Observation - type of service used by doctors and hospitals to decide whether the patient needs inpatient hospital care or whether they can recover at home or in an outpatient area.   Observation is usually charged by the hour and may include an overnight hospital stay.

Out of Network (OON) services – services obtained from a non-participating provider.  Typically, coverage requires payment of a higher deductible, co-payment, and/or co-insurance than for services from a participating provider.

Out-of-Pocket (OOP) – the portion of payments for services due from the beneficiary, including co-payments, co-insurance, and deductible.

Outpatient (OP) - a patient who does not need to stay overnight in a hospital.  Outpatient services include lab tests, X-rays, and some surgeries.

Over-the-Counter (OTC) drug - drugs that do not require a prescription and are purchased at a pharmacy or drug store.

Participating provider - a doctor, hospital, or other health care provider that is part of an insurance plan’s network.  As such, they agree to accept insurance payment for covered services as payment in full, minus any applicable beneficiary/patient liability.

Patient type - a classification of patients based on the type of services they receive from the hospital, such as outpatient, inpatient, observation, etc.

Per diem - per day.  Usually describes charge or payment methods based on a set rate per day of care.

Point-of-Service (POS) plan - an insurance plan that allows the beneficiary to choose doctors and hospitals without having to first get a referral from their primary care doctor.  These plans frequently have different benefit levels associated with the use of preferred providers.

Policy number - a number that the insurance company assigns the beneficiary to identify the contract through which they are eligible for coverage.

Pre-admission approval/certification - an agreement by insurance to pay for medical services.  Doctors and hospitals ask the insurance company for this approval before providing services.  Failure to obtain this approval often results in a penalty to the beneficiary since the resulting services may be deemed non-covered by insurance.

Pre-existing condition – any medical condition that has been diagnosed or treated within a specified period immediately preceding the beneficiary's effective date of coverage.  Pre-existing conditions may not be covered for a specified time period as defined in the insurance company's certificate of coverage.

Preferred Provider Organization (PPO) – an insurance plan that establishes contracts with providers of medical care for discounted charges.  Providers under such contracts are referred to as a preferred provider.  Usually, the plan provides significantly better benefits and lower costs to the beneficiary for services received from preferred providers.

Premium – the amount paid, often in monthly installments, for an insurance policy.

Prepayment - money paid before receiving medical care.

Primary Care Physician (PCP) - a doctor whose practice is devoted to internal medicine, family/general practice, pediatrics, or obstetrics/gynecology.

Primary insurance - the insurance responsible for paying the claim first.  If a patient is covered by other insurance, it is referred to as the secondary insurance.  See also coordination of benefits.

Private room and board - a hospital room furnished for and occupied by only one patient.  These rooms may be more expensive than semi-private rooms that are furnished for and/or occupied by two patients.  The beneficiary may have to pay the price difference for a private room out-of-pocket if the room is not medically necessary.

Procedure/CPT code - a coding system used to describe outpatient services provided to the patient.

Psychiatric/psychological treatments - nursing care and other services for emotionally disturbed patients, including patients admitted for inpatient care and those admitted for outpatient services.

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