Medical Billing & Collection Terms

Terms covering how hospitals bill, offer financial assistance, and collect on medical debt.

• Financial Assistance Policy (FAP)

  A nonprofit hospital's written policy, required under IRS Section 501(r), that determines whether a patient qualifies for free or reduced-cost care.

• Extraordinary Collection Actions (ECA)

  Collection actions — including lawsuits, credit reporting, and selling the debt — that a nonprofit hospital cannot take against a patient before making reasonable efforts to determine financial assistance eligibility.

• No Surprises Act

  A federal law protecting patients from most surprise out-of-network medical bills, and giving uninsured or self-pay patients a way to dispute a final bill that comes in well above their Good Faith Estimate.

• Explanation of Benefits (EOB)

  A statement from your health insurer showing what a provider billed, what insurance paid, and what you may owe — not a bill itself.

• Balance Billing

  When an out-of-network provider bills you for the gap between what they charged and what your insurance paid — now banned in most emergency and surprise situations under the No Surprises Act.