Billing Terminology

Advanced Beneficiary Notice (ABN)

An Advanced Beneficiary Notice (ABN) is a form advising you that Medicare may not cover tests performed by your doctor.  The purpose of the ABN is to let you know in advance that these services may not be covered and to advise you that you will be responsible for payment of these charges.

Ambulatory Care Charge

The Ambulatory Care Charge assists us in defraying the cost of supporting the physician’s outpatient hospital practice and will be in addition to the physician’s charge. These expenses include, but are not limited to, outpatient nursing care, appointments, receptionists, medical records, housekeeping and facilities operations.

Insurance Deductible

An insurance deductible is a minimum amount the patient must pay before the insurance company will pay anything toward charges. Usually the deductible needs to be met and paid by the patient each year.

Insurance Co-Pay

An insurance co-pay is the amount of money or percent of charges for Basic or Supplemental Health Services which a member is required to pay, as set forth by their health plan. This is often associated with an office visit or emergency room visit. For example $5, $10, or $25.

Co-Insurance

Co-insurance is an arrangement by which the patient and the insurance company share in the payment of a service. Co-insurance takes effect after the approved deductible amount has been met.

For example, assigned Medicare benefits have a 20% co-insurance. This means that after the approved deductible amount has been met, Medicare pays 80% of the approved amount and the patient, or the patient’s supplemental insurance pays the remaining 20%. The deductible in most cases becomes the responsibility of the patient.

Physician Participation

Physician participation is a method by which a physician agrees to accept an insurance company’s payment level as payment in full. The bill is sent directly to the insurance company with payment made directly to the physician. This excludes amounts considered patient obligation under the patient’s coverage plan. For example, co-insurance, deductibles, and non-covered services would still have to be paid by the patient.

Non-Participation

Non-participation means the physician does not participate in the patient’s health plan; therefore, the patient is billed directly for services and is responsible for payment in full.

Assignment of Benefits

Assignment of Benefits means the physician agrees to accept payment from an insurance company first and then bill the patient for any after-insurance balances. In this arrangement the patient has assigned rights for payment, via signature, to the physician for services rendered.

Coordination of Benefits

Coordination of Benefits is the determination of benefits payable under more than one group health insurance so the insured's total benefits do not exceed 100% of the medical expenses.

Birthday Rule

The Birthday Rule is endorsed by the National Association of Insurance Commissioners (NAIC).  The Birthday Rule states that the plan of the parent whose date of birth (month and day) falls earlier in the calendar year is the primary plan for dependent children.  For example, if the father's birth date is March 4 and the mother's birth date is January 22, the mother's plan would be primary. If both parents have the same birth date, the health plan in effect for the longer period of time will be primary.

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