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Glossary of Terms

Knowing the facts and being able to speak to insurance representatives in their terms will help tremendously.
Here are some terms that may help while speaking with your insurance provider.

Appeal: The procedure available to a beneficiary/patient or supplier to contest an adverse decision made on a claim.

Beneficiary: A person eligible to receive benefits under a health care plan; patient.

Carrier: The insurance company that writes and administers the health insurance policy.

Copayment: The portion of the balance of covered medical expenses/prescriptions which a beneficiary/patient must pay.

Deductible: A stipulated amount, generally on an annual basis, which the covered person must pay toward the cost of medical treatment before the benefits of the program go into effect.

Denial: Determination that certain care or services cannot be reimbursed.

Diagnosis Code/ICD9 for PKU: The official code for PKU (270.1) issued by the U.S. Department of Health and Human Services.

Diagnosis Code/ICD9 for MSUD: The official code for MSUD (270.3) issued by the U.S. Department of Health and Human Services.

Drop-Ship: Third party order placed by a wholesaler with the manufacturer and shipped to the provider or an order placed by the provider and shipped directly to the patient.

HCPCS Code: Code used to classify service or supply for Medicare/Medicaid billing and some insurance companies.

Health Maintenance Organization (HMO): An organization that provides comprehensive health services to its members in return for a fixed, prepaid fee.

Medicaid: A program of federal matching grants to the states to provide health insurance for the indigent. States share in financing the program and determine eligibility and benefits consistent with federal standards.

Medical Benefits: Portion of your insurance policy which provides for medical services and or supplies.

Medical Food/Formula: Food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.

Medical Necessity Letter or Letter of Medical Necessity (LMN): Letter which explains why the product is needed, written by a metabolic professional/prescribing Physician. This may be required by your insurance company to obtain authorization of coverage.

Medical Supply Company: A DME (Durable Medical Equipment) or Home Healthcare provider of oral/enteral formula.

Prior Approval: A special authorization required by insurance companies before certain DME, is delivered to the beneficiary/patient. The written or oral authorization of coverage is usually referenced with a number given by the insurance company, Medicaid or Medicare. Prior Approval is required in most cases in order to receive coverage for medical foods.

Provider: A person, company, hospital, pharmacy, home health agency DME dealer or infusion company that renders/provides medical services or supplies to a beneficiary/patient.

Reimbursement Code: Used to identify products (medical foods/formula) for ordering and reimbursement purposes. Although it is not a National Drug Code (NDC) code, it follows the NDC format and is often referred to as (NDC) by payers.

Review: A consideration of medical records or information as it relates to a service rendered and billed by a provider or beneficiary/patient for payment. This is the first level of the appeals process.

Self-insured Health Plan (ERISA policy): Employer provided health insurance in which the employer, not an insurer, is at risk for its employees' medical expenses. Not required to abide by state mandates.

Standing Order: An extra month's supply of formula is reordered, held, or shipped automatically by a pharmacy or DME.

Wholesaler: Company that supplies product to your DME, Home Health, Hospital, State Agency or Pharmacy supplier. Most medical foods are available as a "DropShip" item through a wholesaler.