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Glossary of Billing Terms

Glossary of Billing Terms

Glossary of Billing Terms

Ambulatory Patient Classification  
Assignment 
Beneficiary Beneficiary Liability  
Certificate of Coverage
Charity Care  
Children's Health Insurance Program (CHIP)   
Coding 
Co-insurance 
Consolidated Omnibus Budget Reconciliation Act (COBRA)   
Coordinated Coverage  
Coordination of Benefits (COB)  
Co-payment 
Date of Service (DOS)   
Deductible 
Diagnosis-Related Groups (DRGs)   
Duplicate Coverage Inquiry (DCI)  
Durable Medical Equipment (DME) 
Employee Retirement Income Security Act of 1974 (ERISA)   
Enrollee 
Explanation of Benefits (EOB)  
Health Care Provider  
Health Insurance  
Health Insurance Portability and Accountability Act (HIPAA)   
Health Maintenance Organization (HMO)  
Home Health Agency (HHA) 
International Classification of Diseases, 9th Edition (Clinical Modification) (ICD-9-CM)  
Medicaid
Medicare
Medicare Assignment  
Medicare + Choice  
Medicare Supplement Policy (Medsupp)  
Medigap Insurance  
Medigap Plan  
Medigap Policy   
Non-Participating Provider (Non-par)   
Out of Network (OON)  
Out-of-Pocket-Costs/Expenses (OOPs)   
Over-the-Counter Drug (OTC)  
Pre-Admission Certification (PAC)  
Part A Medicare  
Part B Medicare  
Point-of-Service Plan (POS)  
Pre-existing Condition (PEC)   
Pre-existing Condition Exclusion  
Preferred Provider Organization (PPO)  
Premium 
Prevailing Charge  
Primary Care Network (PCN)  
Primary Care Physician (PCP)
Reasonable and Customary (R&C)  
Secondary Insurance
Skilled Nursing Facility (SNF)  
Sub-Acute Care
Third Party Administrator (TPA)  
Usual, Customary, and Reasonable (UCR)   
Utilization Review (UR)  

Ambulatory Patient Classifications (APC)
A system for classifying outpatient services and procedures for purposes of payment. Call the Centers for Medicare and Medicaid Services at 1-800-633-4227 and request a free brochure. Back to Top 

Assignment
A process under which Medicare pays its share of the allowed charge directly to the physician or supplier. Medicare will do this only if the physician accepts Medicare's allowed charge as payment in full. Back to Top  

Beneficiary
Someone who is eligible for or receiving benefits under an insurance policy or plan.  Back to Top  

Beneficiary Liability
The amount beneficiaries must pay for covered services. These include co-payments, coinsurance, deductibles, and balance billing amounts. Back to Top 

Certificate of Coverage (COC)
A description of the benefits included in a carrier's plan. The certificate of coverage is required by state laws and represents the coverage provided under the contract issued to the employer. Back to Top  

Charity Care
Free or reduced-fee care provided due to financial situation of patient. Back to Top  

Children's Health Insurance Program (CHIP)
A federal program jointly funded by states and the federal government, which provides medical insurance coverage for children not covered by state Medicaid-funded programs. Back to Top  

Coding
How physicians' services are identified and defined. Back to Top  

Co-insurance
A type of cost sharing where the beneficiary and insurance provider share payment of the approved charge for covered services in a specified ratio after payment of the deductible by the insured. For example, for Medicare physicians' services, the beneficiary pays co-insurance of 20 percent of allowed charges. Back to Top  

Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal law that requires employers to offer continued health insurance coverage to certain employees and their beneficiaries whose group health insurance coverage has been terminated. Applies to employers with 20 or more eligible employees. Typically, COBRA makes continued coverage available for up to 18 or 36 months. COBRA enrollees may be required to pay 100 percent of the premium, plus an additional 2 percent. Back to Top  

Coordinated Coverage
Integrating benefits payable under more than one health insurance (for example, Medicare and retiree health benefits). Coordinated coverage is typically arranged so the insured benefits from all sources not exceeding 100 percent of allowable medical expenses. Coordinated coverage may require beneficiaries to pay some deductible. Back to Top  

Coordination of Benefits (COB)
A provision that applies when a person is covered under more than one group medical program. (See "Coordinated Coverage.") Back to Top  

Co-payment
1) A fixed dollar amount paid for a covered service by a beneficiary. (See "Co-insurance" and "Deductible.") 2) Amount that a member of a health plan has to pay for specific health services, such as visits to a physician. (See "Beneficiary Liability" and Co-insurance.") Back to Top  

Date of Service (DOS)
The date(s) health care services were provided to the beneficiary. Back to Top  

