Health Insurance
Key Definitions &
Frequently Asked Questions
Insert Name Here
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Key Definitions
• Health Insurance
– A contract between you and a health insurer that requires the
health insurer to pay some or all of your healthcare costs in
exchange for a premium
• Medicare, Medicaid, Blue Cross Blue Shield, United
Healthcare, etc.
• Premium
– The amount that must be paid by you (the subscriber) for your
health insurance plan
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Key Definitions
• Contracted Rates
– The amount that health insurance plans will pay to healthcare
providers in their networks for covered services.
– These rates are negotiated and established in the contracts with
the in-network providers
• Provider
– Healthcare professionals
• Physicians, Advanced Practice Providers (Nurse Practitioner,
Physician Assistant)
– Healthcare facilities
• Hospital, Surgery Center, etc.
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Key Definitions
• In-Network
– The hospitals, providers, suppliers, and other healthcare facilities
(for example, surgery centers) your health insurance plan has
contracted with to provide healthcare services
• Out-of-Network
– The hospitals, providers, suppliers, and other healthcare facilities
your health insurance plan has NOT contracted with to provider
healthcare services
• Your payment responsibility will be different for innetwork versus out-of-network
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Key Definitions
• Explanation of Benefits (EOB)
– A statement sent by your health plan after you receive healthcare
services from a provider.
– For each service it shows:
•
•
•
•
•
Amount charged by the provider
Plan’s allowable charge
Plan’s payment
The amount you owe
It is NOT a bill – it is informational only
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Key Definitions
• Explanation of Benefits (EOB)
– Amount Charged
• Charge is the dollar amount a healthcare provider sets for services rendered
– Allowable Charge / Allowed Amount
• The maximum amount the health insurance company will pay for covered
services
• Also referred to as “eligible expense”, “payment allowance”, or “negotiated
rate”
– Covered Services
• Medical services that are included in your health insurance plan
– Non-Covered Services
• Medical services that are NOT included in your health insurance plan
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Key Definitions
• Explanation of Benefits (EOB) – Your Share of
Payment
– Deductible
• The amount you are expected to pay for covered healthcare services before
your health insurance plan begins to pay
• Example: If you have a $1,500.00 deductible – your health insurance will not
pay anything until you have received covered healthcare services amounting
to $1,500.00.
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Key Definitions
• Explanation of Benefits (EOB) – Your Share of
Payment
– Coinsurance
• Your percentage share for covered healthcare services after you have met
your deductible
• Example: You have a 20% coinsurance. You receive healthcare services and
your plan’s allowed amount for those services are $100.00. You will owe
$20.00 for that service. Your health plan will owe $80.00.
– Copayment
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•
•
•
A fixed amount you pay for a covered healthcare service
Different than coinsurance
Does not count towards your deductible
Common for Clinic Visits or ER visits
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Key Definitions
• Explanation of Benefits (EOB) – Your Share of
Payment
– Out-of-pocket healthcare costs
• Your expenses for healthcare services (deductible, coinsurance, copayments,
and any “non-covered” services)
– Out-of-pocket maximum
• The limit on the total amount a health insurance plan requires a member to
pay in a year
• Includes deductible, coinsurance, and copayments for covered services
• Once out-of-pocket is met for the year the health insurance plan will pay
100% of covered healthcare services
• Does not apply to non-covered healthcare services
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Key Definitions
• Pre-Authorization
– A requirement that healthcare services must receive prior
approval from the health insurance plan before being considered
a covered service
– Also referred to as prior authorization
– If not pre-authorized, services will be considered non-covered
– Must complete pre-authorization BEFORE services are received
• Whose responsibility is it?
• ALL agreements are different – know your plan!
– Disclaimer: Prior authorization does not always guarantee payment
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Key Definitions
• Inpatient Services
– “Admitted” to the Hospital with an order from your
healthcare provider
– Provider must document the reasoning for admitting
you as an Inpatient, also referred to as “medical
necessity”
– Sometimes referred to as
“Acute Care”
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Key Definitions
• Outpatient Services
– Emergency Department
– Outpatient Surgery
– Lab, X-Ray, other imaging
• These services can also be done during an Inpatient Stay
– Observation
• Hospital outpatient service where the healthcare provider is
determining whether your medical condition meets ‘medical
necessity’ for Inpatient Services
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Key Definitions
• Inpatient versus Outpatient
– Your health insurance plan will have different rules for
inpatient versus outpatient services
• Payment
• Pre-authorization requirements
• Length of Stay requirements
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Key Takeaways
• Know YOUR Plan!!!
– Know who is “in-network”
– Know what services are considered “covered”
– Know what services require priorauthorization
– Know what your deductible, coinsurance, and
copayment responsibilities are
– If you don’t know – ASK!!
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Key Takeaways
• Be Prepared
– If possible, ask for estimated charges for
services you will be receiving
– Ask about payment arrangement options for
out-of-pocket expenses
– Keep an open line of communication with the
business office
• Patient Accounts, Patient Financial Services, etc.
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Frequently Asked Questions
• Why do I get so many bills for the same service?
– There are multiple participants in some healthcare
services
• Ambulance, Hospital, Physician, Radiologist, Pathologist, etc.
– There are various relationships with healthcare
providers
• Some providers are employed by the organization where you
receive healthcare services
• Some are independent, private practices
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Frequently Asked Questions
• Why do I get so many bills for the same service?
– Facility Fees versus Professional Fees
– Facility Fees
• Hospital, Lab, X-Ray
• Bills are for service or procedure being provided
– Equipment, supplies, pharmaceuticals, hospital personnel (radiology
technicians, lab technicians, nursing, etc.)
– Professional Fees
• Physician, Nurse Practitioner, Physician Assistant,
Anesthesiologist, Pathologist, Radiologist
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Thank You!
Questions?
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