Basics of HealthCare Domain:

Subscriber: The person who takes the insurance policy from the insurer.

Provider: The doctor or hospital who provides the service

Payer: The insurance company who pays to the insured

Patient : The person who actually takes the service.

Underwriting: Underwriting is the process of calculating the premiums based on certain

criteria’s. They will have some tools and with the help of those tools they will categorize the
subscriber to which group he will fall under and calculates the premium according to that group.

Premium: The amount which the subscriber needs to pay annually for an insurance policy

Professional Claim: The services provided by a professional like checkup with doctor,
physician visit etc…

Facility Claim: The services that are provided by the hospital by using all its facilities like
surgeries etc… This can be both inpatient and outpatient.

CPT (Current Procedure Terminology): It determines the procedure that is followed for a
particular service for professional claims.

HCPCS (Helathcare Procedure Coding System): This is almost same as the CPT but is used
for facility claims.

CDT (Current Dental Terminology): It determines the procedure followed for dental services.

Diagnosis Code: This determines the actual disease

Revenue Code: This code is used for only facility claims. This code determines the ancillary
charges for a service.

Adjudication: The processing of a claim is called as Adjudication

Deductible: The Amount that will be deducted annually for a particular contract. This will be
determined at the time of taking the contract from the insurance company.

Co-Pay: Certain amount to be paid from our pocket for particular type of services.
Coinsurance: The percentage of amount that needs to paid by the insured for the claim. This
will be determined at the time of contract from insurance company.

OOP (Out Of Pocket Expenses): The maximum amount that can be paid by the subscriber
(Deductible and Coinsurance). Sometimes the OOP can be without the deductible amount.

Explanation of Benefits (EOB):

Statement sent by health plans to persons who have experienced a
claim under the health plan. The explanation of benefits (EOB) details
the charges for the services received, the amount the health insurance
company will pay for those services, and the amount the insured
person will be responsible for paying.

Pricing: The calculation of the Allowable Amount

Allowable Amount: The maximum amount payable to a particular service

Ineligible Amount: The Difference between the Charged and the Allowed Amount

Participating Provider: The provider who gives discounts to the insurer

COB & Supplementary Insurance: This deals with the additional insurance other than the
primary insurance. According to COB the subscriber should not get more than 100 % of the
amount.

Group Policy & Individual Policy: The policy taken by an organization or a group of people
comes under a group policy and the policy taken by a individual person comes under individual
policy.

Healthcare Plans:

There are three types of healthcare plans.

1. HMO(Health Managed Organization)

2. PPO (Prefferd Provider Organization)
3. POS(Point of Service)

HMO (Health Managed Organization):

This type of plan has less premium and less benefit. In this type of plan first we should go
through PCP and he should send to the providers with in the HMO network. There will be no
benefits if they choose any providers outside the HMO network. Also in case of any emergency,
one can bypass the PCP( Primary care physician)

PPO (Prefferd Provider Organization):

This type of plan has more premium and more benefits than HMO. In this type of plan there is no
PCP and we can go to the providers outside the PPO network also. You can use doctors,
hospitals, and providers outside of the network for an additional cost.

POS (Point of Service):

This type of plan has medium premium and benefits. In this type of plan first we should go to the
PCP and he can refer to the providers within and out of POS network. Also in case of any
emergency, one can bypass the POS.

Primary Care Physician (PCP):

Under a health maintenance organization (HMO) plan, the primary care physician is
usually an insured person's first contact for health care. This is often a family physician,
internist, or pediatrician. A primary care physician monitors patient health, treats most
patient health problems, and refers patients, if necessary, to specialists .

Product: Under each type of plan, there can different types of product depending on the benefits.

Claim 1500 & UB92 forms: We have to submit Claim 1500 form for professional claims and
UB92 form for facility claims.

Coinsurance - The percentage of a charge for services that you may have to pay
after you pay any plan deductibles. In a Private Fee-for-Service plan, the
coinsurance payment is a percentage of the cost of the service .

A form of medical cost sharing in a health insurance plan that requires an insured person to pay a
stated percentage of medical expenses after the deductible amount, if any, was paid.
Once any deductible amount and coinsurance are paid, the insurer is responsible
for the rest of the reimbursement for covered benefits up to allowed charges: the
individual could also be responsible for any charges in excess of what the insurer
determines to be “usual, customary and reasonable”.
Coinsurance rates may differ if services are received from an approved provider
(i.e., a provider with whom the insurer has a contract or an agreement specifying
payment levels and other contract requirements) or if received by providers not
on the approved list.
In addition to overall coinsurance rates, rates may also differ for different types
of services.

Copayment - The amount you pay for each medical service, like a doctor visit. A
copayment is usually a set amount you pay for a service. For example, this could
be $5.00 or $10.00 for a doctor visit. Copayments are also used for some hospital
outpatient services.
A form of medical cost sharing in a health insurance plan that requires an
insured person to pay a fixed dollar amount when a medical service is received. The
insurer is responsible for the rest of the reimbursement.
There may be separate copayments for different services.
Some plans require that a deductible first be met for some specific services
before a copayment applies.

Co-payment is a predetermined fee, in addition to what health

insurance covers, that an individual pays for health care services. For
example, a PPO may require a $20 "co-payment" for normal services
delivered during a physician office visit.

Deductible - A fixed dollar amount during the benefit period - usually a year - that an
insured person pays before the insurer starts to make payments for covered medical
services. Plans may have both per individual and family deductibles. The amount you
must pay for health care before the plan begins to pay. This amount can change every year

Some plans may have separate deductibles for specific services. For example, a
plan may have a hospitalization deductible per admission.
Deductibles may differ if services are received from an approved provider or if
received from providers not on the approved list.

Rider:
An attachment, amendment or endorsement to an insurance policy.

Capitation
A flat monthly fee that a health plan pays to a provider (doctor, hospital, lab, etc.) to take care of
a patient's needs. Capitation is part of the provider-reimbursement mechanism. Capitation
represents a fixed monthly dollar amount that a Health Maintenance Organization (HMO) pays to
a group of health care providers who have contracted with the HMO. The amount of this fixed
dollar amount depends upon the number of HMO enrollees who have chosen this group of health
care providers for "primary care" services under the HMO plan. This fixed dollar amount does
not vary with how much HMO enrollees use (or don't use) services offered by this group of HMO
providers. Not all HMO utilize capitation payments.

Claim
A notice to the insurance company that a person received care covered by the plan. A claim also
may be a request for payment and will state so.