Glossary of Insurance Terms
Navigating the insurance world can be confusing. Here are some definitions of terms and types of insurance products to help make sense of it all.
Allowable Charges: The maximum dollar amount a benefits plan will pay for a procedure. This allowance includes coinsurance amounts, if any.
Annual Maximum: The maximum dollar amount that will be paid toward the cost of care for an individual or family in a twelve month period. Allowable Charges are used to calculate this amount.
Appeal: see Review
Assignment of Benefits: An arrangement by which a patient requests that their health benefit payments be made directly to a designated person or facility, such as a doctor or hospital.
Balance Billing:
When subscribers are billed for the difference between what the insurer pays and the fee that the provider normally charges. Participating Providers may not balance bill except for co-insurance and deductibles.
Billing Service: An administrative service that a dentist may utilize to handle claim submissions, whether paper or electronic.
By-Report Procedure: Procedures that require written justification/documentation from the treating dentist.
Calendar Year: The period beginning January 1 through December 31 of the same year.
Capitation: Fees paid to providers based on the number of patients they serve on behalf of a benefits plan.
Claim Review: see Review
Clearinghouse: An intermediary that receives claims from dental offices, translates the data from a given format to one that is accepted by an insurance company and forwards the claims to the insurance company in a readable format.
Coinsurance: The portion of the dentist’s fee that the patient is responsible for paying.
Contract Provider: see Participating Provider
Contract Fee Schedule Plan: A benefit plan in which participating providers agree to accept set fees for treatment.
Contract Year: Any given 12 month period of time which the contract annual maximum applies.
Coordination of Benefits COB): Rules that determine the payment of claims when the patient has more than one dental plan. Up to 100% of charges may be allowed between the two dental plans, as opposed to Non-duplication where reimbursement is limited to the larger benefit allowed by the two plans.
Date of Service: For purposes of determining coverage, the date the service is completed (e.g., cementation date for crown or bridge, insertion date of denture, date root canal is sealed).
Definitive Service: Any dental service other than a diagnostic service.
Dental Advisor: A dentist who works with insurance company staff to review claims, predetermination requests and appeals.
Dental Plan: A written description of the dental insurance which is provided to enrolled members.
DEOB (EOB): A Dental Explanation of Benefits which is mailed to patients and dentists explaining benefit determinations – type of service, amount billed, amount allowed, coinsurance amount, etc. If a service is denied, the DEOB will explain reason for denial and how to appeal that decision.
Effective Date: The date on which benefits under a policy begin.
Electronic Claim Submission: The process of submitting insurance claims electronically from a dental office to a billing service, clearinghouse or insurance company.
Eligibility Date: The date on which an individual member becomes eligible to apply for benefits under the benefit plan.
Eligibility Period: A specified length of time, following the eligibility date during which an individual member will remain eligible to apply for benefits under a benefit plan without evidence of insurability.
EOB (Explanation of Benefits): See DEOB.
Fee for Service: Traditional provider reimbursement in which the doctor is paid according to his or her fee for the service performed.
Fee Schedule: see Maximum Fee Schedule
HIPAA: Health Insurance Portability and Accountability Act is Federal legislation that defines standard formats for health insurance transactions; protects the privacy of individually identifiable health information; the HIPAA Security Rule, which sets national standards for the security of electronic protected health information; and the confidentiality provisions of the Patient Safety Rule, which protect identifiable information being used to analyze patient safety events and improve patient safety.
In-Network: When services are provided by a Participating Provider, they are considered to be“in-network”. See “Participating Provider” for obligations of a Participating Provider.
In-Progress Services: Services begun prior to the effective date of insurance coverage.
Integral Services: Services provided in conjunction with another service for w hich the dentistwould not normally itemize with a separate fee.
Maximum Allowable Charge (MAC): see Maximum Allowance
Maximum Allowance: The maximum dollar amount a dental plan will pay toward the cost of each dental service as specified in the plan’s contract provisions. Participating Providers are obligated to accept this allowance as paid-in-full. Coinsurance and deductible amounts are the patients’ responsibility.
Maximum Benefit: see Annual Maximum
Maximum Fee Schedule: A listing of fees for each dental service. Participating Providers agree to accept the set amount for each service as the total fee for covered services.Coinsurance and deductible amounts are patient responsibility.
