Insurance billing glossary

Insurance billing comes with its own vocabulary. This glossary gives you clear, concise definitions of the key terms you'll meet while setting up policies, submitting claims, and posting payments in Pabau — useful for providers, front-desk teams, and billing staff alike.

Insurance payer

The organization that processes and pays claims — a commercial insurer, a government program such as Medicare or Medicaid, or a third-party administrator. The payer receives your claim and decides reimbursement based on the member's benefits. In Pabau, each insurer you bill is linked to its payer in Setup → Claims → Claim.MD → Payers.

Insurance policy

The contract between a person and an insurer setting out the coverage terms — including deductibles, co-pays, and which services are covered. In Pabau, a client's policy lives on the Insurance tab of their client card.

Deductible

The amount the insured person pays out of pocket each year before the insurance starts paying for covered services.

Copayment (Copay)

A fixed fee the insured pays for a covered service, usually collected at the time of the visit. You can record a policy's co-pay on the client's policy details and collect it at the point of sale.

Coinsurance

The percentage of the cost the insured owes for covered services once their deductible has been met — for example, the plan pays 80% and the client pays 20%.

Policy holder

The person (or entity) who owns the policy and holds the contract with the insurer. The policy holder isn't always the person receiving care — a client can be covered under a partner's or parent's policy, which is why Pabau lets you set the policy holder to "Someone else."

Insurance plan

A specific program offered by an insurer that defines networks, covered services, limits, and cost-sharing. Plans act as templates for individual policies.

Insurance coverage

The specific services, treatments, and procedures the insurer agrees to pay for under a plan. Coverage varies by service category — an eligibility & benefits report in Pabau shows it per service type.

Insurance claim

A provider's formal request to an insurer for payment for services rendered. US professional claims travel on the CMS-1500 format, which is exactly what Pabau builds and submits for you.

Insurance payment

The amount the payer remits to the provider after approving a processed claim. Electronic payments arrive with an ERA (electronic remittance advice), which you post from Money → Payment remittance.

Coverage type

The classification of benefits that defines which services are covered and how they're paid — including network rules, referrals, cost-sharing, and prior-approval requirements.

Billing profile

The information that identifies your business as the billing entity on claims — legal name, NPI, Tax ID, and billing address. In Pabau it lives in Setup → Claims → Claim.MD → Billing profile and prints in box 33 of every CMS-1500.

Clearinghouse

An intermediary that transmits electronic claims between providers and payers, validating and formatting them to each payer's requirements along the way. Pabau's clearinghouse partner for US claims is Claim.MD.

Credentialing

The insurer's process of verifying a provider's education, training, licenses, and practice history — required before joining a payer's network.

In-network

Providers who have completed credentialing and contracted with a payer at negotiated rates. Patients generally pay less when they see in-network providers.

Out-of-network

Providers without a contract with a given payer. Patients usually pay more — higher coinsurance, separate deductibles, or no coverage at all. For out-of-network clients, Pabau can generate a superbill so they can claim reimbursement themselves.

Enrollments

Registering your providers with insurers so you can submit claims, receive ERAs, and run eligibility checks electronically. Managed per payer from the Payers tab in Pabau — note this is different from a patient enrolling in a health plan.

Superbill

A detailed receipt you give a client so they can seek reimbursement directly from their insurer. It includes your provider details, ICD-10 diagnosis codes, the services provided with CPT codes, and costs. Download one from any claim's Export menu in Pabau.

Ready to put the vocabulary to work? Start with Getting started with insurance billing.