GLOSSARY

Of Terms

Common Terms Dental Procedures and Services Medical Procedures and Services Frequently Used Health Insurance Terms

Common Terms

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This glossary of common health reimbursement terms is intended to help consumers to better understand their out-of-network benefits. We will be continuing to develop and expand this glossary over time, and welcome your suggestions for additional terms and concepts to be featured here.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Affordable Care Act (ACA) - The health reform law enacted in 2010. (The formal name is the Patient Protection and Affordable Care Act - PPACA.)

Allowable Amount - The maximum dollar amount that an insurer will consider reimbursing for a covered service or procedure. This dollar amount may not be the amount ultimately paid to the member or provider as it may be reduced by any co-insurance, deductible or amount beyond the annual maximum. Some plans may refer to the "allowable amount" as the "maximum allowable amount"; these terms have a similar meaning.

Allowed Charge - The maximum amount that an insurer will consider to pay for a service, including any amount that the patient will be responsible for paying. For in-network providers, the allowed charge is based on the contracts with the providers. For out-of-network providers, the allowed charges may be:

the same as for in-network providers,
based on a percentage of the amount that Medicare would pay for the same services, or
Usual, Customary and Reasonable (UCR) charges, an amount that your plan determines is reasonable for that service in your local area.

Approval Number - A number issued by your insurer authorizing the health insurance company to pay for your care. You may need to obtain an approval number from your insurer before you see a particular doctor or receive a particular medical service in order for your health insurance company to pay for that visit and/or service. Your doctor’s office staff might be able to help you obtain the approval number from your insurer.

B

Balance Billing - Balance billing is a type of healthcare billing that occurs when an out-of-network provider bills a plan member for the difference between the out-of-network provider's charge and the amount paid by a member's benefit plan for the out-of-network service, and this difference exceeds the member’s defined liability from the Plan. This means that if the defined out-of-pocket for the member was 20% of the provider’s charge and the member pays more than 20% - not due to a deductible application – this is a balance bill. This situation happens when a provider does not participate in a member's provider network.

Billed Charge - The amount billed by your physician or other healthcare provider for services you have received. If you use a provider in your plan’s network, the billed charge usually is submitted directly to the insurer and is reduced by the claim payment system to the allowed amount, or contracted rate negotiated by your insurer and its network provider. But, if you use providers outside your network, you will generally have to pay the full difference between your insurer’s allowed amount and the amount that your provider charges that exceeds the allowed amount unless you and your provider agree otherwise.

C

CDT or Current Dental Terminology - Current Dental Terminology (CDT) codes are numbers assigned to dental services and procedures. These codes help support accurate recording and reporting of dental treatment and are part of a uniform system designed and maintained by the American Dental Association (ADA). CDT codes have a consistent format and each is unique. Every code number has a written description of the specific dental service or procedure. You will see CDT code(s) on your Explanation of Benefits form (EOB), or you can ask your dental provider for the CDT code for a procedure or service you will undergo, or have already received.

CDT® is a registered trademark of the American Dental Association (“ADA”).

Co-insurance - Co-insurance is a cost sharing feature of many plans. It requires a member to pay out-of-pocket a prescribed portion of the cost of covered healthcare expenses. The defined co-insurance that a member must pay out-of-pocket is based upon his or her health plan design. Co-insurance is established as a predetermined percentage of the allowed amount for covered services and usually applies after a deductible is met in a deductible plan, such as deductible HMO, preferred provider organization (PPO), point-of-service (POS), and indemnity plans.

Co-payment or "Co-pay" - A form of medical cost sharing in a health insurance plan that requires the member to pay a fixed dollar amount for each visit to a doctor or for a specific service. This fee is pre-set; it will be specified in your health insurance policy and also may be listed on your insurance card.