Deductible
1) The amount the patient pays for medical care before insurance covers the balance. 2) A type of cost sharing where the beneficiary pays a specified amount of approved charges for covered medical services before the insurer will pay for all or part of the remaining covered services. 3) Total amount a member of a heath plan has to pay for services before that person's plan begins to cover the costs of care. (See "Beneficiary Liability.") Back to Top  

Diagnosis-Related Groups (DRGs)
1) A system of classifying patients on the basis of diagnosis for purposes of payment to hospitals. The DRG system classifies payments into groups based on the principal diagnosis, type of surgical procedure, presences or absence of complications, and other relevant indicators. Back to Top  

Duplicate Coverage Inquiry (DCI)
A request to an insurance company or group medical plan by another insurance company or medical plan to find out whether other coverage exists. (See "Coordinated Coverage.") Back to Top  

Durable Medical Equipment (DME)
Medical equipment which: can withstand repeated use; is not disposable; is used to serve a medical purpose; is generally not useful to a person in the absence of sickness or injury, and is appropriate for use in the home. Examples include hospital beds, wheelchairs, and oxygen equipment. Back to Top  

Employee Retirement Income Security Act of 1974 (ERISA)
This law mandates reporting, disclosure of grievances and appeals requirements, and financial standards for group life and health. Self-insured plans are regulated by this law.
Back to Top 

Enrollee
Person who is covered by health insurance. Back to Top  

Explanation of Benefits (EOB)
The coverage statement sent to covered persons listing services rendered, amount billed, and payment made. This normally would include any amounts due from the patient, as described in "Beneficiary Liability," "Co-insurance," "Deductible," and "Co-payment." Back to Top  

Health Care Provider
An individual or institution that provides medical services; e.g., physician, hospital, or laboratory. This term should not be confused with an insurance company that "provides" insurance. Back to Top  

Health Insurance
Coverage that provides for the payment of benefits as a result of sickness or injury. Includes insurance for losses from accident, medical expense, disability, accidental death, or dismemberment. Back to Top  

Health Insurance Portability and Accountability Act (HIPAA)
A federal law intended to improve the availability and continuity of health insurance coverage that, among other things:

  • places limits on exclusions for pre-existing medical conditions;
  • permits certain individuals to enroll for available group healthcare coverage when they lose other health coverage or have a new dependent;
  • prohibits discrimination in group enrollment based on health status;
  • guarantees the availability of health coverage to small employers and the renewability of health insurance coverage in the small and large group markets; and
    requires availability of non-group coverage for certain individuals whose group coverage is terminated. Back to Top  


Health Management Organization (HMO)
An entity that provides, offers or arranges for coverage of designated health services needed by plan members for a fixed, prepaid premium.
Back to Top 

Home Health Agency (HHA)
A facility or program licensed, certified, or otherwise authorized according to state and federal laws to provide health care services in the home. Back to Top  

Hospital Inpatient Prospective Payment System (PPS)
Medicare's method of paying acute care hospitals for inpatient care. Prospective per-case payment rates are set at a level intended to cover operating costs for treating a typical inpatient in a given DRG. Back to Top   

International Classification of Diseases, 9th Edition (Clinical Modification) (ICD-9-CM)
A listing of diagnosis and identifying codes used by physicians and hospitals for reporting diagnoses and procedures of health plan enrollees. Back to Top  

Medicaid
1) A state/federal benefit program for the poor who are aged, blind, disabled, or members of families with dependent children. Each state sets its own eligibility standards. Only 40 percent of individuals with income below the poverty level currently are covered.  Back to Top 

Medicare
A federal health benefit program for people over 65 and disabled and disabled that covers 35 million Americans - or about 14 percent of the population - for an annual cost of over $120 billion. Medicare pays for 25 percent of all hospital care and 23 percent of all physician services. Back to Top   

Medicare Assignment
See "Assignment" Back to Top  

Medicare + Choice
A program created by the Balanced Budget Act of 1997. Beneficiaries will have the choice during an open season each year to enroll in a Medicare + Choice plan or to remain in traditional Medicare. Medicare + Choice plans may include coordinated care plans (HMOs, PPOs, or plans offered by provider-sponsored organizations); private fee-for-service plans, or plans with medical savings accounts. Back to Top  

Medicare Supplement Policy (Medsupp)
The insurer will pay a policyholder's Medicare co-insurance, deductible, and co-payments for Medicare Part A and B and may provide additional supplement benefits according to the supplement policy selected. Also called Medigap of Medicare wrap. Back to Top  

Medigap Insurance
Privately purchased individual or group health insurance policies designed to supplement Medicare coverage. Benefits may include payment of Medicare deductibles, co-insurance and balance bills, as well as payment for services not covered by Medicare.               Back to Top   

