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Appeal
Request made to a health insurance company to reconsider a decision, such as a claim denial or denied prior authorization request. Most appeals must be submitted in writing within a specified period.
Assignment of benefits (AOB)
Instruction provided from an insured to a health plan, advising that payment for an item provided or service rendered should be sent directly to the provider of that item or service. In this scenario, the provider is responsible for billing the health plan for the item or service.
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| Benefit cap |
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Total dollar amount that a health insurance company will reimburse for covered drugs and/or medical services during a specified period, such as 1 year or a lifetime.
Claim
Form submitted to a health insurance company (by a health care provider or patient) to request payment for items or services.
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| Coding |
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Coding provides universal definition and recognition of diagnoses, procedures, products, and levels of care.
Co-insurance
Cost-sharing arrangement between an insured and health insurance company in which the insured will be required to pay a percentage of the cost for the health care services received (eg, 20% of the cost of ENBREL).
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| Co-payment |
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Cost-sharing arrangement between an insured and health insurance company in which the insured will be required to pay a specified dollar amount for a particular item or service (eg, $20 for a 1-month supply of ENBREL).
Current procedural terminology (CPT)
A system of terminology and coding developed by the American Medical Association (AMA) that is used for describing, coding, and reporting medical services and procedures.
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| Deductible |
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Cost-sharing arrangement between an insured and health insurance company in which the insured will be required to pay a fixed dollar amount of covered expenses each year before the health insurance company will reimburse for covered health care expenses. Generally, an insured must meet a deductible each calendar year.
Explanation of benefits (EOB)
Statement sent by health insurance companies to health care beneficiaries that details the charges for the services received, the amount the health insurance company will pay for those services, and the amount the beneficiary will be responsible for paying.
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| Formulary |
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Approved list of prescription medications covered by a health insurance company. Depending on the individual plan, an insured patient may have a "closed formulary," which would require that the insured patient use only those medications included on that health plan's formulary or they may have an "open formulary," which may allow access to all medications at a higher cost.
HCFA common procedure coding system (HCPCS)
Name given to CPT codes (Level I), alphanumeric codes (Level II), and local codes (Level III) used by health insurance companies and health care providers for billing purposes. Within the industry, most refer to Level II national codes as HCPCS codes.
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| International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) |
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Coding system maintained by the National Center for Health Statistics and the Centers for Medicare and Medicaid Services (CMS). This coding system differentiates diagnostic conditions and is used by hospitals, governments, health insurance plans, and health care providers.
Letter of medical necessity
Documentation intended to justify that the service rendered or item provided is reasonable and appropriate for the diagnosis or treatment of a medical condition or illness.
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| Medicaid |
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Federal and state health insurance program for individuals who meet established eligibility criteria (programs vary from state to state).
Medicare
Federal health insurance program for the elderly (age 65 and older), certain disabled individuals, and those with end-stage renal disease. Medicare is administered by the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA).
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| Medigap / MedSup |
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Health plans offered by private health insurance companies to individuals with Medicare. Plans cover costs not typically covered by Medicare (designed to "fill the gaps" of Medicare coverage). Costs covered may include co-insurance amounts, deductibles, and prescription drugs costs.
National Drug Code (NDC)
Numerical coding system for drug identification. NDC numbers are assigned by the Food and Drug Administration (FDA) and are typically used to bill health insurance companies for the drugs provided to health care beneficiaries. The NDC number for ENBREL is 58406-425-34.
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| Out-of-pocket maximum |
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Total dollar amount an insured will be required to pay for covered medical services during a specified period, such as 1 year. The out-of-pocket maximum may also be called the stop-loss limit or catastrophic expense limit.
Preexisting condition
Medical condition for which an insured received medical care prior to the health insurance coverage becoming effective. Depending upon the plan's policy language, the health insurance company may deny or limit the amount of care for which it will reimburse related to the preexisting condition.
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| Prior authorization |
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Review of need for health care items or services before services are rendered or products are provided. This refers to a decision made by the health insurance company or plan to cover or not cover the charges before the services are provided.
Private insurance
Insurance is a method for managing medical risk by spreading the risk over a group of individuals through pooled premiums that cover the costs of unanticipated illnesses or injuries. Private insurance is insurance that is not an entitlement or federal or state-funded program. Typically, this insurance is offered through an employer group, individual purchase, union group, or association group (AARP, Small Business Association).
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| Recertification |
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The process of renewing a prior authorization obtained through a health insurance company for a specific product or service. This process is often an abbreviated version of the prior authorization process. See prior authorization for more information.
Usual, customary, and reasonable charge
Prevailing charge for an item or service in a particular geographic area.
Verification of benefits
The process of determining a patient's specific insurance benefits for a product or service. This includes determining if the health insurance company covers the product or service and the patient's cost associated with obtaining the product or service.
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