Uncompensated Care & Insurance Discovery Glossary: Key Terms
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A
Affordable Care Act (ACA)
This U.S. healthcare reform law enacted in March 2010 aims to increase health insurance coverage for Americans and reduce healthcare costs. It achieves this by expanding Medicaid, establishing health insurance marketplaces, and implementing various provisions to ensure healthcare is accessible and of the highest quality.
B
Bad debt
The amount of unpaid medical bills that patients owe but are unable or unwilling to pay, resulting in financial loss for the healthcare provider. It is also known as uncompensated care.
Balance billing
“Balance billing” refers to instances when a healthcare provider bills a patient for the difference between the total cost of a service and the amount covered by the patient's insurance.
Bundled payments
A healthcare payment model where all services used to treat a patient during one episode of care are billed as one single, predetermined payment. Providers are incentivized to work for better patient outcomes without unnecessary services as they are responsible for financial costs incurred above the predetermined amount.
C
Charity care
Free or discounted medical services provided to patients who lack the financial means to pay for their care. It is also known as hospital financial assistance.
Claim submission
Claims submission involves healthcare providers formally requesting payment from insurance firms or government health programs for services provided to patients. Each claim includes detailed information about the patient and an itemized statement of services and associated costs.
Coordination of Benefits (COB)
A process in which multiple insurance plans determine their respective payment responsibilities when a patient is covered by more than one insurance policy. The primary insurer pays first, then the secondary. Any leftover costs are billed to the patient out of pocket.
Cost of care
The total expenses incurred by a healthcare facility to provide medical services to patients encompass various elements such as personnel, medical supplies, equipment use, facility overhead, and other operational costs.
D
Denial management
When an insurer rejects or denies a claim submission, hospitals must identify, analyze, and address why the denial occurred and either resubmit the claim or pass unpaid costs onto the patient. The goal is to reduce claim denials, improve reimbursement rates, and ensure efficient revenue cycle processes.
E
Explanation of Benefits (EOB)
An Explanation of Benefits is a statement issued by an insurance company to a policyholder that details how a healthcare claim was processed. It specifies the services rendered, the total charges billed, the portion paid by the insurance, and any outstanding amounts the patient owes, including copayments and deductibles.
H
Health Insurance Marketplace
The Affordable Care Act established the Health Insurance Marketplace platform, enabling individuals, families, and small businesses to explore, compare, and buy health insurance policies. It provides various coverage choices and allows qualified individuals to obtain subsidies or tax credits to help reduce the cost of insurance.
Health Savings Account (HSA)
A tax-advantaged savings account is available to individuals enrolled in high-deductible health plans (HDHPs). It allows account holders to save money for medical expenses on a pre-tax basis and withdraw funds tax-free for qualified medical expenses.
I
Insurance discovery
The process of identifying previously unknown or undisclosed insurance coverage for a patient. This tool can help healthcare providers recover costs from insurance payors that would otherwise remain unpaid or have bad debt. This process is also referred to as coverage discovery.
M
MAPS
A software platform that allows hospitals to manage self-pay patient activity and identify patient eligibility and reimbursement opportunities all in one place. It’s a comprehensive solution where hospitals can convert self-pay patients to reimbursement-eligible accounts and lower the overall cost of managing those accounts.
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The patient portal is a companion to the MAPS software platform, which allows for patient outreach and engagement via secure messaging options. Patients can also securely upload documentation and information to assist in enrollment and billing for the financial assistance program.
Medicaid
Medicaid is a U.S. government program that provides health insurance coverage to low-income individuals, families, children, pregnant women, the elderly, and people with disabilities. Though it is government-funded and the federal government provides broad guidelines, Medicaid is managed on a state-by-state basis.
The cyclical pattern in which individuals gain and lose Medicaid coverage due to changes in their eligibility status, often related to fluctuating income or administrative issues. This inconsistency can lead to gaps in healthcare coverage and increased administrative costs for the Medicaid system.
Medicaid disenrollment
Disenrollment is when individuals are removed from Medicaid coverage, typically because they no longer meet eligibility criteria. Disenrollment is the driving force behind Medicaid churn.
Medicaid eligibility
The criteria determining whether an individual or family qualifies for Medicaid coverage are based on income, family size, age, disability status, pregnancy, and other conditions that vary by state and program rules.
Coordinated efforts by healthcare providers, government agencies, or community organizations to connect with eligible individuals and encourage them to enroll in Medicaid. This outreach aims to raise awareness about Medicaid benefits, address barriers to enrollment, and help eligible people access healthcare coverage.
