Billing & Insurance FAQs

Glossary of Billing Terms


Below is a list of common billing terms used at Sanford Health of Northern Minnesota. These
terms should provide assistance in understanding your billing statement.

Account Numbe
r: A unique number that is assigned to you each time you visit the
hospital. A new number will be issued for each visit.

Adjustment: A portion of your hospital bill that is adjusted due to a contract between
Sanford and individual insurance companies.

Amount Not Covered: A portion of your hospital bill that the insurance company will
not pay. It may include deductibles, coinsurances, and charges for non-covered
services.

Amount Payable by Plan: The amount your insurance plan pays or covers for your
treatment, less any deductibles, coinsurance, or charges for non-covered services.

Benefit: The services that are covered under your insurance plan.

Billing Statement: A summary of current activity on an account.

Claim: The information billed to the insurance company for services provided.

Completed Application: May include in addition to the application, any or all
necessary documents deemed necessary when making a determination on the
submitted application.

COBRA Insurance: Health insurance coverage that you can purchase when you are no
longer employed, or awaiting coverage from a new insurance plan to begin. Coverage
may be purchased for up to 18 months from termination of employment. It is generally
more expensive than insurance provided through the employer but less expensive than
insurance purchased as an individual policy.

Coinsurance: The percentage of coverage not covered under your insurance benefits.
For example, your policy may cover 80% of charges. Your coinsurance/patient portion
would be the remaining 20%.

Co-payment/Co-pay: A set fee established by the insurance company for a specific
type of visit. This amount is due from the guarantor. This information can routinely be
located on the insurance card and will be different amounts according to the type of
visit. For example, Emergency Room Visit - $50, Inpatient Stay - $100, Physician Office
Visit - $20.

Date of Service (DOS): The date(s) when you were provided healthcare services. For
an inpatient stay, the dates of service will be the date of your admission through your
discharge date. For outpatient services, the date of service will be the date of your visit.

Deductible: The amount of eligible (covered) expenses that you must pay each year
before coverage begins. Call your insurance company for the most up-to-date
information regarding your deductible.

Eligible Charges (Allowed Amount): The maximum dollar amount allowed for covered
services rendered by participating providers and facilities or by nonparticipating
providers and facilities. Deductibles and coinsurance amounts are calculated from
eligible charges. Participating providers and facilities accept this allowed amount as
payment in full for covered services. Nonparticipating providers and facilities may not
accept this amount as payment in full for covered services.

Explanation of Benefits (EOB)
: This is a notice you receive from your insurance
company after your claim for healthcare services has been processed. It explains the
amounts billed, paid, denied, discounted, uncovered, and the amount owed by the
patient. The EOB may also communicate information needed by the insured in order to
process the claim.

Family: Using the Census Bureau definition, a group of two or more people who reside
together and who are related by birth, marriage, or adoption. According to the Internal
Revenue Service rules, if the patient claims someone as a dependent on his or her tax
return, that person may be considered a dependent for purposes of the provision of financial
assistance.

Family Income: Family income is determined using the Census Bureau definition,
which uses the following income when computing federal poverty guidelines.

-Includes earnings, unemployment compensation, workers' compensation,
Social Security, Supplemental Security Income, public assistance, veterans'
payments, survivor benefits, pension or retirement income, interest,
dividends, self employed business and farm income, rents, royalties, income
from estates, trusts, educational assistance, alimony, child support,
assistance from outside the household, and other miscellaneous sources;
-Noncash benefits (such as food stamps and housing subsidies) do not count;
-Determined on a before-tax basis;
-Excludes capital gains or losses; and
-If a person lives with a family, includes the income of all family members
(non-relatives, such as housemates, do not count).

Guarantor: The person responsible for paying the bill.

Health Maintenance Organization (HMO): An insurance plan that has contracted with
providers to provide healthcare services at a discounted rate. These services will
require prior pre-certification, authorization, and/or referrals.

Managed Care: An insurance plan that has a contract agreement with hospitals,
physicians, and other healthcare providers.

Medicaid: A state administered federal and state-funded insurance plan for low-income
families who have limited or no insurance.

Medicare: A health insurance program for people age 65 and older, some people with
disabilities under age 65, and people with end-stage renal disease (ESRD). For
questions concerning the Medicare program, call the Social Security Administration tollfree
at 1-800-772-1213, or call your local Social Security office.

Medicare Part A (Hospital Insurance): Healthcare coverage for inpatient stays at
participating hospitals.

Medicare Part B (Medical Insurance): Healthcare coverage for doctors' services,
outpatient hospital care, and some other medical services that Part A does not cover,
such as the services of physical and occupational therapists, and some home health
care.

Medigap: Medicare supplemental insurance available by private insurance companies
that pays for some services not covered by Medicare A or B, including deductible and
coinsurance amounts.

Non-Covered Services
: Services not covered under the patient's insurance plan.
These charges are the patient's responsibility to pay.


Out-of-Network Provider/Non-Participating Provider
: The provider is not part of the
insurance plan's network of contracted providers. Generally, insurance plans pay less
for services at an out-of-network provider and the guarantor has higher out of pocket
costs.

Out-of-Pocket Costs/Maximum: The amount that you pay until your insurance benefit
coverage reaches 100%.

Payor: A third-party entity (commercial or government insurance carriers) that pays
medical claims.

Point-of-Service Plans
: An insurance plan that allows you to choose doctors and
hospitals without first having to get a referral from your primary care physician.

Pre-Authorization Number: A number obtained from your insurance company by
doctors and hospitals. This number will represent the agreement by the insurance plan
that the service has been approved. This is not a guarantee of payment.

Preferred Provider Organizations (PPO): An insurance plan that has a contract with
providers to provide healthcare services at a discounted rate. These services may
require prior pre-certification, authorization, and/or referrals.

Primary Insurance: The insurance primarily responsible for the payment of the claim.

Prior Authorization/Precertification: A formal approval obtained from the insurance
company prior to delivery of medical services.

Referral: Approval or consent by a primary care doctor for a patient to see a certain
specialist or receive certain services.
 
Sanford: Sanford Health of Northern Minnesota which includes: Sanford Bemidji Medical Center, Neilson Place, Trillium, WindSong, Sanford Bemidji Home Care and Hospice, and Sanford Bemidji Peak Performance.

Secondary Insurance: The insurance responsible for processing the claim after the
primary insurance determination of benefits.

Subscriber: The person responsible for payment of premiums or whose employment is
the basis for eligibility for a health plan membership.

Supplemental Insurance: An additional insurance policy that processes claims after
Medicare reimbursement.

Uncompensated Care: Healthcare services that have or will be provided but are never
expected to result in cash inflows. Uncompensated care results from a provider's policy
to provide healthcare services free or at a discount to individuals who meet the
established criteria.

Underinsured: The patient has some level of insurance or third-party assistance but
still has out-of-pocket expenses that exceed his/her financial abilities.

Uninsured: The patient has no level of insurance or third party assistance to assist
with meeting his/her payment obligations.