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Glossary of insurance terms

Glossary of insurance terms

This glossary includes definitions for some common insurance terms.

Tip: Use either Control or Command + F to search for a specific term. 

A - D

Adjustments: Insurance adjustments occur after a finalized claim has been reprocessed or corrected, usually resulting in a clawback. Payers routinely perform audits of finalized claims, and if the reimbursement amount or client responsibility is changed, an adjustment is issued. For more information, see Managing insurance adjustments

Allowed amount: This refers to the maximum amount a plan will pay for a covered healthcare service. If the deductible amount remaining is greater than the allowed amount, the client will owe the allowed amount in full. If the client has a copay or coinsurance, they’ll owe a dollar amount or percentage amount based on their level of coverage, and the insurance will pay the remainder of the allowed amount. This amount may also be referred to as the eligible expense, payment allowance, or negotiated rate.

Benefit level exceptions/single-case agreement: This refers to when an out-of-network provider receives in-network benefits for certain clients because they’ve negotiated an agreement specifically between those clients and the payer.

Billing NPI: Your billing NPI is used to let insurance companies know what entity is billing for the services rendered. The billing NPI can be an individual (Type 1) or an organization/group (Type 2) NPI, and goes in box 33a of the claim form. For more information, see Entering your billing information

CAQH EnrollHub: This is a website that providers may need to enroll through to receive their insurance payments via EFT (Electronic Funds Transfer). This depends on the payer and if they’re using CAQH as their EDI (Electronic Data Interchange).

Carve out: This is when an insurance payer excludes a service from their coverage because another insurance payer is covering that service under the patient's plan.

Clawbacks/take-backs: It’s common for insurance payers to audit claims that they've processed to check for errors. Sometimes they'll find that they've paid too much or too little and will issue new EOBs/ERAs to correct the mistake. How clawbacks/take-backs are processed varies from payer to payer. For more information, see Managing insurance adjustments

Clearinghouse: A clearinghouse serves as a connection to insurance payers. Clearinghouses review and correct claims before submitting them to payers for final processing, and return Payment Reports (ERAs) from the payer.

Clearinghouse Reference number: This is a unique number that our clearinghouse assigns to a submitted claim. This number should be included when submitting a help request referencing a specific claim. It shouldn’t be used when communicating with a payer, as they’ll assign their own claim number. For more information, see Using claim reference numbers

COB: This stands for Coordination of Benefits. If a client’s insurance is covered by more than one payer, a Coordination of Benefits will be issued outlining which portion of the services each payer covers. This includes which plan is the client’s primary, and which is secondary. 

Courtesy billing: This refers to an out-of-network clinician who’s submitting claims to insurance so that the client gets reimbursed directly. The client pays the clinician their full Self-pay fee up-front and waits for reimbursement from the payer.

CMS1500 (formerly HCFA): This is the standard claim form that's used to file insurance claims. This is the only insurance form supported in SimplePractice.

Coinsurance: A client with coinsurance is responsible for a set percentage of their service costs. Coinsurance normally begins after a client meets their deductible. For more information, see Setting up insurance billing for your clients.  

Contracted amount/contractual agreement: When a provider becomes credentialed/paneled as an in-network provider, they agree to a contract with the payer. This contract details the amount the payer will pay for the provided services. 

Contractual obligation: Also known as a write-off, the contractual obligation is the amount that remains after the client responsibility and contracted amount have been determined. This amount isn’t collected by the provider, or by the insurance payer. 

Copay: A copay is a set price that indicates what the provider charges a client up-front. Not all plans have copays, and if they do, they’re generally listed on the client’s insurance ID card. You may also call a payer directly to confirm if a client owes a copay. For more information, see Setting up insurance billing for your clients.  

Credentialing or paneling process: This is the process a clinician goes through directly with the payer in order to become an in-network provider. SimplePractice can't assist with this process. For more information, see The credentialing process

Deductible: A deductible is a set amount that a client is responsible for meeting before their insurance payer begins covering services. For more details, see Billing clients who haven’t met their deductible.

E - I

EDI: This stands for Electronic Data Interchange. This is a form of electronic communication used by companies to exchange data. Clearinghouses and insurance payers, for example, communicate via EDI. 

EFT: This stands for Electronic Funds Transfer. This is a direct deposit or wire transfer between two bank accounts. Also known as ACH, many payers offer the option of signing up to receive payments via EFT instead of paper checks. To set up EFT, contact the payer directly. For more details, see Getting paid by an insurance payer

EIN: This stands for Employer Identification Number and is a Tax ID/TIN. This is a federal tax ID number for non-person entities, such as an LLC or a corporation. To enter an EIN in your account, see Setting up your billing and automations

Enrollment: Submitting enrollments in SimplePractice lets insurance payers know that you’ll be filing claims and/or receiving Payment Reports (ERAs) via SimplePractice. For more information, see Submitting enrollments to file claims and receive Payment Reports.

EOB: An Explanation of Benefits is a document sent by insurance payers, along with any payment, that summarizes the services being covered.

