Billing & Insurance Terms

Sometimes billing and insurance terms can leave you feeling like you’re learning a second language. We’re here to help! Below is a list of commonly used terms you might see regarding your healthcare billing and insurance claims.

Important Definitions to Understand

Copay 

Fixed dollar amount a patient pays for covered health care.

Coinsurance

Patient share of the costs of a covered service, calculated as a percent of the allowed amount for the service. Example: If the plan’s allowed amount for an office visit is $100, patient co-insurance payment of 20% would be $20.00.

Deductible 

A deductible is the amount you must pay for covered services before the insurance starts covering your cost.  Screenings, immunizations and preventative services are covered without requiring you to pay a deductible. If you are unsure of your coverage, please contact your insurance company.

When you are insured on a family plan, please review the type of deductible-traditional or aggregate. Health plans with traditional deductibles have 2 separate deductibles: an individual and a family deductible. The individual deductible allows each member of a family to receive benefits from the insurance company before the family deductible has been satisfied.

If your family is on an aggregate deductible plan, the entire family needs to satisfy the deductible before any members of the family receive benefits. This type of plan is usually seen in high deductible plans tied to a health savings account.

Out of Pocket Limit

This is the most a you could pay during a covered period (usually 1 year) for your share of covered services. If you are unsure of your limit, please contact your insurance company with questions.

In-Network

“Participating” or “In Network” providers are those contracted with your carrier. You pay a lower co-insurance and deductible when they use an in-network provider. We do our best to verify coverage prior to your visit but your carrier states it is your responsible to verify you are scheduled with an “in-network” provider by checking online or calling your carriers customer service line listed on the backside of your insurance card.

Out-of Network

If a provider or pharmacy is not listed as an “in-network” or “participating provider”, you will  have a higher out of pocket cost for the service(s) rendered. Please contact the customer service number on the back of your card for the exact amount. The deductible and co-insurance will be higher than in network providers.

