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Acronym or Term
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Definition |
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Acute Care |
Medical care provided in direct response to an illness,
injury, or other condition. Acute care contrasts with preventive care, which
tries to reduce the chances of acquiring a condition. |
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Allowable expenses |
The necessary, customary, and reasonable expenses that an
insurer will cover. |
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AMBHA |
The American Managed behavioral healthcare Association, the
trade association for managed behavioral health care companies, founded in
1994. AMBHA members are companies that manage benefits, not organizations
that are primarily engaged in delivering clinical services. |
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Ambulatory care |
Medical care provide on an out-patient (non-hospital) basis.
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Ambulatory care |
Health care that does not require a hospital admission for
the patient-also called outpatient care. Commonly provided in a doctor's
office, clinic, or health center, but can also be provided in a hospital or
"surgi-center". |
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Anniversary date |
The date on which a health plan's or insurer's contract with
an employer or an individual subscriber is renewed each year. It is the date
when premium costs and benefits are most likely to change. It may be
preceded by an "open enrollment period," when employees have the option to
switch health plans. |
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Annual maximum limits or caps |
The limit an insurance plan sets on a given service. It may
be a certain number of visits or a dollar amount. If your child needs more
of a given service than is allowed by the limits in your plan, you will need
to request an exception. |
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Average length of stay |
Measurer used by hospitals to determine the average number
of days patients spend in their facilities. A managed care firm will often
assign a length of stay to patients when they enter a hospital and will
monitor them to see that they don't exceed it.
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Bad faith |
The unreasonable refusal to pay a valid claim which can be
remedied in a civil suit. |
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Behavioral health care firm |
Specialized (for profit) managed care organizations,
focusing on mental health and substance abuse benefits, which they term
"behavioral health care." these firms offer employers and public agencies a
managed mental health and substance abuse benefit. Almost non existed ten
years ago, but they are now a big industry.
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Benefits or benefit package |
The health care services covered by a health plan or health
insurance company, under the terms of its member contract. Terms of the
contract also include any cost sharing required through co-payments,
deductibles, or coinsurance: limitations on the amount or length of
coverage: and condition such as the requirement to have care authorized in
advance and delivered within the HMO network.
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Capitation |
Method of payment for health services in which the insurer
pays providers fixed amount for each person served regardless of the type
and number of services used. Some HMOs pay monthly capitation fees to
doctors, often referred to as a per member per month amount.
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Case management program |
Special programs now offered by many insurance companies,
particularly for individuals who require high cost care. Under such a
program, a case manager is assigned to oversee all of a given child's claims
and arrange for alternative benefits, which may not be part of the original
contracted insurance plan. These alternative benefits, which may not be more
costly than the stated benefits in the plan. Case management programs have
sometimes chosen to pay for home-based care instead of costs of long-term
hospitalization. Find out whether such a program is available under your
plan, who is eligible, and how it works.
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Certificate of insurance |
A description of health benefits included in a group health
plan, usually given to insured members by the employer or group.
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Claim |
The documentation of a medical service that was provided to
a covered patient by a doctor, hospital, laboratory, diagnostic service, or
other medical professional. A claim is filed with the insurer by the
provider or the patient to request payment ( or reimbursement ) for the
service if the service was not prepaid.
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Clinician |
A term that is often used to describe all types of medical
professional who care for patients -doctors, nurse, physicians' assistants,
therapists, etc. |
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Co-payments ( or coinsurance) |
An amount a health insurance policy requires you to pay for
medical and hospital service, after payment of a deductible. Indemnity plans
typically require a co-payment to be a percent of the charge for the service
(e. g. 20%). It may vary based on the type of service when the service was
received ( for examply within a certain number of days of an emergency) or
where the service was received (out-patient versus in-patient). When there
is co-payment in managed care plans, it is usally a small fixed amount
regardless of the cost of the service.
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COBRA ( Consolidated Omnibus Budget Reconciliation Act ) |
A federal law that includes important benefits for
individuals who lose their employee health insurance because of a loss of
job or a death. This law provides the opportunity for individuals to
continue the same insurance coverage for 18-36 months. The individual is
responsible for paying the full insurance premium. There may also be
language in your policy on provisions for continuing the same coverage. The
Insurance Commissioner in your state or your employer may offer information
on your rights for continuation. |
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Coinsurance |
A cost-sharing arrangement typical to traditional health
insurance, in which patients pay a portion of the cost of certain covered
medical procedures, usually on a fixed percentage basis. For instance,
patients might be required to pay 20 to 30 percent of the cost of their
doctor's office fees or hospital charges for services they received. Usually
coinsurance payments begin after an annual deductible is met.