ERA: An Electronic Remittance Advice is the electronic version of an EOB. These are called Payment Reports in SimplePractice. 

HCFA form: This stands for Health Care Financing Administration, and is the former name used to describe a claim form.

ICN: When claims are entered into the Medicare system, they’re issued a 13-digit tracking number known as an Internal Control Number.

Incident-to billing: This refers to claims that are submitted when a supervisee or intern is the rendering provider. States have different requirements for whose name and NPI is entered on the claim, so we recommend reaching out to an insurance payer before submitting claims. For more information, see Billing insurance under your supervisor's credentials.

Individual NPI: This is the rendering (Type 1) NPI assigned to an individual clinician. To enter this number in your account, see Entering your billing information

J - P

Loops and segments: These refer to specific boxes on a CMS1500 claim form. This language is used primarily by clearinghouses and payers. 

Medicare ID: This is an ID number provided by Medicare to be used when submitting a Medicare enrollment. This is also referred to as a PTAN (Provider Transaction Access Number).

Medicare crossover: Medicare is a unique payer in that they’ll submit a secondary claim on your behalf if the client has their Coordination of Benefits set up. This is referred to as a crossover claim and will take place after Medicare has processed the primary claim. We recommend contacting Medicare to confirm whether or not they’ll submit a crossover claim on your behalf. For more information, see Medicare crossover claims

NPI: This stands for National Provider Identifier. An NPI is a unique identification number for covered health care providers. NPIs are always 10 digits and are assigned by the Centers for Medicare and Medicaid Services (CMS). For more information on entering this number in your account, see Entering your billing information

Out-of-pocket max: This refers to the maximum amount of money that a client will have to pay out of their own pocket. Once they’ve accumulated this total amount in charges for services, the insurance payer is expected to cover remaining billable services.

Payer control number: This is a unique reference number that a payer assigns to a claim once it’s entered into their system. When contacting a payer about a specific claim, use this number, not the Clearinghouse Reference number. For more information, see Using claim reference numbers

Payer ID: This is a unique number used to identify payers for electronic claim submission. Payer IDs are typically unique to SimplePractice, but some will match the one listed on the client’s insurance ID card. To learn more, see Adding insurance payers and selecting the correct payer ID.

Payer portal: Most insurance companies have a payer portal where providers and/or clients can log in. In the payer portal for some payers, a provider can check the status of claims and review remittance advice.

Payment Reports: Payment Reports are SimplePractice’s version of Electronic Remittance Advices (ERAs). When you receive a Payment Report, our system will automatically add that payment information to the services. For more details, see ERAs in SimplePractice (Payment Reports)

PTAN: A Provider Transaction Access Number is a unique number Medicare assigns to clinicians in their network. This number is needed when submitting an enrollment to Medicare through SimplePractice. You can contact Medicare directly to confirm your PTAN.

R - Z

Rendering NPI: This is the NPI that goes in box 24j of the claim form and lets insurance payers know who was the individual who provided/rendered the services on that claim form. This will typically be a Type 1 NPI. For more information on entering this number in your account, see Entering your billing information

Submitter: This refers to the clearinghouse the claim is being submitted through.

Subscriber: The subscriber is the primary insured person on the plan. This can be the client, their spouse, a parent, or another party. To assign the subscriber, see Setting up insurance billing for your clients.

Superbills: A superbill is also known as a Statement for Insurance Reimbursement. This is a statement out-of-network clinicians give to their clients so they can request reimbursement from insurance themselves after paying for services up-front in full. The information in this statement is the same information that’s included in an insurance claim. For information on creating superbills in SimplePractice, see Creating superbills.

Tax ID: A federal Tax ID is your taxpayer identification number and is also known as a TIN or EIN. To enter a Tax ID in your account, see Setting up your billing and automations

Taxonomy code: A taxonomy code is a number that specifies a provider’s specialty. This information is required for claims to be processed and populates in box 33b of our claim form. For more information, see Identifying your taxonomy code for claims.

Third-party clearinghouse: Also known as a trading partner, a third party clearinghouse is another entity our clearinghouse works with to be able to establish a claim filing and/or ERA connection with a payer.

TIN: This stands for Tax Identification Number, and is also known as a Tax ID or EIN. To enter your TIN in your account, see Setting up your billing and automations

Trading partner: Also known as a third-party clearinghouse, this is another entity our clearinghouse works with to be able to establish a claim filing and/or ERA connection with a payer. 

Trading partner ID or submitter ID: This is the unique identifier that a payer gives each clearinghouse.

Write-off: For insurance clients, a write-off, or contractual obligation, is the portion of a service’s fee that’s covered by neither the payer or the client’s responsibility. For self-pay clients, this is a portion of a service’s fee that you can choose not to charge a client. 

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835: This is a term used by clearinghouses and payers to refer to an electronic Payment Report enrollment.

837p: This is a term used by clearinghouses and payers to refer to an electronic claim filing enrollment.

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