Insurance Fundamentals

Question 1

Advance beneficiary notice (ABN)

Answer 1

Form provided to the pt when the provider believes Medicare will not pay for services received.

Question 2

Allowed amount

Answer 2

Maximum amount a third-party payer will pay for a particular procedure or service

Question 3

Copay

Answer 3

Amount of money that is paid at the time of medical service

Question 4

Coinsurance

Answer 4

Policy provision frequently found in medical insurance whereby the policyholder and the insurance company share the cost of covered losses in a specific ratio, 80:20

Question 5

Deductible

Answer 5

Specific amount of money a patient must pay out of pocket before the insurance carriers begins paying

Question 6

Explanation of benefits (EOB)

Answer 6

Statement from insurance detailing what was paid, denied, or reduced in payment
Contains info about amounts applied to deductible, coinsurance, and allowed amounts

Question 7

Participating provider (PAR)

Answer 7

Providers who agree to write off the difference between the amount charged by the provider and the approved fee established by the insurer

Question 8

Medicare

Answer 8

Covers pts 65 and older by Part A (hospital) or Part B (office visits) benefits.

Question 9

Tricare

Answer 9

Authorizes dependents of military personnel to receive treatment from civilian providers at the expense of the federal government

Question 10

CHAMPVA

Answer 10

Covers surviving spouses and dependent children of veterans who died as a result of service-related disabilities

Question 11

Medicaid

Answer 11

Provides health insurance to the medically indigent population through a cost-sharing program between federal and state governments for those who meet specific criteria

Question 12

Managed care

Answer 12

An umbrella term for plans that provide health care in return for preset scheduled payments and coordinated care through a defined network of providers and hospitals.

Question 13

Workers’ compensation

Answer 13

Protects wage earners against loss of wages and the cost of medical care resulting from an occupational accident or disease as long as the employee is not proven negligent.

Question 14

Remittance Advice (RA)

Answer 14

A document that itemizes all paid, denied, allowable charges for a patient.
This document notifies the provider of any and all claim denials.

Question 15

What is an Account Balance?

Answer 15

It is the total balance on the account. It can be debit (negative) or credit (positive).

Question 16

What is accounts receivable??

Answer 16

The amount owed to the provider for the services rendered

Question 17

What is accounts payable?

Answer 17

It is a debt incurred but not yet paid; this can be for supplies or utilities.

Question 18

What is coordination of benefits

Answer 18

Method of determining how much each third-party will pay for services provided while ensuring that overpayment does not occur.

Question 19

What is Eligibility for Insurance?

Answer 19

Informs a patient and provider of what service are and are not covered for reimbursement through the insurer.

Question 20

What is a CMS-1500 form?

Answer 20

Used to submit claims