Glossary of Billing Terms

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Labor and Delivery Room - A unit of a hospital where babies are born.

Laboratory - Charges for blood tests and tests on body tissue samples, such as biopsies.

Lifetime Reserve Days (Medicare) - Under Medicare, you have a lifetime reserve of 60 more days of inpatient services after you use the first 90 benefit days. You must pay a fixed amount for each day of service.

Long-Term Care - Care received in a nursing home. Medicare does not pay for long-term care unless you need skilled nursing or special rehabilitation.

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Mailer/Summary of Account - A monthly summary of services (and charges?) mailed to the person who pays the bill.

Managed Care - An insurance plan that requires patients to see doctors and hospitals that have a contract with the managed care company, except in the case of medical emergencies or urgently needed care if you are out of the plan’s service area.

Medicaid - A state administered, federal and state funded insurance plan for low-income people who have limited or no insurance.

Medical Record Number - The number assigned by your doctor or hospital that identifies your individual medical record.

Medical/Surgical Supplies - Special supplies, such as materials used to repair a wound or instruments used for your care.

Medicare - A health insurance program for people age 65 and older. Medicare covers some people under age 65 who have disabilities or end-stage renal disease (ESRD).

Medicare + Choice - A Medicare HMO insurance plan that pays for preventive and other healthcare from designated doctors and hospitals.

Medicare Approved - Medical services for which Medicare normally pays.

Medicare Assignment - Doctors and hospitals who have accepted Medicare patients and agreed not to charge them more than Medicare has approved.

Medicare Number - Every person covered under Medicare is assigned a number and issued a card for identification to providers.

Medicare Paid - The amount of your bill that Medicare paid.

Medicare Paid Provider - The amount of your bill that Medicare paid to your doctor or hospital.

Medicare Part A - Usually referred to as Hospital Insurance, it helps pay for inpatient care in hospitals and hospices, as well as some skilled nursing costs.

Medicare Part B
- Helps pay for doctor services, outpatient care, and other medical services not paid for by Medicare Part A.

Medicare Summary Notice (MSN) - The notice you receive from Medicare after getting services from your doctor or hospital. It tells you what was billed to Medicare, Medicare's approved payment, the amount Medicare paid, and what you have to pay. Also called an Explanation of Medicare Benefits (EOMB).

Medigap - Medicare Supplement Insurance that pays for some services not covered by Medicare A or B, including deductible and coinsurance amounts.

MRI - A type of X-ray; magnetic resonance brain or body images, usually done in a hospital’s x-ray department.

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Network - A group of doctors, hospitals, pharmacies, and other health care experts hired 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.

Non-Participating Provider - A doctor, hospital, or other healthcare provider that is not part of an insurance plan’s doctor or hospital network.

Nursery - Nursing care charges for newborn babies.

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Observation - Type of service used by doctors and hospitals to decide whether you need inpatient hospital care or whether you can recover at home or in an outpatient area. Usually charged by the hour.

Oncology - Charges for treating cancer and related diseases.

Operating Room - A hospital or clinic area where surgeries are done.

Other Room and Board - Any extra charges that cannot be included in routine room and board charges.

Out-of-Network Provider - A doctor or other healthcare provider who is not part of an insurance plan's doctor or hospital network. Same as non-participating provider.

Out-of-Pocket Costs - Costs you must pay because Medicare or other insurance does not cover them.

Outpatient (OP) - Patient who does not need to stay overnight in a hospital. Outpatient services include lab tests, x-rays, and some surgeries.

Outpatient Service - A service you receive in one day at a hospital or clinic without staying overnight.

Over-the-Counter Drug
- Drugs not needing a prescription that you buy at a pharmacy or drug store.

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Paid to Provider - Amount the insurance company pays your medical provider.

Paid to You - Amount the insurance company pays you or your guarantor.

Participating Provider
- A doctor or hospital that agrees to accept your insurance payment for covered services as payment in full, minus your deductibles, co-pays and coinsurance amounts.

Patient Amount Due - The amount charged by your doctor or hospital that you have to pay.

Patient Type - A way to classify patients--outpatient, inpatient, etc.

Pay This Amount - How much of your bill you have to pay.

Per Diem - Charged or paid by the day.

Pharmacy Charges - Cost of drugs given under a pharmacist’s direction.

Physical Therapy - Treatment of diseases or injuries by exercise, heat, light, and/or massage.

Physician - Person licensed to practice medicine.

Physician Extenders - Also called mid-level service providers. Physician extenders include licensed nurse practitioners and/or licensed physician assistants. They coordinate patient care under a doctor’s supervision.