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Community rating |
An insurance practice of pooling people within a geographic
area and charging everyone a set premium for a set benefit package without
considering their individual health status.
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Concurrent review |
A managed care technique in which a representative of a
managed care firm continuously reviews the charts of hospitalized patients
to determine if they are staying too long and if the course of treatment is
appropriate. |
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Coordination of benefits |
The process for how benefits will be applied if you have
more than one private health coverage plan. Regulations on coordination of
benefits may exist within your state or your insurance plan may describe how
such coordination should happen. Usually one the plan is designated to pay
all claims first and the residual bills are the responsibility of the
secondary carrier. These provisions are to prevent individuals from
collecting more than once for the same medical charge.
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Cost shifting |
A phenomenon occurring in the U.S. health care system in
which providers are inadequately reimbursed for their costs and subsequently
raise their prices to other payers in an effort to recoup costs. Low
reimbursement rates from government health care programs often cause
providers to raise prices for medical care to private insurance carriers.
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Cost containment |
An attempt to reduce the higher-than-necessary costs
surrounding the allocation and consumption of health care. These costs may
arise from inappropriately used services and from care that can be provided
in less costly settings without harming the patient.
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Current procedural technology (CPT) |
A set of codes developed by the American Medical Association
that describe medical procedures for billing. Each item submitted by your
provider to an insurance company for payment must be listed by code on the
bill. |
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Deductibles |
The amount that you must pay out-of-pocket for covered
medical care before the benefits of the coverage begins. Check what this
amount is per family member. There may also be a total family limit.
Deductible amounts vary a great deal from policy to policy. Deductibles are
usually set as an annual amount. |
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Diagnosis-related groups (DRGs) |
Method of reimbursing providers based on the medical
diagnosis for each patient. Hospitals receive a set amount determined in
advice based on length of time patients with a given diagnosis are likely to
stay in the hospital. Also called prospective payment system.
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Documenting |
Keeping written records relating to your family's medical
care and insurance. You may need detailed records to support your case if
you disagree with your insurer. |
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Effective date |
The date on which coverage under a health plan or insurance
contract begins. |
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Employee Retirement Income Security Act (ERISA) |
Federal law that establishes uniform standards for
employer-sponsored benefit plans. Because of court decisions, the law
effectively prohibits states from experimenting with alternative
health-financing arrangements without waivers from Congress.
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Employer contribution |
The amount of money an employer pays toward the health
benefit plans of its employees. The employer may pay the same fixed number
of dollars toward every plan it offers to its employees ("an equal-dollar
contribution"); it may pay a fixed percentage of the premium for every plan
offered ('equal-percentage"); or it may adjust its contribution in other
ways. The employee's portion of the health plan premium is typically paid
through a payroll deduction.
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Enrollment Area |
The geographical area within which a health plan member must
reside in order to be eligible for coverage. Most HMOs place a limit on the
length of time members (except students) can live outside the enrollment
area each year and still be covered.
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Estimate of benefits (EOB) |
The statement from your insurance plan that itemizes the
actions taken on claims that have been submitted.
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Exclusion |
A treatment or service that is not covered by a policy.
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Exclusive provider organization |
A health care payment and delivery arrangement in which
members must obtain all their care from doctors and hospitals within an
established network. If members go outside, no benefits are payable.
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Experience rating |
An insurance practice of setting premiums based on previous
use of health services and health status. An employer whose employees are
unhealthy will pay higher rates. This practice generally discriminates
against persons with disabilities or chronic illness.
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Experimental treatment |
Medical treatment not covered by insurance companies or
public programs because its efficacy is considered unproven. Insurance
companies or public programs may reject claims when they decide that the
treatment is experimental. Insurers may rely on an internal medical review,
consultation with outside experts, or a combination of these and other
means. Articles in the current medical literature may influence decisions.
Individuals have won claims by proving that other insurance companies have
paid for the treatment in question, or that the treatment has been
beneficial in other instances. |
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Federally qualified |
An HMO that has met certain federal standards regarding
financial soudness, quality assurance, member services, marketing, and
provider contracts can be federally qualified. HMOs that are not federally
qualified are still subject to federal and state regulations and requirments
intended to protect consumers and providers and ensure quality of care.
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Fee for service |
A form of payment where a provider is paid for each service,
supply, or equipment. Traditional indemnity plans are fee for service plans.
