Insurance and Billing Ch. 17

medical insurance/health insurance

a written contract in the form of a policy between a policy holder and a health plan(insurance carrier)


the charge for keeping the insurance policy in effect


payments for medical services

lifetime maxium benefit

a total sum the health plan will pay out over the patient's lifetime

first party

the patient/policyholder

second party

the physician who provides medical services


a written contract

patient-physician contract

a contract that is created when a physician agrees to treat a patient who seeks medical services

third-party payer

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


a fixed dollar amount that must be paid by the insured for charges of providers, or "met" once a year, in addition to the premium, before the third-payer begins to cover medical expenses


a fixed percentage of covered charges after the deductible is met


a fixed fee collected at the time of visit


expenses that may not be covered under the insured's contract


a list of approved prescription brands

elective procedure

a procedure that is done at the convenience of the physician or surgeon and the patient


the process of the provider contacting the insurance plan to see if the proposed procedure is a covered service under the patient's insurance plan

group policies

in the US, the majority of individuals with insurance are covered by this type of policy

49.9 million

the number of uninsured Americans as of 2010

Affordable Healthcare Act

-the extension of insurance coverage to all Americans
-bans the ability of private insurance carriers to impose lifetime limits on coverage
-bans denial of coverage for preexisting conditions
-bans policy cancellations when an insured person becomes ill

fee-for-service plan

the oldest and most expensive type, it repays policy holders for healthcare costs due to illnesses and acicidents

managed care organizations

control both the financing and delivery of healthcare to policyholders; enroll policyholders, physicians, and other care providers to provide services for their members at reduced rates

participating physicians

physicians who enroll with managed care plans


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

preferred provider organization

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

health maintenance organization

a healthcare organization that provides specific services to individuals and their dependents who are enrolled in an HMO agree to provide certain services in exchange for a prepaid fee

health maintenance organization

-physicians are often paid a capitated rate
-patients pay premiums and usually also pay a copay
-patients must usually choose from a specific group of healthcare providers
-patients also pay for excluded services

utilization review

in this process, committee members who have training similar to that of the physician providing the medical care review individual cases to be sure that all services provided were medically necessary and that there was appropriate use of medical resources

Blue Cross Blue Shield

a nationwide federation of nonprofit and for profit service organizations that provide prepaid healthcare services to BCBS

liability insurance

covers injuries caused by the insured or that occurred on the insured's property

disability insurance

may be offered to employees, provided by an employer for its employees, or purchased privately; activated when the insured is injured or disabled for non-work related reasons


-the largest federal program which provides health insurance for citizens aged 65 and older, the disabled, the blind, and workers of any age who have chronic kidney disease requiring dialysis or end-stage renal disease
-managed by CMS
-divided into two pa

Medicare Part A

the hospital benefit of Medicare, which is billed by hospitals or other healthcare facilities and financed through contributions collected from the Federal Insurance Contributions Act tax on income earned by workers and the self employed

Medicare Part B

-covers a portion (usually 80%) of the allowed charges for a wide range of outpatient procedures and supplies
-individuals entitled to Part A benefits automatically qualify
-must enroll because coverage is not automatic; has 6 months to enroll (3 months p

Medicare Part C

provides several plan choices for individuals called Medicare Advantage plans; include PPOs, HMOs, private fee-for-service plans, special need plans, and Medicare savings account plans

Medicare Part D

prescription drug plan offered to Medicare beneficiaries

medicare fee for service

allows the beneficiary to choose any licensed physician certified by Medicare

medicare managed care plans

charges a monthy premium and a small copaymet for wach office visit, but not a deductible

medicare preferred provider organization plan

patients pay less when they use doctors within a network, but they may choose to go outside the network for additional costs, such as a higher copayment or higher coinsurance

medicare private fee for service plan

patients receive services from the provider they choose, as long as medicare has approved the provider or facility

recovery audit contractor program

program where four institutions audits one-fourth of the country, designed to guard the Medicare Trust Fund by fighting fraud, waste, and abuse in the medicare program


a health benefit program designed for low income, blind, or disabled patients; needy families; foster children; and children born with birth defects

accepting assignment

agreement in which physicians who agree to treat medicaid pstients also agrees to accept tje established medicaid payment for covered services as payment in full

dual coverage

term used when a patient id covered by medicare and medicaid


a healthcare benefit for families of uniformed personnel and retirees from the Uniformed Services


Civilian Health and Medical Program of the Veterans Administration; covers the expenses of the families (dependent spouses and chilldren) of veterans with total, permanent, service-connected disabilities.


State Children's Health Inusrance Plan; allows statesto provide health coverage to unisured children in families whose incomes are too high to qualify for Medicaid but too low to afford private insurance

Worker's Compensation Insurance

covers employment related accidents or diseases

fee schedule

a list of a physician's usual fees, charged to most of their patients most of the time under typical conditions

resource based relative value scale

the payment system Medicare uses; establishes the relative value units for services, replacing the providers'consensus on fees with amounts based on resources;

national uniform relative value unit

based on three cost elements: the physician's work, the practice cost (overhead), and the cost of malpractice insurance

geographic adjustment factor

used to adjust each relative value to reflect a geographical area's relative costs, such as office rent and utilities

nationally unifrim conversion factor

a dollar amount used to multiply the relative values to produce a payment amount

allowed charge

the maximum amount the payer will pay any provider

balance billing

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

The Advance Beneficiary Noticeof Noncoverage/ABN

a notice giventoMedicare beneficiaries to convey that Medicare is not likely to provide coverage in a specific case

birthday rule

states that the insurance policy oF the policyholder whose birthday comes first in the calendar year is the primary payer for all dependents

data elements

the information entered on electronic claims

taxonomy code

a 10 digit number representing a physician's medical specialty

HIPAA Electronic Health Care Transactions and Code Sets

means that all health plans are required to accept the standard claim submitted electronically, although the information required by each payer may vary

direct transmission to the payer, clearinghouse use, direct data entry

three major methods used to transmit claims electronically

direct ransmissions to the payer

medical offices and payers exchange transmissions directly, using the necessary information systems-inlcuding a transkator and communications technology-to conduct electronic data interchange


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

direct data entry

uses an internet based service into which employees can key the standard data elements

remittance advice/explanation of benefits

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