Glossary of Terms

Billing & Medical TerminologyGlossary of Medical and Billing Terminology

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Account Number – number the patient’s visit (account) is given by the hospital for documentation and billing purposes.

Adjustment/Contractual Adjustment – part of the bill that the hospital has agreed not to charge the patient because of billing agreements they have with the patient’s insurance company.

Admitting Diagnosis – the initial medical reason that was documented for the patient’s condition.

Advance Beneficiary Notice (ABN) – a notice the hospital gives the patient before they receive services when Medicare is not expected to pay for some or all of the services.

Ambulatory Care – outpatient services.

Ambulatory Care Charge – these fees support the physician’s outpatient hospital practice and will be in addition to the physician’s charge.

APC (Ambulatory Payment Classification) – a Medicare payment system for grouping and classifying similar outpatient services and procedures so Medicare can pay all hospitals the same amount.

Assignment – an agreement the patient signs that allows your insurance to pay the doctor or hospital directly.

Appeal – a process by which the patient, their doctor, or the hospital can object to the health plan’s decision not to pay for medical services.

Applied to Deductible – part of the bill the insurance company requires the patient to pay the hospital.

Assignment of Benefits – the doctor or hospital agrees to accept payment from an insurance company first and then bill the patient for the balance.

Authorization Number – a reference number stating that your treatment has been approved by insurance. Also called a certification number or prior-authorization number.

Beneficiary/Patient Liability – the portion patients must pay out-of-pocket for medical services, including co-payments, co-insurance, and deductibles.

Benefit – the amount insurance pays for medical services.

Billed Charges – the total charges that hospitals send to insurance companies / patients prior to any negotiated contracts or discounts being applied.

Centers for Medicare and Medicaid (CMS) – the federal agency that operates the Medicare program and works with states to manage the Medicaid program.

Certificate of Coverage (COC) – a description of the healthcare coverage included in an insurance company’s plan.

Charity Care – free or reduced-fee health care for patients who have financial hardship.

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.

Claim – the medical bill the hospital sends to the insurance company on behalf of the patient.

Clinic – an area in a hospital or separate building that provides medical care to regularly scheduled or walk-in patients for non-emergency care.

Coding – a way hospital / physician’s services and supplies are classified and defined into a set of predetermined numbers / codes for the purpose of billing.

Coding of Claims – a process through which diagnoses and procedures from the patient’s medical record are translated into numbers (codes) that computers can process for payment.

Co-Insurance – a type of cost sharing where the patient and insurance company share payment of the approved charge for covered services after payment of the deductible by the patient.

Co-Insurance Days – Medicare coverage from day 61 to day 90 of continuous inpatient hospital stay. The patient is responsible for paying for a portion of those days.

Consolidated Omnibus Budget Reconciliation Act (COBRA) – a federal law that mandates employers with 20 or more eligible employees to provide continued health insurance under their group plan to terminated employees and their dependents.

Coordinated Coverage – integrating benefits payable under more than one health insurance (for example, Medicare and retiree health benefits).

Coordination of Benefits (COB) – the method for determining which insurance company is primarily responsible for payment when a patient is covered under more than one insurance plan.

Co-pay – a fixed dollar amount that a patient must pay out-of-pocket.

Covered Days – days of the hospital stay that insurance company pays for in full or in part.

Date Of Service (DOS) – the date(s) medical services were provided to the patient.

Deductible – an agreed amount that a patient must pay before the insurance company will pay anything toward medical charges.

Denial – a decision by insurance company not to pay for part or all of a medical bill based on a lack of medical necessity or pre-admission approval / certification, terminated coverage, or other reasons.

Diagnosis Code – a code used for billing that describes the patient’s illness.

Diagnosis-Related Groups (DRGs) – a payment system of classifying patients on the basis of diagnosis.

Duplicate Coverage Inquiry (DCI) – a request to an insurance carrier by another insurance carrier to find out whether patient has other coverage.

Durable Medical Equipment (DME) – Medical equipment that can be used multiple times and is ordered by a doctor for use at home. Examples include hospital beds, wheelchairs and oxygen equipment.

EEG (Electroencephalogram) – equipment or medical procedure that measures electricity in the brain.

EKG/ECG (Electrocardiogram) – equipment or medical procedure that measures how the heart works.

Eligibility Verification – a way hospitals determine whether the patient has insurance coverage for the services they will provide.