Commercial Health and Dental Insurance Data - Commercial health and dental insurance data, which are the type in the FAIR Health Database, are based on charge amounts billed by healthcare providers, as reported by health plans and other healthcare payors in the private insurance system. FAIR Health uses these data to develop medical and dental cost estimates that reflect the fees that healthcare providers bill in different geographic areas.These fees are similar to what health insurance plans may call “usual, customary and reasonable” (UCR) charges. Cost estimates based on FAIR Health data are different from fees established by Medicare, a federal health insurance program that covers individuals ages 65 and older, as well as individuals with end-stage renal disease and certain persons with disabilities. Medicare fees are usually lower than commercial charge amounts.

The FH Medical Cost Lookup provides out-of-pocket cost estimates for individuals covered by plans that use either UCR-based or Medicare-based out-of-network reimbursement methods. Also see Medicare. The data available on the FH Consumer Cost Lookup reflect fees for services provided “out-of-network,” and not the “in-network” fees negotiated by insurers for services obtained from providers who participate in the plan’s network.

Contracted Rates - The amounts that health insurance companies will pay to healthcare providers in their networks for services. These rates are negotiated and established in the insurers’ contracts with in-network providers.

Coordination of Benefits - The process of reconciling healthcare charges when an individual is covered by more than one health insurance plan or policy. For example, if a child is insured through both parents’ employers’ plans, one insurer is generally considered the primary insurer and pays first, and the insurer considered secondary reimburses after the primary plan pays. The secondary insurer’s reimbursement, if any, takes into consideration any outstanding dollar amounts for covered services received up to the allowed amount. In any case, the secondary plan will never pay more than they would have paid had they been primary.

Cost-sharing - A requirement that insured patients pay a portion of their medical costs, either as a deductible, or a flat dollar co-payment, or as co-insurance (i.e., a percentage of the total paid claim for a covered benefit or service).

Covered Services - The medical services, procedures, prescription drugs and other healthcare services that your insurer pays for under your plan. Keep in mind that not all care is covered. For instance, some plans will not pay for medications that are available over the counter. And, even if a service is covered, you may still need to pay a co-payment or co-insurance, request pre-authorization, or get a referral from your primary care physician before your insurer will pay. Your policy should contain a detailed list of what is and is not covered.

CPT Modifier - A code that is used to provide additional information on a procedure or service. For example, there are modifiers that indicate that a procedure is being repeated or that multiple surgeries were performed at the same time. They can also indicate that the service is more or less complex than normal. The modifier can affect how much the plan will pay the provider.

CPT® or Current Procedural Terminology® - CPT® is a registered trademark of the American Medical Association (“AMA”). Current Procedural Terminology (CPT) codes are numbers assigned to services and procedures performed for patients by medical practitioners. The codes are part of a uniform system maintained by the American Medical Association (AMA) and used by medical providers, facilities and insurers. Each code number is unique and refers to a written description of a specific medical service or procedure. CPT codes are often used on medical bills to identify the charge for each service and procedure billed by a provider to you and/or your insurer. Most CPT codes are very specific in nature. For example, the CPT code for a fifteen-minute office visit is different from the CPT code for a thirty-minute office visit.

You will see a CPT code on your Explanation of Benefits form (EOB). You can also ask your healthcare provider for the CPT code for a procedure or service you will undergo, or have already received.

D

Deductible - A fixed dollar amount of healthcare costs that you must pay before your insurer will consider payment for a healthcare service you receive. In most cases, you must pay the deductible amount each calendar/plan year. Many insurance plans have both per individual and per family deductibles. The per family deductible helps to limit the number of deductibles a family will pay in order to have all covered members of the family eligible for claim payments.

Department of Health and Human Services - The federal cabinet-level agency that administers federal health, welfare, and human services programs and activities. HHS has lead agency responsibility for significant aspects of the Patient Protection and Affordable Care Act and is home to the Centers for Medicare and Medicaid Services and its Center for Medicare and Medicaid Innovation, the Health Resources and Services Administration, the Centers for Disease Control and Prevention, the Agency for Health Care Research and Quality, the National Institutes of Health, the HHS Inspector General, the HHS Office for Civil Rights, the HHS Office of Minority Health, the Substance Abuse and Mental Health Services Administration, the Indian Health Service, and other federal agencies that oversee the Patient Protection and Affordable Care Act.

