Revenue Cycle Management - RCM

When you enter the field of US Healthcare, the first thing you notice right away is the unique terminology that keeps bombarding you! New medical terms and medical slang keep popping up.

Added to it is the abbreviations, acronyms and what not.... You feel overwhelmed at first... But gradually with some patience you can master the terms which are used often in your office.

I am listing below some common healthcare terms used in Insurance and Billing in RCM. Check them out and hope you will learn a word or two!

BILLING TERMS

When both you and your health insurance company pay for your health care expenses, it’s called cost sharing. Deductibles, coinsurance and copays are all examples of cost sharing. Understanding how they work will help you know how much you’ll pay.

Deductible

A deductible is the amount you pay for health care services before your health insurance begins to pay.

How it works: If your plan’s deductible is $1,500, you’ll pay 100 percent of eligible health care expenses until the bills total $1,500. After that, you share the cost with your plan by paying coinsurance.

Coinsurance

Coinsurance is your share of the costs of a health care service. It's usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you've paid your plan's deductible.

How it works: You’ve paid $1,500 in health care expenses and met your deductible. When you go to the doctor, instead of paying all costs, you and your plan share the cost. For example, your plan pays 70 percent. The 30 percent you pay is your coinsurance.

Copay

A copay is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service.

How it works: Your plan determines what your copay is for different types of services, and when you have one. You may have a copay before you’ve finished paying toward your deductible. You may also have a copay after you pay your deductible, and when you owe coinsurance. 

Understanding health care can be confusing and sometimes intimidating at first. That's why it's helpful to know the meaning of commonly used terms such as copays, deductibles, and coinsurance. Knowing these important terms may help you understand when and how much you need to pay for your health care. Let's take a look at the definitions for these three terms to better understand what they mean, how they work together, and how they are different.

What is a copay?Do I always have a copay?What is a deductible?

A copay (or copayment) is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription. For example, if you hurt your back and go see your doctor, or you need a refill of your child's asthma medicine, the amount you pay for that visit or medicine is your copay. Your copay amount is printed right on your health plan ID card. Copays cover your portion of the cost of a doctor's visit or medication.


A deductible is the amount you pay each year for most eligible medical services or medications before your health plan begins to share in the cost of covered services. For example, if you have a $2,000 yearly deductible, you'll need to pay the first $2,000 of your total eligible medical costs before your plan helps to pay.

Deductibles for family coverage and individual coverage are different. Even if your plan includes out-of-network benefits, your deductible amount will typically be much lower if you use in-network doctors and hospitals.

Not necessarily. Not all plans use copays to share in the cost of covered expenses. Or, some plans may use both copays and a deductible/coinsurance, depending on the type of covered service. Also, some services may be covered at no out-of-pocket cost to you, such as annual checkups and certain other preventive care services.*

The allowed amount is the maximum amount a plan will pay for a covered health care service. May also be called “eligible expense,” “payment allowance,” or “negotiated rate.” If a provider charges more than the plan's allowed amount, beneficiaries may have to pay the difference, (balance billing).

Write-Off: This term refers to the discrepancy between a provider's fee for healthcare services and the amount that an insurance company is willing to pay for those services that a patient is not responsible for. The write-off amount may be categorized as “not covered” amounts for billing purposes.

Recoup:

When you or your provider file a claim, TRICARE usually reimburses the proper amount. Sometimes we reimburse the wrong amount to you or your provider. Regardless of fault, the Federal Claims Collection Act requires your regional contractor to try to recoup—or recover—any overpayments from you or your provider.



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