Insurance Terms You Should Know
We know insurance terms can be very confusing. To help, here’s a list of some of the most common terms. Hopefully, it will demystify the process a bit! If you ever have any questions, please feel free to call the office or bring it up with the front desk at your next appointment.
Allowable Charge: This is the amount that the insurance company finds to be a reasonable charge for medical services/supplies. A.K.A.:
Allowed amount
Maximum allowable
Usual, customary, and reasonable (UCR) charge
Benefits: These include covered items or services that your insurance company pays, such as lab work or an office visit. It does not include cosmetic or most elective procedures.
Claim: This is the request we make, after your appointment, to your insurance company for services rendered. This is how we receive payment from them.
Coinsurance: If you have an insurance plan with a deductible, this is the amount you pay to share the cost of the covered services. The amount is based on a percentage, not a set dollar amount, so it can vary depending on the service. For example: If your insurance pays 80% of the service, you are responsible for paying for 20% of it.
Copayment: This is the flat fee for certain medical expenses that you are asked to pay for regular doctor’s visits. Copayment amounts vary depending on whether your doctor is in-network or out-of-network.
Deductible: This is the amount of money that you pay each year to cover eligible medical expenses before your insurance begins to pay for all services.
Elective Procedure: An elective procedure is one that is decided on by the patient or the doctor, but isn’t considered essential at that time. Elective procedures aren’t covered by insurance companies because they’re not viewed as medically necessary.
HIPAA (Health Insurance Portability and Accountability Act of 1996): HIPAA is the standard for privacy rules and practices that all medical providers and health insurance companies must abide by. For more information about HIPAA, see: https://www.hhs.gov/hipaa/
HMO (Health Maintenance Organization): HMOs require that your care is coordinated through your primary care provider (PCP). This means you’ll need a referral before seeing a specialist if you want it to be covered by your insurance. Some HMOs are deductible plans, while others require a copayment only at the time of your office visit.
In-Network Provider: A provider that is in-network is considered a preferred provider by your insurance company. You typically pay less for services received by in-network providers which include:
Physicians
Medical professionals
Pharmacies
Hospitals
Other outpatient facilities
Out-Of-Network Provider: These are medical professionals, hospitals, and pharmacies who are not preferred providers with your insurance company. The amount of money out of your pocket will be higher for out-of-network providers.
Out-Of-Pocket Maximum: This is the cap on the amount of money you pay per year before your insurance pays 100%. Your copays, coinsurance, and deductible count to this max. The maximum restarts at zero at the beginning of each year.
POS (Point of Service): A POS plan can be seen as a combination of HMO and PPO plans. Your insurance company may require you to choose a primary care physician who can make referrals to specialists, but this isn’t always the case. It’s very important to understand if your plan requires this or not.
PPO (Preferred Provider Organization): Your insurance has a network of preferred providers if you have a PPO. You’ll pay less out of pocket for services rendered at preferred facilities and with preferred providers than you will for out-of-network providers. Most of the time, you do not need to coordinate all of your care through your primary care physician.
Want to learn more about insurance? Here’s a comprehensive list of insurance terms: https://www.ehealthinsurance.com/health-insurance-glossary/terms-a/
Be on the lookout for more posts like these where we take some of the mystery out of billing and insurance concerns.