Employee Retirement Income Security Act of 1974 (ERISA) – this law regulates self-insured plans and makes them exempt from many state regulations that regulate other insurance plans.

Enrollee – person who is covered by health insurance.

Explanation of Benefits (EOB / EOMB) – the statement sent by the insurance company to the patient with a list of services provided, amount billed, and any insurance payments.

Fiscal Intermediary (FI) – a private company that has a contractual relationship with Medicare to process Medicare claims.

Group Name – name of the group (usually an employer) or insurance plan that insures the patient.

Group Number – a number the insurance company uses to distinguish the group under which the patient is insured.

Guarantor – someone who either accepts or is legally responsible to pay for a given patient’s hospital bill.

HCFA / CMS 1500 – a billing form used by doctors to file insurance claims for medical services.

HCPCS codes (HCFA Common Procedural Coding System) – a coding system used to describe outpatient services provided to the patient.

Health Care Provider – a person or entity that provides medical services (e.g. a physician, hospital or laboratory).

Health Insurance – coverage that provides for the payment of medical services as a result of sickness or injury.

Health Insurance Portability and Accountability Act (HIPAA) – a federal law that governs standards for the security and privacy of patients’ health information.

Health Maintenance Organization (HMO) – a type of insurance plan that provides coverage of designated health services needed by plan members for a fixed, prepaid premium.

Home Health Agency – an agency that offers medical care to patients in their homes.

Hospice – a group that provides inpatient, outpatient, and home health care for terminally ill patients.

Hospital Inpatient Prospective Payment System (IPPS) – Medicare’s way of paying acute care hospitals for inpatient care.

Inpatient (IP) – patients who stay overnight in the hospital.

International Classification of Diseases, 9th Edition (Clinical Modification) (ICD-9-CM) – a coding system used to describe the patient’s diagnosis and the procedures performed to treat them.

Lifetime Reserve Days – under Medicare provision, a patient has a lifetime reserve of 60 days of inpatient services they can receive after they receive more than 90 days of inpatient services in a benefit period.

Long Term Care – Medical care received in a nursing home.

Medicaid – a state insurance plan, funded by federal and state agencies, for low-income people who have limited or no insurance.

Medically Necessary – refers to services or supplies that are required to properly treat a specific medical condition.

Medicare – a federal health insurance program established for people age 65 and older.

Medicare + Choice – gives Medicare patients the option of enrolling in a variety of private plans including health maintenance organizations (HMOs), preferred provider organizations (PPOs), provider-sponsored organizations (PSOs), private fee-for-service (PFFS) plans, and medical savings accounts (MSAs) with high deductible insurance plans.

Medicare Number – a number given to every Medicare patient for tracking and billing purposes. This number can be found on the Medicare card.

Medicare Part A – Medicare coverage that helps pay for inpatient hospital, home health, hospice, and skilled nursing facility services.

Medicare Part B – Medicare coverage helps pay for physician services, medical supplies, and other outpatient services not paid for by Medicare Part A.

Medicare Part D – Medicare coverage that helps pay for the costs of prescription drugs.

Medicare Summary Notice (MSN) – also called an Explanation of Medicare Benefits (EOMB).

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.

Medigap – additional insurance purchased by Medicare beneficiaries to cover co-payments, co-insurance, deductibles, and services not paid for by Medicare Part A or B. Also known as Medicare supplement insurance.

Network – a group of doctors, hospitals, and other health care providers that have a contract with an insurance plan to provide services to its patients.

Non-Covered Charges – charges for medical services denied or excluded by insurance. The patient may be billed for these charges. Also called “non covered amount.”

Non-Participating Provider (non-par) – a doctor, hospital, or other health care entity that is not part of an insurance plan’s network.

Out-of-Network (OON) Services – Medical services received from a non-participating provider.

Out-of-Pocket (OOP) – Payment for medical services due from the patient, including copayments, co-insurance, and deductible.

Outpatient (OP) – a patient who does not need to stay overnight in a hospital. Outpatient services include lab tests, X-rays, and some surgeries.

Over-the-Counter (OTC) Drug – drugs that may be purchased at a pharmacy or drug store without prescription.

Participating Provider – a doctor, hospital, or other health care entity that is part of an insurance plan’s network. They agree to accept insurance payment for covered medical services as payment in full, less any patient liability.

