News and Notes from The Johnson Center
Understanding Insurance Language
JCCHD | Mon, June 01, 2015 |A Parent’s Guide to Navigating Insurance Coverage teaches you the language of insurance and gives you the tools you need to cut through the fine print and understand your coverage. In this webinar we discussed a glossary of terms that will help you navigate conversations with insurance company personnel and read insurance paperwork. Below is a review of those terms:
In-network: Your insurer negotiates with a wide range of doctors, specialists, hospitals, labs, and pharmacies to pay a set price. These are the providers in your “network.” Your insurance provider will typically pay a higher percentage of your claim if you choose an in-network provider.
Out-of-network (OON): Providers who are outside your network who have not agreed to any set rates with your insurance company. Your plan may require higher co-pays, deductibles, and co-insurance for out-of-network care. Your plan may not cover out-of-network care at all, leaving you to pay the full cost yourself. Also, if you go to an OON provider, you may be responsible for paying you bill in full and submitting claim paperwork yourself to receive reimbursement from your insurance company.
Co-payment: A specific charge for a medical service or supply. Typically, a “co-pay” is charged at the time of an office visit or purchase. For example, your insurance may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
Co-insurance: The amount you are required to pay for covered medical services after you’ve satisfied any co-payment or deductible. For example, if your insurance company covers 80% of the cost of a specific service, you will be required to cover the remaining 20% as co-insurance.
Annual Maximum: Maximum dollar amount your insurance will pay in a contract year. There may be separate maximums for specific services like ABA, medical visits, diagnostics, etc. Your policy may also limit services by number of visits per contract year.
Contract year: The time frame of your coverage. This may be Jan-Dec or any period of 12 months, depending on your policy.
Reasonable & Customary Charges: The dollar amount an insurance carrier is willing to pay for a specific service. Insurance companies can determine this based on your geographic location. Often times they use the reimbursement rate that Medicaid uses. Reasonable and Customary charges affect your payment amount when you go out-of-network. For example: a chest X-ray at your Out-Of-Network doctor may cost $120, but your insurance carrier may determine the reasonable & customary charge to be $100. In that case, you would be required to pay the $20 difference.
Diagnosis codes: A 3-digit code (may include additional decimals) used to group and identify diseases, disorders, symptoms, poisonings, adverse effects of drugs & chemicals, injuries, and other reasons for patient encounters. Example: 249.00 is the diagnosis code for diabetes.
Procedure/Current Procedural Terminology (CPT) code: A 5-digit code used to identify a specific clinical service. For example, there is a diagnosis code for a broken leg. The procedure code or CPT code is for the service of putting a cast on the broken leg. IMPORTANT: Both diagnosis codes and CPT codes can only be determined by qualified clinicians. To change a code on a claim without the approval of a licensed clinician is insurance fraud.
Explanation of Benefits (EOB): a document provided by your insurance company outlining how benefits were paid out for a specific claim. If your appointment is In-network the EOB will arrive after your care provider has processed the claim, possibly before your bill arrives. If you chose to go Out-Of-Network, the EOB will arrive after you have paid your clinician and submitted your receipt for reimbursement. The EOB may be accompanied by a reimbursement check or an explanation for their refusal to reimburse you.
Pre-authorization: A decision by your insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. This is sometimes called prior authorization, prior approval, or pre-certification. Your insurance company may require pre-authorization for certain services before you receive them, except in an emergency.
These terms should help you when talking with your insurance company or benefits coordinator about your coverage.
