Financial Glossary
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Advance Beneficiary Notice (ABN) Acknowledgment of financial responsibility by a patient for services not covered or unauthorized.
Ambulatory Care Also referred to as outpatient services.
Ancillary Services Medical studies or services used directly to support the patient’s needs, such as diagnostic radiology, radiation therapy, clinical laboratory or other special services.
Annual Maximum The maximum amount that an insurance company will pay toward an insured’s claim in one year. The insurance company may divide claims into categories to establish annual maximum amounts.
Asset Any owned physical object (tangible) or right (intangible) having economic value to its owner.
Assignment of Benefits (AOB) An agreement in which the patient signs a statement instructing his or her insurance company to pay the health care provider directly for services rendered.
Beneficiary A person who is entitled to benefits under a third-party-payer plan.
Benefit The amount of money or services a third-party will pay or provide under the provisions of the policy.
Benefit Period The period of time in which a person is eligible for specific insurance benefits.
Billing Statement Summary of patient account activity that is sent to patients updating them regarding the status of their claim.
Carrier (Medicare) Organizations such as Blue Shield plans or commercial insurance firms that are under contract to administer the Part B (outpatient services) portion of the Medicare program.
Carve Out Medical services that are separated from a contract and paid under a different arrangement.
Claim A notification to an insurance company from either a beneficiary or provider that states that a patient has received medical service and is requesting payment of benefits.
Closed Access A type of health plan in which covered persons are required to select a primary care physician from the plan’s participating providers. The patient is required to see the selected primary care physician for care and referrals to other health care providers within the plan.
CMS An abbreviation for The Center for Medicare and Medicaid Services.
Co-insurance The percentage of covered hospital and medical expenses after subtraction of any deductible for which an individual is responsible. Under Medicare Part B, after the annual deductible has been met, Medicare will generally pay 80% of the approved charges for covered services and supplies; the remaining 20% is the coinsurance, which is the responsibility of the beneficiary.
Coordination of Benefits (COB) A method of determining the primary payment source when an individual is covered under more than one group medical program. COB allows group plans to work together so that the total benefits do not exceed total charges or that there is no duplication of benefits.
Co-payment The fee per visit paid by the patient for health-care services as determined by your medical insurance policy. An example is the $10.00 co-pay for physician office visits.
Customary Charge The maximum amount an insurance carrier will approve for payment for a particular service provided by a physician.
Daily Hospital Services Are those inpatient services generally included by the hospital in a daily service charge - sometimes referred to as the "room and board" charge. Included are the room, dietary, and nursing services, minor medical and surgical supplies, and the use of certain equipment and facilities for which the hospital does not customarily make a separate charge.
Deductible The amount that the patient or family must pay for health-care services before the insurance policy begins making payments. The health insurance policy sets this amount; usually it is due every calendar year.
Diagnostic Imaging Services The use of imaging equipment, e.g., MRI, CT Scanner, etc., in the determination of a diagnosis.
Effective Date The date when coverage provided by an insurance policy begins.
Encounter A face-to-face contact between a patient and a doctor who has the responsibility for assessing and treating the condition of the patient.
Explanation of Benefits (EOB) A statement from the insurance company that provides an explanation on the actions taken by the insurance company on a specific claim. The statement will explain if the insurance company paid the claim, rejected the claim or if the claim is pending.