Insurance Billing Glossary

This glossary provides clear and concise definitions of key insurance-related terms, including insurance payers, policies, deductibles, claims, and coverage types. It serves as a helpful reference for healthcare providers, billing professionals, and patients navigating the complexities of insurance claims and payments.

An organization (typically an insurance company, government program like Medicare/Medicaid, or third-party administrator) that processes and pays healthcare claims on behalf of plan members or covered individuals. The payer receives claims from healthcare providers and determines what portion of services will be reimbursed according to the member's benefits.

A contract between an individual and an insurance company that outlines the terms of coverage, including deductibles, copayments, and covered services.

The amount the insured must pay out-of-pocket before the insurance begins to pay for covered services.

A fixed amount the insured pays for a covered healthcare service, usually at the time of service.

A percentage of costs for a covered service that the insured pays after the deductible has been met.

The individual or entity who owns the insurance policy and has entered into a contract with the insurance company. The policyholder is the primary person named on the insurance policy and may not necessarily be the person who the policy covers or who is receiving healthcare services.

A specific healthcare program offered by an insurance company that outlines provider networks, covered services, limits, and cost-sharing structures. Plans serve as templates from which individual policies are created.

The specific healthcare services, treatments, and procedures that an insurance company has agreed to pay for under a policy. Coverage varies by plan, and some service categories may have different copayments, coinsurance, or coverage limitations.

A request for payment submitted to an insurance company by a provider for reimbursement of services provided.

The amount an insurance payer has paid to a healthcare provider after a claim is processed and approved as reimbursement for services provided to the insured person.

The category or classification of health insurance benefits that defines what medical services are covered and how they are paid for. Different coverage types have different rules regarding networks, referrals, copayments, coinsurance, and approval requirements for services.

A collection of information that identifies and defines a business or healthcare provider and is used when submitting claims to specific insurance payers. It typically includes details such as credentials, tax IDs, billing addresses, and other identifying information.

An intermediary organization that facilitates the electronic transmission of healthcare claims between healthcare providers and insurance payers. Clearinghouses validate claims for accuracy, ensure proper formatting to meet payer requirements, and convert paper claims to electronic format when needed.

The process where insurance companies verify a healthcare provider's qualifications, including education, training, licenses, and practice history. Providers must be credentialed by an insurer before they can become in-network providers.

Healthcare providers who have gone through the credentialing and enrollment processes with an insurance company and have contracted to provide services at negotiated rates. Patients typically pay less when seeing in-network providers because of these pre-negotiated rates and more favorable benefit structures.

Healthcare providers who have not contracted with a particular insurance payer. Clients receiving services usually pay more when seeing out-of-network providers due to higher coinsurance rates, separate deductibles, or in some cases, no coverage at all.

The process of registering providers with insurance companies to enable them to submit claims and receive payments. Provider enrollment is distinct from patient enrollment, which refers to patients signing up for insurance plans.

A detailed receipt given to clients by healthcare providers that contains all the information necessary for the patient to submit a claim to their own insurance company for reimbursement. It includes the provider’s information, the client’s diagnosis codes (ICD codes), the services provided, related procedure codes (CPT codes), and costs.

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