With the changes occur­ring in health­care and insur­ance, it can be tricky and dif­fi­cult to under­stand. Here are a few high-lev­el tips and expla­na­tions of com­mon­ly used ter­mi­nol­o­gy that you will come across dur­ing this process. 

Fil­ing a claim:
After you receive treat­ment your doc­tor or care provider sub­mits a bill for pay­ment to your insur­ance com­pa­ny. When the bill is sent to your insur­ance com­pa­ny it is called a claim. The insur­ance com­pa­ny reviews the claim and process­es it. Once your insur­ance com­pa­ny receives the prop­er paper­work they deter­mine whether or not the ser­vices you received are cov­ered by your pol­i­cy, how much of the cost will be paid to the doc­tor by the insur­ance com­pa­ny and how much you will pay. In a worst-case sce­nario, they deny your claim entirely. 

Denial of claim:
A denial of your insur­ance claim can result when you receive ser­vices that are not cov­ered by your insur­ance pol­i­cy. You should review your pol­i­cy and under­stand the lim­i­ta­tions of your pol­i­cy before receiv­ing med­ical treat­ment. This is essen­tial for elec­tive, non-emer­gent pro­ce­dures. If your ser­vices are not cov­ered by your insur­ance this will result in a high­er out-of-pock­et expense for you.

If you are a mem­ber of an HMO (Health Main­te­nance Orga­ni­za­tion) you are required to receive approval for the med­ical pro­ce­dure and to pay your por­tion of the bill, your co-pay­ment, before you receive the care. Denial of ser­vice for you, as an HMO sub­scriber, means that you are denied approval for a med­ical pro­ce­dure that you want or feel that you need.

A denial of your claim either results in you not being reim­bursed or being billed for the por­tion of your bill that remains unpaid.

Com­mon rea­sons your claim can be denied: 

  • The insur­ance forms were filled out improp­er­ly. Make sure the insur­ance infor­ma­tion you sub­mit to your health care provider is accu­rate and timely. 
  • The claim was not sub­mit­ted in a time­ly man­ner. It is your respon­si­bil­i­ty to ensure your health care provider has the cor­rect insur­ance infor­ma­tion at the time of ser­vices. Your insur­ance com­pa­ny places a time lim­it on accept­ing your claim. If your claim is filed after the dead­line, it could be denied. It is your respon­si­bil­i­ty to know your insur­ance com­pa­ny’s require­ments and to meet them. 
  • Your treat­ment was exclud­ed, per the terms of your pol­i­cy. Every health insur­ance pol­i­cy con­tains some treat­ments that are exclud­ed. Again, it is your respon­si­bil­i­ty to know the rules of your pol­i­cy, as you will bear full finan­cial respon­si­bil­i­ty if you receive treat­ment that is not cov­ered. Check with your insur­ance provider pri­or to treat­ment to ensure you are covered. 
  • You received treat­ment with­out prop­er approval and autho­riza­tion. Make sure that you obtain prop­er approval and per­mis­sion when­ev­er it is required. Con­tact your insur­ance com­pa­ny for more infor­ma­tion about pre-authorization.

insurance tips

1. Know your pol­i­cy: Insur­ance cov­er­age varies from pol­i­cy to pol­i­cy. It is your respon­si­bil­i­ty to know which kind of med­ical pro­ce­dures and treat­ments are cov­ered under your plan. Some poli­cies require that treat­ments be lim­it­ed to strict guide­lines. Insur­ance pol­i­cy deductibles can vary
with­in your pol­i­cy depend­ing on the kind of treat­ment you seek and/​or the treat­ment you received. If you have any ques­tions con­cern­ing with­er a por­tion of your care is cov­ered, your deductible and/​or any oth­er cov­er­age options please con­tact your insur­ance com­pa­ny.

2. Check with your insur­ance provider before treat­ment: It can be very con­fus­ing to know exact­ly how your cov­er­age applies. Check with your health­care provider to get an accu­rate descrip­tion of the care you are seek­ing. Then con­tact your insur­ance provider to see how much of your treat­ment they will cov­er and how much you will be respon­si­ble for. Obtain­ing this infor­ma­tion before your pro­ce­dure will pro­tect you from unex­pect­ed costs and denied claims.

