Therapy Billing Glossary: 35 Terms Every Therapist and Client Should Know

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. See how insurers determine reimbursement.
• 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%. See deductibles vs copays.
• 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. See how to read your EOB.
• 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. See mental health parity law guide.
• NPI (National Provider Identifier) — A unique 10-digit ID for healthcare providers. Required on all superbills and claims. See what is an NPI number.
• 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. See prior authorization guide.

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. See single case agreement guide.
• 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. See what is a taxonomy code.
• 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.