E

Electrical Stimulation- Electrical stimulators and supplies are used for managing pain and wound healing.

Emergency Medical Treatment and Active Labor Act (EMTALA) - is a U.S. Act of Congress passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). It requires hospitals and ambulance services to provide care to anyone needing emergency healthcare treatment regardless of citizenship, legal status or ability to pay. There are no reimbursement provisions. As a result of the act, patients needing emergency treatment can be discharged only under their own informed consent or when their condition requires transfer to a hospital better equipped to administer the treatment.

Exchanges - State health insurance “marketplaces” whose establishment was mandated by the Patient Protection and Affordable Care Act. Exchanges are to be established by 2014 for individuals and small employer groups (exchanges for small employers are known as SHOP exchanges). Exchanges are responsible for calculating premium subsidies, enrollment, quality oversight, certification of qualified health plans that can be sold in the exchange, and other matters. By standardizing health insurance products, enrollment, operations, and oversight, exchanges are also meant to make the process of selecting insurance easier and transparent.

Exclusive Provider Organization (EPO) - A managed care organization that exhibits characteristics of both health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Like an HMO, an EPO plan requires that members visit in-network providers only; care from out-of-network providers is not covered except in some cases for an emergency. Like a PPO, an EPO plan often allows members to see specialists without first obtaining a referral from a primary care doctor; these specialist visits are covered as long as the providers are in the network.

Explanation of Benefits (EOB) - Your insurer will provide you with an EOB after you have submitted a healthcare claim to your insurer or after a provider has submitted a claim to your insurer on your behalf. The EOB will include a detailed explanation of how your insurer/administrator determined the amount of reimbursement it made to your provider or to you for a particular medical service. The EOB will also include information on how to appeal or challenge your insurer’s reimbursement decision. Note that you may not receive an EOB for care that you have received from a provider or facility that is in your insurer’s network if there is no required payment from you for those services.

G

Geozip - A geozip is a geographic area usually defined by the first three digits of U.S. zip codes. Geozips may include areas defined by one three-digit zip code or a group of three-digit zip codes. Geozips generally do not include zip codes in different states. When you search for a cost estimate, the results will be based on billed charges for procedures performed in the geozip that includes the ZIP code you entered.

H

Health Insurance Policy - A contract between you and your insurer that provides that your insurer will be required to pay for specific medical services (these will be defined in the policy) as long as your premium is paid. Having a health insurance policy does not mean that your insurer will pay for every medical service that you receive. It is important for you to know the services that are included for coverage in your health insurance policy and any requirements that you need to meet in order to have the insurer pay for the services. You will be responsible for paying for any services that you receive that are not covered by your policy unless your insurer/administrator states that you are not responsible.

Health Insurance Portability and Accountability Act (HIPAA) - A federal law that protects the privacy of individuals’ health information, regulates health insurance portability and non-discrimination, and provides health insurance simplification. The HIPAA provisions have been broadly expanded by the Patient Protection and Affordable Care Act.

Health Maintenance Organization (HMO) - An HMO is a health plan that typically has a closed network of physicians and other healthcare providers, and hospitals. With a traditional HMO plan, a member receives services from the HMO's providers for a predetermined co-payment. A member pays only co-payments for services and need not file claim forms unless he or she receives medical services outside the network. Non-emergency services received outside the network without prior plan approval are not covered by the plan.

Health Savings Account (HSA) - An HSA is a tax-advantaged savings account that a member can open to pay for qualified medical expenses. Contributions to an HSA can be made by both a member and his or her employer, but the money belongs to the member. The money invested in an HSA is tax-deductible, and any earnings are tax-deferred. The member can withdraw funds tax-free and without penalty from the account if the funds are used to pay for qualified medical expenses. The HSA is portable and goes with the member if the member changes jobs. Tax references are applicable per federal tax regulations. State tax regulations may vary. (See the page about HSAs at the U.S. Department of the Treasury Web site.) (See the Internal Revenue Service's list of qualified medical and dental expenses.)

Healthcare Common Procedure Coding System (HCPCS) codes - There are two main types of HCPCS codes: Level I and Level II codes.

