Healthcare Billing Glossary

The maximum amount your insurance company agrees to pay for a covered service. Providers in your network agree to accept this amount as payment in full. You cannot be billed for the difference between the billed amount and the allowed amount.

The amount you pay out of pocket for covered services before your insurance starts paying. Resets on January 1 each year for most plans. Preventive care is usually covered without meeting the deductible first.

A formal request to your insurance company to reconsider a coverage or payment decision. You have the right to appeal most denials under the ACA. Most plans allow 180 days from the denial date to file.

The full price a provider charges for a service before any insurance adjustments or discounts. This is almost never what you actually owe.

A request submitted to your insurance company asking them to pay for a medical service. Your provider usually submits claims on your behalf.

The Consolidated Omnibus Budget Reconciliation Act. A federal law that lets you keep your employer-sponsored health insurance for up to 18 months after leaving a job. You pay the full premium including the portion your employer previously covered, plus a 2% administrative fee.

Your share of the cost of a covered service after you have met your deductible, expressed as a percentage. For example, if your coinsurance is 20%, you pay 20% and your insurance pays 80%.

The process used when you have more than one insurance plan to determine which plan pays first (primary) and which pays second (secondary).

A fixed dollar amount you pay for a covered service at the time of the visit, regardless of the total cost. For example, $25 for a primary care visit or $50 for a specialist.

Current Procedural Terminology code. A standardized 5-digit number used to identify medical procedures and services on insurance claims. For example, 99213 is a standard office visit.

A code on your EOB or denial letter explaining why a claim was not paid or was reduced. Standard codes are CARC (Claim Adjustment Reason Codes) and RARC (Remittance Advice Remark Codes). Payer-specific codes vary by insurer.

A document from your insurance company explaining how a medical claim was processed. It shows what was billed, what insurance paid, and what you owe. It is not a bill. Do not pay until you receive an actual bill from the provider.

A type of health plan that only covers care from providers in its network, except in emergencies. Unlike an HMO, you do not need a referral to see a specialist.

An employer-sponsored account that lets you set aside pre-tax dollars for eligible medical expenses. Funds typically expire at the end of the plan year (use it or lose it).

A written estimate of expected costs for a scheduled medical service. Under the No Surprises Act, providers must give uninsured and self-pay patients a Good Faith Estimate upon request.

A health plan with a higher deductible than traditional plans but lower premiums. HDHPs qualify you to open a Health Savings Account (HSA). In 2025, the minimum deductible to qualify as an HDHP is $1,650 for individuals.

A type of health plan that requires you to use providers in its network and get referrals from a primary care physician to see specialists. Usually has lower premiums than PPOs.

A tax-advantaged savings account for people with HDHPs. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Unlike FSAs, HSA funds never expire.

International Classification of Diseases code. A standardized code used to identify diagnoses on insurance claims. Insurers use diagnosis codes to determine whether a service is medically necessary.

A doctor, hospital, or other healthcare provider that has a contract with your insurance plan to provide services at negotiated rates. Using in-network providers results in lower out-of-pocket costs.

A detailed statement from a provider showing every individual charge, procedure code, and service with its specific cost. You have the right to request an itemized bill. Always request one before paying a large medical bill.

A standard insurers use to decide whether to cover a service. A service is considered medically necessary if it is appropriate, reasonable, and required to diagnose or treat an illness or injury. Denials for lack of medical necessity are among the most commonly appealed and overturned.

A federal law effective January 2022 that protects patients from unexpected bills from out-of-network providers in certain situations, including emergency care and care at in-network facilities. Limits what out-of-network providers can charge to the in-network cost-sharing amount.

A provider who does not have a contract with your insurance plan. Using out-of-network providers typically results in higher costs or no coverage at all depending on your plan type.

The most you will pay for covered services in a plan year. After you reach this limit, your insurance pays 100% of covered costs for the rest of the year. In 2025, the ACA out-of-pocket maximum for individual plans is $9,200.

A type of health plan that lets you see any provider without a referral. You pay less for in-network providers but can still get partial coverage for out-of-network care. More flexible but usually more expensive than HMOs.

The monthly amount you pay for health insurance coverage regardless of whether you use any medical services. Paid to the insurance company, not the provider.

Approval required from your insurer before you receive certain services or medications. If you get care without required prior authorization, the claim may be denied. Always check whether prior auth is required before scheduling a procedure.

A requirement that you try less expensive treatments before your insurer will approve a more expensive option. Also called fail-first. Many states have laws that allow exceptions to step therapy requirements.

A detailed receipt from a provider that includes all the information needed to file an insurance claim, including diagnosis codes, procedure codes, and provider information. Useful when seeing out-of-network providers.

A billing error where a provider bills separately for procedures that should be billed together under a single code. Unbundling inflates the bill and is considered improper billing.

A billing error where a provider bills for a more expensive service than was actually provided. For example, billing for a complex visit when a routine visit occurred. Upcoding is one of the most common medical billing errors.

A standardized code used to identify dental procedures on insurance claims. Dental codes start with the letter D. For example, D1110 is an adult prophylaxis (cleaning) and D2750 is a porcelain crown.