Patient Type – a way to classify patients based on the type of services they receive from the hospital, such as outpatient, inpatient, and Emergency, etc.

Physician Participation – a way in which a physician agrees to accept an insurance company’s payment level as payment in full. This does not include patient’s co-insurance, deductibles, and non-covered services.

Point-of-Service Plan (POS) – a health insurance plan that allows the patient to choose to receive a medical service from a participating or non-participating provider, with different benefit levels with the use of participating providers.

Policy Number – a number that the insurance company assigns the patient to identify the contract for coverage.

Pre-Admission Approval/Certification (PAC) – an agreement by insurance company to pay for medical services. Physicians and hospitals ask the insurance company for this approval before providing medical services.

Pre-Existing Condition (PEC) – any health condition that has been diagnosed or treated within a certain time period immediately before the patient’s effective date of coverage. Pre-existing conditions may not be covered for a specified time period as noted in the insurance company’s certificate of coverage (usually 6 to 12 months).

Pre-Existing Condition Exclusion – a practice of some health insurance companies to deny coverage to patients for a certain time period for medical conditions that already exist when coverage began.

Preferred Provider Organization (PPO) – an insurance plan that has contracts with healthcare providers for discounted charges. Typically, the plan offers significantly better benefits and lower costs to the patients for services received from preferred providers.

Premium – the amount paid, often in monthly payments, for an insurance policy.

Prepayment – money paid before receiving medical services.

Prevailing Charge – a billing charge that is frequently made by physicians in a specific region or community.

Primary Care Network (PCN) – a group of primary care physicians who have agreed to share the risk of providing medical care to their patients who are covered by a given health plan.

Primary Care Physician (PCP) – a physician whose practice is devoted to internal medicine, family/general practice, pediatrics, or obstetrics/gynecology.

Primary Insurance – the insurance plan responsible for paying the bill first. If a patient is covered by another insurance, it is referred to as the secondary insurance.

Private Room and Board – a hospital room occupied by only one patient. These rooms may be more costly than semi-private rooms that are occupied by two patients.

Procedure / CPT code – a coding system used to describe medical services and surgical procedures provided to the patient.

Reasonable and Customary (R & C) – Commonly charged or prevailing fees for health services within a region or community.

Referral – approval needed for medical care beyond that offered by a primary care physician or hospital.

Release of Information – a signed statement from patients or guarantors that allows physicians and hospitals to release medical information so that insurance companies can pay medical bills.

Revenue Code – a billing code used to categorize charges based on the type of service, supply, or procedure provided.

Same-Day Surgery – outpatient surgery.

Secondary Insurance – additional insurance that may pay some medical charges not covered by primary insurance.

Self-Administered Drug – for patients that are not admitted as an inpatient, these are drugs that do not require doctors or nurses to help the patient take them.

Self-Insured Plan – an insurance plan where financial responsibility for medical expenses is assumed by the group (usually an employer) rather than an insurance company. Self-insured plans are often managed by Third Party Administrators (TPA).

Skilled Nursing Facility (SNF) – a facility, either free-standing or part of a hospital, that provides care to patients seeking rehabilitation and other medical care that is less intense than that received in a hospital.

Source of Admission – the way a patient was admitted to the hospital. For example, physician referral, transfer from another hospital, emergency room visit, etc.

Specialist – a physician who specializes in treating specific body parts and medical conditions, or certain age groups. For example, cardiologists only treat patients with heart problems.

State Children’s Health Insurance Program (SCHIP) – a federal program funded by states and the federal government, which offers health insurance coverage for children not covered by state Medicaid-funded programs.

Sub-Acute Care – a comprehensive inpatient care program for patients with a serious illness, injury, or disease who do not need intensive (acute care) hospital services. For example, infusion therapy, respiratory care, cardiac services, wound care, and rehabilitation services.

Third Party Administrator (TPA) – an independent entity (third party) that manages group benefits, claims and administration for a self-insured company or group.

TRICARE – insurance plan for active and retired military personnel, their families, and dependents. Also known as CHAMPUS.

UB-92 – a billing form used by hospitals to file insurance claims for medical services. Units of service – A way to measure quantity of medical services, such as the number of days in a hospital stay, pints of blood, etc.

Usual, Customary, or Reasonable (UCR) – the amount insurance companies believe to be the common or prevailing charges for medical services provided in a region or community.