Billing Glossary

Birthday Rules

Used to determine coordination of benefits (primary or secondary) for children. Insurances only use the month and day to determine coverage. We have listed some examples:

• Parents are married, the insurance of the parent whose birthday occurs first in a calendar year is primary, while the other parent’s coverage would be secondary.
• If the parents have the same birthday, the parent who has had their insurance plan the longest would be considered primary.
• In situations where the parents are separated or divorced and both parents have coverage for the child, the benefits are determined in the following order.*

1. The insurance plan of the parent with legal custody of the child.
2. The plan of the spouse of the parent with legal custody of the child.
3. Lastly, the plan of the parent who does not have legal custody of the child.
4. *This can vary depending on the court decree, if there are no specific terms on a court decree, the benefit determination would be the same as the first bullet listed above.

Coordination of Benefits (COB)

An insurance group policy provision which determines the primary carrier, when the insured is covered by more than one plan.

Contractual Adjustment

The difference between the insurance contracted payment amount and the amount of the charge.

Co-Payment or Co-Insurance

A fee predetermined by your insurance policy that you pay for health care services.

Deductible

The amount of money a patient must pay for health care services before an insurance company will make a payment. This amount is predetermined by your insurance company based on your policy and usually due every calendar year.

EOB or Explanation of Benefits EOB

Explanation of payments sent to the provider and policyholder by the insurance company.

Guarantor

The person financially responsible for the bill.

Managed Care

A medical delivery system (Medical Group) that manages the quality and cost of medical services.

Medicare

A federal insurance program which primarily serves those over 65 years or disabled people. Medicare is made up of two component, Part A and Part B.

• Medicare Part A: covers inpatient hospital services, nursing home care, home health care and hospice care.
•  Medicare Part B: covers doctors’ services, outpatient’s hospital services, durable medical equipment and supplies and other health care services.

Visit the Medicare website for more information.

Non-Covered Services

Services an insurance policy does not cover. A patient incurs these charges.

Payment Arrangements

A payment plan formally set with either the financial counselor or customer service department, when the balance due on account cannot be paid in full. These plans are based on established policies and guidelines.

Payer or Payor

A third party entity (commercial/government) that processes and applies payment for your medical claim.

Prior-Authorization/Pre-Certification

A formal approval obtained to provide referred or requested services, granted by one or more of the following:

1. Health Plan – Medical Group or the hospital depending upon whom is financially responsible for the requested or referred services.
2. Referral – A physician’s medical request for services or consultation to be provided by a specialist.
3. Self-Pay – An account for medical services, payable by the guarantor, when they do not have insurance coverage, the charges are non-covered and/or excluded from their policy.
4. Subscriber – A person who is enrolled for benefits with an insurance company
5. Workers Compensation – Insurance coverage provided by employers to cover employees injured on the job.