Nierman Medical Billing Service
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      Medical Billing Terminology in Dentistry

      Understanding Key Terms and Concepts for Integrating Medical Billing into your practice

      🧾 Insurance Basics

      • Allowed Amount

        • The amount the insurance plan determines should be paid to the provider for services rendered.

        • Typically lower than the billed amount.

      • Amount Not Covered

        • Includes deductibles, co-insurance, and services not covered under the insurance plan.

      • Benefits

        • Outlines the services your insurance covers and what the patient might owe after insurance processing.

      • Benefit Contract

        • A legal agreement between the health plan and the insured, specifying the full range of benefits available under the healthcare plan.

        • Sometimes called a Certificate of Coverage or Evidence of Coverage.

      • Covered Benefit

        • A service or treatment that insurance will pay for, either partially or fully, once the patient’s deductible or other requirements are met.

      • Eligibility

        • A determination made by the insurance company on whether a patient is eligible to participate in the health plan.

      • Effective Date

        • The date when the patient’s coverage begins.

      • Explanation of Benefits (EOB)

        • A statement sent to the patient after their insurance processes a claim.

        • Details the amount billed, the allowed amount, the payment made to the provider, and any amounts owed by the patient (e.g., copayments, deductibles, or coinsurance).

      • Gap Exceptions / Network Waivers / NAP Exceptions

        • Allows for in-network benefits on a one-time basis, including lower deductibles, co-insurance, and in-network pricing.

        • Some policies may allow providers to balance bill, and some may not, so always verify terms when checking benefits.

      • Balance Billing

        • Occurs when a provider bills the patient for the difference between the total billed amount and what the insurance company paid.

        • Allowed only when the provider is out of network.

      • Health Plan

        • Refers to the type of insurance coverage, such as private, employer-sponsored, Medicaid, Medicare, or others.

      🏥 Providers & Networks

      • In-Network Provider

        • Healthcare providers contracted with an insurance company.

        • Offers maximum benefits to patients who use in-network providers.

      • Out-of-Network Provider

        • Providers who do not have an agreement with the insurance company.

        • Patients typically face higher costs for out-of-network services.

      • Participating Provider

        • A healthcare provider who agrees to accept the insurance company’s payment as full payment, minus the patient’s copay, deductible, and co-insurance.

      • Non-Participating Provider

        • Providers who do not have a contract with the insurance plan.

        • They may charge higher fees, and patients may need to pay the difference.

      📋 Enrollment & Registration

      • Enrollment / Enrolling

        • Signing up for or adding a provider to an insurance plan or system. Enrollment is the process of submitting your information to the insurance company so they can add you to their system. (Ex: Medicare enrollment)

          Note: You may come across the term "enroll in a clearinghouse." This simply means you need to register as a provider with the clearinghouse in order to submit claims electronically.

      • Registration / Registering

        • Entering provider details into a system before submitting claims.

        • Example: Registering an out-of-network provider for billing purposes. When you register as an out-of-network provider, you are not part of the insurance company’s network. However, you can still submit claims for patients covered by that insurer.

      🧾 Credentialing & Contracting

      • Credentialing 

        • Credentialing is the process of verifying a healthcare provider’s qualifications, including their education, training, licenses, certifications, work history, malpractice record, and professional references. You will need to be credentialed before you can work at a facility or join an insurance network.

      • Contracting

                       Contracting is the process of agreeing to the terms set by an insurance company, including reimbursement rates, covered services, and the conditions for becoming an in-network provider, which outlines your rights and responsibilities within their network. Contracting usually happens after your credentialing is approved.

      🧮 Payments & Costs

      • Co-Insurance

        • The percentage the patient must pay after insurance has paid its share (e.g., 30% of the allowed amount).

      • Co-Payment (Co-Pay)

        • A fixed amount the patient pays at the time of service.

        • Co-pays vary depending on the service or provider.

      • Deductibles

        • The amount a patient must pay before insurance covers any costs.

        • Deductibles often apply per year and may differ by service.

      • Paid to Provider

        • The amount the insurance company actually pays to the provider.

      • Usual, Customary, and Reasonable (UCR)

        • A pricing benchmark based on what providers in your area typically charge for similar services.

        • Please visit Fair Health Consumer for more information in your area. 

      📑 Claims & Forms

      • Claim

        • A request for payment submitted to the insurance company for services rendered.

      • CMS 1500 Form

        • The standard form used by healthcare providers to submit claims to insurance companies.

      • Remittance Advice

        • A document sent to the provider, usually with payment, explaining how the insurance company processed the claim.

