Glossary of Health Insurance Terms
A B C D E F G H I J L M N O P Q R S T U V W
To search this Glossary, press Ctrl & F and type the word you wish to find into the box.
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AB1672 (California Small Group Law)
What it does: If you are a small employer in California with 2 to 50 employees, an insurer cannot deny you group medical coverage based on the health status of your employees, and premiums can only be slightly higher (+ 10%) than average if employees have health problems. The law's key provisions are:
- Guaranteed issue and renewal of small group policies,
- Rules on small group rates,
- Limitations on pre-existing condition exclusions, and
- Requirement that plans and brokers provide fair information about all products.
access
A person's ability to obtain affordable medical care on a timely basis.
accredited (accreditation)
A "seal of approval" for health care facilities. Being accredited means that a facility has met certain quality standards. These standards are set by private, nationally recognized groups that check on the quality of care at health care facilities.
ACF
acquisition
The purchase of one organization by another organization.
ACR
See adjusted community rating.
actual charge
The charge(s) for a particular service/treatment by a health care provider.
actuaries
The insurance professionals who perform the mathematical analysis necessary for setting insurance premium rates.
acupuncture
An alternative health procedure based on ancient Chinese methods, gaining acceptance in Western hospitals, involving insertion of thin needles at specific pressure points in the body.
additional insured
Refers to anyone covered under your health plan that is not named as "insured" in your documentation.
adjusted community rating (ACR)
A rating method under which a health plan or MCO divides its members into classes or groups based on demographic factors such as geography, family composition, and age, and then charges all members of a class or group the same premium. The plan cannot consider the experience of a class, group, or tier in developing premium rates. Also known as modified community rating or community rating by class.
adjudication
Determination of the amount of payment for a claim.
administrative services only (ASO) contract
An arrangement in which an employer hires a third party to deliver employee benefit administrative services to the employer. These services typically include health claims processing and billing. The employer bears the risk for health care expenses under an ASO plan.
admitting physician
The doctor responsible for admitting you to a hospital or other inpatient health facility.
admitting privileges
The right granted to a doctor to admit patients to a particular hospital.
adverse selection
See antiselection.
agent
A person who is authorized by an MCO or an insurer to act on its behalf to negotiate, sell, and service managed care contracts.
aggregate stop-loss coverage
A type of stop-loss insurance that provides benefits when a group's total claims during a specified period exceed a stated amount.
allergy treatment
Treatment of allergy, which may involve allergy testing and physician's services.
allowable charge
The maximum fee that a third party will reimburse a provider for a given service. An allowable charge may not be the same amount as either a reasonable or customary charge.
alternative medicine
Some medical techniques once considered outside the boundaries of standard practice have become more accepted in recent years and may now be eligible for coverage. Acupuncture, midwives, and osteopathic treatments are examples of formerly excluded treatments that are now covered under many health insurance policies.
ambulatory care
All types of health services that do not require an overnight hospital stay.
ambulatory care facility (ACF)
A medical care center that provides a wide range of healthcare services, including preventive care, acute care, surgery, and outpatient care, in a centralized facility. Also known as a medical clinic or medical center.
ambulatory surgery
Surgical procedures performed that do not require an overnight hospital stay.
ancillary services
Auxiliary or supplemental services, such as diagnostic services, home health services, physical therapy, and occupational therapy, used to support diagnosis and treatment of a patient's condition.
annual maximum benefit amount
The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in a year.
The tendency of persons who present a poorer-than-average risk to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss.Legislation designed to protect commerce from unlawful restraint of trade, price discrimination, price fixing, reduced competition, and monopolies. See also Sherman Antitrust Act, Clayton Act, and Federal Trade Commission Act.
Any Willing Provider Laws
Legislation that requires health care plans to accept into their PPO and HMO networks any provider willing to agree to the network's terms and conditions.
appeal
Request made to a payer to reconsider a decision, such as a claim denial or denied prior authorization request. Most appeals must be submitted in writing within a specified period.
appropriate care
A diagnostic or treatment measure whose expected health benefits exceed its expected health risks by a wide enough margin to justify the measure.
appropriateness review
An analysis of healthcare services with the goal of reviewing the extent to which necessary care was provided and unnecessary care was avoided.
approved charge
The dollar amount on which your insurer bases its payments and your co-payments.
APS
See Attending Physician's Statement.
ASO contract
See administrative services only contract.
assignment of benefits
When an insured person assign benefits, they sign a document allowing the hospital or doctor to collect health insurance benefits directly from the health insurance company. Otherwise, the insured person pays for the treatment and is later reimbursed by the health insurance company.
associate medical director
Manager whose duties are often defined as a subset of the overall duties of the medical director.
associated group plans
Fully insured plans issued to employee groups, including those formed by labor unions, nonprofit membership corporations, etc.
at-risk
Term used to describe a provider organization that bears the insurance risk associated with the healthcare it provides.
Attending Physician's Statement (APS)
A written statement from a physician who has treated, or is currently treating, a proposed insured or an insured for one or more conditions. The statement provides the insurance company with information relevant to underwriting a risk or settling a claim.
authorization
The approval of care, for hospitalization, outpatient procedure, certain specialty, etc., by a managed care or insurance company for its member, subscriber, or insured.
autonomy
An ethical principle which, when applied to managed care, states that managed care organizations and their providers have a duty to respect the right of their members to make decisions about the course of their lives.
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behavioral healthcare
The provision of mental health and substance abuse services.
beneficence
An ethical principle which, when applied to managed care, states that each member should be treated in a manner that respects his or her own goals and values and that managed care organizations and their providers have a duty to promote the good of the members as a group.
beneficiary
A person eligible for benefit under a health insurance policy.
benefit
Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.
benefit cap
Total dollar amount that a payer will reimburse for covered health care services during a specified period, such as one year.
benefit consultant
An individual or organization hired by a group planholder to review, analyze, and make recommendations on benefit strategies, including benefit plan design, carrier selection, pricing, etc. An insurance professional who provides information, advice and counseling for their clients.
benefit design
The process an MCO uses to determine which benefits or the level of benefits that will be offered to its members, the degree to which members will be expected to share the costs of such benefits, and how a member can access medical care through the health plan.
benefit maximum
The most a policy pays for a specified loss or covered service. This can be expressed as either a period of time, a dollar amount, or a percentage of the approved amount.
benefit period
The interval during which you will be eligible for benefits. Generally, your benefit period will begin with the first medical service you received for a specific illness and end after you have not been treated for that condition for 60 days.
birthing center
A facility that allows mothers to give birth in a home-like setting.
blended rating
For groups with limited recorded claim experience, a method of forecasting a group's cost of benefits based partly on an MCO's manual rates and partly on the group's experience.
board certified
A physician who has passed examinations given by a medical specialty group and who has, as a result, been certified as a specialist in this area of practice.
brand
A name, number, term, sign, symbol, design, or combination of these elements that an organization uses to identify one or more products.
Prescription drug which is marketed with a specific brand name by the company that manufactures it. May cost insured individuals a higher co-pay than generic drugs on some health plans. See Generic.
broker
A salesperson who has obtained a state license to sell and service contracts of multiple health plans or insurers, and who is ordinarily considered to be an agent of the buyer, not the health plan or insurer.
business integration
The unification of one or more separate business (nonclinical) functions into a single function.
