Understanding Medical Billing Terms

Understanding medical billing can be complex, especially when faced with unfamiliar terminology. At Gables Medical Review, we believe in empowering patients and businesses with the knowledge to navigate their medical expenses with confidence. Below, we’ve outlined key medical billing terms with clear, easy-to-understand explanations to help you better manage your healthcare costs.

Medical Terms

An Explanation of Benefits (EOB) is a statement from your insurance company that details what was covered, how much was paid, and what portion of the bill you are responsible for. It is not a bill, but it helps you understand the breakdown of charges and your financial responsibility.
The allowed amount is the maximum sum an insurance company will pay for a covered healthcare service. If your provider charges more than this amount, you may have to pay the difference unless you are covered under a contracted network.
Balance billing occurs when a healthcare provider bills you for the difference between what they charged and what your insurance company paid. This often happens with out-of-network providers who do not have pre-negotiated rates with your insurance plan.
Co-insurance is the percentage of healthcare costs you must pay after meeting your deductible. For example, if your insurance covers 80% of a bill, you are responsible for the remaining 20% as your co-insurance.
A co-payment (co-pay) is a fixed fee you pay for a medical service, such as a doctor's visit or prescription medication, as determined by your health insurance plan. Co-pays vary depending on the service and type of coverage.
A deductible is the amount you must pay out-of-pocket before your insurance plan starts covering healthcare costs. Higher deductible plans usually have lower monthly premiums, but you must pay more upfront for medical care.
Prior authorization is when your insurance company requires pre-approval before covering certain medical procedures, treatments, or medications. Failure to obtain prior authorization could lead to a denied claim.
The out-of-pocket maximum is the highest amount you have to pay for covered healthcare services in a policy period. Once you reach this limit, your insurance will cover 100% of your medical costs for the remainder of the year.
A claim denial occurs when an insurance company refuses to pay for a medical service, often due to coverage limitations, incorrect billing codes, or lack of prior authorization. Denied claims can often be appealed.
In-network providers have contracts with your insurance company to offer services at pre-negotiated rates, which means lower costs for you. Out-of-network providers do not have agreements with your insurance plan, often resulting in higher charges and potential balance billing.
Medical coding involves assigning standardized codes to medical diagnoses and treatments. Errors in coding can lead to billing discrepancies, insurance claim denials, or incorrect charges on your medical bill.
A surprise medical bill happens when you unknowingly receive care from an out-of-network provider, often in emergencies or specialized treatments, leading to unexpected higher costs.
An itemized bill provides a detailed breakdown of all charges for medical services received, including procedures, tests, and medications. Reviewing an itemized bill can help you identify errors and unnecessary charges.
A financial assistance program is offered by many hospitals and healthcare providers to help low-income or uninsured patients reduce or eliminate their medical expenses based on their financial situation.
Medical necessity refers to healthcare services that are deemed necessary to diagnose or treat a medical condition. Insurance companies may deny coverage for treatments they do not consider medically necessary.

How Gables Medical Review Can Help You

Why Choose Gables medical review
Medical Bill Advocacy - Gables Medical Review

If you have received a confusing medical bill, an insurance denial, or a charge that seems incorrect, our experts are here to help. We specialize in reviewing medical statements, identifying errors, and negotiating with providers to reduce costs.

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Understanding medical billing is essential to managing healthcare costs. If you need assistance with a medical bill review, insurance claim dispute, or billing negotiation, reach out to Gables Medical Review for a consultation.

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