Every billing term, in plain English

Allowed Amount

The maximum amount your insurance company will pay for a specific medical service. If your provider is in-network, they've agreed to accept this amoun...

Also called: Eligible Expense, Payment Allowance, Negotiated Rate

Balance Billing

When an out-of-network provider bills you for the difference between their charge and what your insurance paid. The No Surprises Act (effective 2022) ...

Also called: Surprise Billing

Coinsurance

The percentage of costs you pay for a covered medical service after you've met your deductible. For example, if your coinsurance is 20%, you pay 20% o...

Copay (Copayment)

A fixed dollar amount you pay for a covered medical service at the time you receive it. Unlike coinsurance (a percentage), a copay is a set fee — like...

Also called: Co-payment, Co-pay

Deductible

The amount you must pay out-of-pocket for covered medical services before your insurance starts paying. Most plans reset the deductible annually. Prev...

Also called: Annual Deductible

Explanation of Benefits (EOB)

A document from your insurance company explaining how a medical claim was processed. It shows what was billed, what insurance paid, what discounts wer...

Also called: EOB

Facility Fee

A separate charge from a hospital or outpatient facility for using their building, equipment, and support staff — charged on top of your doctor's prof...

Also called: Hospital Facility Fee, Institutional Fee

In-Network vs. Out-of-Network

In-network providers have contracts with your insurance company and have agreed to accept negotiated rates. Out-of-network providers have no contract,...

Also called: Participating Provider, Non-Participating Provider

Out-of-Pocket Maximum

The most you'll pay for covered medical services in a plan year. Once you reach this amount, your insurance pays 100% of covered services for the rest...

Also called: MOOP, Out-of-Pocket Limit

Prior Authorization

A requirement from your insurance company that your doctor get approval BEFORE performing certain services, procedures, or prescribing certain medicat...

Also called: Pre-authorization, Pre-certification, Pre-approval

CPT Code

A five-digit code that identifies a specific medical service or procedure. Maintained by the American Medical Association, CPT codes are used on every...

Also called: Current Procedural Terminology, Procedure Code

ICD-10 Code

A standardized code that describes your diagnosis or reason for the medical visit. ICD-10 codes start with a letter followed by numbers (like J06.9 fo...

Also called: Diagnosis Code, International Classification of Diseases

Upcoding

A billing practice (which can be fraud) where a provider bills for a more expensive service than what was actually performed. This results in higher c...

Also called: Overcoding

Unbundling

When a provider bills separately for procedures that should be grouped together under a single, cheaper code. This artificially inflates the total bil...

Also called: Fragmentation

No Surprises Act

A federal law effective January 2022 that protects patients from surprise medical bills. It bans balance billing for emergency services, out-of-networ...

Also called: NSA

Good Faith Estimate (GFE)

Under the No Surprises Act, healthcare providers must give uninsured or self-pay patients an estimate of expected charges before providing non-emergen...

Also called: Cost Estimate

Medical Necessity

The standard insurance companies use to determine whether a treatment, test, or procedure is appropriate and needed for your condition. If insurance d...

Also called: Medically Necessary

Coordination of Benefits (COB)

The process of determining which insurance plan pays first when you're covered by two or more health plans. The primary plan pays first, then the seco...

Also called: COB

Insurance Appeal

The formal process of asking your insurance company to reconsider a denied claim. You have the legal right to appeal any denial. There are typically t...

Also called: Claim Appeal, Grievance

Chargemaster

A hospital's comprehensive list of prices for every item and service it provides — from a single aspirin to open-heart surgery. These are the 'sticker...

Also called: Charge Description Master, CDM