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C&R
Cal-COBRA
California Continuation of Benefits Replacement Act of 1997 provides the same protection under state law for workers of employers with 2 to 19 employees. See Consolidated Omnibus Budget Reconciliation Act.
calendar year deductible
The dollar amount for covered services that must be paid during the calendar year (January 1 – December 31) by members before any benefits are paid by the insurance company.
capitation
Capitation represents a fixed monthly dollar amount that a Health Maintenance Organization (HMO) pays to a group of health care providers who have contracted with the HMO. The amount of this fixed dollar amount depends upon the number of HMO enrollees who have chosen this group of health care providers for "primary care" services under the HMO plan. This fixed dollar amount does not vary with how much HMO enrollees use (or don't use) services offered by this group of HMO providers.
capped fee
See fee schedule.
calendar year deductible
A fixed dollar amount you must pay out of pocket before the plan will begin reimbursing you. Separate limits are usually applied on a per person and per family basis.
captive agents
Agents that represent only one health plan or insurer.
care plan
A written plan for one's health care.
carrier
Insurance company or HMO insuring the health plan.
carve-out
Specialty health service that an MCO obtains for members by contracting with a company that specializes in that service. See also carve-out companies.
carve-out companies
Organizations that have specialized provider networks and are paid on a capitation or other basis for a specific service, such as mental health, chiropractic, and dental. See also carve-out.
case management
A process of identifying plan members with special healthcare needs, developing a health-care strategy that meets those needs, and coordinating and monitoring the care, with the ultimate goal of achieving the optimum healthcare outcome in an efficient and cost-effective manner. Also known as large case management (LCM).
case management
A nurse, doctor, or social worker who arranges all services that are needed to give proper health care to a patient or group of patients.
case-mix adjustment
See risk-adjustment.
catastrophic illness
A very serious and costly health problem that could be life threatening or cause life-long disability. The cost of medical services alone for this type of serious condition could cause financial hardship.
catastrophic limit
The maximum amount of certain covered charges you have to pay out of your pocket during the year. Setting a maximum amount protects you. Separate limits are usually applied on a per person and per family basis.
categorically needy individuals
Enrollees in Medicaid programs who meet traditional Medicaid age and income requirements.
centers of excellence
Hospitals that specialize in treating particular illnesses, or performing particular treatments, such as cancer or organ transplants.
certificate booklet
The plan agreement. A printed description of the benefits and coverage provisions intended to explain the contractual arrangement between the carrier and the insured group or individual. May also be referred to as a policy booklet.
certificate of authority (COA)
The license issued by a state to an HMO or insurance company which allows it to conduct business in that state.
certificate of coverage
A document given to an insured that describes the benefits, limitations and exclusions of coverage provided by an insurance company.
certificate of insurance
This is the printed description of your benefits and coverage limits that forms a contract between you and your carrier. It spells out precisely what will be covered, what won’t, and the dollar maximums.
certification
CHAMPUS
See Civilian Health and Medical Program of the Uniformed Services.
chemical dependency / substance abuse
Conditions that include, but are not limited to (1) psychoactive substance induced mental disorders; (2) psychoactive substance use dependence; and (3) psychoactive substance use abuse. Chemical dependency does not include addition to or dependency on, tobacco or food substances (or dependency on items not ingested).
chemotherapy
Treatment of malignant disease by chemical or biological antineoplastic agents.
Children's Health Insurance Program (CHIP)
A program, established by the Balanced Budget Act, designed to provide health assistance to uninsured, low-income children either through separate programs or through expanded eligibility under state Medicaid programs.
CHIP
See Children's Health Insurance Program
chiropractic care
An alternative medicine therapy administered by a provider such as a chiropractor, osteopath or physical therapist. The provider adjusts the spine and joints to treat pain and improve general health.
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
A program of medical benefits available to inactive military personnel and military spouses, dependents, and beneficiaries through the Military Health Services System of the Department of Defense. See also TRICARE.
claim
An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.
claim form
An application for payment of benefits under a health plan.
claimant
The person or entity submitting a claim.
claims administration
The process of receiving, reviewing, adjudicating, and processing claims.
claims analysts
Employees in the claims administration department who consider all the information pertinent to a claim and make decisions about the MCO's payment of the claim. Also known as claims analysts.
claims investigation
The process of obtaining all the information necessary to determine the appropriate amount to pay on a given claim.
claims supervisors
Employees in the claims administration department who oversee the work of several claims examiners.
A federal act which forbids certain actions believed to lead to monopolies, including (1) charging different prices to different purchasers of the same product without justifying the price difference and (2) giving a distributor the right to sell a product only if the distributor agrees not to sell competitors' products. The Clayton Act applies to insurance companies only to the extent that state laws do not regulate such activities. See also antitrust laws.
See consolidated medical group.
clinical integration
A type of operational integration that enables patients to receive a variety of health services from the same organization or entity, which streamlines administrative processes and increases the potential for the delivery of high-quality healthcare.
A utilization and quality management mechanism designed to aid providers in making decisions about the most appropriate course of treatment for a specific clinical case.
clinical status
A type of outcome measure that relates to improvement in biological health status.
closed access
A provision which specifies that plan members must obtain medical services only from network providers through a primary care physician to receive benefits.
closed formulary
The provision that only those drugs on a preferred list will be covered by a PBM or MCO.
closed-panel HMO
An HMO whose physicians are either HMO employees or belong to a group of physicians that contract with the HMO.
closed PHO
A type of physician-hospital organization that typically limits the number of participating specialists by type of specialty.
closed plans
According to the NAIC's Quality Assessment and Improvement Model Act, managed care plans that require covered persons to use participating providers.
closed practice
A primary care physician that is not accepting new patients.
CMP
COA
COB
COBRA
See Consolidated Omnibus Budget Reconciliation Act.
coinsurance (co-insurance)
A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.
coinsurance maximum
The total amount of coinsurance that an individual pays each year before the carrier pays 100% of allowable charges for covered services. Coinsurance amounts differ with each contract.
community rating
A rating method that sets premiums for financing medical care according to the health plan's expected costs of providing medical benefits to the community as a whole rather than to any sub-group within the community. Both low-risk and high-risk classes are factored into community rating, which spreads the expected medical care costs across the entire community.
community rating by class (CRC)
The process of determining premium rates in which a managed care organization categorizes its members into classes or groups based on demographic factors, industry characteristics, or experience and charges the same premium to all members of the same class or group. See adjusted community rating (ACR).
compensation committee
Committee of the board of directors that sets general compensation guidelines for a managed care plan, sets the CEO's compensation, and approves and issues stock options.
competitive advantage
A factor, such as the ability to demonstrate quality, that helps a managed care organization compete successfully with other MCOs for business.
competitive medical plan (CMP)
A federal designation that allows a health plan to enter into a Medicare risk contract without having to obtain federal qualification as an HMO.
concurrent authorization
Authorization to deliver healthcare service that is generated at the time the service is rendered.
concurrent review
Concurrent review involves monitoring the medical treatment and progress toward recovery, once a patient is admitted to a hospital, to assure timely delivery of services and to confirm the necessity of continued inpatient care. This monitoring is under the direction of medical professionals. Concurrent review is a component of "Utilization Review".
continuation
See COBRA.
conditionally renewable
An insurance policy that the company will renew with each premium payment, as long as you meet certain conditions.
conflict of interest
For an MCO board member, a conflict between self-interest and the best interests of the plan.
A large single medical practice that operates in one or a few facilities rather than in many independent offices. The single-specialty or multi-specialty practice group may be formed from previously independent practices and is often owned by a parent company or a hospital. Also known as a medical group practice or clinic model.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees (2 to 19 employees for Cal-COBRA) to offer continued health coverage for employees and their dependents for 18 months after the employee leaves the job. Longer durations of continuance are available under certain circumstances. If a former employee opts to continue coverage under COBRA, the former employee must pay the entire premium, usually 110% of the cost of their group coverage.
The plan administrator must notify the employee and the covered spouse of their right to continue coverage within 44 days of the event, except in the case of legal separation or divorce. In those cases, the individual must first notify the plan administrator of the separation or divorce, and the administrator then has 14 days to notify them of their continuation rights. After any of these events, individuals must notify the plan administrator that they want continuation benefits within 60 days after they receive their COBRA or Cal-COBRA notice.
