Common Billing Terminology Advanced Beneficiary Notice (ABN) – A notice advising you that tests performed by your physician may not be covered by Medicare. The purpose of the ABN is to make you aware in advance that the services about to be rendered may not be covered and to advise you that you will be responsible for making payment. Alternate Communication Form (ACF) – A form to be complete by the patient stating who is able to speak to a healthcare professional on the patient’s behalf as well as specific information that is allowed to be released. Billing Statement – A summary of current activity on an account, balance due and other key information. Birthday Rule – Endorsed by the National Association of Insurance Commissioners (NAIC) states that the plan of the parent whose date of birth (Month and Day) falls earlier in the calendar year is the primary plan for the dependent children. Claim – The information billed to the insurance company for a specific date of service provided to a patient. Co – Insurance – An arrangement made with an insurance company where the patient and insurance company share in the payment of a service. Co-insurance takes effect after the approved deductible has been met. Co-Pay – The amount of money or percent of charges for basic supplemental health services that a member is required to pay, set in place by your health plan. This is often associated with an office visit or emergency room visit. Example $5, $15, $25. Coordination of Benefits(COB) – The process of determining which of two or more insurance policies will have the primary responsibility of processing/paying a claim and the extent to which the other policies will contribute. Deductible – The portion of eligible (covered) expenses that you must pay each year before your insurance plan will begin to pay. Effective Date – The date on which a policyholder’s coverage begins. Eligible Charges (Allowed Amount) – The maximum dollar amount allowed for covered services rendered by participating providers and facilities or by nonparticipating providers and facilities. Deductibles and coinsurance amounts are calculated from eligible charges. Participating providers and facilities accept this allowed amount as payment in full for covered services. Nonparticipating providers and facilities may not accept this allowed amount as payment in full for covered services. Evidence of Coverage (EOC) – A written guide from your health plan that explains what the plan does and does not cover and the rules you must follow for getting care. Explanation of Benefits (EOB) – A statement provided to the insured by an insurance company explaining how the claim was processed. Flexible Spending Account (FSA) – A short term savings account that lets you set aside pre-tax income and use it to pay for health care. Guarantor – The person responsible for paying the bill. Health Insurance Portability and Accountability Act (HIPPA) – This act helps to ensure that privacy is maintained in regards to patients’ medical records and includes a set of standards to which all electronic medical records must adhere. Health Maintenance Organization (HMO) – A health care system that provides comprehensive health care services for enrollees in a particular geographic area. HMO’s require the use of specific in-network plan providers. Health Savings Account (HSA) – A personal savings account used in conjunction with a high-deductible health plan (HDHP) that allows users to save money tax-free against medical expenses. With an HAS-Qualified HDHP members can take the money they save on premiums and invest it in the HAS to pay for future qualified medical expenses. In-Network Provider – A healthcare professional, hospital or pharmacy that is part of a health plans network of preferred providers. You generally will pay less for services received from in-network providers because they have negotiated a discount for their services. Insurance Deductible – An insurance deductible is a minimum amount the patient must pay before the insurance company will cover the remaining costs. Usually the deductible needs to be met and paid by the patient each year. Medicaid – A health insurance program that provides health benefits to low-income individuals who cannot afford Medicare or other commercial plans. Medicare – The federal insurance program that provides health benefits to Americans 65 and older and people under 65 with certain medical conditions. Medicare has two parts: Part A – covers hospital services and Part B – covers doctor services. Medicare Supplemental Insurance – An additional insurance policy that processes claims after Medicare reimbursement that helps fill the “gaps” in Medicare coverage. Non-Participation – Non-Participation means that the physician does not participate in the patient’s health plan; therefore, the patient is billed directly for services and is responsible for payment in full. Open Enrollment – The period during each year in which you can join a plan or change plans if your employer offers more than one plan. Out-Of-Network Provider – Physicians who are not contracted with an insurance company. Out-Of-Pocket Maximum – The most you will have to pay for covered medical expense in a plan year through deductible and coinsurance before your insurance plan will begin to pay 100% of covered medical expenses. Payer – A third-party entity (commercial or government insurance carriers) that pays medical claims. Physician Participation – A method by which a physician agrees to accept an insurance company’s payment as payment in full, the claim is sent directly to the insurance company with payment made directly to the physician. This excludes any amount considered patient obligation under the patient’s coverage plan. Example co-insurance, deductibles, and non-covered services would still have to be paid by the patient. Pre-Approval – Permission from you medical group or health plan to get a service that requires a referral from your doctor. Also called a prior authorization or authorization. Pre-Existing Condition – An illness or injury you have before you join a health plan. Premium – What your health plan charges each month to maintain your healthcare coverage. Primary Care Physician (PCP) – A physician who delivers general health care and is most often the first physician a patient sees. This physician treats patients directly and refers them to specialists and/or admits them to the hospital. Primary Insurance – The insurance primarily responsible for the payment of the claim. Prior Authorization/Precertification – A formal approval obtained from the insurance company prior to delivery of medical services. Provider – Any person (doctor, nurse practitioner, medical assistant, etc.) or institution (hospital) that provides medical care. Referral Authorization – Approval for a member to see a physician or access services outside of the participating medical group. Referring Physician – A physician who sends a patient to another doctor for specialty care or services. Secondary Insurance – The insurance responsible for processing the claim after the primary insurance determination of benefits. Subscriber – The person who holds and/or is responsible for the medical insurance policy. Termination Date – The date on which a policyholder’s coverage ends. Yearly Deductible – The amount you must pay each year before your health insurance plan starts to pay. Also called an annual deductible. Yearly Out-Of-Pocket Maximum – The most you have to pay for most health care services in a year. In some cases, you may still have to pay co-pays for some services.