Below is a list of some common insurance terms and definitions.
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A - D
Adjustments: 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.
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.
Availity, OfficeAlly, Change Healthcare: These are clearinghouses that our clearinghouse works with when we aren't able to establish a direct connection with a payer. These are also referred to as trading partners or third-party clearinghouses.
Benefit level exceptions/single case agreement: This refers to when a provider is out of network, but for certain clients, they’ll receive in-network benefits, 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 the one 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.
CAQH EnrollHub: This is a website that providers may need to enroll through to receive their insurance payments via EFT (Electronic Fund 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.
Claim reference ID: This is a unique number that our clearinghouse assigns to a claim once it’s submitted so they can easily identify it. This number should be used to communicate with our team when referencing a specific claim. It shouldn’t be used when communicating with a payer, as they’ll assign their own claim number.
Clawbacks/take-backs: It’s common for insurance payers to audit claims that they've processed to look 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.
Clearinghouse: A clearinghouse serves as a connection to insurance payers. Clearinghouses review and correct claims before submitting them to payers for final processing.
Coordination of Benefits (COB): 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 a clinician who’s out of network, but is submitting claims to insurance, so that the client is the one that gets reimbursed. In this scenario, the clinician is getting paid their full fee as Self-Pay from the client in SimplePractice.
CMS 1500: This is the standard claim form that's used to file insurance claims. This is the only insurance form supported in SimplePractice.
Coinsurance: A coinsurance is a percentage that the payer will cover after a client’s deductible has been paid in full. After a client has met their deductible, coinsurance covers their services at a predetermined percentage based on their benefits.
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 services they provide.
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.
Credentialing or paneling process: This is the process a clinician goes through in order to become an in-network provider. SimplePractice doesn’t assist with this process.
Deductible: A deductible is a set amount that a client is responsible for meeting before their plan kicks in. Once a deductible has been met, the insurance payer will begin covering services.
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 Fund 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 Employee Identification Number. This is a federal tax ID number for non-person entities, such as an LLC or a corporation.
Enrollment: Submitting enrollments in SimplePractice lets insurance payers know that you’ll be filing claims and/or receiving ERAs via SimplePractice. For more information, see How do I submit an enrollment to file claims or receive payment reports?
EOBs: An Explanation of Benefits (EOB) is a document sent by insurance payers, along with any payment, that summarizes the services being covered.
ERAs: An ElectronicRemittance Advice (ERA) is the electronic version of an EOB. These are also called Payment Reports in SimplePractice.
HCFA form: This stands for Health Care Financing Administration, and is another 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 (ICN).
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 How to bill insurance under your supervisor's credentials.
Individual NPI: This is also known as a type 1 NPI, and is the NPI assigned to an individual clinician.
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.
Medicare crossover: Medicare is a unique payer in that they’ll submit a secondary claim on your behalf, if the client’s plan has a secondary insurance. This is referred to as a crossover and will take place after Medicare has processed the primary claim, so long as the client’s Coordination of Benefits is set up. We recommend contacting Medicare to confirm whether or not they’ll submit a crossover claim on your behalf.
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 they’re assigned by the Centers for Medicare and Medicaid Services (CMS).
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, everything in-network will be covered at 100%.
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, to help them locate it.
Payer ID: This is a unique number used to identify payers for electronic claim submission. Payer IDs are typically unique in SimplePractice, but some insurance ID cards will list them.
Payer Portal: Most insurance companies have a payer portal where providers and/or clients can log in. In the payer portal, a provider can check the status of claims and review remittance advice.
Payment Reports: Payment Reports are SimplePractice’s version of ERAs. When you receive a Payment Report, our system will automatically add that payment information to the services.
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 in that claim form. This will typically be a type 1 NPI.
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, or a parent.
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 that clients can request reimbursement from insurance themselves. 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.
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 How do I find my taxonomy code?
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 the same as an EIN.
Trading partner ID or submitter ID: This is the unique identifier that a payer gives each clearinghouse.
Write-off: A write-off is the portion of a service’s fee that’s covered by neither the payer, or the client’s responsibility. This amount is written-off and may be categorized as “not covered” amounts for billing purposes.
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835: This is language used by clearinghouses and payers to define an electronic Payment Report enrollment.
837p: This is language used by clearinghouses and payers to define an electronic claim filing enrollment.