Employees and their dependent spouses and children of these firms who are enrolled in the employer's employee benefit plans at the time of a qualifying event (defined below) are known as "qualified beneficiaries" and are eligible for COBRA (or Cal-COBRA), unless the individual:
- becomes covered under another group benefit plan which does not impose any pre-existing condition limitations affecting the individual;
- becomes eligible for Cal-COBRA;
- becomes eligible for Medicare;
- becomes eligible for Medi-Cal;
- fails to notify the health plan of a qualifying event in the time specified by the law (generally 60 days); or
- fails to pay their premium on a timely basis.
consolidation
A type of merger that occurs when previously separate providers combine to form a new organization with all the original companies being dissolved.
consumer-driven plans
Describes a wide range of approaches to give you more incentive to control the cost of either your health benefits or health care. You have greater freedom in spending health care dollars up to a designated amount, and you receive full coverage for in-network preventive care. In return, you assume significantly higher cost sharing expenses after you have used up the designated amount. The catastrophic limit is usually higher than those common in other plans. Common features include full or partial employee responsibility for several thousand dollars in expenses, and catastrophic coverage covering costs above a certain level, usually higher than those common in other plans.
contract management system
An in-formation system that incorporates membership data and reimbursement arrangements, and analyzes transactions according to contract rules. The system may include features such as decision support, modeling and forecasting, cost reporting, and contract compliance tracking.
contract year.
The period of time from the effective date of the contract to the expiration date of the contract. A contract year is typically 12 months long, but not necessarily from January 1 through December 31.
conversion privileges
Group plans generally have a conversion privilege that allows an employee to covert to an individual health insurance plan upon termination of employment. Alternatively, coverage under a COBRA plan may be available.
coordination of benefits (COB)
A provision in the contract that applies when a person is covered under more than one health insurance plan. It requires that payment of benefits be coordinated by all plans to eliminate over-insurance or duplication of benefits.
coordinated care
Links the treatments or services necessary to obtain an optimum level of medical care required by a patient and provided by appropriate providers. It is also another term for "managed care" used by federal government officials.
co-pay/co-payment
A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.
corporation
A type of organizational structure that is an artificial entity, invisible, intangible, and existing only in contemplation of the law.
cost containment
A set of programs to reduce use of unnecessary or inappropriate services and to encourage provision of necessary and appropriate services in a cost-effective manner.
cost sharing
This occurs when the users of a health care plan share in the cost of medical care. Deductibles, coinsurance, and co-payments are examples of cost sharing.
covered benefit
A health service or item that is included in a health plan, and that is partially or fully paid by the health plan.
covered charges/expenses
Most insurance plans, whether they are PPOs or HMOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures for which the insurer agrees to pay. They are listed in the policy.
covered person.
An individual who meets eligbility requirements and for whom premium payments are paid for specified benefits of the contractual agreement.
covered services and supplies
Usually, the insured will receive a booklet that describes the services and supplies that are covered and reimbursable under the plan. This booklet will probably also describe the types of services and supplies that are not covered and reimbursable under the plan.
CPT
See Current Procedural Terminology.
CRC
See community rating by class.
credentialing
The process of obtaining, reviewing, and verifying a provider's credentials the documentation related to licenses, certifications, training, and other qualifications for the purpose of determining whether the provider meets the MCO's preestablished criteria for participation in the network.
credentialing committee
Committee, which may be a subset of the QM committee, that oversees the credentialing process.
credibility
A measure of the statistical predictability of a group's experience.
credit for prior coverage
Any previous health insurance coverage that can be used to shorten the pre-existing condition waiting period. See HIPPA.
critical access hospital
A small facility that gives limited outpatient and inpatient hospital services to people in rural areas.
chronic condition
Prolonged conditions or illness, such as asthma, diabetes, etc.
cure provision.
A provider contract clause wich specifies a time period (usually 60--90 days) for a party that breaches the contract to remedy the problem and avoid termination of the contract.
Current Procedural Terminology (CPT)
A system of terminology and coding developed by the American Medical Association (AMA) that is used for describing, coding, and reporting medical services and procedures.
custodial care
Personal care, such as bathing, cooking, and shopping.
Customary and Reasonable (C&R)
The amount customarily charged for the service by other physicians in the area (often defined as a specific percentile of all charges in the community), and the reasonable cost of services for a given patient after medical review of the case.
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day treatment center
An outpatient psychiatric facility that is licensed to provide outpatient care and treatment of mental or nervous disorders or substance abuse under the supervision of physicians.
deductible
Cost-sharing arrangement between an insured person and health insurance company in which the insured person will be required to pay a fixed dollar amount of covered expenses each year before the health insurance company will reimburse for covered health care expenses. Generally, an insured person is responsible for a deductible each calendar year.
deductible carry over credit
Charges applied to the deductible for services during the last 3 months of a calendar year which may be used to satisfy the following year's deductible.
defensive medicine
Use of unnecessary treatments, procedures or other medical services by doctors to minimize the threat of a malpractice lawsuit.
demand management
The use of strategies designed to reduce the overall demand for and use of healthcare services, including any benefit offered by a plan that encourages preventive care, wellness, member self-care, and appropriate utilization of health services.
denial of claim
Refusal by a health insurance company to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.
dental care
Under a medical plan, dental care is dental treatment which due to the nature of the procedure or patient's medical condition, may be provided in a hospital setting.
dental health maintenance organization (DHMO)
An organization that provides dental services through a network of providers to its members in exchange for some form of prepayment.
dental point of service (dental POS) option
A dental service plan that allows a member to use either a DHMO network dentist or to seek care from a dentist not in the HMO network. Members choose in-network care or out-of-network care at the time they make their dental appointment and usually incur higher out-of-pocket costs for out-of-network care.
dental POS option
See dental point of service option.
dental PPO
See dental preferred provider organization.
dental preferred provider organization (dental PPO)
An organization that provides dental care to its members through a network of dentists who offer discounted fees to the plan members.
dependent
A covered person who relies on another person for support or obtains health coverage through a spouse or parent who is the covered person under a health plan.
designated facility
A facility which has an agreement with a health insurance plan to render approved services (Organ transplants are the most common example.). The facility may be outside a covered person’s geographic area.
DHMO
See dental health maintenance organization.
diagnostic tests
Tests and procedures ordered by a physician to determine if the patient has a certain condition or disease based upon specific signs or symptoms demonstrated by the patient. Such diagnostic tools include radiology, ultrasound, nuclear medicine, laboratory, pathology services or tests.
diagnostic and treatment codes
Special codes that consist of a brief, specific description of each diagnosis or treatment and a number used to identify each diagnosis and treatment.
A planned system of contacts seeking to produce a lead or an order. Using any media, direct marketing requires the use of a database and can be measured in costs and results.
direct response marketing
discharge planning
Medical personnel of a health plan working with the attending physician and hospital staff to assess alternatives to hospitalization, evaluate appropriate settings for care, and arrange for the discharge of a patient, including planning for subsequent care at home or in a skilled nursing facility. The goal is to determine when patients are ready to go home, and to provide a more comfortable, cost-efficient setting for continued treatment.
discount fees for service to providers
HMOs contract with health providers to provide services at discounted rates.
disease management programs(DM)
A coordinated system of preventive, diagnostic, and therapeutic measures intended to provide cost-effective, quality healthcare for a patient population who have or are at risk for a specific chronic illness or medical condition. Also known as disease state management.
disease state management
disenroll
Ending a person's health care coverage with a health plan.
DM
See disease management programs.
drive time
A measure of geographic accessibility determined by how long members in the plan's service area have to drive to reach a primary care provider.
A drug approved by the State Department of Health or the Food and Drug Administration and which by law may only be sold with a written prescription of a qualified healthcare provider. Also see formulary.
drug cards
drug formulary
A list of preferred pharmaceutical products that health plans, working with an expert panel of pharmacists and physicians, have developed to encourage the dispensing of quality, cost effective medications. Formularies can be classified as:
- Open, in which doctors are encouraged to prescribe medications on the formulary but which allow non-formulary drugs to be covered without prior authorization.
- Restricted, in which only medications on the formulary list are covered.
- Managed, in which doctors are encouraged to prescribe medications on the formulary, but non-formulary drugs are covered with prior authorization.
A review program that evaluates whether drugs are being used safely, effectively, and appropriately.
due process clause
A provider contract provision which gives providers that are terminated with cause the right to appeal the termination.
DUR
Mechanical devices, equipment and supplies that enable a person to maintain functional ability.
