CH 15 Health Insurance Billing Procedures

allowed charge

The amount that is the most the payer will pay any provider for each procedure or service.

assignment of benefits

An authorization for an insurance carrier to pay a physician or practice directly.

balancing billing

Billing a patient for the difference between a higher usual fee and a lower allowed charge.

benefits

Payments for medical services.

birthday rule

A rule that states that the insurance policy of a policyholder whose birthday comes firswt in the year is the primary payer for all dependents.

capitation

A payment structure in which a health maintencance organization prepays an annual set fee per patient to a physician.

Centers for Medicare and Medicaid Services (CMS)

A congressional agency designed to handle Medicare and Medicaid insurance claims. It was formerly known as the Health Care Financing Administration.

CHAMPVA

A type of health insurane that covers the expenses of families (dependent spouses and children) of veterans with total, permanent, and service-connected disabilities. It also covers the surviving families of veterans who die in the line of duty or as a re

clearinghouse

A group that takes nonstandard medical billing software formats and translates them into the standard EDI formats.

coinsurance

A fixed percentage of covered charges paid by the insured person after a deductible has been met.

coordication of benefits

A legal principle that limits payment by insurance companies to 100% of the cost of covered expenses.

copayment

A small fee paid by the insured at the time of a medical service rather than by the insurance company.

deductible

A fixed dollar amount that must be paid by the insured before additional expenses are covered by an insurer.

disability insurance

Insurance that provides a monthly, prearranged payment to an individual who cannot work as the result of an injury or disability.

elective procedure

A medical procedure that is not required to sustain life but is requested for payment to the third-party payer by the patient or physician. Some elective procedures are paid for by third-party payers, whereas others are not.

electronic data interchange (EDI)

Transmitting electronic medical insurance claims from providers to payers using the necessary information systems.

exclusion

An expense that is not covered by a particular insurance policy, such as an eye examination or dental care.

explanation of benefits (EOB)

Information that explains the medical claim in detail; also called remittance advice (RA).

fee-for-service

A major type of health plan. It repays policyholders for the costsw of health care that are due to illness and accidents.

fee schedule

A list of the costs of common services and procedures performed by a physician.

formulary

An insurance plan's list of approved prescription medications.

health maintanance organization (HMO)

A health-care organization that provides specific services to individuals and their dependents who are enrolled in the plan. Doctors who enroll in an HMO agree to provide certain services in exchange for a prepaid fee.

liability insurance

A type of insurance that covers injuries caused by the insured or injuries that occured on the insured's property.

lifetime maximum benefit

The total sum that a health plan will pay out over the patient's life.

Medicaid

A federally funded health cost assistance program for low-income, blind, and disabled patients; families receiving aid to dependent children; foster children; and children with birth defects.

Medicare

A national health insurance program for Americans aged 65 and older.

Medicare Advantage plans

Medicare benefit in which beneficiaries can choose to enroll in one of three major types of plans instead of the Original Medicare Plan.

Medigap

Private insurance that Medicare recipients can purchase to reduce the gap in coverage- the amount they would have to pay from their own pockets after recieving Medicare benefits.

Original Medicare Plan

The Medicare fee-for-service plan that allows the beneficiary to choose any licensed physician certified by Medicare.

participating physicians

Physicians who enroll in managed care plans. They have contracts with MCOs that stipulate their fees.

preauthorization

Authorization or approval for payment from a third-party payer requested in advance of a specific procedure.

precertification

A determination of the amount of money that will be paid by a third-party payer for a specific procedure before the procedure is conducted.

preferred provider organization (PPO)

A managed care plan that establishes a network of providers to perform services for plan members.

premium

The basic annual cost of health-care insurance.

referral

An authorization from a medical practive for a patient to have specialized services performed by another practice; often required for insurance purposes.

remittance advice (RA)

A form that the patient and the practice recieve for each encounter that outlines the amount billed by the practice, the amount allowed, the amount of subscriber liability, the amount paid, and notations of any service not covered, including an explanatio

resource-based relative value scale (RBRVS)

The payment system used by Medicare. It establishes the relative value units for services, replacing the providers' consensus on usual fees.

third-party payer

A health plan that agrees to carry the risk of paying for patient services.

TRICARE

A program that provides health-care benefits for families of military personnel and military retirees.

X12 837 Health Care Claim

An electronic claim transactio nthat is the HIPAA Health Care Claim or Equivalent Encounter information ("HIPAA claim")