Common Health Insurance Terminology
Premium– The monthly or bimonthly fee you pay to have health insurance.
CPT codes– A medical code used for billing (a 5 digit number like 97110).
Allowed Amount– The maximum amount your particular health insurance plan will pay for a service.
Deductible– The amount you owe before your insurance begins to pay.
Co-insurance– A percentage of the allowed amount that you pay.
Out of Pocket– The maximum you will ever pay during your benefit period.
Copay– A fixed dollar amount you may pay for a service at the time you receive it. Many times, a copay does not apply towards your deductible. However, it will often apply towards your Out of Pocket Limits.
Physical Therapy Visit limits, Caps, Authorizations, and Benefit periods
Specific to physical therapy, each insurance company decides on what is the maximum amount of physical therapy the insurance company will pay for. This is done through imposing visit limits, caps and authorizations.
A visit limit is an actual number of the maximum visits that an insurance company will cover. Even if the service applied to your deductible and you paid the cost, that counts as insurance coverage and it is a visit under your limit. 15, 20, 30, 60 are common visit limit numbers.
A cap is a dollar amount that the insurance company will cover. They will only cover X dollars. If the cap is $1000, then the insurance company will only cover $1000 worth of visits. Keep in mind that this is the allowed amount, not the billed amount (See Allowed Amounts post).
An authorization is when the provider asks the insurance company’s permission before providing the service. The provider will send documentation (notes, a doctor’s prescription, etc.) to provide reason why the treatment is needed. The insurance company will provide either 1) an actual number of visits to use within a time frame or 2) an unlimited number of visits within a time frame. Example: 10 visits to use between 7/12/17- 9/12/17.
Your plan’s benefit period is the time that your plan is active. Many plans are ‘calendar year’ plans, meaning that they are active from January- December. However, they can span for any amount of months, eg. September- August; July- June. Many visit limits last during the same times as the benefit periods. So, if the plan is a calendar year plan, the visits will last from January- December also. However, rarely, there are plans that differ, in which they are July- June for a benefit period, but the visit limits were on a January- December period. They only way to know for sure is to consult your insurance handbook, call your insurance company, or speak with someone in the provider’s office.