Medigap Plan
Purchased by Medicare enrollees to cover co-payments, deductibles, and health care goods or services not paid for by Medicare. Also known as a Medicare supplement policy.  Back to Top  

Medigap Policy
A privately purchased insurance policy that supplements Medicare coverage.             Back to Top  

Non-Participating Provider (Non-par)
Also known as out-of-network provider. A healthcare provider who has not contracted with the carrier of a health plan to be a participating provider of health care. Back to Top

Out of Network (OON)
Coverage for treatment obtained from a non-participating provider. Typically, it requires payment of a deductible and higher co-payments and co-insurance than for treatment from a participating provider. Back to Top   

Out-of-Pocket-Costs/Expenses (PAC)
The portion of payments for covered health services required to be paid by the patient, including co-payments, co-insurance, and deductible. (See "Beneficiary Liability, " "Co-insurance," "Deductible," and "Co-payment.") Back to Top  

Over-the-Counter Drug (OTC)
A drug product that does not require a prescription under federal or state laws.
Pre-Admission Certification (PAC)
A review of the need for inpatient hospital care, done before the actual admission.     Back to Top  

Part A Medicare
Medical Hospital Insurance (HI) under Part A of Title XVIII of Social Security Act, which covers patients for inpatient hospital, home health, hospice, and limited skilled nursing facility services. Beneficiaries are responsible for deductibles and co-payments. Back to Top  

Part B Medicare
Medicare Supplement Medical Insurance (SMI) under Part B of Title XVII of the Social Security Act, which covers Medicare beneficiaries for physician services, medical supplies, and other outpatient treatment. Beneficiaries are responsible for monthly premiums, co-payments, deductibles, and balance billing. Back to Top  

Point-of-Service Plan (POS)
A health benefit plan allowing the covered person to choose to receive a service from a participating or non-participating provider, with different benefit levels associated with the use of participating providers. Back to Top  

Pre-existing Condition (PEC)
Any medical condition that has been diagnosed or treated within a specified period immediately preceding the covered person's effective date of coverage. Pre-existing conditions may not be covered for some specified amount of time as defined in the certificate of coverage (usually six to 12 months). Individuals can be required to satisfy a pre-existing waiting period only once, so long as they maintain continuous group health plan coverage with one or more carriers. Back to Top  

Pre-existing Condition Exclusion
A practice of some health insurers to deny coverage to individuals for a certain period for health conditions that already exist when coverage is initiated. Back to Top  

Preferred Provider Organization (PPO)
A program that establishes contracts with providers of medical care. Providers under such contracts are referred to as preferred providers. Usually, the benefit contract provides significantly better benefits and lower member costs for services received from preferred providers, thus encouraging covered persons to use these providers. Back to Top  

Premium
1) Amount paid periodically to purchase health insurance benefits. 2) The amount paid or payable in advance, often in monthly installments, for an insurance policy. Back to Top  

Prevailing Charge
What determined a physician's payment for a service under the Medicare payment system. Back to Top  

Primary Care Network (PCN)
A group of primary care physicians who have joined together to share the risk of providing care to their patients who are covered by a given health plan. Back to Top  

Primary Care Physician (PCP)
A physician, the majority of whose practice is devoted to internal medicine, family/general, and pediatrics. An obstetrician/gynecologist sometimes is considered a primary care physician, depending on coverage. Back to Top

Reasonable and Customary (R&C)
A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. Back to Top

 
Secondary Insurance
Any insurance that supplements Medicare coverage. The three main sources for secondary insurance are employers, privately purchased Medigap plans, and Medicaid. Back to Top  

Skilled Nursing Facility (SNF)
A facility, either freestanding or part of a hospital, that accepts patients seeking rehabilitation and medical care that is less intense than that received in a hospital.        Back to Top  

Sub-Acute Care
Usually described as a comprehensive inpatient program for those who have experienced a serious illness, injury, or disease, but who do not require intensive hospital services. The range of services considered sub-acute can include infusion therapy, respiratory care, cardiac services, wound care, rehabilitation services, post-operative recovery programs for knee and hip replacements, cancer, stroke, and AIDS care. Back to Top  

Third Party Administrator
An independent person or corporate entity (third party) that administers group benefits, claims, and administration for a self-insured company or group. Back to Top  

Usual, Customary, and Reasonable (UCR)
A Termused to refer to the commonly charged or prevailing fees for health services within a geographic area. Back to Top  
Utilization Review (UR)
A formal assessment of the medical necessity, efficiency and/or appropriateness of health care services and treatment plans on a prospective, concurrent, or retrospective basis.
Back to Top 

 

 

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