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EAP
See employee assistance programs.
early and periodic screening, diagnostic, and treatment (EPSDT) services
Services, including screening, vision, hearing, and dental services, provided under Medicaid to children under age 21 at intervals which meet recognized standards of medical and dental practices and at other intervals as necessary in order to determine the existence of physical or mental illnesses or conditions. Plans offering Medicaid coverage to EPSDT participants must provide any service that is necessary to treat an illness or condition that is identified by screening.
EDI
See electronic data interchange.
edits
Criteria that, if unmet, will cause an automated claims processing system to "kick out" a claim for further investigation.
effective date
The date health insurance coverage begins.
electronic data interchange (EDI)
The application-to-application interchange of business data between organizations using a standard data format.
electronic medical record (EMR)
An automated, on-line medical record containing clinical and demographic information about a patient that is available to providers, ancillary service departments, pharmacies, and others involved in patient treatment or care.
eligible dependent
A dependent of a covered person (spouse, child, or other dependent) who meets all requirements specified in the contract to qualify for coverage and for who premium payment is made.
eligible expenses
The lower of the reasonable and customary charges or the agreed upon health services fee for health services and supplies covered under a health plan.
elimination period
The number of days of care that you pay before your insurance plan picks up the benefits.
emergency
In general, a sudden, serious, and unexpected acute illness, injury, or condition (including without limitation sudden and unexpected severe pain) which the member reasonably perceives could permanently endanger health if medical treatment is not received immediately. More detailed or slightly different definitions may apply based on applicable law.
emergency care
Care for patients with severe or life threatening conditions that require immediate medical attention.
Employee Assistance Programs (EAPs)
Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program.
employee benefits consultant
A specialist in employee benefits and insurance who is hired by a group buyer to provide advice on a health plan purchase.
Employee Retirement Income Security Act (ERISA)
A broad-reaching law that establishes the rights of pension plan participants, standards for the investment of pension plan assets, and requirements for the disclosure of plan provisions and funding.
employer purchasing coalitions
employment-model IDS
An IDS that generally owns or is affiliated with a hospital and establishes or purchases physician practices and retains the physicians as employees.
EMR
See electronic medical record.
endorsement
See rider..
enrollee
The person who is the primary insured. Under an individual or family policy, this person is the applicant. Under an employer-sponsored group health policy, this person is the employee.
enrollment period
The period during which individuals may enroll for an insurance policy, Medicare, HMO benefits.
enterprise scheduling systems
Information systems that control the use of facilities and resources for such organizations as physician groups, hospitals, and staff model HMOs.
EOB
Episode of Care
The health care services given during a certain period of time, usually during a hospital stay.
EPO
See exclusive provider organization.
EPSDT services
See early and periodic screening, diagnostic, and treatment services.
ERISA
See Employee Retirement Income Security Act.
Ethics in Patient Referrals Act
A federal act and its amendments, commonly called the Stark laws, which prohibit a physician from referring patients to laboratories, radiology services, diagnostic services, physical therapy services, home health services, pharmacies, occupational therapy services, and suppliers of durable medical equipment in which the physician has a financial interest.
evidence of insurability
Proof that you're in good health.
exchange
The act of one party giving something of value to another party and receiving something of value in return.
exclusive provider organization (EPO)
A healthcare benefit arrangement that is similar to a preferred provider organization in administration, structure, and operation, but which does not cover out-of-network care.
exclusion period
A period of time when an insurance company can delay coverage of a pre-existing condition. Sometimes this is called a pre-existing condition waiting period.
exclusions and limitations
Medical services that are either not covered or limited in benefit by a health insurance insurance policy.
exclusive remedy doctrine
A rule which states that employees who are injured on the job are entitled to workers' compensation benefits, but they cannot sue their employers for additional amounts.
executive committee
Committee whose purpose is to provide rapid access to decision making and confidential discussions for an MCO board of directors.
executive director
In a managed care plan, individual responsible for all operational aspects of the plan. All other officers and key managers report to this person, who in turn reports to the board of directors.
experience
The actual cost of providing healthcare to a group during a given period of coverage.
experience rating
A rating method under which an MCO analyzes a group's recorded healthcare costs by type and calculates the group's premium partly or completely according to the group's experience.
experimental and investigational procedures
Health insurance coverage generally excludes medical treatments that are deemed to be unproven, ineffective, or non-standard. This includes surgical techniques and medicines not approved by the Food and Drug Administration. Sometimes such treatments may be available by traveling to another country, but these treatments would generally not be covered.
expert system
Software that attempts to replicate the process an expert uses to solve a problem in order to arrive at the same decision that an expert would reach.
expiration date
The date coverage expires.
Statement sent by health plans to persons who have experienced a claim under the health plan. The explanation of benefits (EOB) details the charges for the services received, the amount the health insurance company will pay for those services, and the amount the insured person will be responsible for paying.
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Federal Employee Health Benefits Program (FEHBP)
A voluntary health insurance program administered by the Office of Personnel Management (OPM) for federal employees, retirees, and their dependents and survivors.
A federal act which established the Federal Trade Commission (FTC) and gave the FTC power to work with the Department of Justice to enforce the Clayton Act. The primary function of the FTC is to regulate unfair competition and deceptive business practices, which are presented broadly in the Act. As a result, the FTC also pursues violators of the Sherman Antitrust Act. See also antitrust laws.
fee allowance
See fee schedule.
fee-for-service (FFS) payment system
A system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.
fee maximum
See fee schedule.
The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.
FEHBP
See Federal Employee Health Benefits Plan.
FFS payment system
See fee-for-service payment system.
finance committee
Committee of the board of directors whose duty it is to review financial results, approve budgets, set and approve spending authorities, review the annual audit, and review and approve outside funding sources.
finance director
Chief financial officer responsible for the oversight of all financial and accounting operations, such as billing, management information services, enrollment, and underwriting as well as accounting, fiscal reporting, and budget preparation.
First Dollar Coverage
Refers to not having to meet a calendar year deductible prior to receiving reimbursement or payment for a medical service
Flexible Spending Accounts (FSA)
A flexible Spending Account is an employer-sponsored benefit which allows you to defer a portion of your paycheck into an account specifically intended to reimburse you for out of pocket costs. FSAs can be used for reimbursement of any medically related cost that is not covered by your health care plan, such as: deductibles and co-pays; birth control; Dental; Vision; etc.
A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in prescribing medications. Also see drug.
free look
The period during which you may reconsider the purchase of an insurance policy, cancel, and get a full refund. The clock starts running the day you receive the policy. Check your state’s insurance law for the specific provisions that apply in your state.
FSA
See Flexible Spending Accounts.
full time student
Under a health plan, an eligible dependant child student (typically age 19 or older) who meets the health plan's criteria of "full-time." Such criteria normally typically includes minimum credit hour requirements (such as 12 credit hours in a semester) and a maximum age (age 23 is typical).
full time employee
An employee who meets the eligibility requirements for full-time employees as outlined in the Benefit Agreement.
fully funded plan
A health plan under which an insurer or MCO bears the financial responsibility of guaranteeing claim payments and paying for all incurred covered benefits and administration costs.
functional status
A patient's ability to perform the activities of daily living.
funding vehicle
In a self-funded plan, the account into which the money that an employer and employees would have paid in premiums to an insurer or MCO is deposited until the money is paid out.
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Gag Rule Laws
Special laws that make sure that health plans let doctors tell their patients complete health care information. This includes information about treatments not covered by the health plan.
Gatekeeper
A primary care physician in a managed care environment who is responsible for managing the patient's overall care and who must authorize all specialist referrals. In most health maintenance organizations (HMOs), the secondary care is not covered by insurance if the primary care physician does not approve it. See primary care physician
generic prescription drug (generic drug)
The chemical equivalent to a brand name drug. These drugs cost less, and the savings is passed onto health plan members in the form of a lower co-pay.
generic substitution
The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physician approval.
geographic accessibility
Health plan accessibility, generally determined by drive time or number of primary care providers in a service area.
GPWW
See group practice without walls.
grace period
A specified period of time after a premium is due during which you can still make a payment without losing the insurance. Check your policy to be sure what it provides.
grievance procedure
The required appeal process an HMO/insurance company provides to protest a decision regarding a claim payment.
grievances
Formal complaints demanding formal resolution by a managed care plan.
group health plan (Click here for a quote).
