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Plain-English definitions for every billing term on this site, and how the price data itself works. Click any term for a full explanation with a worked example.

Costs & pricing basis

  • Deductible

    The amount you pay out of your own pocket each year before your insurance starts paying its share.

  • Coinsurance

    The percentage of a bill you pay after you've met your deductible — insurance covers the rest.

  • Copay

    A fixed dollar amount you pay for a specific type of visit or service, regardless of the bill's size.

  • Out-of-pocket maximum

    The most you'll pay in a year for covered care — once you hit it, your plan pays 100% of covered costs for the rest of the year.

  • Gross charge (chargemaster price)

    The hospital's full, undiscounted list price — pulled from its internal "chargemaster" price list. Almost no one actually pays this.

  • Discounted cash price

    What a hospital charges a self-pay patient who pays directly, without going through insurance — usually well below the gross charge.

  • Negotiated rate

    The price a specific insurance plan agreed to pay the hospital for a service — it varies by insurer, and even by plan within the same insurer.

  • Case rate

    A single flat fee covering an entire episode of care (e.g. a whole surgery), instead of billing each component separately.

  • Per diem rate

    A flat daily rate for an inpatient stay, regardless of what happens that day.

  • Fee schedule

    A price list that sets a specific negotiated amount for each individual billing code, rather than a flat bundle.

Insurance & claims

  • Payer

    The insurance company footing the bill — Aetna, UnitedHealthcare, Medicare, and so on.

  • Plan

    The specific product an insurer sells — e.g. "Blue Cross PPO 500" — which sets your deductible, coinsurance and negotiated rates.

  • In-network vs. out-of-network

    A hospital "in-network" with your plan has a pre-negotiated rate; "out-of-network" means no agreed price, and you can be billed far more.

  • EOB (Explanation of Benefits)

    A statement your insurer sends after a claim is processed, showing what was billed, what insurance paid, and what you owe. It is not a bill.

  • Prior authorization

    Approval your insurer requires before certain procedures, or it may refuse to pay even if the care is otherwise covered.

  • Surprise billing

    An unexpected bill from an out-of-network provider you didn't choose — e.g. an anesthesiologist at an in-network hospital. Largely restricted by the federal No Surprises Act since 2022.

Codes & billing

  • DRG (Diagnosis-Related Group)

    A code that classifies an inpatient hospital stay by diagnosis and treatment, used mainly by Medicare to set a single flat payment for the whole admission.

  • CPT code

    A 5-digit code (Current Procedural Terminology) identifying a specific medical, surgical or diagnostic service — the most common way procedures are billed.

  • HCPCS code

    A billing code system (Healthcare Common Procedure Coding System) that extends CPT codes to cover supplies, equipment and services CPT doesn't, like ambulance rides.

  • Revenue code

    A 3-4 digit code identifying which hospital department or cost center a charge came from, used alongside CPT/HCPCS codes.

  • Facility fee vs. professional fee

    The facility fee covers the building, staff and equipment; the professional fee is the separate bill from the doctor who treated you — two bills for one visit.

  • Inpatient vs. outpatient

    Inpatient means you're formally admitted and stay overnight under a doctor's order; outpatient means you're treated and released the same day — and they're billed very differently.

How it works