Reference

Glossary

Last reviewed November 3, 2026 · Educational use only

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Accumulator: The running total a plan keeps of a member's payments toward the deductible and out-of-pocket maximum.
Actuarial value: The average share of covered costs a plan pays for a standard population. The basis for Marketplace metal tiers.
Adjudication: The payer's process of deciding whether and how much to pay on a claim.
Advance Beneficiary Notice (ABN): Medicare form CMS-R-131 given before a service Medicare may deny, making the patient liable if it does.
Aggregate deductible: A family deductible with no individual amount: the whole family amount must be met before coinsurance starts for anyone.
Allowed amount: The maximum a plan recognizes for a covered service; the basis for cost-sharing. Also negotiated rate or eligible expense.
Ancillary services: Under the No Surprises Act: anesthesia, pathology, radiology, labs, neonatology, assistant surgeons, hospitalists and intensivists, which cannot use notice and consent.
Appeal: A request for the plan to reconsider a denial. Internal first, then external review or the next level.
Assignment of benefits: The patient's authorization for the plan to pay the provider directly.
Balance billing: Billing a patient for the difference between the charge and the plan's allowed amount. Barred for in-network providers and in No Surprises Act situations.
Benefit period: For Medicare Part A, a stretch starting with an inpatient admission and ending after 60 days without inpatient or skilled nursing care. The Part A deductible applies per benefit period.
Billed charge: The provider's full price before any discount.
Birthday rule: Coordination rule: for dependent children, the plan of the parent with the earlier birthday in the calendar year is primary.
Bundling: Including payment for one service in another's allowance (see NCCI).
Capitation: A fixed payment per member per month to a provider, regardless of services used. Common for HMO primary care.
CAQH ProView: Online credentialing profile most commercial plans use to verify providers.
CARC: Claim adjustment reason code: the standard reason for each adjustment on a remittance.
Catastrophic plan: A Marketplace plan for people under 30 or with a hardship exemption, with a very high deductible.
Clean claim: A claim with no defects or missing information that can be processed without extra development. Prompt-pay laws use this term.
Clearinghouse: A company that checks and routes electronic claims and responses between providers and payers.
CMS-1500: The standard paper claim form for professional services; the electronic version is the 837P.
COBRA: Federal right to continue employer group coverage after losing eligibility, at up to 102% of the full premium.
Coinsurance: The member's percentage share of the allowed amount after the deductible.
Coordination of benefits (COB): Rules for deciding which plan pays first when a person has more than one plan.
Copay: A fixed dollar amount for a service, such as $30 for an office visit.
Corrected claim: A replacement (frequency code 7) or void (8) of a previously processed claim.
Cost-sharing reductions (CSR): Extra savings on Marketplace silver plans that lower deductibles and copays for eligible incomes.
CPT: Current Procedural Terminology: AMA codes for medical procedures and services (HCPCS Level I).
Credentialing: Verifying a clinician's qualifications before a plan contracts with them.
Deductible: The amount a member pays for covered services each plan year before coinsurance begins.
Dependent: A spouse or child covered under the subscriber's plan.
DME: Durable medical equipment: reusable equipment ordered for home use, such as CPAP machines or oral appliances for sleep apnea.
Embedded deductible: A family deductible with individual deductibles inside it, so each person's coinsurance can start before the family total is met.
EOB: Explanation of Benefits: the plan's statement to the member about a processed claim. Not a bill.
EPO: Exclusive Provider Organization: in-network only (except emergencies), usually no referrals.
ERA: Electronic remittance advice (X12 835): the provider's version of the EOB.
ERISA: Employee Retirement Income Security Act: federal law governing most employer health plans, especially self-funded ones.
Essential health benefits: Ten categories ACA individual and small-group plans must cover, including hospitalization, maternity and prescription drugs.
Exclusion: A service the plan does not cover at all.
External review: Review of a denial by an independent organization outside the plan, after internal appeals.
Fee schedule: A list of the amounts a payer pays for each code.
Formulary: The plan's list of covered drugs, usually by tier.
FSA: Flexible spending account: employer plan account for pre-tax medical expenses, mostly use-it-or-lose-it.
Gap exception: Approval to see an out-of-network provider at in-network cost-sharing because no adequate in-network provider is available. Also network adequacy exception.
