Billing Terms and Definitions

What Do These Words Mean?

You may receive paperwork with words that you do not understand, or hear your insurance company talking about some of these terms. This is normal. 

We know it can be difficult to understand, so we have listed some terms with definitions to make it easier for you. If you still have questions about your billing statement or financial applications, please let us help. You can reach us at 1-844-591-5949.

  • Pre-Existing Condition
  • Presumptive Eligibility
  • Price Estimate
  • Proxy
  • Referral
  • Secondary Payer
  • Self-Pay
  • Settlement Date
  • Supplemental Insurance
  • Usual, Customary, and Reasonable (UCR)

  • Account Number

    This is your billing number. The account number is not your medical record number.

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    Advance Beneficiary Notice (ABN)

    An advance beneficiary notice is a form, signed by you, that shows that the tests performed by your doctor may not be covered by Medicare. The purpose of an ABN is to let you know in advance that these services may not be covered and to advise you that you will be responsible for payment.

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    Ancillary Services

    Professional services provided in a hospital or other inpatient health program. These services may include x-ray, drug, laboratory, and others.

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    Balance Due

    The total amount due to UPMC.

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    Birthday Rule

    The Birthday Rule is endorsed by the National Association of Insurance Commissioners (NAIC). The Birthday Rule states that the plan of the parent whose date of birth (month and day) falls earlier (or first) in the calendar year is the primary plan for dependent children.

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    A statement from UPMC to your insurance company asking them to pay for your health care services. Your insurance company may pay all, some, or none of this amount.

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    If your claim is denied, your insurance company did not pay your hospital or physician bill, and you may be expected to pay this yourself.

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    Certified Application Counselor

    UPMC staff who have received certification through CMS (Center for Medicare and Medicaid Services) to assist patients in applying for coverage through the Health Insurance Exchange.

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    COBRA (Consolidated Omnibus Budget Reconciliation Act)

    This law requires an employer to allow the beneficiary to remain covered under the employer’s group health plan for a certain length of time after the loss of a job.

    The beneficiary may have to pay both his or her share and the employer’s share of the premium.

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    The percent of the insurance approved amount that a patient must pay after the deductible on their insurance plan. Co-insurance is an arrangement by which the patient and the insurance carrier share in the payment of service.

    Co-insurance takes effect after the approved deductible amount has been met.

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    Contractual Adjustment (C/A)

    A contractual adjustment is the amount that the carrier agrees to accept as a participating provider with your insurance carrier.

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    Coordination of Benefits (COB)

    Coordination of benefits is the determination of which insurance pays: primary, secondary, or tertiary.

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    Insurance co-pay is the amount of money or percent of charges for basic or supplemental health services that a member is required to pay, as set forth by their health plan.

    A co-pay is often associated with an office visit or emergency room visit.

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    Covered Charge

    Any charges deemed to be “allowable” and payable by an insurance carrier.

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    An insurance deductible is the minimum amount the patient must pay before the insurance carrier will pay anything toward the charges. Usually, the deductible needs to be met and paid by the patient each year.

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    Explanation of Benefits (EOB)

    Explanation of Benefits is a statement from your insurance carrier that explains the benefits payable based on your plan’s provisions. It outlines the insurance payment for the service(s) rendered and shows the deductible, co-pay, and co-insurance that the patient may owe.

    It also details non-covered items or maximum benefits in accordance with your insurance plan provisions that may become the responsibility of the patient.

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    Fee Schedule

    A complete listing of fees used by either a government or private health care plan to pay doctors and other providers on a fee-for-service basis.

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    The individual who is assuming financial liability for the patient’s account.

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    Individual Coverage

    Individual coverage may be purchased as a supplement to group health insurance or as the sole coverage for the subscriber.

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    Medically Necessary

    Services or supplies that are proper and needed to diagnose or treat your medical condition.

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    A group of doctors, hospitals, pharmacies, and other health care experts who work under a contract with a health plan.

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    Non-Covered Charges

    These charges are specifically excluded from coverage by an insurance carrier.

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    Non-Participating Physician

    A group of doctors, hospitals, pharmacies, and other health care experts who are not under a contract with a particular health plan.  

    Non-participation means that the hospital or doctor does not participate in the patient’s health plan and therefore, the patient is billed directly for services and is responsible for payment in-full.

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    Out-of-Pocket Costs

    Health care costs that are not covered by insurance and you (the patient) must pay.

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    Outstanding Balance

    This is the amount you still owe to UPMC that remains on your payment plan prior to you making a payment. This may also be called installment balance.

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    Hospital participation is a method by which a hospital agrees to accept an insurance carrier’s payment as payment in full. The bill is sent directly to the insurance carrier with payment that is addressed directly to the hospital.

    This excludes amounts that are considered a patient’s obligation and are listed on the patient’s coverage plan. For example, co-pays, co-insurance, deductibles, and non-covered services are the patient’s responsibility.

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    Payment Plan

    An agreed upon plan of how much you will pay over time. For example, you may have a bill for $600, and choose to pay it over 1 year. You could set up a plan to pay $50 each month.

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    Pre-Existing Condition

    A medical condition that occurred before a program of health benefits went into effect.

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    Presumptive Eligibility

    A policy which allows UPMC to screen you based on your gross annual income, to determine your ability to pay.

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    Price Estimate

    The approximate amount you will have to pay. This is just an estimate and may change.

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    Someone who is allowed to talk about your financial status and billing, and/or pay on your behalf.

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    Your primary care doctor’s written permission for you to see a certain specialist or to receive certain medical services.

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    Secondary Payer

    A secondary payer is the insurer that pays second on a claim for medical care.

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    If you are paying for your health care services out-of-pocket, or without the help of health care insurance.

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    Settlement Date

    The date that appears on your bill which was sent to you.

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    Supplemental Insurance

    A private health insurance coverage that you may purchase to supplement or fill the gaps in your health plan coverage.

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    Usual, Customary, and Reasonable (UCR)

    UCR is the usual fee charged in a geographic area by a medical provider for a specific medical procedure or service. The fee is based on a consensus of what most other hospitals, physicians, or laboratories charge for a similar procedure or service.

    Please note that UPMC will bill you (the patient) for any balances remaining after the insurance carrier has made payment.

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    For help in finding a doctor or health service that suits your needs, call the UPMC Referral Service at 412-647-UPMC (8762) or 1-800-533-UPMC (8762). Select option 1.

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    Medical information made available on is not intended to be used as a substitute for professional medical advice, diagnosis, or treatment. You should not rely entirely on this information for your health care needs. Ask your own doctor or health care provider any specific medical questions that you have. Further, is not a tool to be used in the case of an emergency. If an emergency arises, you should seek appropriate emergency medical services.

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