Glossary of Insurance and Medical Billing Terms

Following are some of the most common terms you may hear that are associated with your insurance plans and medical billing.

Ambulatory Surgery	Surgery done in the doctor’s office or at a surgical center, and not requiring an overnight stay.
Ancillary Providers	Services over and above physician services, including laboratory, radiology, home health and skilled nursing facilities.
Authorization	Approval of care required before a service is provided. Pre-authorization may be necessary before hospital admission, or before care is given by non-HMO providers.
Balance Billing	Billing a patient for charges not paid by their insurance plan because the charges are above the Usual and Customary Rate or because the insurer considered a procedure medically unnecessary.
Carve-out Policy	A contracted agreement between an insurance company and another company which provides special services to its members, such as prescription drugs or cancer treatment.
Case manager	A case manager is a trained insurance professional, primarily in the areas of long-term medical care, life insurance and annuities, which presides over a patient or client’s account. Case managers are prevalent in the healthcare industry.
Claim	A record of medical services provided to a patient and submitted by the provider to the insurance company for payment.
Claims Review	The method by which a patient’s health care service claims are reviewed before reimbursement is made. This is done to validate the appropriateness of services given and that the cost is not excessive.
Coinsurance	A provision which limits the amount of the coverage paid by an insurance plan to a certain percentage, with the remaining costs paid by the member.
Co-pay	Co-pay is the amount that a patient is responsible for at the time they visit a physician or hospital, or have a prescription filled. The patient is responsible for this up-front fee, while the insurance provider covers the remaining cost of a medical service or prescription.
CPT-4	A 5-digit code that applies to medical services delivered.
COBRA (Consolidated Omnibus Budget Reconciliation Act)	The COBRA Act allows for employees and their dependents to continue to receive insurance coverage after the loss of a job or reduction in hours. COBRA insurance is more expensive than group insurance, but is still usually less expensive than individual coverage.
Deductible	An insurance deductible is the amount that a policyholder is responsible for on a claim. Whether it is on an auto, homeowner’s or renter’s policy, the deductible must be paid before the insurer will cover any of the other expenses.
EOB (Explanation of Benefits)	A statement describing medical benefits and account activity, including explanation of why certain claims may or may not have been paid.
Exclusion	Services or supplies not covered under a health plan.
Fee Schedule	A listing of the maximum fee which a health plan will pay for services based on CPT billing codes.
Family and Medical Leave Act (FMLA)	The FMLA provides up to 12 weeks of unpaid leave per year for employees with medical issues, for those who are caring for family members, or for births and adoptions. All public agencies, elementary and middle schools, and businesses with more than 50 employees are subject to the FMLA guidelines.
Health Insurance Portability and Accountability Act (HIPAA)	This act, which was passed in 1996, helps ensure that privacy is maintained in regards to patients’ medical records. It also created a set of standards to which all electronic medical records must adhere.
ICD-9	A 3 to 5-digit number code describing a diagnosis or medical procedure.
Inpatient	A patient who is admitted to a hospital and receives medical services from a physician during at least a 24-hour period.
Insurance cap	An insurance cap is the total lifetime dollar amount that a provider will pay on a particular policy. Many insurance companies have a lifetime cap of $1 million, which can be easily attained in cases of prolonged medical treatment and care.
In-Network Provider	Physicians and other service providers who are contracted with a managed care plan.
Out-of-Network Provider	Physicians who are not contracted with a managed care plan.
Outpatient	A patient who receives health care services, but is not admitted to a hospital during a 24-hour period.
Patient Navigator	Patient Navigator is an organization that assists families with medical treatment options and with the explanation of insurance coverage and acts as a liaison with medical personnel.
Primary Care Physician	A physician, usually a general, family practitioner or internist, who delivers general health care, and is most often the first doctor a patient sees. This physician treats the patient directly, refers them to a specialist (or secondary care physician) or admits them to the hospital.
Provider	A physician, hospital, laboratory, pharmacy or other organization that provides health care, goods or services.
Pre-Certification	Also known as pre-admission certification, is the process of obtaining authorization from the health care plan for routine inpatient and outpatient admissions. Failure to obtain pre-certification may result in penalty to the provider or the subscriber.
Premium Pre-certification	Premium pre-certification occurs when a person requesting insurance coverage fills out additional paperwork to determine whether they meet the requirements for policy coverage. This occurs primarily in mental health insurance cases.
Referral Authorization	Approval for a member to see a physician or access services outside of the participating medical group.
Referral Physician	A physician who sees a patient after another doctor has sent them for specialty care or services.
Referring Physician	A physician who sends a patient to another doctor for specialty care or services.
Subscriber	A person who enrolls in a health care plan and agrees to pay for premiums, co-payments and deductibles that are part of the plan.
Treating Physician	A physician who provides care to the patient while in the hospital, and usually works at the hospital or comes in as a specialist.