He must therefore collect $27.30 from his patient.
Deductible: This is an amount paid by the subscriber for medical expenses, before his coverage starts paying. Depending on the type of coverage, the patient will have to pay $500 or $1000 for his medical treatment before his insurance company starts paying on his behalf. Some insurance companies have a yearly deductible, which means that every calendar year the patient would be responsible for a certain amount of money before their insurance starts paying their medical bills for that year. Other insurances have a lifetime deductible, which means that the patient will have to pay for his treatment until a certain limit (like $5000) and then the insurance would start paying till his coverage is valid.
Co-insurance/co-payment: A primary insurance company makes a payment on a claim to a participating physician. They instruct the physician’s office to collect a specified amount from the secondary insurance or the patient. This specified amount is called a co-insurance or co-payment.
Balance bill: When a non-participating primary insurance co. pays a part of a claim, the balance on the claim can be billed to the patient or secondary ins. Regardless of the non-participating ins. Allowed amount.
Out of pocket Expenses: A medical bill or part of medical bill paid by patient out of his pocket because of non payment of his insurance company is called Out of pocket expenses. Deductible, co-pay, co-insurance and balance bills are “Out of pocket expenses”.
Contract Maximum: Some insurance companies have a maximum payable amount on certain illness or policies. The total amount payable on a patient’s policy based on his/her contract is called contract maximum.
Coordination of Benefits: This is a provision regulating payments to eliminate duplicate coverage when a claimant is covered by multiple group plans – an insurance company takes into account benefits payable by another carrier in determining its own liability.
Risk: It is the chance or possibility of loss (also could be the possibility of loss associated with a given population)
Retention/Discount: Retention is basically withhold of a part or full payment by the insurance company for some specified reasons which may be to compensate overpayments done earlier or any other reasons.
Authorization/Referral: Some insurance contracts require an authorization or a referral for patients who have met a specialist. This should come from the primary care physician, stating his diagnosis and reasons for sending the patient to meet a specialist. This referral acts as a kind of a second opinion on the patient’s medical condition. It also helps in keeping the insurance co.’s costs down by filtering the number of patients who really require a specialist’s supervision.
Pre-authorization/pre-certification: Some insurance contracts require a pre-authorization/pre-certification for specific services. Pre-certification is a method of pre-approving all elective hospital admissions, surgeries, and other services as required by an Insurance company. Approval is essential to receiving payment.
For ex: If a patient comes in for an eye surgery and if his insurance card says that any treatment related to the eye surgery needs to be pre-certified.
Fee Schedule: A list of all medical procedures and their respective allowed amounts for any INS co is that INS company’s “FEE SCHEDULE”.
Offset: When an Insurance company had paid excess amount in the previous EOB to the provider or the billing office it will adjust that excess amount in the next EOB they sent (by reducing the exceeded amount). Thus the process of adjusting the excess amount paid by the insurance to the provider in their next EOB is called “OFFSET”.