Assignment: In health care, this is an agreement signed by the patient to allow the insurance carrier
to send payment directly to the service provider.
Capitation: A system of payment used by managed care plans in which physicians and hospitals
are paid a fixed per capita amount for each patient enrolled over a stated period of time, regardless
of the type and number of services provided; reimbursement to the hospital on a
per-member/per-month basis to cover costs for the members of the plan. Can also mean a set
amount to be paid per claim.
Claim: a bill sent to an insurance carrier requesting payment for services rendered; also known as
an encounter record.
Coinsurance: cost-sharing requirement under a health insurance policy in which the insured will
assume a percentage of the cost for covered services.
Coordination of benefits: Two insurance carriers working together and coordinating the payment of
their benefits so that there is no duplication of benefits paid between the primary and secondary
insurance carriers.
Copayment (copay): A type of cost-sharing that requires the patient to pay a predetermined fee to
the health care provider of the time of services rendered.
Deductible: A type of cost-sharing that requires a specific dollar amount to be paid by the insured
before a medical insurance plan or government program begins covering health care costs.
Exclusions: Provisions written into the insurance contract denying coverage or limiting the scope of
coverage.
fee-for-service: method of payment in which the patient pays the healthcare organization or
provider for services performed from an established schedule of fees.
Health maintenance organization: a medical insurance group that provides coverage of health
services for a prepaid fixed annual fee.
Participating health care organization or provider: Healthcare providers who have contracted
with a managed care plan to provide eligible healthcare services to members of that plan.
Preauthorization: A requirement of some health insurance plans to obtain permission for a service
or procedure before it is done to see whether the insurance program agrees it is medically
necessary.
Precertification: A procedure done to determine whether treatment (surgery, tests, or
hospitalization) is covered under a patient's health insurance policy.
Predetermination: A financial inquiry done before treatment to determine the maximum dollar
amount the insurance company will pay for surgery, consultations, postoperative care, and so forth.
Preferred provider organization: a type health benefits program in which enrollees receive the
highest level of benefits when they obtained services from a physician, hospital, or other health care
provider designated by their program as a preferred provider.