Glossary of Terms
The dollar amount a provider sets for services rendered before negotiating any discounts. The charge can be different from the amount paid. Medicare or Medicaid beneficiaries, privately insured patients, and uninsured patients who qualify for financial assistance rarely pay full charges. Uninsured patients who do not qualify for financial assistance may be asked to pay full charges, but often ultimately pay a lower price.
A copayment is a fixed dollar amount that an insured patient is required to pay directly to a health care provider at the time of service for each visit. The amount can vary by the type of covered health care service. The copayment is due in addition to any deductible.
The definition of cost varies by the party incurring the expense: To the patient, cost is the amount payable out of pocket for healthcare services, which may include deductibles, copayments, coinsurance, amounts payable by the patient for services that are not included in the patient’s benefit design, and amounts balance billed by out-of-network providers. Health insurance premiums constitute a separate category of healthcare costs for patients, independent of healthcare service utilization. To the provider, cost is the expense (direct and indirect) incurred to deliver healthcare services to patients.
The percentage share of the cost of a covered health care service is called coinsurance. This (for example, 20 percent) is based on the allowed amount for the service. You pay coinsurance plus any deductibles you owe. For example, if the health plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance payment of 20 percent would be $20. The health insurance or plan pays the rest of the allowed amount.
A deductible is the dollar amount an insured patient is expected to pay for health care services before a health plan begins to pay over the course of a year. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve paid $1,000 toward covered health care services that are subject to the deductible. The deductible may not apply to all services.
UAB Medicine provides financial assistance to persons who have health care needs and are uninsured, underinsured, ineligible for a government program, or otherwise unable to pay for medically necessary care based on their individual financial situations.
An in-network provider is a hospital that has contracted with the health insurance company to provide services to plan members for specific, pre-negotiated rates. Typically, if a patient visits a physician or other provider within the network, the amount the patient will be responsible for paying will be less than at an out-of-network provider. It is the responsibility of the patient to contact the insurance provider to determine if a physician or hospital is in-network or out-of-network.
An out-of-network provider is not contracted with the health insurance plan. As a result, the patient likely will incur higher out-of-pocket expenses. It is the responsibility of the patient to contact the insurance provider to determine if a physician or hospital is in-network or out-of-network.
The portion of total payment for medical services and treatment for which the patient is responsible, including copayments, coinsurance, and deductibles. Out-of-pocket payment also includes amounts for services that are not included in the patient’s benefit design and amounts for services balance billed by out-of-network providers. For insured patients, out-of-pocket payment can be affected by a number of variables beyond copayments, coinsurance, and deductibles. For example, the use of an out-of-network provider can significantly increase the amount of an out-of-pocket payment. Out-of-pocket payment for insured patients thus depends on the specifics of each patient’s benefit design and on the contracting status of the relevant providers. For uninsured patients, out-of-pocket payment can rise to the full charge for a service, although patients rarely pay full charges today.
An organization that negotiates or sets rates for provider services, collects revenue through premium payments or tax dollars, processes provider claims for service, and pays provider claims using collected premium or tax revenues. Examples include commercial health plans (also known as insurers), third-party health plan administrators, and government programs such as Medicare and Medicaid.
As a courtesy, UAB Medicine will allow patients to satisfy an outstanding balance incrementally through a payment plan.
The total amount a provider expects to be paid by payers and patients for healthcare services. The price of healthcare services often differs depending on whether the patient has insurance coverage or is eligible for financial assistance. For an insured patient, the price for healthcare services is the rate negotiated for services between the payer and the provider, including any copayments, coinsurance, or deductible due from the insured patient.
For an uninsured patient, price is first determined by eligibility for financial assistance. If the patient qualifies for financial assistance, the price is reduced according to the terms of the provider’s financial assistance policy, provided that the patient works with the provider to supply the documentation necessary to establish financial need.
If an uninsured patient has the financial means to pay for the services rendered, the price could be as much as the provider’s full charge for the services, although the patient and the provider may negotiate a discount from the charge.
In health care, readily available information on the price of healthcare services that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.
An entity, organization, or individual that furnishes a healthcare service. Examples of providers include (but are not limited to) hospitals, health systems, physicians and other clinicians, pharmacies, ambulance services, ambulatory surgical centers, rehabilitation centers, and skilled nursing facilities.
The quality of a healthcare service in relation to the total price paid for the service by care purchasers