Glossary of terms

Advance beneficiary notice (ABN). This is a written notice given to you by a doctor, provider or supplier in advance of any service that Medicare may not consider covered.

Allowable. This refers to the predetermined allowable limits used by insurance carriers to limit the maximum amount they will pay for a service based on their contract with you. Please note that Mayo Clinic doesn't accept predetermined usual, customary and reasonable (UCR) health-insurance payment amounts for health plans with which Mayo Clinic doesn't participate. "Allowable" charges are sometimes known as reasonable and customary (R&C) charges.

Billing account number. This is the account number of the billing addressee (guarantor) assigned to receive the bill. Refer to this number when contacting Mayo Clinic with questions.

Billing addressee (guarantor). This is the person designated to receive the monthly billing statements. This person can coordinate the billing, payment and insurance coverage for the account.

Coinsurance. Coinsurance is a provision in your insurance coverage that limits the amount of coverage by the insurance plan to a certain percentage. Any costs above this amount are paid by you. Your percentage typically may range from 20 to 40 percent of the cost of medical services after their deductibles are paid.

Commercial health insurance. This term refers to nongovernment insurance to pay all or some portion of medical bills. It may be purchased by individuals or by employers, and is most often obtained as an employment benefit.

Copayment. The copayment is the portion of a claim or medical expense that you must pay out-of-pocket. It is usually a fixed amount, such as $5, $20 or $50.

Deductible. The deductible is the amount of health care expenses that you're required to pay before health benefits become payable by the insurance company. A deductible usually is given as an annual amount, such as $500 per year. In-network and out-of-network benefits may require different deductible amounts be met prior to any payments by the insurance company.

Explanation of benefits (EOB). This is a statement provided to the insured person by an insurance company explaining how the insurer processed and paid the claim.

Health maintenance organization (HMO). An HMO is an entity that provides, offers or arranges for coverage of designated health services needed by members for a fixed, prepaid premium.

Hospice. A hospice is a facility or program that provides care for people who are terminally ill. Hospice care involves a team-oriented approach that addresses the medical, physical, social, emotional and spiritual needs of the patient. Hospice care is covered under Medicare Part A (hospital insurance).

Itemized statement of charges. This is a detail of services and charges for a specific visit.

Managed health care. Managed health care is a broad term applied to many different types of organizations, payment mechanisms, review mechanisms and collaborations. Managed health care sometimes is used as a general term for the activity of organizing doctors, hospitals and other providers into groups in order to enhance the quality and cost-effectiveness of health care.

Mayo Clinic contracted services. These are patient services when Mayo Clinic has a contract with a specific insurance company to accept a contractually set amount for these medical services.

Mayo Clinic number. This is your personal identification number at Mayo Clinic. It's unique, and it will be your Mayo Clinic number for life.

Medicaid (Title XIX). This is a joint federal and state program that helps with the medical costs for some people who have low incomes and limited resources. Each state has its own standards for qualification, benefits covered, program eligibility, rates of payment for providers and methods of administering the program.

Medicare (Title XVIII). This is a federal program for people age 65 and over, for persons eligible for Social Security disability payments for two years or longer, and for certain workers and their dependents who need kidney transplantation or dialysis, regardless of financial status. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B), and also a separate drug coverage program administered by the private sector (Part D).

Medicare Advantage Plan. Medicare Advantage Plans are offered by a private company that contracts with Medicare to provide you with Medicare Part A and Part B benefits. Medicare Advantage Plans may be HMOs, PPOs or private fee-for-service plans. When a person is enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan. Services aren't paid for under Original Medicare.

Medicare assignment. Medicare assignment means that a doctor or supplier agrees to accept the Medicare-approved amount as full payment. Patients still pay a share of the cost.

Medicare summary notice. This is a statement Medicare provides to Medicare enrollees by explaining how it processed and paid a claim.

Medigap. Medigap is private health insurance that supplements Medicare reimbursement for medical services. Medigap policies only work with Original Medicare and vary from state to state.

Monthly statement of account. This is your Mayo Clinic bill.

Point of service (POS) plan. This is an insurance plan in which members don't have to choose financial coverage levels for services until they need care. The most common use of the term applies to a plan that enrolls each member in both an HMO (or HMO-like) system and an indemnity plan. These plans provide different benefits (for example, 100 percent coverage rather than 70 percent) depending on whether the member receives care from a plan provider or someone outside the plan.

Preferred provider arrangement (PPO). This is a common method of managing care while still paying for services through an indemnity plan. Independent providers contract to give care at a discount. The panel of providers is limited and usually some type of utilization review is involved. Most PPO plans are point of service plans in that they pay a higher percentage for services received from providers in the PPO.

Pre-certification. This is also known as pre-admission certification, pre-admission review or pre-cert. It refers to the process of obtaining authorization from the health insurer or health plan for routine hospital admissions and outpatient services. Failure to obtain pre-certification often results in financial penalty to the provider or patient.

Primary care physician (PCP). Sometimes referred to as a "gatekeeper," the primary care physician usually is the first doctor you see for an illness. Your doctor treats you directly, refers you to a specialist (secondary care) or admits you to a hospital. Your primary care physician may be a family doctor, internist, pediatrician or, occasionally, an obstetrician or gynecologist.

Primary insurance company. This is the insurance company with first responsibility for the payment of the claim.

Provider. The provider is a hospital, doctor or other health professional who provides care. Health plans, managed care companies and insurers are called payers.

Reasonable and customary (R&C). "Reasonable and customary" refers to the predetermined allowable limits used by insurers to limit the maximum amount they'll pay for a service based on their contract with you. Please note that Mayo Clinic doesn't accept predetermined health-insurance payment amounts for health plans with which it doesn't participate. R&C also may be known as allowable or UCR.

Secondary insurance company. This is the insurance company responsible for processing the claim after the primary insurance determines what it will pay.

Self-insured or self-funded plan. This is a health plan in which an employer, rather than an insurance company or managed care plan, assumes risk for medical costs. Under the Employee Retirement Income Security Act (ERISA), self-funded plans are exempt from state laws and regulations covering such things as premium taxes and mandatory benefits. Self-funded plans often contract with insurance companies or third party administrators (TPAs) to administer the benefits.

Skilled nursing facility (SNF). Skilled nursing facilities generally are institutions for recovery (convalescence). A skilled nursing facility provides a high level of specialized care for long-term or acute illness. It's an alternative to extended hospital stays, although a hospital may contain a skilled nursing unit.

Supplemental insurance. This is any private health insurance plan held by a Medicare or commercial beneficiary, including Medigap policies or post-retirement benefits. Supplemental insurance usually pays the deductible or copay and sometimes will pay the entire bill when primary insurance benefits have reached their limit.

Third party administrator (TPA). This is an entity outside the insurer that handles the administrative duties and sometimes utilization review for a health plan or organization that funds the health benefits.

Uninsured patient. This is a patient without public or private health insurance. Mayo Clinic requires uninsured patients to make a deposit before receiving care.

Usual, customary or reasonable (UCR). This term refers to insurers' predetermined allowable limits they pay for a service based on their contract with the patient. Please note that Mayo Clinic doesn't accept predetermined UCR health-insurance payment amounts for health plans with which it doesn't participate. Usual, customary or reasonable also is known as allowable or R&C.

Utilization review. This is a process of tracking, reviewing and rendering opinions about care. The practices of pre-certification, recertification, retrospective review and concurrent review all describe utilization review methods.

Visit number. This is a number assigned to identify each episode of care. This number is used to track services and payments.

Workers' compensation coverage. This is insurance that employers are required to have to cover medical care of employees who get sick or are injured on the job.