Glossary of Billing Terms
The dollar limit your insurance company will pay for any given service. This amount is almost always less than the reasonable and customary fees charged by most medical providers and may vary between insurance companies. Insurance companies establish their “allowable” amounts as a way to limit their financial liability and control their costs. This amount in no way reflects the value of the service or the appropriate amounts medical providers charge. The difference between the “allowable” amount and the actual provider fees charged is the responsibility of the insured patient. Keep in mind that it is the insurance company who has shifted this financial burden to the patient, not the medical provider. Interestingly, not all insurance companies will disclose their so-called “allowable” amounts to medical providers.
Sometimes insurance companies deny payment or make payment at a level that the medical provider disagrees with. This is often done with and without reasonable basis and results in a delay of payment. When this happens, OPA may choose to forward a letter of explanation with additional information to the insurance company to help them reconsider on behalf of the patient. This is known as an appeal. They will review this information, re-consider the claim and make a decision to pay or reimburse the medical provider at a higher amount. If the insurance company fails to do so, they in affect shift the burden and responsibility for making payment to the insured patient.
The practice of billing a patient for the difference between what the patient’s health insurance chooses to reimburse and what the provider chooses to charge.
Co-Payment & Co-Insurance
The patient share of any medical claim required under the patient’s insurance benefit plan. This may be a percentage (e.g., 80/20 co-insurance), flat amount (e.g., $30.00 per office visit co-pay) or any combination as defined by the plan.
The annual amount the insurance company requires their insured patient to pay out-of-pocket before the insurance company will make any payment on claims submitted by medical providers. Insurance companies often have different rates for individual deductible amounts and family deductible amounts.
Durable Medical Equipment (DME)
Braces, crutches, post-op shoes, slings, and other devices that may be prescribed or dispensed by a medical provider as a part of your orthopedic treatment. These items are necessary and specially designed to protect, stabilize, align, heat, cool or stimulate the muscles, bones or joints to help the healing process. Patients are strongly advised to carefully follow the instructions of the providers with regard to utilization of these important items.
An insurance plan purchased and maintained by an employer or other group on behalf of its employees or members.
An insurance policy purchased by an individual for personal use, rather than an employer.
These plans are common in the Lower 48 states. Plans are designed for cost containment. Structuring of these plans may vary, and referrals to a specialist are commonly required for payment. Please check your benefit plan for specific provisions. You must have a referral from your Primary Care Provider (PCP) if you are on a managed care or HMO plan. Without this your Insurance will not cover your costs.
Out of Pocket (OOP)
The amount that must be spent by the patient (deductible + co-payments) before the insurance company begins to process claims at 100% of the company’s allowed amount.
The process completed to inform insurance of upcoming procedure, such as surgery. OPA will contact your insurance carrier prior to surgery. We are able to communicate necessary information to your carrier, and check benefits. Please understand this is not a guarantee of payment. Patients are always encouraged to contact insurance personally to check benefits, and other policy provisions that may affect their payment requirements or claim processing. Some plans require pre-certification before other procedure types are performed. Please check your benefit booklet or contact your H.R. department for specific information.
Some surgical procedures require the assistance of a second provider. The need for the surgical assist will be made by your surgeon, and is based solely on medical necessity.