Do you speak 'HospitalBillingese in the USA? Quiz

Answer: you authorize your insurance to send payment to the hospital

This means that you will permit your insurance company to pay the hospital directly for services rendered. Without the assignment of benefits, your insurance company would mail the payment directly to you, the subscriber.

Answer: more than one insurance carrier will provide benefits

This usually happens when, for example, a child needs hospital services and both parents have group coverage, each with coverage for dependents. Both insurances will work together to pay the bill, but the total payment from the carriers will not exceed the total charges covered.

Answer: how the insurance carriers will determine who pays first

Let's go back to the example of the child who is covered by both parents' insurance. One of the carriers will have to be listed as the 'primary' (or first paying) {carrier;} the other will be considered the 'secondary' carrier. Many carriers use the 'birthday rule' to determine which is primary i.e. that parent's birthday that falls first in the calendar year will have the primary coverage.

Answer: permission from your doctor to render the specified care or service

PCP stands for Primary Care Physician, that doctor that you chose when you enrolled in the HMO. Any services rendered to you outside of the PCP's office must have a 'referral form', completed and signed by the PCP. This serves as proof that the doctor has ordered the services for you, and will permit the HMO to be billed for the service indicated.

The rule: no referral form, no treatment.

Answer: the difference between your covered charges and the amount your insurance is contractually obligated to pay

Insurance carriers have contracts with hospitals detailing what they will pay for each service rendered; these payments are usually far less than the hospital's charges. However, the hospital must accept this payment as payment in full of covered charges.

The hospital must record the difference between your charges and the carrier payment on your bill (otherwise, GOD FORBID, you'd be billed!). This is the Contractual Adjustment.

Answer: to determine which insurance will be primary

We have to go back to that poor sick kid who is covered by both parents' insurances. The 'effective date of coverage' is another way for the carriers to determine which policy will be primary. The one in force the longest will be considered primary.

Answer: they won't pay because you had this injury or illness prior to the effective date of your coverage

Your insurance carrier is denying payment because they claim that you had this illness when you became enrolled in their plan. If they're wrong, have your doctor write a letter clarifying the situation as soon as possible. If they're right, ask about any funding that you may be entitled to or make arrangements to pay the bill over a period of time.

The good news about 'pre-existing conditions' is that after one year (length of time depends on the carrier) the pre-existing condition problem disappears and injuries and illnesses should be covered regardless of the date of onset. Update - legislation passed in 2010 prohibited this exclusion, but this may change again in the future.

Answer: a flat rate per day paid by your insurance

This means that your insurance has contracted with the hospital to pay a fixed amount for each day you are hospitalized. The difference between this amount and the covered charges should be adjusted as a Contractual Adjustment (see above).

Answer: Diagnosis Related Group

This means that your insurance paid your bill with an amount based on your diagnosis. This payment format was instituted by {Medicare;} all diagnoses were categorized and a value assigned to each one. This amount is considered payment in full of covered charges, and you should see a Contractual Adjustment on your bill as well.

Answer: you will owe any 'personal items' as well as any copayments or deductibles

Check your insurance enrollment card for any deductibles or copayments that you will owe. If not contained on the card, check with your carrier or the hospital Business Office to verify. In addition to a deductible or copayment you will owe for any personal items you use. Personal items would be the daily charge for the room telephone, any special or gourmet meals, a non-medically necessary private room, a daily charge for television, and such.