A Quick Glossary of Billing and Insurance Terms
- Micro-Dyn
- Oct 30
- 4 min read
Updated: 4 days ago
If you’re new to claims pricing, seeking health insurance coverage for yourself, or trying to navigate a federal health insurance plan like Medicaid, the terminology can be overwhelming. Even if you're a healthcare provider or work in insurance policy, it can be tricky to track insurance acronyms and terms. In this short glossary of health insurance terms, we’ll be reviewing key phrases you should know.
📖 Here are some important terms for your insurance glossary:
Advance Beneficiary Notice (ABN): A statement issued by a health care provider to inform a patient that their Medicare insurance plan is unlikely to pay for a service.
Assignment of Benefits (AOB): An insurance contract that allows a third party to file a claim on behalf of the policyholder. This means an insurance company pays the healthcare provider directly for care, rather than the covered individual needing to submit a claim for reimbursement.
Adjudication: A health insurance carrier's evaluation to decide how much of a claim will be reimbursed. The health plan may choose to pay the claim in full, pay the claim partially, or deny the claim completely.
Adjustment/Write Off: Changes to a claim’s billed amount. This accounts for negotiated corrections or discounts.
Accounts Receivable (A/R): Uncollected payments still owed to a provider for services.
Allowed Amount (Allowable): The maximum an insurance company agrees to reimburse a patient for covered services.
Ancillary Service: Services provided outside of room and board, i.e., surgeries or tests.
Annual Election Period: The period when Medicare patients can join or change insurance. This occurs from October 15th to November 7th.
Ambulatory Surgical Care (ASC): Healthcare facilities for same-day surgical care for patients with a focus on procedures that don't require overnight care.
Charge Capture: The process by which provided medical services are recorded and converted into billable charges. This allows healthcare providers to be paid.
Charge Description Master (CDM): A catalog of health care services including their prices and codes from an insurance provider.
Clean Claim: A complete claim submitted to health insurance without errors or missing information. This allows the payer to process the claim smoothly.
Claim Denial: A health insurance plan's refusal to pay for a partial or full amount of a claim.
Claims Pricing: The process of deciding an allowed amount for a medical claim based on established rules.
Centers for Medicare & Medicaid Services, or CMS: CMS is the federal agency that handles Medicare and Medicaid, programs that allow individuals to access essential health benefits.
Certification Number: Also referred to as a Treatment Number or Authorization Number, this is provided by insurance and certifies that your treatment has been approved by your health coverage.
Coinsurance: The percentage of covered healthcare services paid by the patient after a deductible has been met.
Commercial Health Insurance: Nongovernment or private insurance.
Coordination of Benefits: How insurance policies or plans will work together if an individual has more than one form of health care coverage.
Deductible: The amount patients must pay out-of-pocket before insurance benefits apply.
Diagnosis Related Groups (DRGs): A patient classification system used by health plans to categorize inpatient stays. DRGs group patients with similar diagnoses to help insurance payers choose reimbursements.
Explanation of Benefits (EOB): A document created by the health insurance plan explaining how a claim was processed.
Electronic Remittance Advice (ERA): An electronic version of an EOB.
Fee Schedule: An authorized maximum payment list for each service or procedure.
Fee-for-Service: A method of reimbursement where each service is billed and paid separately.
HCPCS/CPT Codes: Standard codes for procedures and services for claim submission.
Health Savings Account: A savings account that allows you to set aside pre-tax money for medical expenses.
IPPS or Inpatient Prospective Payment System: A Medicare payment system that establishes rates per discharge from a health care facility based on resource use averages.
Medicare: A federal insurance plan for people over 65 and individuals with certain disabilities.
Medicaid: A federal and state insurance plan providing low-income individuals, pregnant women, and children access to healthcare. Medicaid was expanded by the Affordable Care Act, providing access to essential health insurance policies to a wider group.
Medicare Severity Diagnosis-Related Groups (MS-DRGs): Categories used in IPPS to decide payment rates in a Medicare health plan. These categorizations consider the patient's diagnosis, procedures, age, sex, discharge status, and complicating conditions.
New Technology Add-on Payments: Payments that help the IPPS system adapt to changing technology when the MS-DRGs have not yet been updated.
Outpatient Prospective Payment System (OPPs): A system established by Medicaid that pays a fixed amount for care provided, rather than fee-per-service payments.
Preauthorization: Getting health plan approval for services before they are performed.
Primary Care Provider: Also called a general practitioner or primary care physician. A PCP should be an in-network provider that the patient goes to for most of their healthcare.
Upcoding: A form of insurance fraud where codes are submitted for more expensive services than the ones performed.
Superbill: A detailed, itemized receipt for healthcare services.
🤝 Looking for more help with health insurance processing?
Health insurance programs can be confusing. Microdyn Medical simplifies the payment process across the healthcare system with accurate claims pricing. Microdyn's software can help price claims in OPPs, IPPs, and ASC. With Microdyn, you can accurately and efficiently comply with health reimbursement rules. Health services can be complicated, but your claims pricing software doesn't need to be.
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