A health plan that provides health coverage to employees and their families, and is supported by an employer or employee organization.
group insurance (Click here for a quote).
An insurance contract made with an employer or other entity that covers individuals in the group.
group market
A market segment that includes groups of two or more people that enter into a group contract with an MCO under which the MCO provides healthcare coverage to the members of the group.
An HMO that contracts with a multi-specialty group of physicians who are employees of the group practice. Also known as a group practice model HMO.
group practice model HMO
See group model HMO.
group practice without walls (GPWW)
A legal entity that combines multiple independent physician practices under one umbrella organization and performs certain business operations for the member practices or arranges for these operations to be performed. The GPWW may maintain its own facility for business operations or it may hire another company to provide this function.
guaranteed issue
Under guarantee issue, a health insurance company or HMO must issue coverage to an applicant regardless of prior medical history. In Illinois and Indiana, small employers (defined as 2 to 50 employees) cannot be refused coverage for their employees regardless of the medical history of one or more employees.
guaranteed renewable
An agreement by an insurance company to insure a person for as long as premiums are paid.
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health benefit plan
A health insurance product offered by a health plan company that is defined by the benefit contract and represents a set of covered services and a provider network.
HCFA Common Procedure Coding System (HCPCS)
Name given to CPT codes (Level I), alphanumeric codes (Level II), and local codes (Level III) used by payers and providers for billing purposes. Within the industry, most refer to Level II national codes as HCPCS codes.
HCPCS
See HCFA Common Procedure Coding System.
HCQIA
See Health Care Quality Improvement Act.
HCQIP
See Health Care Quality Improvement Program.
HDHP
See High Deductible Health Plan.
healthcare quality
The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.
health care provider
A doctor, hospital, laboratory, nurse, or anyone who delivers medical or health-related care.
Health Care Quality Improvement Act (HCQIA)
A federal act which exempts hospitals, group practices, and HMOs from certain antitrust provisions as they apply to credentialing and peer review so long as these entities adhere to due process standards that are outlined in the Act.
Health Care Quality Improvement Program (HCQIP)
A program, established by the Balanced Budget Act of 1997, that seeks to improve the quality of care provided to Medicare beneficiaries by requiring Medicare+Choice coordinated care plans to undergo periodic quality review by a peer review organization.
health care reimbursement accounts
Accounts that allow you to set aside pre-tax dollars to pay for medical care or costs. See Health Savings Account (HSA).
Health Employer Data and Information Set (HEDIS)
A set of standard performance measures that provides information about the quality of a health plan. These measures are used to compare managed care plans.
Health Information Network (HIN)
An electronic system that uses telecommunications devices to link various healthcare entities within a geographic region in order to exchange patient, clinical, and financial information in an effort to reduce costs and practice better medicine.
Health Insurance Portability and Accountability Act (HIPAA) (Click here for more information)
A federal act that protects people who change jobs, are self-employed, or who have pre-existing medical conditions. HIPAA standardizes an approach to the continuation of healthcare benefits for individuals and members of small group health plans and establishes parity between the benefits extended to these individuals and those benefits offered to employees in large group plans. The act also contains provisions designed to ensure that prospective or current enrollees in a group health plan are not discriminated against based on health status. The purpose of the law is to:
- Improve portability and continuity of health insurance coverage in the group and individual markets
- To combat waste, fraud and abuse in health insurance and health care delivery
- To promote the use of medical savings accounts
- To improve access to long-term care services and coverage
- To simplify the administration of health insurance
health insurance purchasing co-ops (HPCs)
health maintenance organization (HMO)
Prepaid health plans which cover doctors' visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests, X-rays, and therapy. In a HMO, one must choose a primary care physician who coordinates all care and makes referrals to any specialists that may be required. In a HMO, one must use the doctors, hospitals and clinics that participate in your plan's network. No benefits are paid for non-emergency benefits provided outside the HMO network.
Health Reimbursement Arrangement (HRA)
A high deductible health insurance plan (sometimes called Section 125 plans) that provides savings that can be reimbursed to the employee as a tax deduction to the employer and not taxable to the employee. Funds placed into employee HRA accounts, along with premium fees and employee reimbursements, are tax-deductible. Unused HRA funds roll over on a yearly basis, and if left unused, continue to accrue until required. HRA funds can be used to pay for any tax-deductible medical expense. HRAs are similar to Flexible Spending Accounts (FSA); however, while an FSA is an add-on to your already existing medical coverage, an HRA is your medical coverage.
Health Savings Account (HSA) (Click here for more information)
Operating similarly to IRAs, HSAs are tax-advantaged savings accounts for health care services. A person must enroll in a qualified High-Deductible Health Plan (HDHP) before they can establish an HSA.
hearing services
Testing and services related to hearing.
HEDIS
See Health Employer Data and Information Set.
High Deductible Health Plan (HDHP)
A person must be enrolled in a qualified High-Deductible Health Plan (HDHP) before they can establish a Health Savings Account (HSA). Not all high-deductible health plans qualify for purposes of establishing HSA eligibility. A qualified HDHP benefit design must conform to various federally-mandated requirements, such as a minimum $1000 deductible and a lack of first-dollar benefit provisions.
HIN
See Health Information Network.
HIPAA
See Health Insurance Portability and Accountability Act.
HMO
See health maintenance organization.
HMO Act
1973 federal law that ensured access for HMOs to the employer-based insurance market.
hold harmless provision
A contract clause which forbids providers from seeking compensation from patients if the health plan fails to compensate the providers because of insolvency or for any other reason.
home health care
Services given at home to aged, disabled, sick, or convalescent individuals not needing institutional care. The most common types of home care are visiting nurse services and speech, physical, occupational, and rehabilitation therapy. These services are provided by home health agencies, hospitals, or other community organizations.
home infusion therapy
The administration of intravenous drug therapy in the home. Home infusion therapy includes the following services: solutions and pharmaceutical additives; pharmacy compounding and dispensing services; durable medical equipment; ancillary medical supplies; and nursing services.
hospice care
Care for the terminally ill and their families, in the home or a non-hospital setting, that emphasizes alleviating pain rather than a medical cure.
hospital
An institution whose primary function is to provide inpatient services, diagnostic and therapeutic, for a variety of medical conditions, both surgical and non-surgical. In addition, most hospitals provide some outpatient services, particularly emergency care.
hospital care
Reimbursement for both inpaient and outpatient medical care expenses incurred in a hospital. Inpatient Benefits include; Charges for room and board, charges for necessary services and supplies sometimes referred to as 'hospital extras,' 'other hospital extras,' 'miscellaneous charges,' and 'ancillary charges. Outpatient Benefits include; surgical procedures, rehabilitation therapy, and physical therapy.
hospital indemnity policy
Pays a fixed dollar amount for each day you are hospitalized, regardless of the actual costs.
hospital pre-certification
Managed care plans often require prior approval before the insured enters the hospital. In the case of an emergency, or other situation where pre-certification is not possible, such plans often require prompt notification often in 48 hours after admission.
hospital surgical coverage
A form of health insurance that offers coverage of certain costs related to hospitalization and surgical procedures. A hospital-surgical plan does not cover other types of medical services, such as physician office visits and outpatient prescription drugs.
HRA
See Health Reimbursement Arrangement.
HSA
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IBNR claims
See incurred but not reported claims.
ID card/identification card
Card given to insured individuals which advises medical providers that a patient is covered by a particular health insurance plan.
