- Affordable Care Act (ACA): A federal law enacted in 2010 aimed at improving access to health insurance, expanding Medicaid, and preventing insurance companies from denying coverage due to pre-existing conditions.
- Allowed Amount (AKA: Eligible Expense, Payment Allowance, Negotiated Rate, Contracted Amount, or Contractual Agreement): The maximum amount an insurance plan will pay for a covered healthcare service. This amount is determined by the agreement between the payer and the healthcare provider.
- Annual Deductible: The amount a policyholder must pay for covered health services before their insurance begins to pay.
- Appeal: A request by a policyholder to have an insurance company reconsider a decision, such as a denial of coverage.
- Balance Billing: The practice of billing a patient for the difference between what the insurance pays and what the provider charges.
- Benefit Level Exceptions: Special agreements where coverage terms deviate from the standard policy, often to accommodate specific, non-covered services or situations.
- Billing NPI (Box 33a of the Claim Form): The National Provider Identifier (NPI) listed in box 33a of a claim form, representing the healthcare provider or organization submitting the claim for reimbursement. It can refer to an individual (Type 1) or an organization/group (Type 2).
- Capitation: A payment arrangement where providers are paid a fixed amount per patient, regardless of the number of services provided.
- Catastrophic Health Plan: A high-deductible health plan for people under 30 or those with a hardship exemption, covering only essential health benefits after a high deductible is met.
- Claim: A request submitted to an insurance company for payment of health care services.
- Clearinghouse: A third-party intermediary that processes and transmits healthcare claims from providers to insurance payers, ensuring claims are formatted correctly and free of errors.
- Coinsurance: A percentage of costs a policyholder pays for covered services after meeting the deductible (e.g., 20% coinsurance means the patient pays 20% of costs).
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Contractual Obligation: The portion of a claim that a healthcare provider must write off or adjust due to their agreement with the insurance payer. This amount is typically the difference between the provider's charge and the allowed amount set by the payer.
- Coordination of Benefits (COB): A process to determine which insurance policy pays first when a policyholder is covered by multiple plans.
- Copayment (Copay): A fixed amount a policyholder pays for a specific service (e.g., $25 for a doctor’s visit).
- Courtesy Billing: A provider’s submission of a claim to a patient’s insurance company as a service, even if the provider does not participate in the insurance network or expect direct payment.
- Covered Services: Health care services that are included under a health insurance plan and will be partially or fully paid for by the insurer.
- Credentialing or Paneling Process: The procedure healthcare providers undergo to verify their qualifications and obtain approval to participate in an insurance network or be reimbursed by specific payers.
- Current Procedural Terminology (CPT) Code: A standardized code used to describe medical, surgical, and diagnostic services provided to patients. These codes are used in claims to document the services for reimbursement.
- Deductible: The amount a patient must pay out-of-pocket for healthcare services before their insurance begins to cover costs.
- Dependent: A family member (e.g., spouse, child) who is covered under a policyholder’s health insurance plan.
- Drug Formulary Tier: Categories used by insurers to group medications by cost, often affecting copayment amounts.
- Effective Date: The date when a health insurance policy begins to provide coverage.
- Electronic Remittance Advice (ERA): Electronic remittance advice (ERA) is an electronic version of a paper explanation of payment (EOB) that provides details about a health plan's payment for a claim. It explains how a health plan adjusted a claim's charges, including the amount billed, the amount paid, and the reasons for any differences.
- Electronic Data Interchange (EDI): The electronic exchange of healthcare information, such as claims, eligibility verification, and remittance advice, between providers and payers in a standardized format.
- Electronic Funds Transfer (EFT): An electronic funds transfer (EFT) is a digital method of moving money between bank accounts without the use of paper checks. EFTs can be initiated through a variety of methods, including:
- Electronic terminals: Such as point-of-sale (POS) terminals, ATMs, and cash dispensers
- Telephone: By calling a company and providing banking information
- Computer: Through online banking
- Magnetic tape: Another method for initiating an EFT
- Employer Identification Number (EIN): A unique nine-digit number assigned to businesses by the IRS, used for tax purposes. Healthcare organizations use their EIN when billing insurance.
- Enrollment: The process by which providers or facilities register with an insurance payer to submit claims and receive reimbursement.
- Essential Health Benefits: A set of 10 categories of services that health insurance plans must cover under the ACA, including hospitalization, maternity care, and prescription drugs.
- Exclusions: Services not covered under a health insurance plan.
- Explanation of Benefits (EOB): A statement sent by the insurance company detailing what was covered and what the policyholder may owe after a claim.
- Flexible Spending Account (FSA): A tax-advantaged account to save for eligible medical expenses, typically offered by employers.
- Formulary: A list of prescription drugs covered by a health insurance plan.
- Grace Period: A set time after a payment is due during which coverage continues, even if the premium hasn’t been paid.
- Grandfathered Plan: A health insurance plan that existed before the ACA and is exempt from certain requirements of the law.
- Health Maintenance Organization (HMO): A type of health plan that requires members to use in-network providers and get referrals for specialist care.
- High-Deductible Health Plan (HDHP): A plan with lower premiums but higher deductibles, often paired with a Health Savings Account (HSA).
- Health Reimbursement Arrangement (HRA): An employer-funded account to reimburse employees for qualified medical expenses.
- Health Savings Account (HSA): A tax-advantaged account for individuals with HDHPs to save money for medical expenses.
- Incident-to-Billing: A billing practice in which services provided by a non-physician (e.g., nurse or physician assistant) are billed under a supervising physician's National Provider Identifier (NPI) number. This typically applies when the services are part of the physician's established treatment plan and occur under their direct supervision.
