Glossary of Billing Terms
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 provider 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 provider gives the patient before they receive services when Medicare is not expected to pay for some or all of the services. The notice is given so that the patient may decide whether to have the treatment and how to pay for it if Medicare denies the charges. ABNs apply to patients with traditional Medicare only.
Appeal - a process by which the patient, their provider, 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 provider. See also deductible.
Assignment - an agreement the patient signs that allows your insurance to pay the provider or hospital directly.
Assignment of Benefits - the provider or hospital agrees to accept payment from an insurance company first and then bill the patient for any after-insurance balances. See also benefit.
Authorization Number - a reference number stating that your treatment has been approved by insurance. Also called a certification number or prior-authorization number.
Beneficiary - someone who is covered under an insurance policy or plan.
Beneficiary/Patient Liability - the portion patients must pay out-of-pocket for medical services, including co-payments, co-insurance, and deductibles. This is in addition to the portion paid by insurance.
Benefit - the amount insurance pays for medical services.
Billed Charges - the total charges that provider send to insurance companies/patients prior to any negotiated contracts or discounts being applied.
Birthday Rule - the Birthday Rule is approved by the National Association of Insurance Commissioners (NAIC). The Birthday Rule indicates that the plan of the parent whose date of birth (month and day) falls earlier in the calendar year is the primary plan for dependent children. For example, if the mother's birth date is June 10 and the father's birth date is April 23, the father's plan would be primary. If both parents have the same birth date, the health plan in effect for the longer period of time will be primary.
Centers for Medicare and Medicaid (CMS) - the federal agency that operates the Medicare program and works with states to manage the Medicaid program (referred to as Medi-Cal in California, AHCCCS in Arizona and Medicaid in Nevada).
Certificate of Coverage (COC) - a description of the healthcare coverage included in an insurance company's plan. The certificate of coverage is required by state laws and explains the healthcare coverage provided under the contract issued to the employer.
Charity Care - free or reduced-fee health care for patients who have financial hardship.
Claim - the medical bill the provider 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 provider 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.
Collection Agency - a business that contracts with the provider to collect money from patients for unpaid bills.
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. COBRA generally provides continued health insurance coverage for up to 18 or 36 months. COBRA beneficiaries may be required to pay 100 percent of the premium plus an administrative fee.
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. The insured's total benefits do not exceed 100% of the medical expenses.
Co-pay - a fixed dollar amount that a patient must pay out-of-pocket. This is often associated with an office visit or emergency room visit. For example $5, $10, or $25.
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. Usually the amount must be met and paid by the patient each year.
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 prior approval/certification, terminated coverage, or other reasons. Denied amounts may be charged to the patient. See also appeal.
Diagnosis Code - a code used for billing that describes the patient's illness.
Durable Medical Equipment (DME) - Medical equipment that can be used multiple times and is ordered by a doctor for use at home.
EEG - equipment or medical procedure that measures electricity in the brain.
EKG/ECG - equipment or medical procedure that measures how the heart works.
Eligibility Verification - a way providers 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. ERISA mandates financial standards and other requirements for group 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. This statement normally includes any payment due from the patient, such as co-insurance, deductibles, and co-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 bill. The guarantor may or may not be the patient.
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. HCPCS codes include CPT codes and other codes.
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. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment.
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.