Physician Office - Your doctor’s office.

Physician Practice - A group of doctors, nurses, and physician assistants who work together.

Physician Practice Management
- Non-physician staff hired to manage the business aspects of a physician practice. These staff include billing staff, medical records staff, receptionists, lab and X-ray technicians, human resources staff, and accounting staff.

Point-of-Service Plan (POS)
- An insurance plan that allows you to choose doctors and hospitals without having to first get a referral from your primary care doctor.

Policy Number - A number that your insurance company gives you to identify your contract.

Pre-Admission Approval or Certification - An agreement by your insurance company to pay for your medical treatment. Doctors and hospitals ask your insurance company for this approval before providing your medical treatment.

Pre-Existing Condition
- A health condition or medical problem that you already have before you sign up to receive insurance. Some health insurers may not pay for health conditions you already have.

Prepayments - Money you pay before getting medical care; also referred to as preadmission deposits.

Prevailing Charge - A billing charge that is commonly made by doctors in a specific region or community. Your insurance company determines this charge.

Primary Care Network (PCN) - A group of doctors serving as primary care doctors.

Primary Care Physician (PCP) - A doctor whose practice is devoted to internal medicine, family/general practice, or pediatrics. Some insurance companies consider Obstetrician/gynecologists primary care physicians.

Primary Insurance Company - The insurance company responsible for paying your claim first. If you have another insurance company, it is referred to as the Secondary Insurance Company.

Private Room (Deluxe) - A more expensive hospital room than those available to other patients. You may have to pay extra for this type of room if it is not a medical necessity.

Procedure Code (CPT Code) - A code given to medical and surgical procedures and treatments.

Prospective Payment System (PPS) - A Medicare system that pays hospitals a set amount for covered diagnostic or treatment services.

Provider Contract Discount - A part of your bill that your doctor or hospital must write off (not charge you) because of billing agreements with your insurance company.

Provider Name, Address, and Phone # - Name and address of the doctor or hospital submitting your bill.

Psychiatric/Psychological Treatments - Nursing care and other services for emotionally disturbed patients, including patients admitted for inpatient care and those admitted for outpatient treatment.

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Radiology - X-rays used to identify and diagnose medical problems.

Reasonable and Customary (R & C) - Billing charges that insurers believe are appropriate for services throughout a region or community.

Recovery Room - A special room where you are taken after surgery to recover before being sent home or to your hospital room.

Referral - Approval needed for care beyond that provided by your primary care doctor or hospital. For example, managed care plans usually require referrals from your primary care doctor to see specialists or for special procedures.

Release of Information - A signed statement from patients or guarantors that allows doctors and hospitals to release medical information so that insurance companies can pay claims.

Renal Dialysis - Removal of wastes from the blood. Normally the kidneys would remove these wastes if they were functioning properly.

Respiratory Therapy - Giving oxygen and drugs through breathing, as well as other therapies that measure inhaled and exhaled gases and blood samples.

Responsible Party - The person(s) responsible for paying your hospital bill--usually referred to as the guarantor.

Revenue Code - A billing code used to name a specific room, service (X-ray, laboratory), or billing sum.

Room and Board Private - Routine charges for a room with one bed.

Room and Board Semiprivate - Routine charges for a room with two beds.

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Same-Day Surgery - Outpatient surgery.

Secondary Insurance - Extra insurance that may pay some charges not paid by your primary insurance company. Whether payment is made depends on your insurance benefits, your coverage, and your benefit coordination.

Service Area - Geographic area where your insurance plan enrolls members. In an HMO, it is also the area served by your doctor network and hospitals.

Service Begin Date - The date your medical services or treatment began.

Service Code - A code describing medical services you received.

Service End Date - The date your medical services or treatment ended.

Skilled Nursing Facility - An inpatient facility in which patients who do not need acute care are given nursing care or other therapy.

Source of Admission - The source of your admission—referral, transfer, emergency room, etc.

Specialist - A doctor who specializes in treating certain parts of the body or specific medical conditions. For example, cardiologists only treat patients with heart problems.

Statement Covers Period - The date your services or treatment begin and end.

Submitter ID - Identification number (ID) that identifies doctors and hospitals who bill by computers. Doctors and hospitals get an ID from each insurance company to whom they send claims using the computer.

Supplemental Insurance Company - An additional insurance policy that handles claims for deductible and coinsurance reimbursement.

Swing Bed - Bed for a patient who receives skilled nursing care in a non-skilled nursing facility.

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NOTE: An asterisk (*) after a term means that this definition, in whole or in part, is taken from the Medicare Glossary,, February 2003