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Blount Memorial Patient Billing Glossary

A quick guide to common patient billing and insurance coverage terms

The terms used on hospital billing and insurance coverage statements can be unfamiliar and confusing. To help make it easier to read and respond promptly to any payment-related information you receive, we’ve compiled this helpful glossary of terms.

Co-insurance is the portion (usually a percentage) of the total bill that is the patient’s (or guarantor’s) responsibility to pay. This amount varies based on a patient’s insurance plan benefits, and may be covered by a Supplemental Insurance Plan.

Co-payment is the set amount—determined by each patient’s insurance plan benefits—paid at each office visit.

Covered Services are medically necessary procedures, services or supplies listed in the patient’s insurance benefits certificate. The hospital can file insurance claims on behalf of the patient to receive payment for these services. Non-covered services are the patient’s financial responsibility. No insurance benefits are available for payment.

Deductible is the amount patients must pay for medical services before their health insurance company will pay benefits. Deductible amounts vary based on each patient’s health insurance coverage.

Deposit is the amount of money that must be paid before a patient receives hospital services. Deposits often are required for self-pay patients.

Estimated charges is an amount determined by averaging costs for the same or similar procedure, test or procedure. Knowing this total in advance helps patients plan financially for an upcoming hospital visit or future outpatient services. Actual charges may be higher or lower than the estimated charges. Payment responsibility is based on actual charges. Overpayments will be refunded in accordance with the Credit Balance Policy.

Explanation of Benefits (EOB) is the statement prepared by a patient’s insurance company explaining the amount billed by the health care provider, the amount paid by insurance and the remaining balance that the patient is required to pay.

Guarantor is the person responsible for payment of the patient’s bill. Typically, this is the patient unless the patient is a minor. In this case, the adult who brings the minor patient for treatment is considered the guarantor.

Observation is a type of service ordered by a physician to decide whether a patient requires inpatient hospital care or can recover at home or in an outpatient area.

Pre-certification, also known as pre-authorization, is a formal approval required by many insurance plans before a service can be scheduled or provided. While the ordering or primary care physician, hospital or outpatient facility can request pre-certification, patients should check with their insurance providers to make sure upcoming services have been authorized. Services that have not been approved in advance by the insurance company will not be covered if pre-certification is required.

Timely Filing Limits refers to the period of time (determined by each patient’s health insurance carrier) during which a claim for hospital services must be submitted for payment. Claims submitted after this date will be denied.

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