Are you buried under a pile of paperwork? Running into medical and vision plan billing roadblocks? Need a refresher course in common medical billing and insurance terms?
We’ve got you covered with a glossary of insurance terminology and billing tips to help you improve collections, prevent rejected and denied claims, and focus on growing revenue for your eye care business.
Medical Billing Terms and Descriptions for Billers and Coders
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Premium: This is the monthly or annual fee you pay to have health insurance. Think of it like a subscription cost to access the health plan’s benefits.
- Example: Your employer offers a health plan, and your share of the cost is a $300 premium deducted from your paycheck each month. Even if you don’t visit the doctor, you still pay this amount to maintain your coverage.
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Deductible: The amount you must pay for covered medical services before your insurance company starts to pay. After you meet your deductible, your insurance “kicks in” and begins to cover a portion of your costs.
- Example: You have a $2,000 deductible and need a knee MRI that costs $3,000. You’ll pay the first $2,000, and your insurance will then start contributing to the remaining $1,000.
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Copayment (Copay): A fixed amount you pay for a specific medical service, like a doctor’s visit or a prescription. Your copay usually doesn’t count towards your deductible.
- Example: Your plan has a $30 copay for a visit to a primary care doctor. When you check in for your annual physical, you pay $30 at the front desk.
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Coinsurance: A percentage of the cost of a covered service that you’re responsible for paying after you’ve met your deductible.
- Example: Your plan’s coinsurance is 20%. You’ve already met your $2,000 deductible. Now, you need physical therapy sessions costing $500. Your insurance will pay 80% ($400), and you will be responsible for the remaining 20% ($100).
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Out-of-Pocket Maximum: The maximum amount you will have to pay for covered services in a plan year. Once you reach this limit, your insurance plan pays 100% of all covered costs for the rest of the year. This includes your deductibles, copays, and coinsurance.
- Example: Your plan has a $5,000 out-of-pocket maximum. After paying your deductible, copays, and coinsurance for various services throughout the year, your total payments reach $5,000. For the rest of that year, all covered medical services will be paid in full by your insurance.
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Explanation of Benefits (EOB): A document sent by your insurance company after you receive medical services. It explains what the provider billed, the amount the insurance plan paid, and the amount you owe. It is not a bill.
- Example: You get a bill for a lab test. A few days later, you receive an EOB from your insurer that shows the billed amount, the “allowed amount” negotiated with the lab, the amount the insurance paid, and your remaining coinsurance. The EOB helps you verify the bill you receive from the provider.
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Allowed Amount: The maximum amount an insurance company will pay for a covered service. Providers who are “in-network” agree to accept this amount as full payment for a service.
- Example: A hospital bills your insurance company $1,000 for a procedure. Your insurance has a negotiated allowed amount of $800 for that procedure. The insurance will pay its portion of the $800, and the hospital can only bill you for your share of that amount, not the original $1,000.
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In-Network vs. Out-of-Network: In-network providers have a contract with your insurance company to provide services at a discounted rate. Out-of-network providers do not have this contract, and their services may cost you more.
- Example: Your family doctor is in-network. A visit is affordable because the insurance pays a larger portion. A specialist you want to see is out-of-network, so your plan might not cover their services or may require you to pay a much higher coinsurance percentage.
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Prior Authorization: This is a requirement from your health plan for you to get approval before receiving a certain service or medication. Without it, the insurance company may not cover the cost.
- Example: Your doctor recommends a specific brand-name medication. Your plan requires prior authorization for it. Your doctor’s office submits a request to your insurance company explaining why you need that particular drug. The insurance company must approve the request before you can fill the prescription and have it covered.
How CC Billing Helps You Navigate These Terms
At CareCode Billing, we understand that dealing with medical bills and insurance can be confusing and overwhelming. Our services are designed to simplify this process and help you maximize your benefits and minimize your costs.
- Claim Management: We handle all your claims, from initial submission to follow-up. Our team ensures claims are accurate and free of errors to prevent rejections and delays.
- Denial Resolution: If a claim is denied, we work to identify the reason and appeal the decision on your behalf. We fight for the reimbursement you’re owed.
- Insurance Verification: We verify your insurance coverage and benefits before your appointment so you know what to expect and can be prepared for any out-of-pocket costs like deductibles or copays.
- Expert Support: Our team of certified medical billers and coders speaks the language of insurance. We can explain your Explanation of Benefits (EOB) and your bills in plain English, ensuring you understand exactly what you’re paying for.
Ready to take the stress out of medical billing? Contact CareCode Billing today to learn more about how we can help you with your healthcare billing needs. 🤝