Medicaid re-enrollment
The process by which individuals previously enrolled in Medicaid reapply or requalify for coverage after a lapse.
Medicaid reapplication process
This process involves submitting a new application or updating information to reestablish eligibility for Medicaid coverage after it has been lost. It requires providing updated documentation on income, family size, residency, and other relevant factors to verify continued eligibility for the program.
The process began after the COVID-19 pandemic in April 2023. Individuals not disenrolled from Medicaid throughout the public health emergency must now reapply to maintain coverage. It is also known as Medicaid renewal, Medicaid recertification, or Medicaid unwinding.
Medicare
A United States federal health insurance program created mainly for patients at or older than 65, along with some younger individuals with disabilities or certain health conditions. It offers coverage for various medical services and prescription medications, ensuring broad healthcare protection for those who qualify.
O
Out-of-Pocket Costs
Costs that patients are required to pay on their own for healthcare services that insurance does not cover. These expenses may encompass deductibles, copayments, coinsurance, and additional charges for medical care or medications that fall to the patient to pay.
P
Patient Financial Services
A unit within a healthcare facility is responsible for managing patient billing, payment processing, and financial counseling. It assists patients with insurance claims, payment plans, financial assistance, and understanding their healthcare costs and financial obligations.
Patient liability
Another name for out-of-pocket costs is the portion of healthcare costs that a patient is responsible for paying, typically not covered by insurance.
A patient-centric & secure online system for patients to access their health information, book appointments, interact with healthcare providers, and handle various aspects of their care. Its purpose is to boost patient involvement and ease the ability of patients & healthcare teams to communicate with one another.
The measure of how well healthcare services meet or exceed a patient's expectations and needs. The complete picture of patient satisfaction encompasses various aspects of the patient experience, including quality of care, communication with healthcare providers, facility environment, billing experience and overall patient outcomes.
Payor identification
The process of determining which insurance company or government program is responsible for covering a patient's healthcare costs. This information is crucial for billing, claims processing, and ensuring that healthcare services are appropriately reimbursed.
Payment plan
A payment plan is an agreement that permits patients to settle their medical bills in periodic installments instead of a single lump sum. This method facilitates handling substantial or unforeseen healthcare expenses, alleviating the financial strain associated with medical costs.
Pre-authorization/Pre-certification
Pre-authorization or pre-certification requires a managed care company to approve certain medical services, such as hospital admissions or specialty treatments, before they are provided to ensure coverage.
Primary Insurance
The insurance policy is first responsible for covering healthcare costs when an individual is insured under multiple plans. It is the primary source for payment of medical bills, with other policies potentially providing additional or secondary coverage.
Provider network
A group of healthcare professionals, facilities, and providers have contracts with insurance companies to offer services at agreed-upon rates. Patients with insurance plans utilizing provider networks typically receive care at lower costs when using in-network providers than those outside the network.
R
Revenue cycle health
The efficiency and effectiveness of processes involved in generating revenue from patient care, including billing, coding, claims processing, collections, and financial management.
Revenue cycle management
The process of managing elements of revenue cycle health to their full potential for maximum revenue recovery. It aims to ensure a steady cash flow and minimize revenue loss due to errors, delays, or denials.
This includes all activities that identify and reclaim lost or uncollected revenue from unpaid medical bills, insurance denials, or underpayments. It involves various strategies, such as appeals, collections, and audits, to ensure that hospitals receive appropriate compensation for the services they provide.
Risk adjustment
The statistical calculation a payor conducts when enrolling an individual into an insurance plan weighs underlying health status to predict costs for future services. The payor makes adjustments by insuring members with lower expected costs to balance out the number of insured patients with higher expected costs.
S
Secondary insurance
An additional insurance policy that provides coverage after the primary insurance has paid its share of healthcare costs. It helps cover expenses the primary insurance did not fully reimburse, such as copayments, coinsurance, or deductibles, reducing the insured's out-of-pocket burden.
Individuals are responsible for covering their healthcare expenses without assistance from insurance or government programs. These patients either do not have insurance or choose to pay out-of-pocket for medical services.
Sliding fee scale
A pricing system used by healthcare providers to adjust fees for services based on a patient's income and ability to pay. This approach ensures that lower-income individuals can access healthcare at reduced rates, promoting affordability and equity in healthcare services.
U
Medical services are provided by healthcare facilities for which no payment is received, often due to uninsured or underinsured patients.
Unreimbursed Care
Another term for uncompensated care.
Did we leave out any important terms? Do you have any burning questions related to uncompensated care or insurance discovery?
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John Hargrave
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OA Editorial Team
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