Sometimes discussing your health care benefits with your doctor’s office or insurance agent can be difficult to follow. Here’s a list of commonly used terms and their definitions to help you brush up on insurance system lingo.
Case Management – Determining a course of care, based on the needs of the patient, to make sure the most appropriate treatment happens in the best setting.
Centers of Excellence – Locations that provide specific services such as diagnosing and treating a specific disease or condition. Centers of Excellence perform a particular type of care or procedure, such as organ transplants or cancer treatment.
Co-payment or co-insurance – The portion of a medical bill that the patient pays. Many health care plans pay for part of a doctor visit or prescription drug, and require the patient to pay a co-payment.
Deductible –The amount of health care costs that the patient must pay before the insurance company pays covered expenses. For example, you have a $250 deductible, after which your insurance company pays 80 percent of covered expenses. An emergency room visit costs $600. You will pay your $250 deductible, plus 20 percent of the additional cost, or $320. Your insurance picks up coverage after the $250 deductible, so therefore pays 80 percent of additional $350, or $280.
Explanation of Benefits (EOB) – A statement from the insurance company showing the patient what charges have been filed on behalf of a medical provider, how much the insurance company paid, how much of costs for which the insured is responsible, and any reason the insurance company did not cover particular services performed by the provider.
Fee-for-Service – Traditional health care payment system when a physician or medical provider bills a patient for each visit or service at full price. Instead of through a negotiated rate through an insurance provider.
Health Maintenance Organization (HMO) – An organization of health care providers that provides services for a specified group at a fixed cost.
Major Medical Insurance – A health insurance policy that pays for covered medical expenses with a very high cost limit, such as $1 million over the patient’s lifetime. Most major-medical plans also have deductibles or co-payments.
Maximum Out-of-Pocket Expenses – The amount of deductibles and co-payments a patient will be responsible for during a fixed period of time, usually a year. After the insured reaches the maximum out-of-pocket amount, the insurance company pays covered expenses at 100 percent of reasonable and customary expenses.
Medical Savings Account (MSA) – A high-deductible health insurance plan that allows insured employees to have a pre-determined amount deducted from their pay before taxes.
Pre-admission Certification – A Review by your insurance provider before a surgical procedures to decide if an operation is necessary or if it could be completed through a outpatient basis. Most operations require a pre-admission Certification.
Pre-existing Condition. Any medical conditions that have been diagnosed before the insured was covered by his current insurance policy
Preferred Provider Organization (PPO) – A sponsor that negotiates price discounts with medical providers in exchange for more patients. The sponsor may be an insurance company, employer or third-party administrator.
Premium – The payment made by an employer or individual for the cost of insurance.
Reasonable or Customary Charges – Amounts health care providers charge that are consistent with charges from similar providers for identical or similar services in a particular part of the country.
Special Benefit Networks – A type of health care providers that offer specialty services, such as substance abuse, mental health or prescription drugs.
Third-Party Administrator (TPA) – A consultant to an insured employer that maintains records about employees protected under the health care plan.
Underwriting – How an insurer decides who it will accept for insurance coverage. Underwriters generally review the medical histories of people applying for individual polices or group plans.