      • Submitter ID

        • A unique identifier used for submitting electronic claims.

      ✅ Approvals & Authorizations

      • Assignment of Benefits

        • An agreement the patient signs to allow the insurance company to pay the provider directly.

      • Authorization Number / Prior Authorization Number

        • A reference number confirming that the insurance company has approved a treatment or service.

      • Referral

        • A formal recommendation from a primary care provider to see a specialist or receive specific treatment.

      • Peer-to-Peer Review

        • A conversation between the provider and the insurance company to appeal or obtain a prior authorization.

        • This is often required if an authorization has been denied.

      🧪 Special Cases

      • Clinical Trial / Research Study

        • Research designed to evaluate new treatments or interventions.

        • Coverage for participation may vary based on the insurance policy, so confirm with the provider and insurer.

      • Experimental or Investigational Treatments

        • Treatments not yet proven to be medically safe or effective.

        • Typically, these are not covered by insurance unless part of a clinical trial.

      🏛️ Insurance Types

      • Health Maintenance Organization (HMO)

        • Requires using in-network providers and may require referrals for specialist care.

      • Preferred Provider Organization (PPO)

        • Provides more flexibility in provider choice, allowing out-of-network care at higher costs.

      • Medicare

        • Federal insurance for individuals aged 65+, those with disabilities, or end-stage renal disease (ESRD).

      • Medicaid

        • A joint federal and state program providing health coverage for low-income individuals and families.

      • Medicare Advantage

        • A private insurance plan that covers Medicare Part A and B benefits plus additional coverage not provided by Original Medicare.

      Tip: In most cases, you don’t need to be a Medicare provider to bill these. Instead of billing Medicare directly, you would submit the claim to the commercial insurance carrier.
      For example: If the patient has a UHC Medicare Advantage plan, the claim should be submitted to UnitedHealthcare.

      • Supplemental Insurance

        • A policy that helps cover costs not paid by primary insurance, such as deductibles or co-insurance.

      • Tricare

        • Healthcare coverage for military members and their families.

      🧾 Identification

      • Insured Group Name / Number

        • Identifies the group plan under which the patient is covered (e.g., employer-sponsored plans).

      • Insured’s Name (Beneficiary)

        • The name of the individual covered by the insurance policy.

      • Policy Number

        • A unique identification number for the insured individual, typically found on their insurance card.

      • Federal Tax ID Number

        • A unique number assigned to healthcare providers for tax purposes.

      • National Provider Identifier (NPI)

        • A 10-digit unique identifier issued to healthcare providers for billing, claims processing, and administrative tasks.

      🔄 Multiple Insurance Plans

      • Coordination of Benefits

        • Describes how multiple insurance plans work together when a patient has more than one policy.

        • The primary insurance pays first, and the secondary may cover remaining costs.

      • Primary Insurance

        • The insurance that pays first when a patient is covered by more than one policy.

      • Secondary Insurance

        • The insurance that may cover additional expenses after the primary insurance has paid.

      • Tertiary Insurance

                      A health insurance plan that is billed third, after the primary and secondary insurance policies have processed a claim.

      🧓 Medicare-Specific Terms

      • Advance Beneficiary Notice (ABN)

        • A notice given when Medicare may not cover a service, allowing the patient to decide whether to proceed and how to pay.

      • Medicare Accepting Assignment

        • If a Medicare provider accepts assignment, it's for all insurance-covered services. The provider agrees to accept Medicare’s approved amount for services as full payment, writing off any remaining balance and may not balance bill. 

      • Medicare Not Accepting Assignment

      • Limiting Charge

        • The maximum amount a non-participating Medicare provider can charge (typically 15% over the approved rate).

      • Opting Out of Medicare

        • Providers who refuse Medicare payments cannot bill Medicare, except in emergencies. If you opt out of Medicare completely, you typically cannot bill Medicare advantage plans either.

      • Medicare Summary Notice (MSN)

        • Medicare’s version of an Explanation of Benefits, showing what was paid and what the patient owes.

      • PDAC appliances

                  PDAC Appliances are medical devices and equipment that are evaluated and assigned a proper HCPCS (Healthcare Common Procedure Coding System) code by the PDAC. These items must meet specific criteria for durability, medical necessity, and usage over an extended period to qualify for insurance reimbursement, particularly under Medicare. To access the Medicare PDAC list for oral appliances for OSA, please click here: PDAC Cleared List for E0486
      • PTAN number (Provider Transaction Access Number

                      A unique identification number assigned to healthcare providers by Medicare through their Medicare Administrative Contractor (MAC).