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Holiday 10am-4pm

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Understanding Insurance


When you have questions regarding your health insurance coverage, it is best to refer to the member handbook your insurance company provided to you, or visit your insurance company’s website.

The hospital bills your insurance company for you. Usually a claim is paid within 30–60 days after being submitted. In cases where there are two insurance companies to bill, the second insurance will be billed after the first insurance has paid.

Health Insurance Definitions

Amount the insurance company will pay to a claimant, assignee, or beneficiary when the insured suffers a loss.

Billing Statement
A list of services provided, supplies, and their costs associated with a visit to the hospital.

The insurance company or HMO offering a health plan.

A request by an individual (or his or her provider) to an individual's insurance company for the insurance company to pay for services obtained from a health care professional.

Refers to money that an individual is required to pay for services after a deductible has been paid. In some health care plans, co-insurance is called "co-payment". Co-insurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.

A predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.

Consolidated Omnibus Budget Reconciliation Act (COBRA)
Federal legislation that lets you, if you work for an insured employer group of 20 or more employees, continue to purchase health insurance for up to 18 months if you lose your job, or your coverage is otherwise terminated. For more information, visit theDepartment of Labor website.

Covered Service
A health care service that is covered by an insurance plan, and for which the plan agrees to pay a certain benefit amount or percentage.

Current Procedural Terminology (CPT) Code
A code used by medical offices and insurance companies to identify a specific medical service or procedure.

The amount the policyholder needs to pay for covered health services before a health plan will begin to pay benefits. Usually a new deductible needs to be met each calendar year.

Denial Of Claim
Refusal by an insurance company to honor a request by an individual (or his or her provider) to pay for health care services obtained from a healthcare professional.

Effective Date
The date your insurance is to actually begin. You are not covered until the policys effective date.

Elective Service
A service that is not urgently required due to an emergency.

Emergent Service
A test or procedure urgently required due to an emergency.

EOB (Explanation of Benefits)
A detailed explanation from the insurance company that identifies the amount due for services provided. This includes any payments made by the insurance company and any listed copayment, coinsurance or deductible due from the policy holder.

Medical services that are not covered by an individual's insurance policy.

Group Insurance
Coverage through an employer or other entity that covers all individuals in the group.

Health Maintenance Organizations (HMOs)
Health Maintenance Organizations represent "pre-paid" or "capitated" insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided. Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of HMO, services may be provided in a central facility, or in a physician's own office (as with Independent Physician Associations [IPAs]).

Part of the group of hospitals, physicians and other medical care professionals that an insurance plan contracts with to provide medical services to its members.

Lifetime Maximum Benefit (or Maximum Lifetime Benefit)
The maximum amount a health plan will pay in benefits for an insured individual during that individual's lifetime.

Managed Care
A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease.

Maximum Dollar Limit
The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year.

Medigap Insurance Policies
Medigap insurance is offered by private insurance companies, not the government. It is not the same as Medicare or Medicaid. These policies are designed to pay for some of the costs that Medicare does not cover.

A group of doctors, hospitals and other healthcare providers contracted to provide services to insurance companies’ customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

Out-of-Plan (Out-of-Network)
This phrase usually refers to physicians, hospitals or other healthcare providers who are considered non-participants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.

Out-Of-Pocket Maximum
A predetermined limited amount of money that an individual must pay out of their own pocket, before an insurance company or (self-insured employer) will pay 100 percent for an individual's healthcare expenses.

An patient who receives health care services (such as surgery) on an outpatient basis at the hospital without staying the night. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.

Payment Arrangements
A formal payment plan set up between a patient and Legacy Silverton Medical Center when payment cannot be made in full.

A third-party entity (commercial or government insurance carrier) that pays medical claims.

Preferred Provider Organizations (PPOs)
You or your employer receive discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you must pay more for the medical care.

Primary Care Provider (PCP)
A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as a "quarterback" for an individual's medical care, referring the individual to more specialized physicians for specialist care.

A term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other healthcare professionals such as hospitalists, nurse practitioners, chiropractors, physical therapists, and others offering specialized healthcare services.

Primary Insurance
The designation given to the insurer that has first priority for payment of a claim.

Prior Authorization/Precertification
A formal approval obtained from the insurance company prior to delivery of medical services. Many insurance companies require prior authorization or precertification for specific medical services.

Reference Number
This is your “family billing” number. It is the number for the person responsible for paying the bill if a balance is due.

Responsible Party/Guarantor
The person responsible for paying the bill.

Secondary Insurance
The designation given to the insurer that has second priority for payment of a claim. Secondary insurance applies after the primary insurance pays or rejects an insurance claim.

The person who holds and/or is responsible for the medical insurance policy.