Verification of Benefits Terminology Front Office and Physical Therapists Need To Know

One Body verifies benefits for patients of over 50 clinics. Below we’ve put together a list of insurance terminology you should know in order to read and understand patient verification of benefits!

• Primary Policy
  • The insurance policy that will process claims first
• Secondary Policy
  • The insurance policy that will process claims second. May have different benefit limits or requirements than the primary policy
• Supplemental Policy
  • An insurance policy that will process claims after the primary policy. Typically will cover the patient responsibility that is stated by the primary policy. Supplemental plans will only cover services that the primary policy does.

• Deductible
  • The amount of money that a patient will need to pay before the insurance will pay anything towards claims
• Out of Pocket
  • The amount of money that a patient will need to pay before the insurance will pay all claims of covered benefits
• Copay
  • A set amount that the patient will pay for each visit, regardless of the total amount of the claim
• Coinsurance
  • The amount of cost share that the patient will pay. This amount will vary based on the total amount paid for the visit.

For an insurance to consider a claim to be payable, the provider may need to follow certain requirements:

• Referral
  • A document from a medical professional stating they are wanting a patient to receive a specific type of care
• Prescription
  • Similar to a referral, it contains the same information, but will also include how long and how often they want a patient to receive the care, which is known as frequency & duration
• Letter of Medical Necessity
  • A document from a medical professional that states what the patient is experiencing and the limitations caused by the illness or injury and how the patient may benefit from a specific type of care
• Signed Plan of Care (POC)
  • A Plan of Care (POC) is created by the evaluating provider that states the limitations the patient has and sets goals within a timeline.
  •  A signed POC is when the referring provider must sign and return the document to the evaluating therapist.
  • Most often you will see this with patients that have Medicare.

• Pre-authorization/Pre-certification/Authorization/Certification
  • A decision by an insurance company that services are medically necessary after a formal request has been made
• Based on Medical Necessity
  • This phrase is used by insurance companies to let you know that you will not need to make a formal authorization request. However, they do reserve the right to ask for medical documentation at any time to ensure that medical necessity was present at the time the patient had the visits.
• Medical Necessity Review
  • This refers to the process in which an insurance company asks for either all or specific documents related to the patient’s care to ensure that medical necessity was present and determine how many more visits the patient needs
• Utilization Review
  • Another term for Medical Necessity Review
• Cigna/American Speciality Health
  • Refers to their authorization process as Medical Necessity Review (MNR)
  • Since they do not ask for the clinical documentation that the therapists create, it is not a true medical necessity review
• Authorizations are known by several different names, but is the same process

• • Patient Summary Form (PSF)
  • Advanced Clinical Notification (ACN)
  • Clinical Submission

• Visit Limit
  • Maximum number of visits that a patient may have for their policy year
• Day Limit
  • Similar to a visit limit, but allows as patient to have visits with multiple services on the same day and only have one day used against the limit
• Unit Limit
  • Maximum number of units that can be billed to the insurance for the policy year
• Dollar Limit
  • Maximum amount of payment that the insurance will pay for a given service
  • This type of limitation will need to be converted by the practice to a visit limit so that it can be tracked
• Other Types of Limitations
  • Modality limit
    • Practice may only bill up to a certain number of treatments per visit
  • Unit limit
    • Insurance company may limit the total number of units that may be billed per visit

• Concurrent Procedure Terminology (CPT) Codes
  • Universal set of codes that is determined by the American Medical Association (AMA).
  • Consists of a 5 character code that is mostly numbers and may contain letters
• Codes are billed as a unit
  • Can bill multiple units of the same code if it is a timed code
• A modality is a treatment code

• • Untimed Codes
    • Evaluation Codes
      • 97161, 97162, 97163, 97164
  • Timed Codes
    • Treatment Codes
      • 97110, 97112, 97116, 97140, 97530

Exclusions are things that the plan will not cover, even if it is part of a covered benefit. They come in all different forms.

• Examples of exclusions:
  • Therapy in a group setting of 2 or more individuals is excluded.
  • Therapy for treatment of a developmental delay disorder is not a covered benefit
  • Myofunctional therapy is not a covered benefit

Two types of tier systems:

• Tier system applies to the authorization requirements that providers will need to follow
  • American Specialty Health (ASH)
    • Tier 1 providers do not need to submit MNRs
    • Tier 2 providers submit for authorization after the first 12 visits
    • Tier 3 providers submit for authorization after the first 5 visits
  • United Health Care (UHC)
    • Tier 1 providers do not need to submit PSF/ACN/Clinical Submission
    • Tier 2 providers must submit for for all applicable groups

• Tier system applies to the amount of the patient’s responsibility and may involve different limitations 
  • Can be referred to as Tier 1/2/3 or Preferred Provider Tier
    • Example:
      • Tier 1 Provider – patient’s responsibility is $10 copay per visit, no visit limit
      • Tier 2 Provider – patient’s responsibility is $35 copay per visit, 25 visit limit