You may have noticed that we're not going with our usual Expert series today. Since filling out forms requires understanding a lot of jargon, we're sharing our own expertise today!
We've already covered many insurance terms in our previous post 'Breaking Down the Jargon'. When dealing with claims, we tend to use certain terms to describe the insurance your patient has. As a refresher on those terms, here are some detailed descriptions.
Allowable Charge: The maximum amount that an insurance company will reimburse compared to the provider's specific service rate. In-network providers may be required to accept a discounted amount as payment (say $90 instead of the full $100) and the remaining ($10) will be considered provider write-off. If the provider is not an in-network provider, then the patient is held responsible for the full charge ($100).
Allowable Costs: Costs that are covered within a health insurance plan.
Balance Billing: Costs that are not covered (not including co-payments, deductibles or coinsurance) if an out-of-network provider is used.
Claim: An invoice sent to an insurance company by the provider (or billing service) for medical services rendered.
Coinsurance: After the copay and deductible have been paid, a coinsurance may still be required. This is where a patient is required to pay a percentage of the total bill (20%) and the insurance company will cover the other percentage (80%).
Copay: A set charge that is paid by the patient for each visit or prescription (e.g. $15).
Deductible: A specific out-of-pocket amount that a patient must reach before health insurance payments begin (e.g. A patient must spend $3000 before health insurance will start covering the costs).
Out-Of-Pocket Maximum Costs: The maximum amount a patient has to pay before the health insurance kicks in (i.e. pays 100%).
Provider Write Off: Difference between actual charge and the allowable charge.
We hope these terms help! As always, if you have more questions on these terms or other, please leave us a comment.