Basic Medical Billing Terms

Question 1

Account number

Answer 1

The number assigned by your provider (hospital, physician, home care service, etc.) when medical services were provided.

Question 2

Adjustment

Answer 2

The portion of your bill that your provider has agreed to write off. / The portion of your bill that your doctor or hospital has agreed not to charge you.

Question 3

​Admission date (admit date)

Answer 3

The date admitted for treatment.

Question 4

Admitting diagnosis

Answer 4

Words or phrases your doctor uses to describe your condition.

Question 5

Advance beneficiary notice (ABN)

Answer 5

A notice your provider gives you before you are treated, informing you that Medicare will not pay for the treatment or service. The notice is given to you so that you may decide whether to have the treatment and how to pay for it.

Question 6

Ancillary service

Answer 6

The inpatient services you receive beyond room and board charges, such as laboratory tests, therapy, surgery, etc.

Question 7

Appeal

Answer 7

The process by which a patient or provider attempts to persuade an insurance payer to pay for more (or, in certain cases, pay for any) of a medical claim. The appeal on a claim only occurs after a claim has either been denied or rejected (See “Rejected Claim” and “Denied Claim”).

Question 8

Coordination of Benefits (COB)

Answer 8

How insurance companies work together when you have more than one insurance plan. A patient may be covered by more than one commercial insurance plan, such as through an employer as well as a spouse’s, parent’s or domestic partner’s employer. If you have more than one insurance plan, check with the secondary policy to find out how it covers expenses left over after your primary coverage has paid its part. (See “Secondary Insurance​”)

Question 9

Certification number

Answer 9

A number stating that your treatment has been approved by your insurance plan. Also called an Authorization Number, Prior Authorization Number or Treatment Authorization Number.

Question 10

Claim

Answer 10

Your medical bill that is sent to an insurance company for payment.

Question 11

Cost-sharing

Answer 11

Cost-sharing is a general term used to describe any fee you’re responsible for paying per your insurance policy. It consists of coinsurance, deductibles, and copays.

Question 12

Deductibles

Answer 12

The amount a patient pays before the insurance plan pays anything. In most cases, deductibles apply per person per calendar year. With preferred provider organizations (PPOs), deductibles usually apply to all services, including lab tests, hospital stays and clinic or doctor’s office visits. Some insurance plans waive the deductible for office visits. Some plans have service-specific deductibles.

Question 13

Eligible payment amount

Answer 13

The medical services covered by an insurance company.

Question 14

Allowed amount

Answer 14

Determined by your insurance to be the amount your provider is due for a particular service. This amount is usually less than the amount billed by the provider and is determined by pre-negotiated contracts or regulations. The combined total paid by you and your insurance to a provider should not exceed the allowed amount when we are in-network with your plan. Call your insurance company for more information.

Question 15

Co-payment (Co-pay)

Answer 15

A predetermined, fixed fee that you pay at the time of service. Copayment amounts vary by service and may vary depending on which provider (in-network, out-of-network, or provider type) you see. The amounts also may vary based on the type of service you are receiving (for instance, primary care vs. specialty care). For prescriptions, copayment amounts may vary depending on name-brand versus generic drugs. Call your insurance company for more information.

Question 16

Co-insurance

Answer 16

The amount you must pay after your insurance has paid its portion, according to your Benefit Contract​. In many health plans, patients must pay for a portion of the allowed amount. For instance, if the plan pays 70% of the allowed amount, the patient pays the remaining 30%. If your plan is a preferred provider organization (see “Preferred Provider Organization (PPO)”) or other narrow network type of product, your co-insurance costs may be lower if you use the services of an in-network provider on the plan’s preferred provider list.​ Cal​l your insurance company for more information.

Question 17

Benefits

Answer 17

The extent to which your insurance coverage will pay for services provided to you. Benefits may describe what portion of the allowed amount may be due from you, the level to which they will pay for services provided by various providers, and what types of services they will or will not cover.

Question 18

Date of bill

Answer 18

Bill preparation date. It is not the same date as the date of service.

Question 19

Date of service (DOS)

Answer 19

Treatment date.

Question 20

Deductibles

Answer 20

The amount a patient pays before the insurance plan pays anything. In most cases, deductibles apply per person per calendar year. With preferred provider organizations (PPOs), deductibles usually apply to all services, including lab tests, hospital stays and clinic or doctor’s office visits. Some insurance plans waive the deductible for office visits. Some plans have service-specific deductibles.

Question 21

Medicaid

Answer 21

Medicaid is a jointly funded federal and state health insurance plan administered by states for low income adults, pregnant women, children and people with certain disabilities. For additional information, please see Your Health Insurance Coverage.

Question 22

Medicare

Answer 22

Medicare is a federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). For additional information, including explanations of the different parts of Medicare, please see Your Health Insurance Coverage.

Question 23

Network

Answer 23

A group of doctors, hospitals, pharmacies and other healthcare experts hired by a health plan to take care of its members.

Question 24

Policy number

Answer 24

A number your insurance company gives you to identify your contract.

Question 25

Preferred provider organization (PPO)

Answer 25

A healthcare organization that covers a greater amount of the healthcare costs if a patient uses the services of a provider on their preferred provider list. Some PPOs require people to choose a primary care doctor who will coordinate care and arrange referrals to specialists when needed. Other PPOs allow patients to choose specialists on their own. A PPO may offer lower levels of coverage for care given by doctors and other healthcare professionals not affiliated with the PPO.

Question 26

Primary care network (PCN)

Answer 26

A group of doctors serving as primary care doctors.

Question 27

Tricare

Answer 27

Tricare is a health care program for active duty and retired uniformed service members and their families. If members become eligible for Tricare benefits, they are no longer eligible for ChampVA.

Question 28

Individual insurance

Answer 28

Health insurance purchased by an individual, not as part of a group plan.

Question 29

HIPAA

Answer 29

The federal Health Insurance Portability and Accountability Act sets standards for protecting the privacy of your health information.