Other Commonly Used Definitions

  • Adjustment — The portion of your bill that your provider has agreed not to charge you.
  • Advance Beneficiary Notice (ABN) — A notice your provider gives you before you are treated, informing you that Medicare will not pay for the treatment or service. The notice is given to you so that you may decide whether to have the treatment and how to pay for it.
  • Amount Not Covered — What your insurance company does not pay, including deductibles, co-insurances and charges for non—covered services.
  • Ancillary Service — The services you receive beyond room and board charges, such as laboratory tests, therapy, surgery, etc.
  • Appeal — A process by which you, your doctor or your hospital, can object to your health plan when you disagree with the health plan’s decision to deny payment for your care.
  • Applied to Deductible — A portion of your bill, as defined by your insurance company, that you owe your provider.
  • Assignment of Benefits — An agreement you sign that allows your insurance to pay the provider directly.
  • Authorization Number — A number stating that your treatment has been approved by your insurance plan. Also called a Certification Number, Prior Authorization Number or Treatment Authorization Number.
  • Beneficiary — A person covered by health insurance.
  • Beneficiary Eligibility Verification — A way providers retrieve information about whether you have insurance coverage.
  • Benefit — The amount your insurance company pays for medical services.
  • Bill/Invoice/Statement — A printed summary of your medical bill.
  • Centers for Medicare and Medicaid (CMS) — The federal agency that runs the Medicare program. In addition, CMS works with the states to run the Medicaid programs
  • Certification Number — A number stating that your treatment has been approved by your insurance plan. Also called an Authorization Number, Prior Authorization Number or Treatment Authorization Number.
  • Claim — Your medical bill that is sent to an insurance company for payment.
  • Claim Form — A form provided by your insurance company that needs to be complete before your bill can be paid.
  • Claim Number — A number assigned by your insurance company to an individual claim.
  • COBRA Insurance — Health insurance that you can buy when you are unemployed for a certain period of time.
  • Coding of Claims — Translating diagnoses and procedures from your medical record into numbers that insurance companies use to pay claims.
  • Consent — An agreement you sign that gives your permission to receive medical services or treatment from doctors or hospitals.
  • Coordination of Benefits (COB) — A way to decide which insurance company is responsible for payment, if you have more than one insurance plan.
  • Covered Benefit — A health service or item that is included in your health plan and is paid for either partially or fully.
  • CPT Codes — A coding system used to describe what treatments or services your doctor gave to you.
  • Date of Service (DOS) — Treatment date.
  • Diagnosis Code — A code used at the time of billing to describe your illness.
  • Discount — The dollar amount removed from your bill, usually because of a contract between your provider and your insurance company.
  • Due from Insurance — The amount owed by your insurance company.
  • Due from Patient — The amount you owe.
  • Emergency Department — The part of a hospital that treats patients with emergency or urgent medical problems.
  • Estimated Insurance — An estimate of payments from your insurance company.
  • Enrollee — A person who is covered by health insurance.
  • Estimated Amount Due — The amount the provider estimates you or your insurance company owes.
  • Explanation of Benefits (EOB/EOMB) — The notice you receive from your insurance company after your bill has been processed or paid. The notice tells you the amount the provider billed, the amount paid by your insurance and what you have to pay.
  • Federal Tax ID Number — A number assigned by the federal government to doctors and hospitals for tax purposes.
  • Financial Responsibility — The amount of your bill you have to pay.
  • Guarantor — The person responsible to pay the bill. The guarantor is always the patient unless the patient is a child (< 18 years of age), a ward of the court or a full—time student.
  • Healthcare Advance Directive — A written document that describes how you want medical decisions to be made if you lose the ability to make decisions for yourself. A healthcare advance directive may include a Living Will and a Durable Power of Attorney for healthcare decisions.
  • Health Maintenance Organization (HMO) — An insurance plan that pays for preventive and other medical services provided by a specific group of participating providers.
  • HCFA 1500 Form — A coding system used to describe what treatment or services your doctor or provider gave to you.
  • HIPAA – Health Insurance Portability and Accountability Act — This federal act sets standards for protecting the privacy of your health information.
  • Inpatient (IP) — A patient who stays overnight in the hospital.
  • Insurance Waivers — The services excluded from your insurance policy, such as cancer care or obstetric/gynecologic or pre—existing conditions.
  • Insured Group Name — The name of the group or insurance plan that insures you, usually an employer.
  • Insured Group Number — A number that your insurance company uses to identify the group under which you are insured.
  • Insured’s Name (Beneficiary) — The name of the insured person, who is also referred to as the member.
  • Internal Control Number (ICN) — A number assigned to your bill by your insurance company or their agent.
  • Liability — The person or persons liable or under obligation for the bill.
  • Managed Care — An insurance plan that requires patients only see providers (doctors and hospitals) that have a contract with the managed care company, except in the case of medical emergencies or urgent care, if you are out of the plans service area.
  • Medicaid — A state administered federal and state funded insurance plan for low income people who have limited or no insurance.
  • Medical Record Number — The number assigned by your doctor or hospital that identifies your individual medical record.
