Medical Billing Terminology - A

Allowed Amount: The sum an insurance company will reimburse to cover a healthcare service or procedure. The patient typically pays the remaining balance if there is any amount left over after the allowed amount has been paid. This amount should not to be confused with co-pay or deductibles owed by a patient.

American Medical Association (AMA): The AMA is the largest organization of physicians in the U.S. dedicated to improving the quality of healthcare administered by providers across the country. The current procedural technology (CPT) code set is maintained and revised by the AMA in accordance with federal guidelines.

Aging: A formal medical billing term that refers to insurance claims that haven’t been paid or balances owed by patients overdue by more than 30 days. Aging claims may become denied if they aren’t filed in time with a health insurance company.

Ancillary Services: Any service administered in a hospital or other healthcare facility other than room and board, including biometrics tests, physical therapy, and physician consultations among other services.

Appeal: Appeal occurs when a patient or a provider tries to convince an insurance company to pay for healthcare after it has decided not to cover costs for someone on a claim. Medical billing specialists deal with appeals after a claim has been denied or rejected by an insurance company.

Applied to Deductible (ATD): This term refers to the amount of money a patient owes a provider that goes to paying their yearly deductible. A patient’s deductible is determined by their insurance plan and can range in price.

Assignment of Benefits (AOB): This term refers to insurance payments made directly to a healthcare provider for medical services received by the patient. Assignment of benefits occurs after a claim has been successfully processed with an insurance company.

Application Service Provider (ASP): ASP is a digital network that allows healthcare providers to access quality medical billing software and technologies without needing to purchase and maintain it themselves. Providers who use ASP typically pay a monthly fee to the company that maintains the billing software.

Authorization: This term refers to when a patient’s health insurance plan requires them to get permission from their insurance providers before receiving certain healthcare services. A patient may be denied coverage if they see a provider for a service that needed authorization without first consulting the insurance company.