Good Faith Estimate: A required estimate of expected charges for uninsured or self-pay patients before scheduled care.
Grandfathered plan: A plan in place since March 23, 2010 without major changes, exempt from some ACA rules.
HCPCS Level II: Codes for supplies, equipment, drugs and services not in CPT.
HDHP: High-deductible health plan; when it meets IRS limits, members can contribute to an HSA.
HMO: Health Maintenance Organization: in-network only, primary care provider and referrals required.
HRA: Health reimbursement arrangement: employer-funded account that reimburses medical costs.
HSA: Health savings account: member-owned, tax-advantaged account paired with an HSA-qualified plan.
ICD-10-CM: Diagnosis codes used on US claims.
IDR: Independent dispute resolution: federal arbitration between plans and out-of-network providers under the No Surprises Act.
In network: A provider with a contract with the plan, who accepts the allowed amount as payment in full apart from cost-sharing.
Limiting charge: The most a non-participating Medicare provider may charge on unassigned claims: 115% of the non-participating fee schedule amount.
Medical necessity: The plan's determination that a service is appropriate and needed for the diagnosis under accepted standards.
Medicare Advantage: Private plans (Part C) that provide Medicare Part A and B benefits, usually through HMO or PPO networks.
Medigap: Standardized supplemental insurance that pays Original Medicare's cost-sharing.
Modifier: A two-character code added to a CPT/HCPCS code to show a circumstance changes it.
NCCI: National Correct Coding Initiative: Medicare's edits for code pairs that should not be billed together. Many commercial plans use them.
No Surprises Act: Federal law in effect since 2022 protecting patients from surprise out-of-network bills for emergency care, care at in-network facilities and air ambulance.
Non-participating provider: A provider without a contract with the plan (out of network). In Medicare, a provider who does not always accept assignment.
NPI: National Provider Identifier: Type 1 for individuals, Type 2 for organizations.
Open enrollment: The yearly window to sign up for or change a plan.
Out of network: A provider without a contract with the plan.
Out-of-pocket maximum: The yearly cap on a member's cost-sharing for covered in-network care.
Payer of last resort: A program that pays only after all other coverage, such as Medicaid and the Indian Health Service.
PECOS: Medicare's provider enrollment system.
Place of service (POS) code: Two-digit code on a professional claim telling where the service happened.
POS plan: Point of Service: HMO-like with some out-of-network coverage.
PPO: Preferred Provider Organization: in- and out-of-network coverage, no referrals.
Premium: The regular payment for having coverage.
Premium tax credit: Federal subsidy that lowers Marketplace premiums for eligible households.
Primary payer: The plan that pays first under coordination of benefits.
Prior authorization: Plan approval required before certain services. Also precertification or preauthorization.
QPA: Qualifying payment amount: generally the plan's median contracted rate, used to set cost-sharing under the No Surprises Act.
RARC: Remittance advice remark code: extra explanation attached to an adjustment.
Recognized amount: The amount No Surprises Act cost-sharing is based on: a state-law amount, an All-Payer Model amount, or the QPA.
Reference-based pricing: Paying claims as a multiple of a benchmark, usually Medicare, rather than through network contracts.
Referral: A primary care provider's approval to see a specialist, required by HMO and POS plans.
Rejection: A claim refused at the front end (clearinghouse or payer intake) before adjudication. Must be fixed and resubmitted.
Secondary payer: The plan that pays after the primary under coordination of benefits.
Self-funded plan: An employer plan that pays claims from the employer's own money, usually through a TPA, regulated by ERISA.
Single case agreement: A one-time contract between a plan and an out-of-network provider for one patient's care.
Special enrollment period: A window outside open enrollment triggered by a life event, such as marriage, birth or loss of coverage.
Subscriber: The person whose employment or enrollment the coverage is based on. Also policyholder or member.
Summary of Benefits and Coverage (SBC): A standard short summary every plan must provide, with cost-sharing and coverage examples.
Superbill: An itemized receipt with codes that a patient can submit to their plan.
Taxonomy code: A code describing a provider's type and specialty, linked to the NPI.
Timely filing: The deadline for submitting a claim to a payer.
TPA: Third-party administrator: processes claims for a self-funded plan.
UB-04: The standard institutional claim form (CMS-1450); the electronic version is the 837I.
UCR: Usual, customary and reasonable: a plan's estimate of typical local charges, used to price out-of-network claims.
Write-off: An amount the provider removes from the balance and does not collect, such as the contractual adjustment.