The most your dental plan will pay for covered services in a plan year. Commonly $1,000 to $2,000. After you reach this limit, you pay 100% of costs until the plan year resets. Tracking your annual maximum is critical for planning dental work.

When your insurer pays for a less expensive procedure than the one your dentist performed. For example, paying for a silver amalgam filling when you received a tooth-colored composite filling. You pay the difference.

A dental benefit category that typically includes fillings, simple extractions, and some periodontal treatments. Usually covered at 70 to 80% after the deductible.

Some dental plans organize benefits into classes instead of categories. Class I is typically preventive, Class II is basic restorative, and Class III is major restorative. Coverage percentages vary by class.

A restriction on how often your dental plan will cover a specific service. For example, two cleanings per year or one set of full-mouth x-rays every three to five years. Claims submitted before the limitation resets may be denied.

A dental benefit category that typically includes crowns, bridges, dentures, and implants. Usually covered at 50 to 60% after the deductible. Waiting periods of 6 to 12 months are common for major services on new plans.

A separate benefit cap specifically for orthodontic treatment such as braces or aligners. Typically a one-time lifetime benefit of $1,000 to $2,000 per person, separate from the annual maximum.

A request submitted to your dental insurer before treatment to find out how much they will pay. Not a guarantee of payment but useful for planning. Recommended before any major dental work.

Dental services designed to prevent disease, including cleanings, exams, and x-rays. Most dental plans cover preventive services at 100% with no deductible required.

A period after your dental plan starts during which certain services are not covered. Common for basic and major services on new plans. Usually 6 to 12 months. Preventive services typically have no waiting period.

A set dollar amount your vision plan contributes toward frames, lenses, or contacts. Different from percentage coverage. If your allowance is $150 and your frames cost $220, you pay $70 regardless of your plan's coverage percentage.

An optional lens treatment that reduces glare and reflections. Usually an elective upgrade not covered by vision plans. Typically costs $30 to $80 extra.

An optional enhancement to covered eyewear that you choose and pay for separately. Examples include anti-reflective coating, photochromic lenses, and high-index lenses. Your plan covers the base benefit and you pay the upgrade cost.

Your vision plan's coverage for an eye examination. Often covered in full for in-network providers. Subject to frequency limitations, typically one exam per year or every two years.

How often your vision plan will cover an eye exam or new materials. For example, one exam every 12 months and new frames every 24 months. Getting care before your eligibility date resets means you pay out of pocket.

Thinner and lighter lens materials used for stronger prescriptions. Usually an elective upgrade not covered by vision plans.

Your vision plan's coverage for eyeglasses or contact lenses. May be a percentage of the cost or a fixed dollar allowance toward frames and lenses.

Lenses that darken automatically in sunlight and return to clear indoors. Also called transition lenses. Usually an elective upgrade not covered by vision plans.

Multifocal lenses with a gradual transition between distance and reading prescriptions with no visible line. Vision plans may cover standard bifocal lenses and charge the difference for progressives.

The part of an eye exam that determines your prescription. CPT code 92015. Some plans cover refraction as part of the exam benefit. Others bill it separately. Check your EOB to confirm it was not billed as a separate charge when it should be included.

Many employer vision benefits are discount plans rather than true insurance. A discount plan provides a set allowance toward eyewear. True vision insurance covers a percentage of costs. The practical difference matters when your costs exceed the allowance.

Compensation and Pension examination. A medical exam conducted by the VA to evaluate whether a condition is service-connected and determine a disability rating. No copay ever for C&P exams regardless of priority group.

VA-authorized medical care provided by non-VA providers. The VA pays community care providers directly. If you receive a bill from a community care provider, confirm the VA authorized the referral before paying. Community care bills sent directly to the veteran are often errors.

The Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022. Significantly expanded VA healthcare and disability benefits for veterans exposed to burn pits, Agent Orange, radiation, and other toxic substances. Many previously denied veterans now qualify under this law.

One of eight categories the VA assigns to veterans when they enroll in VA healthcare. Your priority group determines your copay amounts. Priority Group 1 (50% or higher service-connected disability) pays no copays for any VA care. All groups receive service-connected care at no cost.

An illness or injury that the VA has determined was caused or worsened by military service. Veterans receive care for service-connected conditions at no cost regardless of priority group. A disability rating of 0% is still compensable and qualifies for some benefits.

A VA benefit that pays veterans at the 100% disability rate even if their combined rating is below 100%, if their service-connected disabilities prevent them from maintaining substantially gainful employment. Veterans with TDIU qualify for the same benefits as 100% rated veterans including free dental care.

Medicare wraparound coverage for military retirees who have Medicare Parts A and B. TFL pays after Medicare and typically covers most or all remaining costs. No enrollment required beyond having Medicare Parts A and B. Do not enroll in Medicare Advantage if you want TFL to work correctly.

VA Dental Insurance Program. A dental insurance option available to all veterans enrolled in VA healthcare who do not qualify for free VA dental care. Provides group rates through private insurers. Not free but significantly discounted.

A nonprofit organization that provides free assistance to veterans navigating VA benefits, filing claims, and appealing decisions. Major VSOs include the Disabled American Veterans (DAV), Veterans of Foreign Wars (VFW), and American Legion. VSO representatives are accredited by the VA and their services are always free.