Level I codes are 5-character Current Procedural Terminology (CPT) Codes that are developed and maintained by the American Medical Association. CPT codes refer to professional services such as reading an MRI, giving a shot, seeing a patient for an office visit or performing surgery. There are 3 categories of Level I codes. Category I codes have 5 digits. Category II codes are used for performance measurement and have 4 digits followed by the letter F. Category III codes are used for emerging technologies, and have 4 digits followed by the letter T.

Level II HCPCS codes include one letter followed by 4 digits (e.g., A9999). Most Level II codes refer to services or items such as durable medical equipment (e.g., wheelchairs, crutches), ambulance services, vision and hearing supplies, injectable and chemotherapy drugs and prosthetic devices. Level II HCPCS codes are maintained by the Centers for Medicare and Medicaid Services (CMS), a division of the US Department of Health and Human Services. You may see a HCPCS code on your Explanation of Benefits form (EOB). You can also ask your healthcare provider for the relevant HCPCS code(s) for a procedure or service you will undergo, or have already received.

Healthcare Professional - A physician, dentist, nurse, physician assistant, or any other individual who is licensed or certified as required in his or her state and is performing services within the scope of that license or certification.

Healthcare.gov - A website maintained by the Office of Consumer Information and Insurance Oversight of the Department of Health and Human Services that provides information to consumers on available insurance options, data on care quality, and resources for disease prevention.

HHS - See Department of Health and Human Services.

HIPAA - See Health Insurance Portability and Accountability Act.

I

Incontinences/Ostomy Supplies-Incontinence and ostomy supplies are medical devices that are used for collecting urine and waste materials.

In-Network - Pertains to treatment from doctors, clinics, health centers, hospitals, medical practices and other providers with whom your plan has an agreement to provide care for its members. Usually, you will pay less out of your own pocket when you receive treatment from in-network providers.

Institutional Review Board (IRB) - A group of people appointed by an institution (such as a hospital or university) to review and monitor research projects involving human subjects, with the purpose of protecting the rights and welfare of the people who are participating as subjects in the research. An IRB seeks to ensure that subjects are not placed at undue risk, and that they give uncoerced, informed consent to their participation. To this end, an IRB has the authority to approve, disapprove, and require modifications to research projects involving human subjects. Once a project is approved, the IRB must monitor the progress of the ongoing research, prospectively approve modifications, and suspend the project if necessary to protect subjects.

M

Maximum Allowable Amount - The maximum dollar amount that an insurer will consider reimbursing for a covered service or procedure. This dollar amount may not be the amount ultimately paid to the member or provider as it may be reduced by any co-insurance, deductible or amount beyond the annual maximum. Some plans may refer to the "allowable amount" as the "maximum allowable amount"; these terms have a similar meaning.

Medicare - The federal health insurance program for individuals ages 65 and older, as well as persons with end-stage renal disease and certain persons with disabilities. Medicare covers beneficiaries for hospital, post-hospital extended care, and home healthcare, as well as a range of medical care services and benefits. Medicare enrollment is compulsory for all individuals covered by the Social Security Act. At their option, Medicare beneficiaries can buy “Part D” outpatient prescription drug coverage. Beneficiaries can elect to enroll either in “traditional” Medicare (which allows patients to receive care from any participating physician, hospital or healthcare supplier) or through Medicare Advantage Plans, most of which restrict patients to specific network providers while typically offering additional benefits and coverage. The Patient Protection and Affordable Care Act expands Medicare coverage for preventative services and additional levels of prescription drug coverage while also introducing reforms to improve healthcare quality and efficiency.

N

Non-covered charges - Costs for medical treatment that your insurer does not cover. In some cases the service is a covered service, but the insurer’s reimbursement does not cover the entire charge amount. In these cases, you will be responsible for any charge not covered by your plan. In some cases the service itself is not covered by your plan and you will be responsible for the full charge. You may wish to call your insurer or consult your health insurance policy to determine whether certain services are included in your plan before you receive those services from your doctor.

