The Vocabulary, Without the Marketing

Demand package

The set of documents a claimant’s representative sends to support a settlement demand — medical bills, treatment records, wage-loss documentation, and a narrative arguing for a figure. It is assembled to persuade, which is why it is reviewed rather than read.

Demand letter

The narrative document at the front of the package. It sets out the theory of liability, describes the injuries, totals the damages, and states the amount sought.

Bodily injury (BI) claim

A claim for physical injury to a person, as distinct from a claim for damage to property. Bodily injury is the part of a liability claim where medical documentation determines the number.

Third-party liability claim

A claim brought by someone who is not the policyholder, against the policyholder’s insurer, alleging the policyholder caused their injury. The claimant has no contract with the insurer, which is what distinguishes it from a first-party claim.

Special damages

The economic losses that can be itemised — medical charges, lost wages, out-of-pocket costs. Often shortened to "specials". This is the part of a demand that documentation can actually test.

Medical specials

The medical portion of the special damages — the total billed charges attributed to treating the claimed injury. It is usually the largest itemised component of a demand and the one most exposed to review.

General damages

Non-economic losses such as pain, suffering, and loss of enjoyment of life. They are argued rather than itemised, and are frequently framed as a multiple of the medical specials — which is why an unrelated charge left standing can raise the demand by more than its own face value.

Policy limits demand

A demand for the full amount available under the applicable liability policy. It carries weight beyond its size: in many jurisdictions, declining a policy limits demand that is later judged to have been reasonable can expose the insurer to liability above the limit.

Time-limited demand

A demand that expires on a stated date, often a short one. The purpose is to create a record that the insurer had a clear opportunity to settle within limits and did not take it. Several states now regulate the form these demands must take and how quickly an insurer must respond, and the rules differ meaningfully between them.

Settlement severity

The average cost to resolve a claim, as opposed to how many claims are filed. It is the figure a demand review programme is ultimately measured against.

Billed charges

The provider’s list price for a service. It is the number that appears on the bill and the number a demand totals, and it often bears little relationship to what the same service is reimbursed at under any negotiated or scheduled rate.

Fee schedule

The maximum reimbursement a jurisdiction permits for a given service, set per state and revised on that state’s own timetable. Where one applies, it is the clearest available benchmark for whether a charge is reasonable.

Usual and customary (UCR)

What providers in the same geographic area typically charge for the same service. It is the reasonableness benchmark generally reached for when no fee schedule controls the charge.

Upcoding

Billing a higher-intensity code than the documentation supports — a longer visit, a more complex procedure, a higher level of service than the record describes.

Unbundling

Billing separately for component services that should have been submitted under a single comprehensive code. The total rises while the care stays the same.

Duplicate billing

The same service charged more than once — resubmitted under a different code, billed by two providers for one encounter, or simply repeated in a package assembled from several sources. It is one of the more common findings and one of the least visible without a date-ordered view of the treatment.

Provider treatment patterns

How a given provider’s billing behaves across claims — the procedures they reach for, the intensity they code at, the length of the treatment courses they run. A charge that looks unremarkable in isolation reads differently against the pattern it came from.

NCCI edits

The National Correct Coding Initiative edit tables published by the Centers for Medicare & Medicaid Services, which identify code pairs that should not be billed together. They are the standard reference for detecting unbundling.

CPT code

Current Procedural Terminology — the code set maintained by the American Medical Association that identifies procedures and services. It records what was done.

ICD-10 code

The diagnosis code set. It records why something was done. Reading the diagnosis codes against the procedure codes is one of the more direct ways to test whether the treatment billed matches the injury claimed.

Medical lien

A claim asserted against settlement proceeds by a provider who treated the claimant, or by an insurer that paid for the treatment. Liens have to be resolved out of the settlement, so their size affects what the claimant actually nets.

Adjuster

Also called a claim handler or claims examiner. The person responsible for investigating, evaluating, and resolving a claim. Demand review exists to give the adjuster a documented position to negotiate from rather than an estimate.

Third-party administrator (TPA)

A firm that administers claims on behalf of a carrier or a self-insured employer without carrying the underlying risk itself.

Self-insured employer

An employer that pays claims from its own funds rather than transferring the risk to a carrier. It carries the exposure directly, usually without the in-house clinical staff a large carrier would have.

RMIS

Risk management information system — the system of record where claims are stored and worked. Any review service has to deliver into it, because it is where the adjuster already is.

Reserves

The amount an insurer sets aside as its estimate of what a claim will ultimately cost. Reviewing a demand affects not only the settlement figure but the accuracy of the reserve set against it.

Claim leakage

The gap between what a claim was settled for and what it should have cost had every available control been applied correctly. Leakage is rarely one large error; it is usually many small ones, each individually too small to argue about.

Loss adjustment expense (LAE)

The cost of handling a claim, as distinct from the indemnity paid to resolve it. Review fees are LAE, which is why a review programme is judged on whether the severity it removes exceeds the expense it adds — and why pricing tied to the work rather than the savings makes that comparison simple to run.

These definitions are general. Liability claims are governed state by state, and several of the terms above — particularly around policy limits and time-limited demands — carry requirements that differ meaningfully between jurisdictions. Nothing here is legal advice.

For how these ideas fit together in an actual review, seereviewing a demand packageand the two-tier process.