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.