BASIC INSURANCE TERMINOLOGY

Question 1

Fraud

Answer 1

Providers, patients, or insurance companies may be found fraudulent if they are deliberately achieving their ends through misrepresentation, dishonesty, and general illegal activity

Question 2

Open Enrollment

Answer 2

The yearly period when people can enroll in a health insurance plan or make changes to current health plans for the following year

Question 3

Preferred Provider Organization (PPO)

Answer 3

Similar to an HMO
A patient can receive healthcare from providers within and established network set up by an insurance company, but is not restrictive to an HMO
Larger group of providers to choose from

Question 4

Health Maintenance Organization (HMO)

Answer 4

Type of health insurance plan that usually limits coverage to care from a doctor or group of doctors who are contracted with the HMO
Generally will not cover out-of-network care except in an emergency
Have the most restricted coverage area (a very small group of providers to choose from)

Question 5

Group Health Plan

Answer 5

Insurance plan provided by an employer to a group of employees

Question 6

Group Name

Answer 6

Name given to the group of employees in the group health plan by the insurance carrier

Question 7

Subscriber

Answer 7

Main individual covered under a group policy

i.e., an employee of a company with a group health policy would be one of many subscribers on that policy

Question 8

Beneficiary

Answer 8

Person who is eligible and entitled to Medicare benefits

Any person or covered entity under an insurance policy who receives benefits

Question 9

Network Provider

Answer 9

a.k.a. in-network
Providers within a health insurance company’s network that has contracted with the company to provide discounted services to a patient covered under the company’s plan
Using an in-network provider or participating provider will result in less financial responsibility for the patient

Question 10

Out-of-Network (OON)

Answer 10

Providers outside of an established network of providers who contract with an insurance company to offer patients healthcare at a discounted rate
Using out-of-network providers typically costs the patient more
Patient is responsible for any amount the insurance does not reimburse

Question 11

Pre-Authorization or Pre-Certification

Answer 11

Process of notifying and receiving approval from the insurance carrier prior to services or procedures being done
Some insurance plans require this be done or risk the charge being denied entirely or the reimbursement reduced

Question 12

Preventive or Routine Services

Answer 12

Services intended to prevent illnesses and detect health concerns early, before symptoms are noticeable

Question 13

Diagnostic Care

Answer 13

Provided to diagnose or treat symptoms the patient already has by monitoring the existing problem, checking out new symptoms, or following up on abnormal test results

Question 14

Inpatient Admission

Answer 14

Status for a patient who is admitted to a hospital or facility on doctors orders for a severe medical condition (usually trauma or severe illness)

Question 15

Outpatient Services

Answer 15

Patient who receives medical treatment without being admitted to a hospital

Question 16

Observation Status

Answer 16

Hospital status indicating the patient is not sick enough to require an inpatient admission, but is too sick to be discharged without needing to be monitored for a period of time, sometimes overnight to determine if admission is eventually necessary

Question 17

Non-Covered Charges

Answer 17

Procedures and services not covered or excluded by a patient’s health insurance plan

Question 18

Self-Administered Drugs (SADs)

Answer 18

Medicare considers any drug a patient is able to take or consume themselves (oral, topical, injectable, or via eye drop) a SAD
Medicare does not cover any SAD charges for non-inpatient visits
Part D plans ‘may’ cover the SAD, but not always
The facility cannot bill Medicare for these charges because they are excluded from coverage, but must balance bill the patient
These charges generally are more expensive because they are being provided in the facility setting

Question 19

Referral

Answer 19

Requiring a general practitioner to see a patient before a specialist will set up a visit

Question 20

Secondary Insurance Coverage

Answer 20

Processes after primary insurance has finalized the claim

Question 21

Tertiary Insurance Coverage

Answer 21

Processes after primary and secondary insurances have finalized the claim

Question 22

Coordination of Benefits (COB)

Answer 22

Process of determining the order the insurance companies will process claims
i.e., primary vs. secondary insurance

Question 23

Contractual Adjustment

Answer 23

Binding agreement between an in-network provider, patient, and insurance company where the provider agrees to write-off certain amounts
Patients are not responsible for the contractual adjustment amounts

Question 24

Allowed Amount

Answer 24

Amount an insurance company will use to calculate the patient responsibility
Excludes contractual adjustments and non-covered charges

Question 25

Assignment Of Benefits

Answer 25

An agreement or arrangement between a beneficiary and an insurance company, by which a beneficiary requests the insurance company to pay the health benefit payment directly to the physician or medical provider

Question 26

Deductible

Answer 26

Amount a patient is responsible for before their benefits (coinsurance) start

Question 27

Coinsurance

Answer 27

Percentage of coverage a patient is responsible for versus what the insurance company is responsible for
e.g., 90/10 or 80/20
Varies among health plans

Question 28

Copayment (Copay)

Answer 28

A monetary charge a health insurance plan may require to be paid in order to receive a specific medical service or supply
Copays are separate from deductibles
Varies among insurance plans

Question 29

Maximum Out-of-Pocket

Answer 29

Total amount a patient is responsible to pay each benefit year before the plan will reimburse at 100%

Question 30

Premium

Answer 30

Amount of money an individual or business must pay for insurance coverage from an insurance carrier

Question 31

Pre-Existing Condition

Answer 31

Medical condition(s) a patient had been treated for before receiving coverage from an insurance company

Question 32

Tax Identification Number (TIN)

Answer 32

Unique number a patient or a company provides, for billing purposes, in order to receive healthcare from a provider

Question 33

Third Party Liability (TPL)

Answer 33

Is purchased to protect the policyholder against liability for damages or losses caused by the named insured to another person or their property
e.g., liability coverage under an automobile policy, homeowner’s liability coverage for personal injury caused by the insured

Question 34

Timely Filing

Answer 34

Allotted time the facility/provider or patient has to file a claim with an insurance company
Once time has elapsed, the insurance will deny the entire charge and it will be the patient’s responsibility

Question 35

Usual Customary and Reasonable (UC&R)

Answer 35

Amount paid for a medical service in a geographical area based on what providers in the area usually charge for the same or similar medical service
Amount is sometimes used to determine the allowed amount by insurance companies