Non-Covered Services - Medical services that are not included in your plan. If you receive non-covered services, your health plan will not reimburse for those services and your provider will bill you, and you will be responsible for the full cost. You will need to consult with your health insurer, but generally payments you make for these services do not count toward your deductible. Make sure you know what services are covered before you visit your doctor.

O

Orthotic Devices - Orthotics are medical devices that are used for treatment of the neuromuscular and skeletal system.

Out-of-Network - Pertains to treatment from doctors, clinics, health centers, hospitals, medical practices and other providers that do not have an agreement with your health insurer to provide care to its members. You typically will pay more out of your own pocket when you receive treatment from out-of-network providers.

Out-of-network benefits - Benefit plan coverage for services provided by doctors and other healthcare professionals who are not under a contract with your health plan.

Out-of-pocket cost - Portion of the cost of healthcare services that the plan member must pay. This cost includes the difference between the amount charged by an out-of-network provider and what a health plan reimburses for such services.

Out-of-Pocket Maximum - The limit on the total amount a health insurance company requires a member to pay in deductible and co-insurance in a year. After reaching an out-of-pocket maximum, a member no longer pays co-insurance because the plan will begin to pay 100% of medical expenses. This only applies to covered services. Members are still responsible for services that are not covered by the plan even if they have reached the out-of-pocked maximum for covered expenses. Members also continue to pay their monthly premiums to maintain their health insurance policies.

P

Participating Provider - A physician, dentist or other healthcare professional, hospital or healthcare facility that contracts with your health insurer to provide services to its members at a specific fee amount.

Patient Protection and Affordable Care Act - The formal name of the health reform law enacted in 2010.

Percentile - A statistical measure used to describe how a particular quantity (such as the cost of a specific healthcare procedure) varies across a range of sources (such as all the doctors in your area.) For example, 50% of all fees billed by providers are at or below the level indicated by the 50th percentile; 80% of all fees billed by providers are at or below the level indicated by the 80th percentile. Percentiles are important because they are used by many insurers in determining the highest level of a billed charge that they will consider for reimbursement.

Physician - An individual who has received a “Doctor of Medicine” (MD) or Doctor of Osteopathic Medicine (DO) degree and is licensed to practice medicine in their state.

Point of Service (POS) Plan - A health plan that allows you to choose at the time medical services are to be received whether you will go to a provider within your plan’s network or seek care outside the network.

Pre-existing condition - A health condition that exists for a set time prior to enrollment into a health plan, regardless of whether the condition has been formally diagnosed. The Patient Protection and Affordable Care Act prohibits insurers and employer-sponsored health plans from denying or limiting coverage to individuals with pre-existing health conditions.

Preauthorization - A process that your health plan or insurer goes through to make a decision that particular healthcare services, treatment plans, prescription drugs or durable medical equipment prescribed by your doctor are covered and medically necessary. Your plan may require preauthorization for certain services, such as hospitalization, before you receive them. Preauthorization requirements are generally waived if you need emergency care.

Preferred Provider Organization (PPO) - A health plan that is designed to encourage you to receive your healthcare through a network of selected healthcare providers (such as hospitals and physicians). If your plan is a PPO, your medical expenses will be lower if you use a provider or facility that is part of your plan’s network. You are entitled to receive reimbursement for care from providers and facilities that are outside the network, but you may pay a larger portion of the charges for such "out-of-network" care.

Premium - The amount a consumer (or employer) pays to a health insurance company for health coverage. The health insurance company generally recalculates the premium each policy year. This amount is usually paid in monthly installments. When a consumer receives health insurance through an employer, the employer generally pays a portion of the cost of the premium and the consumer pays the rest, often through regular payroll deductions.

Primary Care Physician (PCP) - A family doctor, internist or pediatrician who coordinates your care or your family’s care. Some types of plans, like a POS or HMO, require that you visit your PCP first for any care that you need. But even if you’re not required to use a PCP, it’s a good idea to develop a relationship with a primary care doctor who knows your medical history and can make sure you’re getting the care you need.

