Glossary of Billing Terms

Auto insurance - Insurance billed due to an auto accident or a theft

Bad Debt - A person or persons whose account that has been sent to a collection agency for further action

Balance statement - A statement that shows a balance on an account which has not been paid

Benefit coverage - Services provided to plan members as described by insurance policy

Claim - A demand for payment in accordance with an insurance policy

Co-insurance - The percentage of treatment cost for which the consumer is responsible on an insurance claim

Co-pay/Co-payment - The fixed dollar amount the consumer must pay for each visit to a doctor’s office

Deductible - The annual amount the consumer must pay for medical services (excluding premiums) before the insurance plan begins covering costs

Exclusions - Medical services not covered by an insurance policy

Fee for service - A plan in which the insurance company and consumer share the cost of treatment according to a fixed ratio. (For example, the company might pay 80 percent, while the consumer pays 20 percent in co-insurance)

Formulary - A list of medications covered by an insurance plan 

HDHP/High-deductible health plan - A plan that offers lower monthly premiums but much higher deductibles (often more than $2,000 for individuals and $5,000 for families) than typical managed-care plans

HMO/Health Maintenance Organization - A health maintenance organization, or HMO, offers insurance plans in which the consumer pays a modest co-payment for doctor and hospital visits, but coverage is restricted to participating doctors. Specialist care requires a referral from a primary care provider

HSA/Health Savings Account - A tax-free, portable savings account that is used to pay medical expenses. Unused funds can be carried over from year to year. Requires enrollment in a high-deductible health plan (HDHP).

In-network - A term that refers to the fact that a doctor or hospital is part of the group (network) whose services are covered by an insurance plan at the maximum rate

Insurance company - A financial institution that sells insurance

Insured - A person or persons who is a policyholder of an insurance policy. Also known as the subscriber, policyholder, cardholder, beneficiary or consumer

Medicaid - A federal and state-funded program that pays for medical care for those who cannot afford it

Medicare - A federal program that helps pay for medical care for people age 65 and older, or who have certain disabilities. Those enrolled are responsible for premiums, deductibles and co-payments 

Medigap - Private insurance used to fill gaps in Medicare coverage

Out-of-network - A term that refers to the fact that a doctor or hospital is not part of the group (network) whose services are covered by an insurance plan at the maximum rate

Outpatient - A patient who is admitted to a hospital or clinic for treatment that does not require an overnight stay.

PCP/Primary Care Physician - A doctor chosen by a patient in a managed-care plan to provide routine care, as well as referrals to medical specialists

POS/Point-of-service plan - An option, also called a point-of-service plan, offered with certain health maintenance organizations (HMOs) allowing for some coverage for out-of-network treatment. Consumer often can visit specialists without a referral from a primary-care physician

PPO/Preferred Provider Organization - An insurance plan in which the consumer pays a co-payment for visits to in-network doctors. PPOs partially cover treatment by out-of-network doctors 

Personal injury - When a person has suffered some form of injury, either physical or psychological, as the result of an accident

Plan - A program or policy stipulating a service or benefit

Policy - A written contract or certificate of insurance

Pre-authorization - An insurance plan requirement that you or your primary doctor need to notify the insurance in advance of certain medical procedures or inpatient stays

Pre-existing condition - A medical condition not covered by an insurer because the consumer is believed to have had the condition prior to obtaining the policy

Premium - A fee paid by the consumer for participation in a health plan

Prescription - A written order, especially by a physician, for the preparation and administration of a medicine or other treatment.

Referral - The recommendation of a medical professional

Secondary claim - A request for payment after a primary insurance has processed a claim

Self Pay - Uninsured patient who has no third party insurance coverage    

Stop-loss - The point at which a consumer has fully paid the deductible and reached the maximum amount of co-payment required by an insurance policy. Insurance covers 100 percent of additional costs for the remainder of the year

Worker's compensation - Payments required by law to be made to an employee who is injured or disabled in connection with work