Understanding Your Bill

This glossary of terms was prepared to help you understand your bill or statement.

View a sample bill (statement) here


Glossary for Sample Statement

Account number (visit number) — The unique reference number assigned to each hospital encounter.

Adjustment — A transaction that increases or decreases your accounts receivable balance. A debit increases your balance and a credit decreases your balance.

Assignment of benefits — An agreement in which you instruct your insurance organization to pay the hospital, physician or medical supplier directly for your medical services. Your insurance organization decides the payment rate and your responsible portion.

Balance — Amount outstanding on your account. Your statement will indicate who currently owes the balance.

Claim — A form submitted to the insurance organization for payment of benefits.

Co-insurance — The part (usually a percentage) of the covered health care cost for which you are financially responsible. Often, co-insurance applies after you meet your deductible.

Coordination of benefits — How insurance organizations determine the primary payment source when you are covered under more than one insurance organization or group medical plan. Many insurance contracts state that if you are covered under more than one insurance plan, benefits will be coordinated so that total benefits paid will not be more than 100 percent of the bill.

Co-payment — The contractual provision that requires you to pay a specific charges for specific service, usually when you receive the service. A co-payment usually applies to office visits, prescriptions, and emergency or hospital services.

Covered services — Specific services or supplies for which you’re insurance reimburses you or pays your health care provider. These consist of a combination of mandatory and optional services and vary by state.

Deductible — The agreed amount you must pay before your insurance organization will pay a claim. Usually, you have 12 months to meet your deductible. Eligible expenses after you meet your deductible are then paid for the rest of that 12-month period.

Group number — The number of your insurance organization group. See your insurance card.

Guarantor — The individual responsible for paying this bill. Patient statements are addressed to this person.

Nonparticipating health care provider — A health care provider who is not under contract with an insurance organization to accept patients and receive the insurance organization's approved amount on all claims. You pay the difference between its approved amount for a service and this health care provider's charge.

Participating health care provider — A health care provider who contracts with an insurance organization to accept patients and receive the insurance organizations approved amount on all claims.

Policyholder — The name of the person who took out or purchased the insurance policy. This person owns the policy. Also called a subscriber.

Policy number — The number on your insurance policy. See your insurance card.

Preauthorization (precertification) — The process of getting permission from your insurance organization for certain services before they are provided so that the services can be considered eligible expenses. Usually required for hospital and outpatient services.

Primary insurance — The insurance organization with first responsibility for paying eligible insurance expenses for your medical service (after you have paid your deductible and co-payments). If you have additional insurance, those organizations would work with your primary insurance organization to cover eligible expenses according to your insurance policies.

Referral —Written authorization from your health care provider to see another health care provider. For example, your primary care provider may provide written authorization for you to see a specialist.

Secondary insurance — The insurance organization with second responsibility for paying eligible insurance expenses for your medical service (after you've paid your deductible and co-payments). This insurance would work with your primary insurance organization to cover eligible expenses according to your insurance policies. This insurance organization is billed second — after your primary insurance organization has been billed.

Subscriber — The person who purchased the insurance. Also known as a policyholder or guarantor.

Tertiary insurance — The insurance organization with third responsibility for paying eligible insurance expenses for your medical service (after you've paid your deductible and co-payments). This insurance would work with your primary and secondary insurance organizations to cover eligible expenses according to your insurance policies. This insurance organization is billed third — after your primary and secondary insurance organizations have been billed.

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