Insurance Terms and DefinitionsUnderstanding Your Physical Therapy Coverage
Here are some insurance terms and definitions to help you better understand your insurance plan.
Benefit: A general term referring to any service (such as a physical therapy visit, laboratory test, surgical procedure, etc.) or supply (such as prescription drugs, durable medical equipment, etc.) covered by a health insurance plan.
Claim: A request for payment that the patient, doctor, physical therapy clinic, hospital, or other health provider submits to an insurer for covered items or services, such as physical therapy visits
Co-Insurance: This is a percentage amount that is the insured’s responsibility. A common co-insurance split is 80/20. This means that the insurance company will pay 80% of the services and the insured is required to pay the remaining 20%.
Co-Payments: A co-payment is a fixed amount that the insured is required to pay at the time of service.
Deductible: The deductible refers to the amount of money that the insured will need to pay before any benefits would be paid by your health insurance carrier. This is usually a yearly amount so when the policy starts again the deductible would be in effect again. Usually there are separate individual deductible amounts and total family deductible amounts. Some plans may have separate deductibles for specific services, such as physical therapy and hospitalization, and these may be different amounts. Also, the deductible amount may vary if a provider is considered in-network or out-of-network provider.
Exclusions: Services or items not covered under a given health plan that the insurer will not pay. Under the Affordable Care Act pre-existing conditions will no longer be denied coverage.
In-Network: Providers are considered in-network if they have a contract with an insurance company. Typically, deductible amounts are lower and co-insurance amounts are higher with an in-network provider, resulting in lower overall cost to the patient.
Lifetime Maximum: This is the most amount of money the health insurance policy will pay for during the patient’s entire lifetime. Pay attention to individual lifetime maximums and family lifetime maximums as they can be different.
Out-of-Network: Providers are considered out-of-network if they do not have a contract with an insurance company. Typically, deductible amounts are higher and co-insurance amounts are lower with an out-of-network provider, resulting in higher overall cost to the patient.
Out-of-Pocket: An out-of-pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the whole year out of their pocket, excluding premiums.
PIP: PIP, or Personal Injury Protection, is automobile insurance coverage that pays medical expenses for individuals injured in an auto accident, regardless of who is at fault. This coverage is also known as no-fault Personal Injury Protection.
Premium: The amount paid monthly for healthcare insurance coverage.
Provider: A term commonly used by health insurance companies to designate any healthcare provider, whether a doctor, physical therapist, hospital, or clinic.
Referral: The process through which a patient under a managed care health insurance plan is authorized by his or her primary care physician to a see a specialist, such as a physical therapist, for the diagnosis or treatment of a specific condition.
Specialist Visits: Physical therapy is considered a specialty visit because of the in-depth skills and knowledge of the physical therapists.