IDS
See integrated delivery system.
immunizations
Specific types of injections to prevent infectious diseases and viral infections.
in-network
Describes a provider or health care facility which is part of a health plan's network. When applicable, insured individuals usually pay less when using an in-network provider.
incorporation by reference
The method of making a document a part of a contract by referring to it in the body of the contract.
incurred but not reported (IBNR)
The actuarial estimate of amounts required to pay ultimate net losses after netting out existing amounts on reported but unpaid claims. The IBNR estimate includes an allowance for potential changes in such existing amounts as well as additional amounts for claims that have already occurred but are yet to be reported.
incurral date
The date on which health care services are provided to a covered person. The incurral date, not the date on which the insurance company pays a health care claim, is the critical date in determining health insurance benefits. For example, a health insurance company will not pay a claim for health care services incurred prior to the effective date of the health insurance coverage.
indemnity insurance health plan
Indemnity health insurance plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of HMOs and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the health plan pays the other percentage. For example, an individual might pay 20% for services and the insurance company pays 80%. The fees for services are defined by the health care providers and vary from physician to physician and hospital to hospital.
indemnity wraparound policy
An out-of-plan product that an HMO offers through an agreement with an insurance company.
independent agents
Agents that represent the products of several health plans or insurers.
independent/individual practice association (IPA)
An organization comprised of individual physicians or physicians in small group practices that contracts with MCOs on behalf of its member physicians to provide healthcare services.
individual health insurance (Click here for a quote).
Health insurance coverage on an individual, not group, basis. The premium is usually higher for individual health insurance than for a group policy, but you may not qualify for a group plan.
individual market
A market segment composed of customers not eligible for Medicare or Medicaid who are covered under an individual contract for health coverage.
A type of stop-loss insurance that provides benefits for claims on an individual that exceed a stated amount in a given period. Also known as specific stop-loss coverage.
infertility
Term used to describe the inability to conceive or an inability to carry a pregnancy to a live birth. Also includes the presence of a condition recognized by a physician as the cause of infertility.
infusion therapy
The administration of intravenous drug therapy. Infusion therapy includes the following services: solutions and pharmaceutical additives; pharmacy compounding and dispensing services; durable medical equipment; ancillary medical supplies; and nursing services.
inpatient care (inpatient)
Health care that you get when you stay overnight (24 hours) in a hospital.
insured
A person who has obtained health insurance coverage under a health insurance plan.
integrated delivery system (IDS)
A provider organization that is fully integrated operationally and clinically to provide a full range of healthcare services, including physician services, hospital services, and ancillary services.
integration
For provider organizations, the unification of two or more previously separate providers under common ownership or control, or the combination of the business operations of two or more providers that were previously carried out separately and independently.
International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)
Coding system maintained by the National Center for Health Statistics and the Center for Medicare and Medicaid Services (CMS). This coding system differentiates diagnostic conditions and is used by hospitals, governments, health insurance plans, and health care providers around the world.
investigative procedures or medications
Those that have progressed to limited use on humans, but which are not widely accepted as proven and effective within the organized medical community.
IPA
See independent practice association.
IPA model HMO
A health maintenance organization which contracts with one or more associations of physicians in independent practice who agree to provide medical services to HMO members.
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joint venture
A type of partial structural integration in which one or more separate organizations combine resources to achieve a stated objective. The participating companies share ownership of the venture and responsibility for its operations, but usually maintain separate ownership and control over their operations outside of the joint venture.
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large group
A large pool of individuals for which health coverage is provided by the group sponsor. A large group may be defined as more than 50, 250, 500, 1,000, or some other number of members, depending on the MCO.
lifetime maximum benefit
A cap on the benefits paid for the duration of a health insurance policy. Many policies have a lifetime limit of $5 million, which means that the insurer agrees to cover up to $5 million in covered services over the life of the policy. Once the $5 million maximum is reached, no additional benefits are payable.
limitations
A restriction on the amount of benefits paid out for a particular covered expense.
limited policy
A policy that covers only specified accidents or sicknesses (e.g. a cancer policy).
long-term care policy (Click here for a quote)
Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.
Insurance which pays employees a percentage of monthly earnings in the event of disability.
loss
The basis for a claim under an insurance policy.
loss rate
The number and timing of losses that will occur in a given group of insureds while the coverage is in force.
loss ratio
The dollar amount an insurer pays in claims compared to the amount it collects in premiums.
LTD
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mail-order pharmacy programs
Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.
Major Medical
Health insurance coverage for expenses associated with hospital confinements, surgeries and/or medical conditions requiring a broad range of medical services and supplies.
managed behavioral health organization (MBHO)
An organization that provides behavioral health services using managed care techniques.
managed care
The integration of both the financing and delivery of healthcare within a system that seeks to manage the accessibility, cost, and quality of that care.
managed care organization (MCO)
Any entity that utilizes certain concepts or techniques to manage the accessibility, cost, and quality of healthcare. Also known as a managed care plan.
managed care plan
See managed care organization (MCO).
managed dental care
Any dental plan offered by an organization that provides a benefit plan that differs from a traditional fee-for-service plan.
managed indemnity plans
Health insurance plans that are administered like traditional indemnity plans but which include managed care "overlays" such as precertification and other utilization review techniques.
Management Services Organization (MSO)
An organization, owned by a hospital or a group of investors, that provides management and administrative support services to individual physicians or small group practices in order to relieve physicians of non-medical business functions so that they can concentrate on the clinical aspects of their practice.
mandated benefits
Health care benefits that state or federal law says must be include din health care plans.
manual rating
A rating method under which a health plan uses the plan's average experience with all groups—and sometimes the experience of other health plans—rather than a particular group's experience to calculate the group's premium. An MCO often lists manual rates in an underwriting or rating manual.
market segmentation
The process of dividing the total market for a product or service into smaller, more manageable subsets or groups of customers.
market segments
Subsets or manageable groups of customers in a total market.
marketing director
Individual responsible for marketing a managed care plan, whose duties include oversight of marketing representatives, advertising, client relations, and enrollment forecasting.
maximum out-of-pocket (OOP) expenses
See out-of-pocket (OOP) maximum/limit.
maternity care
The care of women before and during childbirth as well as the care of newborn babies.
MBHO
See managed behavioral health organization.
McCarran-Ferguson Act
A federal act that placed the primary responsibility for regulating health insurance companies and HMOs that service private sector (commercial) plan members at the state level.
MCO
See managed care organization.
Medicaid
A jointly funded federal and state program that provides hospital expense and medical expense coverage to the low-income population and certain aged and disabled individuals.
medical advisory committee
Committee whose purpose is to review general medical management issues brought to it by the medical director.
medical center
See ambulatory care facility (ACF).
medical clinic
See ambulatory care facility (ACF).
medical director
Manager in a healthcare organization responsible for provider relations, provider recruiting, quality and utilization management, and medical policy.
medical equipment
See Durable Medical Equipment.
medical foundation
A not-for-profit entity, usually created by a hospital or health system, that purchases and manages physician practices.
See consolidated medical group.
medical necessity
Medical information justifying that the service rendered or item provided is reasonable and appropriate for the diagnosis or treatment of a medical condition or illness
medically necessary
Many insurance policies will pay only for treatment that is deemed "medically necessary" to restore a person's health. For instance, many health insurance policies will not cover routine physical exams or plastic surgery for cosmetic purposes.
A trust that employees of small businesses may establish to pay for out-of-pocket medical expenses.
medical underwriting
The evaluation of health questionnaires submitted by all proposed plan members to determine the insurability of the group.
medically needy individuals
Enrollees in Medicaid programs whose income or assets exceed the maximum threshold for certain federal programs.
Medicare
A federal government hospital expense and medical expense insurance plan primarily for elderly and disabled persons. See also Medicare Part A, Medicare Part B, Medicare Part C, and Medicare Part D.
The part of Medicare that provides basic hospital insurance coverage automatically for most eligible persons. See also Medicare.
A voluntary program that is part of Medicare and provides benefits to cover the costs of physicians' services. See also Medicare.
The part of Medicare that expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries. Also known as Medicare+Choice. See also Medicare.
A voluntary program that is part of Medicare and provides benefits to cover the costs of Prescription drugs.
Medicare+ Choice
See Medicare Part C.
Medicare+ Choice MSAs
Accounts created by contributions from HCFA to pay out-of-pocket medical expenses for Medicare beneficiaries. The accounts are used in conjunction with high-deductible, catastrophic healthcare policies.
A supplemental insurance policy to help cover the difference between approved medical charges and benefits paid by Medicare. These plans are also known as Medi-gap plans.
