Medical Billing and Insurance Glossary
Written by: Leslie Ballentine
A job as a medical biller involves reviewing medical claims and submitting them to insurance companies and other payers, such as Medicare, for payment. You'll need careful attention to detail to work as a medical biller, and you also have to be able to meet deadlines reliably. A medical billing specialist might work in a doctor's office, a hospital, or a nursing home or even from home. Part of a medical billing job involves a full understanding of medical terms as well as health insurance guidelines.
Allowable: An allowable limit is imposed by insurance companies, limiting the maximum amount paid for a service based on a specific insurance policy. Allowable charges may also be called reasonable and customary charges.
Allowed Amount: The allowed amount is the maximum amount of payment based on a customer's covered health-care services. Allowed amounts may also be called negotiated rates or payment allowances.
Ambulatory Care: Ambulatory care is the care provided for patients at a physician's office or a surgical center not involving an overnight stay.
Authorization: An insurer or health plan provides authorization to approve care such as a hospital stay or a surgical procedure.
Balance Billing: Balance billing is when the care provider bills patients for all charges that have not been paid for by their insurer.
Claims Review: A claims review is the review of a claim by an insurer prior to paying the care provider or reimbursing the patient. A claims review validates the appropriateness of the medical care.
Coordination of Benefits: Coordination of benefits involves an agreement between multiple insurers, which prevents double payments for care received.
Copayment: A copayment is the portion of a medical expense paid out of pocket by the patient.
Covered Charges: Covered charges are the services that would be covered under an insurance policy. Covered charges may be subject to a deductible.
Current Procedural Terminology Codes: CPT codes are the five-digit codes used for medical billing and the authorization of services.
Deductible: A deductible is the part of a person's health-care expenses that they must pay prior to the insurer paying.
Denial: A denial is the decision by an insurer not to cover medical services received. The patient is responsible for payment if coverage is denied.
DOS: DOS stands for date of service.
Elective Services: Elective services are any services that are not rendered in an emergency situation.
Explanation of Benefits: An explanation of benefits informs the insured about how a claim was paid or the reasons for it not being covered.
Hospice: A hospice program provides care for terminally ill patients.
In-Network Provider: An in-network provider may also be called a preferred provider. These providers have a contract with the insurer to provide care for patients.
International Classification of Disease Codes: ICD codes are included in the international disease classification system.
Itemized Statement: An itemized statement lists all services provided to a patient.
Medicaid: Medicaid is a health-care program financed by the federal government and each state that provides health coverage for residents with low income.
Medicare: Medicare is a federal program that provides health insurance for people age 65 and older and for people of any age with disabilities.
Medicare Assignment: A Medicare assignment involves a health-care provider agreeing to accept Medicare-approved reimbursement as the full payment for covered services provided.
Medicare Non-Assignment: Health-care providers who do not accept assignment are known as non-participating providers.
Medigap: A medigap plan is private insurance that supplements patients' Medicare reimbursement.
Non-Covered Charges: Non-covered charges are incurred for services that an insurance company does not cover as a part of the benefits of a policy.
Out of Network: Providers who do not have a contract with an insurer are known as out-of-network providers. Patients pay more to see these providers.
Per Diem Reimbursement: Hospitals may receive a set rate per day instead of a reimbursement for charges for services provided. Per diem reimbursements often vary by service.
Point-of-Service Plan: A point-of-service plan requires the patient to get a referral from their primary care provider to see a specialist. These plans have different sets of benefits for in-network and out-of-network providers.
Pre-Admission Certification: A pre-admission certification may also be called a pre-admission review or pre-certification. This is the process of reviewing requests for hospital admission before patients enter the hospital.
Preferred Provider Organization: A PPO has a contract with independent providers to provide services.
Primary Care Physician: A PCP is generally the first doctor a patient sees for an illness or injury. The PCP may treat the patient fully or may refer them to a specialist.
Prior Authorization: A health plan may need to provide prior authorization before a patient receives a covered health service.
Reasonable and Customary: Reasonable and customary refers to the predetermined allowable limit used by insurers to limit the amount paid for a service based on an insurance policy.
Referral: A referral is a written order from a PCP for a patient to see a specialist.
Self-Pay Visit: A self-pay visit is a doctor's visit that a patient pays for independently, without having it billed to an insurer.
UB92/UB04: This form is required by both Medicare and Medicaid and is also sometimes used by private insurance companies for billing.
Utilization Limits: Medicare sets utilization limits that cap how many times some services can be provided to patients in one year.
Visit Number: A visit number is assigned to identify every care episode.
Workers' Compensation Coverage: Workers' compensation coverage is a type of insurance that employers must carry to cover any medical care needed by employees who become sick or injured while working or because of their job.
Additional Helpful Resources
- Medical Terminology and Human Anatomy
- Glossary of Health Coverage and Medical Terms
- Five Creative Ways to Learn Medical Terminology
- Flashcard Decks: Medical Terms
- Definitions of Health Insurance Terms
- 25 Important Medical Terms You Need to Know
- Balance Billing in Health Insurance
- What Is Medical Terminology?
- Medical Terminology for Dummies Cheat Sheet
- Medical Billing: Job Description and Duties
- Learn Basic Medical Terminology: What You Need to Know to Succeed
- 50 Must-Know Medical Terms, Abbreviations, and Acronyms