Physician.

Rejection Reasons

1. The patient is a newborn or added to the guarantor’s insurance policy recently.

2. The claim was issued to the wrong payer ID.

3. The patient’s demographics or insurance policy included on the claim was not adequate for the date when the bill of the service is generated.

Resolution of entity code errors

Resolution steps may differ depending on the cause:

1. If the claim is submitted to the wrong payer ID then primarily verify and edit the payer ID.

2. If the error confers that the patient’s demographics are incorrect, then authenticate the patient’s admissibility criteria.

3. If the patient is a newborn or recently added to the guarantor’s policy then don’t feel hesitant to contact the payer to authenticate the patient is active under the insured’s policy.

Rebill and resubmit all mistaken claims after resolving all the issues with the medical claims and implementing all the needed corrective actions.

It is a very intimidating task to deal with the denied claims that come back from the payers to haunt medical practitioners. Due to the lack of a dedicated medical billing services team, most medical practitioners lose millions of dollars. To let ZEE medical billing helps you in your billing tasks and consistently follow up with paid and unpaid claims___

Get a free no-sting attached billing services quote from ZEE Medical Billing for your practice.


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