NCCT INTERACTIVE REVIEW MEDICAL INSURANCE EXAM
QUESTIONS AND ANSWERS
Premium
The amount charged for a medical insurance policy. The insurer agrees to provide
certain benefits in return for the premium. It is also called coverage cost.
Insurance benefits
Payments for medical services that can be submitted by an insurance company under a
predefined policy issued to an individual or group of individuals.
Lifetime maximum benefit
The total sum that the health plan will pay out over the patient's life.
UCR
The usual, customary, and reasonable fee. It is determined by payers comparing the
actual fee charged by a physician, the fee charged by most physicians in a community,
and the amount determined to be appropriate for the service.
Usual fee
The fee an individual physician most frequently charges for a service to private patients.
Customary fee
The range of fees charged by most physicians in the community for a particular service.
Reasonable fee
The generally accepted fee a physician charges for an exceptionally difficult or
complicated service. A charge is considered reasonable if it is deemed acceptable after
peer review even if it does not meet the criteria for a customary fee or prevailing
charges.
Third-party payer
A health plan or other party that agrees to carry the risk of paying for a patient's medical
services.
Acceptance of assignment
An agreement by a physician to accept the amount established by Medicare, Medicaid,
or a private insurer as full payment for covered services. The patient is not billed for the
difference because it is illegal to bill the patient for the balance.
Allowed charge
, The maximum charge an insurance carrier or government program will cover for specific
services. The allowed charges are detailed in an insurance carrier's explanation of
benefits. In managed care, a participating provider agrees to accept allowed charges in
return for various incentives, such as fast payment. If a participating provider normally
charges more for a service than the allowed charge, the physician must write off the
difference, and the patient may not be billed for this amount. However, nonparticipating
providers may bill patients for this difference.
Coordination of benefits
Prevents duplicate payment for the same service. For example, if a child is covered by
both parents' insurance policies, a primary carrier is designated to pay benefits
according to the terms of its policy, and the secondary plan may cover whatever
charges are still left. If the primary carrier pays $105 of a $150 charge, the most the
secondary carrier will pay is $45.
Participating (PAR) provider
A physician or other health-care provider who participates in an insurance carrier's plan.
The physician must keep a list of valid plans, because benefits vary for participating and
nonparticipating providers. Claims will be denied or have reduced reimbursement if the
physician is not a participating provider. Disallowed charges and charges not eligible for
payment must be written off.
Nonparticipating (nonPAR) provider
A physician or other health-care provider who has not joined a particular insurance plan.
Patients who obtain services from nonPAR providers generally must pay more of the
cost than those who obtain services from PAR providers.
Explanation of Benefits (EOB)
A document from an insurance carrier that shows how the amount of the benefit was
determined.
Copayment (copay)
The amount of money due from the subscriber to cover a portion of a bill. For most
health maintenance organizations (HMOs), this amount is usually a small fixed fee,
such as $10, per office visit.
Exclusions
QUESTIONS AND ANSWERS
Premium
The amount charged for a medical insurance policy. The insurer agrees to provide
certain benefits in return for the premium. It is also called coverage cost.
Insurance benefits
Payments for medical services that can be submitted by an insurance company under a
predefined policy issued to an individual or group of individuals.
Lifetime maximum benefit
The total sum that the health plan will pay out over the patient's life.
UCR
The usual, customary, and reasonable fee. It is determined by payers comparing the
actual fee charged by a physician, the fee charged by most physicians in a community,
and the amount determined to be appropriate for the service.
Usual fee
The fee an individual physician most frequently charges for a service to private patients.
Customary fee
The range of fees charged by most physicians in the community for a particular service.
Reasonable fee
The generally accepted fee a physician charges for an exceptionally difficult or
complicated service. A charge is considered reasonable if it is deemed acceptable after
peer review even if it does not meet the criteria for a customary fee or prevailing
charges.
Third-party payer
A health plan or other party that agrees to carry the risk of paying for a patient's medical
services.
Acceptance of assignment
An agreement by a physician to accept the amount established by Medicare, Medicaid,
or a private insurer as full payment for covered services. The patient is not billed for the
difference because it is illegal to bill the patient for the balance.
Allowed charge
, The maximum charge an insurance carrier or government program will cover for specific
services. The allowed charges are detailed in an insurance carrier's explanation of
benefits. In managed care, a participating provider agrees to accept allowed charges in
return for various incentives, such as fast payment. If a participating provider normally
charges more for a service than the allowed charge, the physician must write off the
difference, and the patient may not be billed for this amount. However, nonparticipating
providers may bill patients for this difference.
Coordination of benefits
Prevents duplicate payment for the same service. For example, if a child is covered by
both parents' insurance policies, a primary carrier is designated to pay benefits
according to the terms of its policy, and the secondary plan may cover whatever
charges are still left. If the primary carrier pays $105 of a $150 charge, the most the
secondary carrier will pay is $45.
Participating (PAR) provider
A physician or other health-care provider who participates in an insurance carrier's plan.
The physician must keep a list of valid plans, because benefits vary for participating and
nonparticipating providers. Claims will be denied or have reduced reimbursement if the
physician is not a participating provider. Disallowed charges and charges not eligible for
payment must be written off.
Nonparticipating (nonPAR) provider
A physician or other health-care provider who has not joined a particular insurance plan.
Patients who obtain services from nonPAR providers generally must pay more of the
cost than those who obtain services from PAR providers.
Explanation of Benefits (EOB)
A document from an insurance carrier that shows how the amount of the benefit was
determined.
Copayment (copay)
The amount of money due from the subscriber to cover a portion of a bill. For most
health maintenance organizations (HMOs), this amount is usually a small fixed fee,
such as $10, per office visit.
Exclusions