- Individual National Provider Number (NPI): A National Provider Identifier assigned to an individual healthcare provider (Type 1 NPI).
- Internal Control Number (ICN): A unique identifier assigned by payers to each claim submitted, used for tracking and processing purposes.
- Insurance Adjustments (AKA: Clawbacks or Take-Backs): Reductions made by payers to the originally paid amount for claims due to errors, overpayments, or contract terms.
- Insurance Payer: An entity, such as an insurance company, government program (e.g., Medicare, Medicaid), or employer-sponsored plan, that is responsible for paying claims and managing healthcare coverage.
- In-Network Provider: A health care provider who has contracted with an insurance company to offer services at negotiated rates.
- Internal Control Number (ICN): An Internal Control Number (ICN) is a unique identifier assigned to a medical claim to track it and process payment. ICNs are used for Medicare and Medicaid claims.
- Insurance Plan Carve Out: A provision in an insurance plan that excludes specific benefits or services from coverage, often requiring the insured to pay for these services out-of-pocket or seek separate coverage.
- Lifetime Limit: A cap on the total benefits an insurance company will pay over the lifetime of a policyholder. The ACA prohibits lifetime limits on essential health benefits.
- Medically Necessary: Services or supplies deemed essential for diagnosis or treatment according to medical standards.
- Medicare Crossover: A process in which claims are automatically forwarded from Medicare to a secondary payer (e.g., Medicaid or a private insurance plan) after Medicare processes its portion of the claim. This ensures the secondary payer covers any remaining eligible costs.
- NPI (National Provider Identifier): A unique 10-digit identification number issued to healthcare providers in the U.S., required for claims processing.
- Open Enrollment Period: A specific time each year when individuals can enroll in or change their health insurance plans.
- Out-of-Network Provider: A provider not contracted with the insurance plan, typically resulting in higher costs for the policyholder.
- Out-of-Pocket Maximum: The most a policyholder will pay for covered services in a year, after which the insurer covers 100% of costs.
- Payer Control Number: A unique identifier assigned by a payer to a claim during processing for internal tracking purposes.
- Payer ID: A unique code identifying an insurance company or payer in the claims submission process.
- Payer Portal: A secure online platform provided by an insurance payer that allows healthcare providers to perform tasks such as checking claim statuses, submitting claims, verifying benefits, and obtaining prior authorizations.
- Pre-Authorization (Prior Authorization): Approval from an insurer before receiving certain services to ensure they will be covered.
- Premium: The amount paid (monthly, quarterly, or annually) to maintain health insurance coverage.
- Preferred Provider Organization (PPO): A type of health plan offering more flexibility to see out-of-network providers without referrals.
- Preventive Services: Health care services, like screenings and vaccinations, aimed at preventing illness, often covered without cost-sharing under the ACA.
- Primary Care Physician (PCP): A general doctor responsible for providing and coordinating a patient’s care.
- Provider Network: A group of doctors, hospitals, and other health care providers that a plan has contracted with to offer services.
- Provider Transaction Access Number (PTAN): A "Provider Transaction Access Number" (PTAN) is a unique Medicare identification number assigned to healthcare providers when they enroll in the Medicare program, used to authenticate their identity for billing and enrollment transactions, essentially acting as a Medicare-specific login credential for providers; it is typically provided on an approval letter from the Medicare Administrative Contractor (MAC) upon enrollment.
- Qualified Health Plan (QHP): A health insurance plan certified by the ACA marketplace that provides essential health benefits.
- Rendering NPI (Box 24j): The NPI of the individual healthcare provider who performed the service, as listed in box 24j of the claim form.
- Single-Case Agreement: A one-time agreement between a provider and an insurance payer to cover a specific service for a patient, typically when the service is outside the provider's network or standard policy coverage.
- Special Enrollment Period (SEP): A time outside the open enrollment period when people can enroll in health insurance due to specific life events, like marriage or losing other coverage.
- Step Therapy: A requirement to try lower-cost medications before coverage is approved for more expensive alternatives.
- Superbills: Itemized documents provided by a healthcare provider to a patient, listing services rendered, CPT codes, and charges for out-of-network reimbursement claims.
- Tax ID: A unique identifier used for tax purposes, interchangeable with EIN or TIN (Tax Identification Number).
- Taxonomy Code (Box 33b of Claim Form): A code identifying a provider’s specialty, used in healthcare claims for additional classification and reimbursement purposes.
- Telemedicine: Remote health care services provided via phone or video.
- Timely Filing: The period within which a healthcare provider must submit a claim to a payer for reimbursement, as specified by the payer's policies.
- TIN (Tax Identification Number): A generic term for numbers used for tax purposes, including EINs and Social Security Numbers (SSNs).
- CMS-1500: A standard claim form used by healthcare providers to bill Medicare and other health insurers for services rendered. It contains sections for patient information, provider details, and the services performed.
- Usual, Customary, and Reasonable (UCR): The standard amount insurers consider a fair payment for a medical service in a specific geographic area.
- Verification of Benefits (VOB): A process where a healthcare provider or patient confirms the details of a patient's insurance coverage before services are provided. This includes verifying deductible amounts, co-pays, co-insurance, covered services, and pre-authorization requirements.
- Waiting Period: The time a new employee or enrollee must wait before their health insurance coverage becomes effective.
- Wellness Program: A program offered by some employers and insurers to promote health and fitness, often including incentives for participation in activities like fitness challenges or health screenings.
- Wraparound Coverage: Additional insurance coverage that supplements a primary health plan, often used for services not included in the main policy.
- Write-Off: The portion of a billed charge that a provider agrees not to collect, typically the difference between the provider's charge and the allowed amount per the insurance contract.