3. Keep excel­lent records: Keep detailed records of con­ver­sa­tions with your insur­ance com­pa­ny or health­care provider. Note the day and time of the call and the name of the per­son with whom you speak. Keep all writ­ten records whether it is paper­work that you receive in the mail or paper­work that is giv­en to you dur­ing an office vis­it. The more detailed your records the eas­i­er your insur­ance com­pa­ny and/​or health­care provider can resolve any issues.

4. If you have man­aged care cov­er­age, know which providers are in-net­work”: When a provider is out­side of your insur­ance’s con­tract­ed net­work you can be left with a high­er out-of-pock­et expense. Ver­i­fy that the facil­i­ty and the physi­cians are in-net­work with your insur­ance. There are cas­es where the facil­i­ty is in-net­work but the indi­vid­ual physi­cian is not.

5. Fol­low up: If you are respon­si­ble for fil­ing paper­work with your insur­ance provider you should ensure that your cor­re­spon­dence is received and processed in their sys­tem. Unfor­tu­nate­ly, you are the one who suf­fers if your paper­work was lost in the shuf­fle. Con­tact your insur­ance com­pa­ny to con­firm that your paper­work was received and is being processed. 

insurance terms

After pay­ment has been made a provider will typ­i­cal­ly receive an Expla­na­tion of Ben­e­fits (EOB)along with the pay­ment from the insur­ance com­pa­ny that out­lines these trans­ac­tions.

Below is a list of com­mon­ly used billing terms and their def­i­n­i­tions.

Billing state­ment — A sum­ma­ry of patient account activ­i­ty that is sent to patients or guardians updat­ing them regard­ing the sta­tus of a claim.

Claim — Infor­ma­tion billed to the insur­ance com­pa­ny for ser­vices pro­vid­ed to the patient.

Con­trac­tu­al write-off/ad­just­ment — The dif­fer­ence between the insur­ance con­tract­ed amount with the health care provider and the actu­al amount of the charge.

Co-pay­ment (patient respon­si­bil­i­ty) — The fee per vis­it paid by the patient or fam­i­ly for health care ser­vices. This amount is deter­mined by your med­ical insur­ance pol­i­cy.

Co-insur­ance (patient respon­si­bil­i­ty) — The por­tion (in per­cent) paid by the patient or fam­i­ly for health care ser­vices as deter­mined by your med­ical insur­ance pol­i­cy. If your pol­i­cy offers an 8020 split, once your deductible has been met, your insur­ance will pay 80% of the charges and you will be respon­si­ble for the oth­er 20%.

Deductible (patient respon­si­bil­i­ty) — The amount that the patient or fam­i­ly must pay toward health care ser­vices before the insur­ance pol­i­cy begins mak­ing pay­ments. The insur­ance pol­i­cy sets this amount; usu­al­ly, the amount is per cal­en­dar year.

Demo­graph­ics — Patient/​guarantor/​subscriber legal name, gen­der, birth date, address, phone num­ber and employ­er infor­ma­tion.

Expla­na­tion of Ben­e­fits (EOB) — A detailed expla­na­tion from the insur­ance com­pa­ny of the med­ical ser­vices pro­vid­ed to the patient by the health­care provider.

Finan­cial assis­tance — Adjust­ments made for qual­i­fied respon­si­ble par­ties, based on finan­cial assis­tance appli­ca­tions and estab­lished finan­cial guide­lines.

Guar­an­tor — The legal guardian of the patient who is usu­al­ly under 18.

Refer­ring physi­cian — The physi­cian who referred the patient to the attend­ing provider or referred the patient to the facil­i­ty for test­ing.

Pay­ment arrange­ments — A for­mal pay­ment plan set up when the bal­ance due can­not be entire­ly paid by the due date.

Pay­or — An enti­ty, whether com­mer­cial or gov­ern­ment, that pays med­ical claims.

Pri­ma­ry care physi­cian (PCP) — The provider who is con­sid­ered your gen­er­al prac­ti­tion­er. Often they are your nor­mal provider who treats your day to day ill­ness­es or check­ups.

Pri­or authorization/​precertification — A for­mal approval obtained from the insur­ance com­pa­ny pri­or to deliv­ery of med­ical ser­vices. Many insur­ance com­pa­nies require pri­or autho­riza­tion or pre­cer­ti­fi­ca­tion for spe­cif­ic med­ical services.