AAC Funding – Funding Glossary

Funding Glossary

As you go through the funding process, you may run across terms that may be unfamiliar.

Following is a glossary of terms unique to the world of state Medicaid, Medicare and insurance. This handy reference should help as you fill out forms, review notices and read through documentation.

A   B   C   D   E   F   G   H   I   M   N  P   S   T   U


Advance Beneficiary Notice (ABN)
This form is used to notify a Medicare beneficiary that certain equipment will not be covered by Medicare. This form is completed prior to the equipment being shipped.

An individual who provides support, protects your rights, and/or works on your behalf.

The amount of money for which a third-party payer will allow claim to be processed. Often co-payments are based on allowable amount.

An appeal is a formal complaint made when there is a disagreement with any decision made about your health care services. For example, you would file an appeal if your insurance company refuses to authorize equipment that has been deemed medically necessary for you, and is covered under your policy.

Assignment of Benefits (AOB)
Form signed by the policy holder that allows the third party payer to pay the provider directly. Without an AOB, payment might be sent to the policy holder.

Assistive Living Facility
Congregate residential facility with self-contained living units providing assessment of each resident’s needs and on-site support 24 hours a day, seven days a week, with the capacity to deliver or arrange for services including some health care and other services.


The formal name of the person who has health insurance through Medicare, Medicaid, and/or insurance.


Centers for Medicare & Medicaid Services (CMS)
The federal agency that runs the Medicare program. In addition, CMS works with the states to run the Medicaid program. CMS works to make sure that the beneficiaries in these programs are able to get high quality health care.

Certificate of Medical Necessity (CMN)
This form is like prescription and must be completed by a physician.       

Billing submitted to the third party payer following delivery of services or products o the client.

Client Information Form
Information collected from the client, usually completed by client's advocate or family. Includes important information such as physician information, insurance information and client address, birth date and other demographics. This is collected by AAC Funding to assist the funding department in compiling necessary information for submission of claims. This form is used for AAC Funding purposes and is not mandated by third party payors.

The percent of the approved amount that the client pays after the deductible is paid.

Your right to communicate with your provider without anyone else finding out what is said.

Cost Sharing
The cost for medical care that is paid by the client such as a co-payment, coinsurance or deductible.

Covered Benefit
A health service or item that is included in your health plan, and that is paid either fully or partially.

CPT Codes (HCPC Codes)
Current Procedural Terminology, an accepted method developed by the American Medical Association in connection with the Health Care Financing Administration Common Procedure Coding System to describe a medical service by use of a numeric code.

Custodial Care Facility
Facility that provides room, board and other personal assistance service, generally on a long-term basis. These services do not include a medical component.


A dedicated speech-generating device solely used for communication purposes.                                       

The amount the client must pay yearly before a third party payer begins to pay.

A notice received following a request for pre-certification/prior authorization from a third party payer. The notice reflects the reviewers findings that the equipment prescribed is either/or found to be not medically necessary, or not covered by the policy. The reason for the denial is stated within the documentation, and is sometimes successfully reversed through an appeal process.

The name for the health problem that the client has. Diagnosis is reflected by an ICD-9 code, which is an industry-wide code used to describe a client’s medical condition.

Dual Eligible
Persons who are entitled to more than one source of third party reimbursement. For example, a client covered by both Medicare and Medicaid is dual eligible.

Durable Medical Equipment
Medical equipment that is ordered by a doctor for use in the home, and is reusable. PRC and Saltillo speech generating devices have been classified as Durable Medical Equipment.

Durable Medical Equipment Regional Carrier (DMERC)
A private company that contracts with Medicare to pay bills for durable medical equipment. There are four separate regions in the United States.


Explanation of Benefits (EOB)/Explanation of Medicare Benefits (EOMB)
A notice that is sent to the client after the doctor files the claim. This notice explains what the provider billed for, the approved amount, how much was paid, and what, if anything, the client owes.

Products and services for which the third party payer will not pay.


Fee Schedule
A complete listing of fees used by health plans to pay providers.


Group Home
Congregate residential foster care setting for children and adolescents in state custody that provides some social, health care, and educational support services and that promotes rehabilitation and reintegration of residents into the community.


Health Insurance Portability & Accountability Act (HIPAA)
A law passed in 1996 which was designed to expand health care coverage for those that lose a job, or need to move from one job to another. HIPAA protects clients who have pre-existing medical conditions and/or those having difficulty getting medical coverage. HIPAA also mandates providers keep your health information secure and private, and establishes uniform coding throughout the industry in attempt to reduce medical expenses derived from administrative processes.

