Glossary of Insurance and Medical Billing Terms

A 

Accept Assignment Provider has agreed to accept the insurance company allowed amount as full payment for the covered services. 

Adjudication The final determination of the issues involving settlement of an insurance claim. 

Allowed Amount The amount of the billed charge the insurance company deems is payable. 

AMA American Medical Association www.ama-assn.org 

Ambulatory Care Any medical care delivered on an outpatient basis.

 Ancillary Services Services including laboratory, radiology, home health and skilled nursing facilities 

Assignment of Benefits The patient or guardian signs the Assignment of Benefits form so that the medical provider will receive the insurance payment directly. 

Authorization Approval from insurance company is required for patient to receive services. Prior Authorization may be necessary before hospital admission, or before care is given by non-HMO providers. 

B 

Beneficiary Person covered by health insurance or Medicare benefits. 

C 

Capitation A payment methodology in which the physician is paid a set dollar amount determined by per member per month calculation to deliver medical services to a specified group of people.

 CCS California Children Services -- A state program for children with certain diseases or health problems. 

CHDP Child Health and Disability Prevention Program -- A preventive program that delivers periodic health assessments and services to low income children and youth in California. 

Claim Response Report Palmetto GBA’s GPNet Claim Acceptance Response Report. This report is available for download immediately after claims submission. Report includes total claims submitted, accepted or rejected with error messages. 

Clearinghouse A company that, for a fee, electronically receives batches of claims from providers or billing centers and retransmits the data electronically to the designated payers. There is a contractual financial relationship between the clearinghouse and the payer. 

CMS Centers for Medicare & Medicaid Services -- Formally known as HCFA, CMS is responsible for oversight of HIPAA administrative simplification transaction and code sets, health identifiers, and security standards. 

CMS 1450 UB-04 Uniform Bill formally known as UB-92 used for Institutional billing 

CMS 1500 The standard claim form used by health plans on which to consider payment to the medical provider

 COB Coordination of Benefits -- The process to determine the obligation of payers when a patient is covered under 2 separate health care plans to avoid duplicate payments for a single service or procedure.

 COBRA Consolidated Omnibus Budget Reconciliation Act -- Health insurance coverage that you can purchase when you are no longer employed, or awaiting coverage from a new insurance plan to begin. 

Contractual Adjustment A part of the charge that the provider or hospital must write off (not charge the patient) because of billing agreements with the insurance company.

 Co-Pay The portion of a claim that a member must pay out-of-pocket.

 CPT Code Current Procedural Terminology -- A 5-digit code used for describing the specific items and services provided in the delivery of health services. Also known as a Procedure Code.