Let's have a look at some of the most frequently used insurance terms:
Preauthorization/Preapproval/Prior Authorization
The insurance company authorizes and allows the service to be provided. Obtain in written form before proceeding with surgery. These terms are used interchangeably.
Precertification/Predetermination
Certifies that the insurance company does cover the procedure if you meet their criteria. These two terms are used interchangeably.
Be careful with the above terms. In a poll of 6 insurance companies, five of them said that all five terms mean the same thing. To say that the insurance company precertifies you does not mean that they allow the service. When you prove medical necessity, then they will allow the surgery. That is preapproval, get preapproval in writing. Preapproval comes only after submission of all your paperwork for them to review.
Criteria:In this case, the standards (rules) used by insurance companies to judge whether you qualify for the surgery. Each insurance company has their own criteria. Some similar criteria that most insurance companies have include the need for a psychological report and a diet history.
Exclusion Statement
A section in your insurance policy that describes what the insurance company will not pay for. Look for the words “surgery for weight control,” “weight control,” “surgery for the treatment of obesity,” “gastric bypass surgery” and others. It is well worth fighting exclusion statements. You may not win in the end, but maybe you will. The steps to do that will be described below.
PCP
Your family medical physician (Primary Care Physician). A primary care physician monitors your health, treats most health problems, and authorizes referrals to specialists, if necessary.
Coinsurance
The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.
Coordination of Benefits
A system to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100 percent of the claim.
Copayment
Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, $5 for every visit to the doctor). The insurance company pays the rest.
Covered Expenses
Most insurance plans, whether they are fee-for-service, HMOs, or PPOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.
Deductible
The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying.
Maximum Out-of-Pocket
The most money you will be required pay a year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums.
Noncancellable Policy
A policy that guarantees you can receive insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.
Preexisting Condition
A health problem that existed before the date your insurance became effective.
Premium
The amount you or your employer pays in exchange for insurance coverage.
Provider
Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical care.
Third-Party Payer
Any payer for health care services other than you. This can be an insurance company, an HMO, a PPO, or the Federal Government.
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