Domain Knowledge & Definitions (Healthcare Insurance)

Here are some key terms I work with daily:

• Provider: Any person (like a doctor or dentist) or institution (like a hospital or clinic) that provides medical services.
• Member Enrollment: The process of adding an individual or a group to a health insurance plan. This is the first step in the insurance lifecycle for a member.
• Coverage: This defines what services and treatments the insurance plan will pay for. For example, a plan might have coverage for dental check-ups but not for cosmetic surgery.
• Claim: A formal request for payment submitted by a provider to the insurance company for services rendered to a member.
• Line Item: A single entry on a claim form that represents a specific service or procedure. For example, a dental claim might have one line item for an X-ray and another for a cleaning. Each has its own procedure code and charge.
• Fee Schedule: A comprehensive list of fees used by insurance companies to determine the maximum amount they will pay for each medical service. If a doctor charges more than the fee schedule amount, the excess may not be covered.
• Adjudication: This is the core process of reviewing a claim. My code checks the member’s eligibility, coverage, and applies business rules (like checking for duplicate claims or medical necessity) to decide whether to pay, deny, or adjust the claim.
• EOB (Explanation of Benefits): After a claim is adjudicated, an EOB is sent to the member. It’s not a bill. It explains what the provider billed, what the insurance paid, and what the member’s financial responsibility is (like copay or deductible).
• COB (Coordination of Benefits): This process is triggered when a member is covered by more than one health plan (e.g., their own and a spouse’s). It determines which plan is primary (pays first) and which is secondary to prevent overpayment.
• Deductible, Copay, and Coinsurance: These are forms of cost-sharing for the member.
  • Deductible: The amount you pay for covered services before your insurance plan starts to pay.
  • Copay: A fixed amount (e.g., $25) you pay for a service.
  • Coinsurance: Your share of the costs of a service, calculated as a percentage (e.g., 20%).
• Out-of-Pocket Maximum: The most a member has to pay for covered services in a plan year. Once this limit is reached, the insurance company pays 100% of the costs for covered benefits.
• Lab Fee: The specific charge for laboratory tests, like blood work or urinalysis, which is often a separate line item on a claim.

What is the difference between a policy and a claim?

A policy is the contract between the insurer and the insured, which outlines the terms of coverage. A claim is a formal request made by the policyholder to the insurer for compensation for a loss covered under that policy. In my work, I’ve dealt with both: configuring policy rules (PBOs) and processing incoming claims against those rules.