Hospice is a special way of caring for people who are terminally ill, and for their families. The care includes physical care and counseling.


ICD Codes
International Classification of Diseases. It is a standardized classification of disease, injuries, and causes of death, by etiology and anatomic localization and codified into a 6-digit number, which allows clinicians, statisticians, politicians, health planners and others to speak a common language.

Insurance Authorization/Approval
The vendor has to obtain the insurance authorization or approval which is necessary to establish medical necessity, however it shouldn't be confused with benefits and is not a guarantee of payment.


Maximum Out of Pocket
The maximum amount a client will pay toward their deductible and/or co-insurance during the year.

Managed Care Organization (MCO)
Any insurance plan in which the client will need to have services approved by their plan's referring physician or medical group. A MCO can administer a Medicaid plan or a Medicare plan.

A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state.

Medical Decision Maker (MDM)
The person who is legally authorized to make medical decisions. This could be the client themselves, a parent, or legal guardian. 

Medical Release
Written permission from the client and/or guardian to share private health information regarding the client with others. Written permission is not required when a provider shares information with those identified as part of the client’s team, and with third party payers.

Medically Necessary
Services or supplies that: are proper and needed for the diagnosis, or treatment of the client’s medical condition; are provided for the diagnosis, direct care, and treatment of the client’s medical condition, meet the standards of good medical practice in the local area; and are not mainly for the convenience of the client or doctor.

The federal health insurance program for people 65 years of age or older and certain younger people with disabilities.


National Provider Identifier (NPI)
This is a unique number assigned to various providers. This number is needed when sending a claim to third party payers.

A non-dedicated speech generating device has extended functionality beyond communication such as environmental controls.

Non-participating Provider
Provider that has not contracted with a health insurance company to provide services at a reduced fee. Also referred to as an out of network provider.


Part B Medicare
Medicare medical insurance that helps pay for doctor’s services, outpatient hospital care, durable medical equipment (including speech generating devices), and some medical services that are not covered by Part A.

Pended Notice
A notice received following a request for pre-certification/prior authorization from a third party payer. The notice identifies missing information in the documentation, which without, cannot prove medical necessity. Generally, failure to return the missing information within a specified time frame results in a denial.

Place of Service
The location where the medical services will be provided to the client. Coverage can depend on whether the client resides at home, in a group home, or in a nursing facility. Clients residing in a skilled nursing facility or Hospice are usually not eligible for speech generating devices.

Pre-certification, Prior Authorization
Approval issued by a third party payer before the equipment is provided. The process usually entails completion of State forms and the attachment of documentation to prove medical necessity.

A review done by an insurance company to determine whether the service can be considered a covered benefit.

Primary Care Doctor, Primary Care Physician (PCP)
The primary care doctor is the doctor the client sees first for most health problems. The PCP might refer the client to other specialists, and must be seen before any other doctor is visited.

A doctor, hospital, health care professional, health care facility, or manufacturer of medical equipment.


SGD Evaluation/Speech and Language Assessment
An assessment conducted by a speech language pathologist to determine the ability of a client to use an SGD and the appropriateness of an SGD to meet the client's communication needs. The speech language pathologist along with a team of professionals possibly including an occupational therapist and physical therapist among others, assesses language and cognitive capacity as well as physical and sensory capacity for accessing an SGD and makes recommendations for the appropriate device to meet client's communication needs. The assessment must be completed by an ASHA certified speech language pathologist.

Sole Provider
A provider who is the only source for equipment or services. PRC or Saltillo is the sole provider of all speech generating devices bearing their name. Some insurance companies will work with PRC or Saltillo to negotiate a single case agreement since we are the sole provider of our equipment.

The person covered under an employer’s insurance policy. This person is identified as the policy holder.

Skilled Nursing Facility (SNF)
A nursing facility with the staff and equipment to give skilled nursing care and/or skilled rehabilitation services and other related health services. In general, clients residing in a SNF do not qualify to receive benefits for speech generating devices under Medicare.

Speech Generating Devices (SGD)
The classification in which Medicare has placed augmentative communication devices such as those manufactured by PRC and Saltillo.


TRICARE is the health care program for active duty members of the military, military retirees, and their eligible dependents. TRICARE was called CHAMPUS in the past.


Unique Physician Identification Number. Identification number that is used to identify the physician who wrote the prescription. This number sometimes is required by various third party payers.