Network Provider: see Participating Provider
Non-duplication of Benefits: A part of a contract that relieves a third-party payer of liability for cost of services, if the services are covered under another program. Non-duplication of Benefits (Non-dup) is distinct from Coordination of Benefits COB) because reimbursement is limited to the larger benefit allowed by the two plans, rather than a total of 100 percent of the charges, as allowed in COB provisions. Also referred to as Benefit-Less-Benefit or Carve Out.
Participating Provider: A dentist who signs an agreement with an insurance company which obligates the dentist to special terms, conditions and reimbursement arrangements. Participating Providers agree to accept the amount allowed by an insurance carrier as paid-in-full for covered services, less coinsurance and deductibles. Patients are responsible for coinsurance and deductibles.
Predetermination: A written estimate provided by insurance companies in response to a request by a dentist or patient for an estimate of coverage for certain services. It is NOT aguarantee of payment for these services. Upon submission for payment of completed services,the claim will be processed based on the coverage in effect at the time the services are actually performed.
Preferred Provider Organization (PPO): PPOs are managed care organizations that offercertain methods to deliver services, such as networks of providers. Under a PPO benefit plan,covered individuals retain the freedom to choose providers but are given financial incentives(e.g., lower out-of-pocket costs) to use the preferred provider network.
Procedure Codes: ADA codes that are used to identify and define specific dental services.
Protected Health Information (PHI): Protected Health Information is made up of two components: Health Information and Individually Identifiable Health Information. Health Information is information that relates to the past, present, or future health of the individual; the provision of health care to an individual; or the past, present or future payment for the provision of health care. Individually Identifiable Health Information is information that can be used to identify the individual, such as a name or Social Security number.
Review: A request by a dentist or patient to seek a separate review from the initial paymentdetermination to assess whether or not the initial payment decision was correct.
Summary Payment Voucher: see DEOB
Usual, Customary and Reasonable (UCR): An obsolete term that was used to identify the commonly charged fees for services within a geographic area.
Insurance Types
Business Overhead Expense (BOE): BOE insurance is designed to reimburse a business for overhead expenses in the event a business owner becomes disabled. This is not the same as personal disability insurance which usually pays benefits to age 65. A business overhead expense policy pays a shorter benefit of one to two years after a waiting (elimination) period.
Disability: This policy is designed to protect the income of dentists who can no longer work because of an accident or illness.
Employment Practices Liability: It provides protection for an employer against claims made by employees, former employees or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment and other employment-related allegations.
Flood: Property insurance does not include damage from flood waters, regardless of the source. The National Flood Insurance Program operated by the federal government provides most policies for damage from flooding.
Group and Individual Health: Health plans come in a variety of forms: indemnity, preferred provider (PPO), point of service (POS) and managed care (HMO). Dentists can choose from plans for individuals or include their staff.
Health Savings Accounts (HSAs): HSAs were created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses.
Homeowners and Automobile Insurance: These policies provide personal homeowner and automobile insurance to protect your most valuable personal assets.
Life Insurance: This term-life policy offers competitive rates, portability, high maximum benefit amounts and the choice of locking in rates for up to 30 years.
Long-term Care: This policy provides funding for your care if you cannot care for yourself. Coverage helps pay for home-based care or a stay in a nursing home or assisted-living facility.
Office Package: This type of policy provides protection against personal injury or injury to others on the business premises. It also provides replacement-cost coverage on buildings and business personal property, including the property of employees and others under the insured dentists care, custody or control. It also can provide coverage for business interruption to pay ongoing expenses such as rent, utilities and some or all payroll expenses.
Pension/Retirement Plan: Members and their employees can enroll in a qualified tax-deductible retirement program. The plan offers low expense charges and the flexibility of many investment options.
Professional Liability or Malpractice: A professional liability policy protects dentists against malpractice claims brought against their practices. The policy covers damages for a variety of dental incidents. A policy also can cover hygienists and assistants employed in your office.
Workers’ Compensation: This policy covers job-related injuries or illness, including medical payments, disability payments and employers liability. Employers must have this coverage if they have one or more employees.