A supplemental insurance policy to help cover the difference between approved medical charges and benefits paid by Medicare. These plans are also known as Medicare Supplement plans.
member
An individual or dependent who is enrolled in and covered by a health care plan. Also called enrollee or beneficiary.
member services
The department responsible for helping members with any problems, handling member grievances and complaints, tracking and reporting patterns of problems encountered, and enhancing the relationship between members of the plan and the plan itself.
mental health / behavioral health
Conditions that affect thinking and the ability to figure things out which affect perceptions, mood and behavior. Such disorders are recognized primarily by symptoms or signs that appear as distortions of normal thinking or distortions of the way things are perceived (seeing or hearing things that are not there). Disorders can also be recognized by moodiness, sudden or extreme changes in mood, depression, and highly agitated or unusual behavior.
Mental Health Parity Act (MHPA)
A federal act which prohibits group health plans that offer mental health benefits from applying more restrictive limits on coverage for mental illness than for physical illness.
merger
A type of structural integration that occurs when two or more separate providers are legally joined.
messenger model
A type of independent practice association (IPA) that simply negotiates contract terms with MCOs on behalf of member physicians, who then contract directly with MCOs using the terms negotiated by the IPA. This type of IPA is most often used with fee-for-service or discounted fee-for-service compensation arrangements.
MET
MHPA
modified community rating
See adjusted community rating.
monthly operating report (MOR)
A document that reports the month- and year-to-date financial status of a managed care plan.
MOR
MSA
MSO
See Management Services Organization.
An arrangement created to obtain health and other benefits for participating employer groups. Small employers can pool their contributions to receive the advantages of large group underwriting.
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NAIC
See National Association of Insurance Commissioners.
national accounts
Large group accounts that have employees in more than one geographic area that are covered through a single national contract for health coverage. Contrast with large local groups.
National Association of Insurance Commissioners (NAIC)
A national organization of state officials charged with regulating insurance. NAIC was formed to promote national uniformity in insurance regulations.
National Committee for Quality Assurance (NCQA)
A national group responsible for devising and monitoring quality measurements and standards for health care entities.
Numerical coding system for drug identification. NDC numbers are assigned by the Food and Drug Administration (FDA) and are typically used to bill payers for the drugs provided to health care beneficiaries.
National Practitioner Data Bank (NPDB)
A database maintained by the federal government that contains information on physicians and other medical practitioners against whom medical malpractice claims have been settled or other disciplinary actions have been taken.
NCQA
See National Committee for Quality Assurance.
NDC
negotiated rate
The amount participating providers agree to accept as payment in full for covered services. It is usually lower than their normal charge. Negotiated rates are determined by Participating Provider Agreements.
network
The group of physicians, hospitals, and other medical care providers that a specific managed care plan has contracted with to deliver medical services to its members.
network model HMO
An HMO that contracts with more than one group practice of physicians or specialty groups.
network provider
Physicians, hospitals or other providers of medical services that have agreed to participate in a network, to offer their services at negotiated rates, and to meet other negotiated contractual provisions. Also called "participating provider."
Newborns' and Mothers' Health Protection Act (NMHPA)
A federal law which mandates that coverage for hospital stays for childbirth cannot generally be less than 48 hours for normal deliveries or 96 hours for cesarean births.
NMHPA
See Newborns' and Mothers' Health Protection Act.
no balance billing provision
A provider contract clause which states that the provider agrees to accept the amount the plan pays for medical services as payment in full and not to bill plan members for additional amounts (except for copayments, coinsurance, and deductibles).
non-cancellable policy
A policy that guarantees you can receive insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.
non-group market
A market segment that consists of customers who are covered under an individual contract for health coverage or enrolled in a government program.
non-maleficence
An ethical principle which, when applied to managed care, states that managed care organizations and their providers are obligated not to harm their members.
non-participating provider
A medical provider who has not contracted with a carrier or health plan to be a participating provider.
NPDB
See National Practitioner Data Bank.
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OBRA
See Omnibus Budget Reconciliation Act of 1990.
occupational therapy
Treatment to restore a physically disabled person's ability to perform activities such as walking, eating, drinking, toileting and bathing.
Omnibus Budget Reconciliation Act (OBRA) of 1990
A federal act which established the Medicare SELECT program, a Medicare supplement that uses a preferred provider organization to supplement Medicare Part B coverage.
OOP
See out-of-pocket.
open access
A provision that specifies that plan members may self-refer to a specialist, either in-network or out-of-network, at full benefit or at a reduced benefit, without first obtaining a referral from a primary care provider.
open enrollment
A period each year during which employees have an opportunity to change their employer-provided health care coverage. They usually can choose among various plans from different health insurance providers (usually the period between November 15 through December 31).
open formulary
The provision that drugs on the preferred list and those not on the preferred list will both be covered by a PBM or MCO.
open-panel HMO
An HMO in which any physician who meets the HMO's standards of care may contract with the HMO as a provider. These physicians typically operate out of their own offices and see other patients as well as HMO members.
open PHO
A type of physician-hospital organization that is available to all of a hospital's eligible medical staff.
operational integration
The consolidation into a single operation of operations that were previously carried out separately by different providers.
operations director
Individual who typically oversees claims, management information services, enrollment, underwriting, member services, and office management.
outcomes measures
Healthcare quality indicators that gauge the extent to which healthcare services succeed in improving patient health.
out-of-network
Health care services received outside the HMO or PPO network.
out-of-plan
This phrase usually refers to physicians, hospitals or other health care providers who are considered non-participants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered at a reduced benefit level.
out-of-pocket costs
Insured health care costs for which one is responsible, because of the application of deductibles, coinsurance and co-payments.
out-of-pocket (OOP) maximum/limit
Total dollar amount an insured will be required to pay for covered medical services during a specified period, such as one year. The out-of-pocket maximum may also be called the stop-loss limit or catastrophic expense limit.
outpatient
A patient who is receiving ambulatory care at a hospital or other health facility without being admitted to the facility.
outpatient care
Treatment that is provided to a patient who is able to return home after care without an overnight stay in a hospital or other inpatient facility.
outpatient services
Services usually provided in clinics, physician or provider officers, ambulatory surgical centers, hospices, home health services, etc.
outpatient surgery
Surgical procedures performed that do not require an overnight stay in the hospital or ambulatory surgery facility. Such surgery can be performed in the hospital, a surgery center or physician office.
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parent company
A company that owns another company.
partial day treatment
A program offered by appropriately licensed psychiatric facilities that includes either a day or evening treatment program for mental health or substance abuse. Such care is an alternative to inpatient treatment.
participating hospital
A hospital that has entered into an agreement with Anthem Blue Cross to provide hospital services as a participating provider. The hospital, by entering into the agreement, is a participating hospital for all members and covered persons.
participating provider
A health care provider who has been contracted to render medical services or supplies to insured persons at a pre-negotiated fee. Providers include hospitals, physicians, and other medical facilities that are part of a PPO or HMO network.
Patient Bill of Rights
Refers to the Consumer Bill of Rights and Responsibilities, a report prepared by the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry in an effort to ensure the security of patient information, promote healthcare quality, and improve the availability of healthcare treatment and services. The report lists a number "rights," subdivided into eight general areas, that all healthcare consumers should be guaranteed and describes responsibilities that consumers need to accept for the sake of their own health.
patient perception
A type of outcomes measure related to how the patient feels after treatment.
PBM plan
See pharmacy benefit management plan.
PCCM
See primary care case manager.
