Glossary

Authorization – when a patient requires permission (or authorization) from the insurance company before receiving a certain treatment or service.

Charge - This is the full undiscounted price of medical services consistently and uniformly charged to patients before applying any contractual allowances, discounts or deductions.

Cost - This is the price of medical services to patients after applying any insurance payments, contractual allowances, discounts or deductions. This is the estimated patient responsibility.

Claim – your medical bill that is sent to an insurance company for processing

Co-insurance – a percentage of the healthcare bill that you pay. For example, you pay 20% and your insurance pays 80%.

Contractual adjustment – the amount of charges a provider or hospital agrees to write-off and not charge the patient per the contract terms with the insurance company.

Copayment / Copay – copayments are set amounts you pay when you go to a health care provider. Providers usually collect at the visit and are listed on your insurance card. For example, Specialty = $40.

Deductible – the amount you owe for covered health care services before your health insurance plan begins to pay. For example, if your deductible is $1,000, your plan starts paying for covered services after you pay the first $1,000.

Excluded services – health care services that your health insurance or plan does not pay for or cover. Excluded services and benefits are defined in the health insurance plan’s coverage documents.

Explanation of Benefits (EOB) – the notice you receive from your insurance company after getting medical services from a doctor or hospital. It tells you what was billed, the payment amount approved by your insurance, the amount paid, and what you have to pay.

Financially Responsible Party – the person(s) responsible for paying your hospital or bill – also referred to as the guarantor.

Network – a group of doctors, hospitals, pharmacies, and other health care experts contracted by a health plan to take care of its members.

Non-Covered Charges – charges for medical services denied or excluded by your insurance. You may be billed for these charges.

Out-of-Network Provider – a doctor or other healthcare provider who is not part of an insurance plan’s doctor or hospital network.

Out-of-Pocket Costs – your expenses for medical care that are not reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that are not covered.

Out-of-Pocket Maximum/limit – the most you pay during a policy period (usually one year) before your health insurance or plan starts to pay 100% for covered essential health benefits.

Payer – An organization that negotiates or sets rates for provider services, collects revenue through premium payments or tax dollars, processes provider claims for service, and pays provider claims using collected premium or tax revenues.

Price Transparency – In health care, readily available information on the price of healthcare services that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.

Provider – An entity, organization, or individual that furnishes a healthcare service.

Value – The quality of a healthcare service in relation to the total price paid for the service by care purchasers.