  • Medicare — A health insurance program for people age 65 and older. Medicare covers some people under age 65 who have disabilities or end—stage renal disease (ESRD).
  • Medicare + Choice — A Medicare HMO insurance plan that pays for preventive and other types of healthcare provided by designated doctors and hospitals.
  • Medicare Approved — Medical services normally paid for by Medicare.
  • Medicare Assignment — Providers who have accepted Medicare patients and agreed not to charge them more than Medicare has approved.
  • Medicare Number — A number and an ID card is assigned to each person covered under Medicare and for identification to providers.
  • Medicare Paid — The amount of your bill paid by Medicare.
  • Medicare Paid Provider — The amount of your bill Medicare paid to your provider.
  • Medicare Part A — Usually referred to as Hospital Insurance, it helps pay for inpatient care in hospitals and hospices, as well as some skilled nursing costs.
  • Medicare Part B — Assists with paying for doctor services, outpatient care and other medical services not paid for by Medicare part A.
  • Medicare Summary Notice (MSN) — The notice provided by Medicare after receiving services from your provider. It tells you what was billed to Medicare, Medicare’s approved payment, the amount Medicare paid and the amount you owe. Also called an Explanation of Medicare Benefits. (EOMB).
  • Medigap — Medicare Supplement Insurance that pays for some services not covered by Medicare A or B, including deductible and co-insurance amounts.
  • Network — A group of doctors, hospitals, pharmacies and other healthcare experts hired by a health plan to take care of its members.
  • Non-Covered Charges — The charges for medical services denied or excluded by your insurance. You may be billed for these charges.
  • Out-of-Network Provider or Non-Participating Provider— A doctor or other healthcare provider who is not part of an insurance plan, doctor or hospital network.
  • Paid to Provider — The amount the insurance company pays to your medical provider.
  • Paid to You — The amount the insurance company pays to you or your guarantor.
  • Participating Provider — A doctor or hospital that agrees to accept your insurance payment for covered services as payment in full, minus your deductibles, co-pays and co-insurance amounts.
  • Patient Amount Due — The amount your provider charges you for services received.
  • Pay This Amount — The amount you owe towards your medical bill.
  • Point-of-Service Plan (POS) — An insurance plan that allows you to choose doctors and hospitals without having to first get a referral from your primary care doctor.
  • Policy Number — A number your insurance company gives you to identify your contract.
  • Pre-Admission Approval or Certification — An agreement made by your insurance company and you.
  • Pre-Existing Condition — A health condition or a medical problem acknowledged by your health plan before you receive insurance. Some health plans may not pay for health conditions you had prior to becoming a member.
  • Preferred Provider Organization (PPO) — An insurance plan in which you use doctors, hospitals and providers that belong to the network. You can use doctors, hospitals and providers outside of the network for an additional cost.
  • Prepayments — The money you pay before receiving medical care; also referred to as preadmission deposits.
  • Primary Care Network (PCN) — A group of doctors serving as primary care doctors.
  • Primary Care Physician (PCP) — A doctor whose practice is devoted to internal medicine, family and general practice or pediatrics. Some insurance companies consider Obstetrician or Gynecologists primary care physicians.
  • Primary Insurance Company — The insurance company responsible for paying your claim first. If you have another insurance company, it is referred to as the Secondary Insurance Company.
  • Prior Authorization Number — A number stating that your treatment has been approved by your insurance plan. It is also referred to as an Authorization Number, Certification Number or Treatment Authorization Number.
  • Procedure code (CPT Code) — A code given to medical and surgical procedures and treatments.
  • Provider Contract Discount — A part of your bill that your provider must write-off because of billing agreements with your insurance company.
  • Reasonable and Customary (R & C) — The costs for medical services that insurers believe are appropriate throughout a geographic area or community.
  • Referral — Approval needed for care beyond that provided by your primary care doctor or hospital. For example, managed care plans (HMO’s) usually require referral forms from your primary care doctor to see a specialist or for special procedures.
  • Release of Information — A signed statement from patients or guarantors that allows providers to release medical information so that insurance companies can pay claims.
  • Remittance Advice — The explanation the hospital receives, usually with payment, from your insurance company after your medical services have been processed.
  • Responsible Party — The person responsible for paying your hospital bill, usually referred to as the guarantor.
  • Service Area — A geographic area where insurance plans enroll members. In an HMO, it is also the area served by your doctor network and hospitals.
  • Specialist — A doctor who specializes in treating certain parts of the body or specific medical conditions. For example, a Cardiologist only treats patients with heart problems.
  • Supplemental Insurance Company — An additional insurance policy that handles claims for deductible and co-insurance reimbursement.
  • Treatment Authorization Number — A number stating that your treatment has been approved by your insurance plan. It is also referred to as an Authorization Number, Certification Number or Prior Authorization Number.
  • Total Charges — The total cost of your medical services.
  • Type of Admission — The reason for your admission, such as emergency, urgent or elective, etc.
  • Usual and Customary (U & C) — The costs for medical services that insurers believe are appropriate throughout a geographic area or community.

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