PCP
peer review
The analysis of a clinician's care by a group of that clinician's professional colleagues. The provider's care is generally compared to applicable standards of care, and the group's analysis is used as a learning tool for the members of the group.
peer review organizations (PROs)
According to the Balanced Budget Act of 1997, organizations or groups of practicing physicians and other healthcare professionals paid by the federal government to review and evaluate the services provided by other practitioners and to monitor the quality of care given to Medicare patients.
pended
A claims term that refers to a situation in which it is not known whether an authorization has or will be issued for delivery of a healthcare service, and the case has been set aside for review.
performance measures
Quantitative measures of the quality of care provided by a health plan or provider that consumers, payors, regulators, and others can use to compare the plan or provider to other plans and providers.
personal care physician
personal care provider
Identification cards issued by a pharmacy benefit management plan to plan members. These cards assist PBMs in processing and tracking pharmaceutical claims. Also known as drug cards or prescription cards.
pharmacy and therapeutics committee
Committee charged with developing a formulary, reviewing changes to that formulary, and reviewing abnormal prescription utilization patterns by providers.
pharmacy benefit management (PBM) plan
A type of managed care specialty service organization that seeks to contain the costs, while promoting safer and more efficient use, of prescription drugs or pharmaceuticals. Also known as a prescription benefit management plan.
PHO
See physician-hospital organization.
physical examination
Physical examination, as well as information about your medical history, may be required to qualify for health insurance. The requirements will vary for individual or group coverage, for different insurance companies, and for very large or very small groups.
physical therapy
Treatment involving physical movement to relieve pain, restore function and prevent disability following disease, injury or loss of limb.
physician-hospital organization (PHO)
A joint venture between a hospital and many or all of its admitting physicians whose primary purpose is contract negotiations with MCOs and marketing.
Physician Practice Management (PPM) company
A company, owned by a group of investors, that purchases physicians' practice assets, provides practice management services, and, in most cases, gives physicians a long-term contract to continue working in their practice and sometimes an equity (ownership) position in the company.
In the context of a pharmacy benefit plan, the process of compiling data on physician prescribing patterns and comparing physicians' actual prescribing patterns to expected patterns within select drug categories. Also known as profiling.
plan administration
Overseeing the details and routine activities of installing and running a health plan, such as answering questions, enrolling new individuals for coverage, billing and collecting premiums, etc.
plan funding
The method that an employer or other payor or purchaser uses to pay medical benefit costs and administrative expenses.
plan benefit maximum
Maximum amount the carrier will pay toward an individual's coverage. The amount varies depending on the type of coverage the individual carries.
A healthcare option that allows members to choose at the time medical services are needed whether they will go to a provider within the plan's network or seek medical care outside the network.
policy
The insurance agreement or contract.
pooling
The practice of underwriting a number of small groups as if they constituted one large group.
portability.
The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.
POS
PPA
See preferred provider arrangement.
PPM
See Physician Practice Management Company.
PPO
See preferred provider organization.
practice guideline
See clinical practice guideline.
pre-admission review
A review of an individual's health care status or condition, prior to an individual being admitted to a hospital or inpatient health care facility. Pre-admission reviews are often conducted by case managers or insurance company representatives (usually nurses) in cooperation with the individual, his or her physician or health care provider, and hospitals.
pre-admission testing
Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility
pre-authorization
Under a pre-authorization provision of a health insurance policy, the insured must contact the health insurance company prior to a hospitalization or surgery, and receive authorization for the service.
This is a requirement that a insured person call their health insurance company and advise them a doctor has stated certain medical treatment is required. This is done before receiving treatment from the doctor or hospital. A health insurance policy will normally list the medical conditions that require pre-certification before receiving treatment. When pre-certification is not received, benefits will be reduced or possibly not covered.See prospective authorization.
pre-certification review
Utilization management performed prior to a patient's admission, stay, or other service or course of treatment. Also known as Prior Authorization.
pre-existing condition
A health problem that existed before the date your insurance became effective. Each health insurance company uses its own particular definitions of pre-existing condtiion. However, the following statement is in line with most insurance company provisions: "A pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage."
preferred provider arrangement (PPA)
As defined in state laws, a contract between a healthcare insurer and a healthcare provider or group of providers who agree to provide services to persons covered under the contract. Examples include preferred provider organizations (PPOs) and exclusive provider organizations (EPOs).
preferred provider organization (PPO)
A healthcare benefit arrangement designed to supply services at a discounted cost by providing incentives for members to use designated healthcare providers (who contract with the PPO at a discount), but which also provides coverage for services rendered by healthcare providers who are not part of the PPO network.
pregnancy care
Federal maternity legislation, enacted in 1978, requires that employers engaged in interstate commerce who have 15 or more employees provide the same benefits for pregnancy, childbirth, and related medical conditions as for any other sickness or injury. This includes all employers who are, or become, subject to Title VII of the Civil Rights Act of 1964.
premium
A prepaid payment or series of payments made to a health plan by purchasers, and often plan members, for medical benefits.
premium taxes
State income taxes levied on an insurer's premium income.
prepaid care
Healthcare services provided to an HMO member in exchange for a fixed, monthly premium paid in advance of the delivery of medical care.
prepaid group practices
Term originally used to describe healthcare systems that later became known as health maintenance organizations.
prescription
A written order or refill notice issued by a licensed medical professional for drugs which are only available through a pharmacy.
prescription benefit management plan
See pharmacy benefit management plan.
prescription cards
prescription drugs, brand name and generic
A brand name drug is approved by the Food and Drug Administration (FDA), and is supplied by one company (the pharmaceutical manufacturer). The drug is protected by a patent and is marketed under the manufacturer's brand name.
When a drug patent expires, other companies may produce a generic version of the brand name drug. A generic medication, also approved by the FDA, is basically a copy of the brand name drug and is marketed under its chemical name. A generic drug may have a different color or shape than its brand name counterpart, but it must have the same active ingredients, strength, and dosage form (i.e., pill, liquid, or injection).
preventive care
An approach to health care which emphasizes preventive measures and health screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, pap smears, mammograms and other early detection testing. The purpose of offering coverage for preventive care is to diagnose a problem early, when it is less costly to treat, rather than late in the stage of a disease when it is much more expensive, or too late to treat.
primary care
General medical care that is provided directly to a patient without referral from another physician. It is focused on preventative care and the treatment of routine injuries and illnesses.
primary care case manager (PCCM)
In states that have obtained a Section 1915(b) waiver, a primary care provider who contracts directly with the state to provide case management services, such as coordination and delivery of services, to Medicaid patients in an effort to reduce emergency room use, increase preventive care, and improve overall effectiveness by fostering a close physician-patient relationship.
primary care physician
Under a health maintenance organization (HMO) plan, the primary care physician is usually an insured person's first contact for health care. This is often a family physician, internist, or pediatrician. A primary care physician monitors patient health, treats most patient health problems, and refers patients, if necessary, to specialists. See primary care provider.
A physician or other medical professional who serves as a group member's first contact with a plan's healthcare system. Also known as a primary care physician, personal care physician, or personal care provider.
primary plan
This is the plan that pays first when you are covered by more than one insurance plan.
primary source verification
A process through which an organization validates credentialing information from the organization that originally conferred or issued the credentialing element to the practitioner.
prior authorization
In the context of a pharmacy benefit management (PBM) plan, a program that requires physicians to obtain certification of medical necessity prior to drug dispensing. Also known as a medical-necessity review or pre-certification review.
prior qualifying coverage
Health plan coverage that was in effect before the effective date of the current or new coverage.
process measures
Healthcare quality indicators related to the methods and procedures that a managed care organization and its providers use to furnish care.
profiling
promise keeping/truthtelling
An ethical principle which, when applied to managed care, states that managed care organizations and their providers have a duty to present information honestly and are obligated to honor commitments.
PROs
See peer review organizations.
prospective authorization
Authorization to deliver healthcare service that is issued before any service is rendered. Also known as precertification.
prosthetic device
A device that replaces all or a portion of a part of the human body. These devices are necessary because a part of the body is permanently damaged, is absent or is malfunctioning.
provider
Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) that provides medical care.
provider manual
A document that contains information concerning a provider's rights and responsibilities as part of a network.
provider network
That set of providers with which a carrier has contracted to provide services to the Accountable Health Plan's covered persons. In the case of a "fee-for-service" or non-network Health Benefit Plan, the Provider Network will be deemed to be all licensed providers of covered services.
Provider-Sponsored Organization (PSO)
A healthcare organization established and organized, or operated, by a healthcare provider or a group of affiliated healthcare providers to arrange for the delivery, financing, and administration of healthcare that meets requirements established by the Balanced Budget Act of 1997 and that has
