Therapy billing has its own language. This glossary defines 35 essential terms that therapists and clients encounter when navigating superbills, insurance claims, and out-of-network reimbursement.
A–C
- Assignment of Benefits — A client's authorization for the insurer to pay the provider directly, rather than reimbursing the client.
- Allowed Amount — The maximum amount an insurer will pay for a covered service, based on UCR rates. Reimbursement is calculated as a percentage of the allowed amount, not the provider's actual charge.
- BAA (Business Associate Agreement) — A HIPAA-required contract between a covered entity (the therapist) and a vendor who handles PHI (e.g., billing software, EHR).
- Claim Number — A unique reference number assigned by the insurer when a claim is received. Use it when calling to check claim status.
- CMS-1500 — The standard paper claim form used by non-facility providers to submit claims to Medicare and most commercial insurers. Superbills are modeled after this form.
- COB (Coordination of Benefits) — Rules for how two insurers share payment when a client has dual coverage. The primary insurer pays first; the secondary may cover some or all of the remainder.
- Coinsurance — The percentage of the allowed amount the client pays after their deductible is met. Example: 30% coinsurance means you pay 30%, the insurer pays 70%.
- Copay — A flat fee paid per visit (e.g., $40/session), regardless of the allowed amount. Copays replace coinsurance on some plan types.
- CPT Code — Current Procedural Terminology code. A 5-digit code that identifies the service provided. For therapy: 90837 (60 min), 90834 (45 min), 90832 (30 min).
- Credentialing — The process of being vetted and approved to join an insurance network as an in-network provider.
D–I
- Deductible — The amount a client must pay out-of-pocket before insurance begins covering costs. Separate in-network and OON deductibles are common.
- EIN (Employer Identification Number) — A tax ID from the IRS. Used on superbills and claims in place of an SSN to protect the provider's identity.
- EOB (Explanation of Benefits) — A document from the insurer showing how a claim was processed: amount billed, allowed amount, plan payment, and client responsibility. Not a bill.
- HIPAA — Health Insurance Portability and Accountability Act. Federal law governing the privacy and security of protected health information (PHI).
- ICD-10 — International Classification of Diseases, 10th edition. The diagnosis coding system required on all claims. Example: F41.1 (Generalized Anxiety Disorder).
- In-Network — A provider who has contracted with an insurer to provide services at negotiated rates. Clients pay lower cost-sharing for in-network care.
- Itemized Receipt — A document listing services and costs. Differs from a superbill in that it may not include diagnosis codes or CPT codes required by insurers.
M–P
- Mental Health Parity — Federal and state laws requiring insurers to cover mental health services at the same level as comparable medical/surgical services.
- NPI (National Provider Identifier) — A unique 10-digit ID for healthcare providers. Required on all superbills and claims.
- OON Deductible — The out-of-network deductible, which is typically higher than the in-network deductible (e.g., $3,000 OON vs $1,500 in-network).
- Out-of-Network (OON) — A provider not contracted with the insurer. Clients can still receive OON reimbursement on most PPO plans via superbill.
- Out-of-Pocket Maximum — The most a client will pay in a plan year for covered services. After reaching this cap, the insurer covers 100%.
- Panel — An insurance provider network. Being "on panel" means you are credentialed as an in-network provider.
- PHI (Protected Health Information) — Any individually identifiable health information. Superbills contain PHI and must be handled in compliance with HIPAA.
- POS (Place of Service) — A two-digit code on a claim or superbill indicating where the service was provided. Common codes: 11 (office), 10 (telehealth client home), 02 (telehealth non-home).
- Prior Authorization (PA) — Insurer approval required before certain services are provided. Less common for standard outpatient therapy but required for IOP, inpatient, and some testing.
R–Z
- Remittance Advice — A document sent to providers (not clients) detailing claim payment. Similar to an EOB but for the provider side of the transaction.
- Single Case Agreement (SCA) — A one-time in-network exception granted by an insurer for a specific client when no comparable in-network provider is available.
- Subrogation — A process where an insurer recovers costs from a third party after paying a claim. Rare in mental health but can occur in legal settlements.
- Superbill — An itemized receipt with all required medical codes (CPT and ICD-10) that a client submits to insurance for OON reimbursement.
- Superbill vs. Invoice — A regular invoice shows what you owe; a superbill shows what you paid and includes diagnostic and procedure codes for insurance processing.
- Taxonomy Code — A 10-character code identifying your provider specialty. Registered with your NPI in the NPPES database.
- Telehealth Modifier — A modifier code added to a CPT code to indicate the service was delivered via telehealth. Common modifiers: GT, 95, 93 (audio-only).
- UCR (Usual, Customary, and Reasonable) — The statistical rate an insurer uses to determine the allowed amount for a service in a given geographic area.