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Mary Free Bed Patient Financial Services Glossary of Terms

Approved Amount - The amount of the hospital's charge that a payer will recognize in calculating benefits. Under Medicare, this is also called "Medicare Allowable Charge."

Authorization - Permission to provide a referred or requested service that is granted by a health insurance plan, medical group, or hospital depending on who is financially responsible for the requested or referred services to be performed.

Benefits Period - Begins the day you are admitted to a hospital or skilled nursing facility (SNF) and ends when you haven't received hospital inpatient or SNF care for 60 consecutive days.

Contracted Services - A contract with a specific insurance company, meaning an agreement that the insurance company will pay for certain medical services.

Co-insurance - Amount designated by the insurance as the patient’s responsibility, usually reported as a percentage of the total amount billed.

Co-payment - A type of cost sharing whereby the insured person pays a specified flat amount per unit of service or unit of time (e.g., $10 per visit, $25 per inpatient hospital day), with the insurer paying the balance.

Coordination of Benefits (COB) - A group policy provision that helps determine the primary carrier in situations where an insured is covered by more than one policy.

Deductible (DED) - The amount of money, as determined by the benefit plan. A person must pay for authorized health care services before insurance payment commences. Deductibles are usually calculated on a calendar year basis, but can also be based on the anniversary date of a patient's effective date with that plan or plan year of the named insured or subscriber.

Explanation of Benefits (EOB) - A statement provided to the insured by an insurance company explaining how the claim was processed.

Guarantor - The person or entity financially responsible for payment on a patient's account. Usually the patient is financially responsible for medical charges. A parent or legal guardian/trustee is the guarantor for patients aged 18 and younger and for those with decreased mental capacities.

Managed Care Plans - Managed care plans involve a group of doctors and hospitals who agree to provide care to Medicare beneficiaries in exchange for a fixed amount of money from Medicare every month.

Medicare Assignment - The Medicare-approved amount of payment to a provider.

Medicare Medical Savings Account (MSA) - A Medicare health plan option made up of two parts. One part is a Medicare MSA Health Policy with a high deductible; the other a special savings account called a Medicare MSA.

Medicare Summary Notice - A statement provided to patients or guardians by Medicare explaining how a claim was processed and paid.

Medicare Supplemental - A supplemental private insurance policy to help cover the difference between approved medical charges and benefits paid by Medicare.

Network - A group of doctors, hospitals, and other health care providers contracted to provide services to insurance company customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

Non-Covered Services - A cost incurred by a patient that his or her insurance policy does not cover.

Out-of-Network (OON) - Services rendered by a provider that does not have a contract to offer you care. Generally, managed care plans are contracted with a panel of providers. If a patient seeks care out-of-network, he or she may be financially responsible for some or all of the care provided. An exception to this rule is emergency medical care.

Preferred Provider Organization (PPO) - You or your employer receives discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you generally pay more for the medical care.

Primary Care Provider (PCP) - A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as a manager for an individual's medical care, referring the individual to more specialized physicians for specific health care needs.

Primary Insurance Company - The insurance company primarily responsible for the payment of the claim.

Private Fee-for-Service Plan - A private insurance plan accepting Medicare beneficiaries.

Prior Authorization - Advance approval equired by most insurance plans, medical groups, gatekeepers, and primary care physicians for elective hospital admissions or other expensive medical services or procedures.

Provider - Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.

Reasonable and Customary Fees - The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference. Sometimes, if an individual questions his or her physician about the fee, the provider will reduce the charge to the amount that the insurance company has defined as reasonable and customary.

Referral - A physician's medical order for services or consultations to be provided by a specialist.

Secondary Insurance Company - The insurance company responsible for processing the claim after the primary insurance processes the claim initially. Balances remaining after the primary insurance company pays are sometimes paid, in whole or in part, by the secondary insurance company.

Supplemental Insurance - An additional insurance policy that processes claims after Medicare reimbursement.

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