Glossary

Insurance jargon, decoded.

Every word you might see on a denial letter, in plain English.

Adverse benefit determination: A formal name for any insurer decision that limits, denies, or reduces a benefit. The legal trigger that gives you appeal rights.
Allowed amount: The maximum the carrier will pay for a service. The difference between the billed amount and the allowed amount may end up on your bill.
Appeal: A formal challenge to a denial. Internal appeals go to the carrier; external appeals go to an independent reviewer.
Authorized representative: A person you designate to act on your behalf during the appeal. Can be a family member, an advocate, or a service like ours.
Coordination of Benefits (COB): Process for figuring out which plan pays first when you have more than one. COB confusion is a frequent cause of denials.
Denial reason code: A short alphanumeric code on the denial letter (CO-50, PR-49, etc.) that tells you the carrier's stated reason. Each code has a known counter-argument.
DME (Durable Medical Equipment): Hospital beds, oxygen, mobility equipment, etc. A common denial category for Medicare and Medicare Advantage.
ERISA: Federal law governing employer-sponsored insurance plans. ERISA appeals follow a separate timeline (60-180 days).
Explanation of Benefits (EOB): The statement showing what was billed, what the carrier paid, and what's owed. Not a bill. But a critical piece of any appeal.
External review: Independent review by an outside organization after internal appeal. The carrier is bound by the decision.
Formulary: The plan's list of covered drugs, organized into tiers. Drugs not on it are 'non-formulary.'
Formulary exception: Request to cover a non-formulary drug. Often submitted with manufacturer clinical data.
HIPAA: Federal health privacy law. Governs how your medical and insurance information is handled.
Independent Review Entity (IRE): Maximus, the contractor that handles Medicare Advantage level-2 appeals.
IRO (Independent Review Organization): Independent panel that handles external review for commercial plans.
Letter of Medical Necessity (LMN): A document. Usually written by your doctor. Explaining why a treatment is medically necessary. The single highest-leverage piece of any appeal.
Medicare Advantage (Part C): Private alternative to Original Medicare. MA plans must follow the federal 5-level appeal process.
Medicare Appeals Council: Level 4 of the Medicare appeal ladder, after the Administrative Law Judge.
Network status: Whether the provider or facility is in-network (lower cost, easier coverage) or out-of-network.
Non-formulary: A drug not on the plan's formulary. Often appealable through a formulary exception.
Out-of-pocket maximum: The most you pay in a year before the plan covers everything. Denials sometimes hide behind this cap.
Peer-to-peer review: Phone call between your doctor and the plan's medical director. A frequent fast-track to reversal.
PHI (Protected Health Information): Identifiable medical information governed by HIPAA. We treat every uploaded file as PHI.
Prior authorization: Approval the plan requires before delivering certain care. Most pre-service denials are prior-auth refusals.
QIC (Qualified Independent Contractor): Level-2 reviewer for Original Medicare appeals.
Reasonable and customary (R&C): What the plan considers a 'fair' price for an out-of-network service. Often disputed.
Retrospective review: Carrier reviews a claim after the fact to decide payment. Most claim denials happen here.
Step therapy: Carrier requires you try a cheaper treatment first before approving the one your doctor prescribed.
Tiering exception: Request to move a drug to a lower-cost tier without changing whether it's covered.
UCR (Usual, Customary, Reasonable): Same as R&C. The plan's view of fair pricing for out-of-network care.

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