With the year new comes time for most of us to start over on our deductibles.  It is important to understand what coverage and benefits you have with your insurance.  Here are a few key insurance terms.

Allowed Amount – The amount an insurance company will pay to reimburse a provider.  The balance is due from the patient, unless the provider is a participating.

Deductible – The amount of expenses that must be paid out of pocket by the patient before an insurance company will pay any expenses.   

Explanation of benefits – Usually attached to a processed claim that explains to the provider and patient which services an insurance company will cover.  EOB’s may also explain what is wrong if the claim has been denied.

Co-Pay – Amount paid by patient at each visit as defined by the insured plan.

CPT codeCurrent Procedural Terminology.  This is a 5 digit code assigned for reporting a procedure performed by the physician.  The CPT code has a corresponding ICD-9 code for the diagnosis.  The ICD-9 code is soon to be replaced with a ICD-10.

ICD-9 CodeInternational Classification of Diseases classification system used to assign codes to patient diagnosis.  This is a 3 to 5 digit number.

ICD-10 Code – 10th revision of the International Classification of Diseases.  Uses 3-7 digit, includes additional digits for more detailed diagnosis reporting.  These codes are not yet used.

In-Network (or Participating) – An insurance plan in which a provider signs a contract to participate in that program.  The provider agrees to accept a discounted rate for procedures and can NOT bill the patient for that discounted amount.