Provider - A doctor or other healthcare professional, hospital or healthcare facility that is accredited, licensed or certified to practice in their state, and is providing services within the scope of that accreditation, license or certification.

Provider network - Doctors and other healthcare professionals who agree to provide medical care to members of a health plan, under the terms of a contract.

Prudent Layperson Standard - Under PPACA, a condition with acute symptoms of sufficient severity (including severe pain) that a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in—(i) placing the health of the individual (or an unborn child) in serious jeopardy, (ii) serious impairment of bodily functions, or (iii) serious dysfunction of any bodily organ or part.

Q

Qualified Medical Expenses - Qualified medical expenses are defined under Section 213 of the Internal Revenue Code. (See the Internal Revenue Service's Publication 502 about medical and dental expenses.) Qualified medical expenses and other expenses permitted to be reimbursed from health savings accounts (HSAs) include, but are not limited to, the following:

doctors' visits
ambulance and hospital services
prescription drugs and certain over-the-counter prescription medications
durable medical equipment
dental care
acupuncture
chiropractic services
COBRA healthcare continuation coverage
qualified long-term care services and limited long-term care premiums
vision care
health insurance premiums for individuals receiving unemployment compensation
at age 65 and over, Medicare Part A and B, Medicare HMO, and a member's share of employer-sponsored health insurance premiums (but not Medicare Supplement premiums)

A medical expense is not a qualified expense if a member receives reimbursement for it under insurance coverage. If the member's expense is paid for or reimbursed by an HSA account, that expense cannot be included for purposes of determining itemized tax deductions.

R

Reimbursement - The amount that your insurer pays for a specific service. For instance, your insurer’s reimbursement rate for a primary care visit may be up to $80. If your provider charges $100, you would be responsible for the remaining $20 if your plan covers that service at 100% of the maximum fee.

Respirator and Oxygen Equipment - Respirator and oxygen equipment are used by people who have difficulty breathing.

S

Self-Insured - If you work for a large employer or group of employers, your plan may be self-insured. Self- insured means that your employer pays medical claims from their bank account and establishes the plan design. The benefits may be administered from a third-party administrator (“TPA”) or a Health Plan. Self- insured plans are not under the control of the Department of Insurance and the employer bears the cost for all utilization.

Sleep Apnea Devices - Sleep apnea devices are used to increase airflow to the lungs.

T

Telehealth - The use of various forms of electronic information and communication technologies to support the delivery of non-clinical health care services. These services can include provider training, administrative meetings, discussions regarding the assessment, diagnosis, and management of the patient, as well as consultation, treatment, education, care management and/or self-management of a patient at a distance. Modes of delivery include but are not limited to, phone conversations, remote training, real-time video conferencing, electronic consultations and remote patient monitoring. The use of technology eliminates geographic barriers in the delivery of healthcare services. The definition of Telehealth services varies by payer and accordingly, coverage and reimbursement is at the discretion of the individual payer.

Telemedicine - The use of various forms of telecommunication and electronic information technologies to provide clinical health care services at a distance. Telemedicine can improve access to medical services that may not be available for many reasons, including geographic or emergency care situations, care provided after regular office hours, and facilitates the transmission of medical, imaging and health informatics data from one site or individual to another. Telemedicine seeks to improve a patient’s health by permitting two-way, real time interactive communication between patients and medical staff with both convenience and privacy, and is viewed as a cost-effective alternative to the more traditional face-to-face way of providing medical care. The definition of Telemedicine services varies by payer and accordingly, coverage and reimbursement is at the discretion of the individual payer.

U

Usual and Customary Rate (UCR) - A term often used to describe a level of reimbursement that insurers use to calculate reimbursements for out-of-network care. If your plan covers some out-of-network care, your insurer may base the payment on a price that it determines to be “usual, customary and reasonable” in your area. It’s a good idea to find out this rate and then ask your provider how much he or she will charge for the service you need. To understand your plan’s UCR, contact your insurer. That way, you can make an informed decision and you won’t be surprised by a large bill.

W

Wound Care Supplies - Wound care supplies are used for improving the healing of a wound.