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First dollar coverage |
A health insurance policy with no required deductible.
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Formulary |
A list of prescription drugs and their recommended doses,
which have been selected by a health plan, insurer, or group of doctors as
the best choices, in terms of effectiveness and value, among the many
possible options for a given condition. Formulary drugs may be only
recommended or they may be required as a condition of HMO prescription drug
coverage (unless individual circumstances make a different drug amore
appropriate choice for the patient). Formularies are used to manage both the
cost and the quality of prescription drugs.
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Gatekeeper |
A term given to a primary care physician in a managed care
network who controls the patient access to medical specialists.
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Gatekeeper PPO |
A health care payment and delivery system consisting of
networks of doctors and hospitals. Members must choose a primary care
physician, use doctors in the network, or face higher out-of-pocket costs.
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Grace period |
A period of time after a premium is due but before payment
is received during which your health coverage is still in effect. States may
have laws requiring health insurance policies to allow a set number of days
of "grace". |
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Guaranteed renewable |
An insurance contract that an insurer cannot terminate,
providing the insured pays the required premiums in a timely manner. With
these contracts, insurers have the right to raise premiums but only for an
entire class of policyholders. |
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Health screening |
A method used by some insurers and health plans to determine
whether applicants are likely to create a high medical costs, either because
they are already sick or because they are likely to have a costly illness in
the future. Health screening is used to detect preexisting medical
conditions and to determine whether the applicant is at risk for illness
because of factors like excessive weight or a past history of drug abuse.
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Health Insurance Purchasing Cooperative (HIPC) |
A large group of employers and individuals functioning as an
insurance broker to purchase health coverage, certify health plans, manage
premiums and enrollment, and provide consumer with buying information. Also
called health insurance purchasing group, health, plan purchasing
cooperative, and health insurance purchasing corporation.
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Indemnity health insurance |
A plan that reimburses physicians and other providers for
health services furnished to enrollees.
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Inpatient |
Medical care that requires the patient to occupy a bed in a
hospital. Not all hospital care is inpatient care; a patient can also
receive "outpatient" care in a hospital's emergency room or ambulatory care
center. |
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Lifetime maximum |
the total amount that an insurance policy will pay out for
medical care during the lifetime of the insured person. Check into other
options you have for enrolling in another group plan during an open
enrollment period well before your child is approaching a lifetime maximum.
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Limitations |
A factor (such as a pre-existing condition) which allows an
insurer to avoid paying for a service that normally would be covered.
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Lock-in |
Refers to the requirement that members of an HMO or other
managed network health plan must have all of their covered services
provided, arranged, or authorized by the plan or its doctors, except in
life-threatening emergencies or when members are temporarily "out of area."
This contrast with a "point-of-service' plan, which allows patients to
receive covered services without prior authorization but at a hight cost,
outside the plan's network. |
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Long-term care |
A continuum of maintenance, custodial, and health services
for people with chronic illness, disability, or mental retardation.
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Managed competition |
A method for controlling health care costs by organizing
employers, individuals, and other buyers of health care in large
cooperatives that will purchase coverage for their members. Insurance
companies and managed care organizations will compete to supply coverage for
the lowest cost. |
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Managed care |
Applies to the integration of health care delivery and
financing. It includes arrangements with providers to supply health care
services to members criteria for the selection of health care providers,
significant incentives for members to use providers in the plan, and formal
programs to monitor the amount of care and quality of services.
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Mandated benefits |
Specific benefits that insurers are required to offer by
state law. Each stat has its own legislation on mandated benefits.
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Medically necessary |
A determination made by a third party payor or a review
organization regarding whether a given medical intervention was, in fact,
necessary for a particular patient. |
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Medically necessary services |
A clause in a health insurance policy that states that the
policy only covers services needed to maintain a certain level of health.
The clause also defines - often in general terms - what those services are.
Be sure to find out exactly what your insurer means by this term - what
those services are. Be sure to find out exactly what your insurer means by
this term. This information will help you to present your request in the
most appropriate way. |
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National Association of Insurance Commissioners (NAIC) |
An organization of state insurance commissioners that writes
model laws and regulations governing the insurance industry.
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Open enrolment period |
A period when you may sign up for a health coverage plan
without waiting periods or consideration for preexisting conditions. Many
employers offer these periods yearly. You may be offered an open enrollment
opportunity when you begin a new job.
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Opt-out |
The option available through some managed care network
plans, such as point-or-service HMOs and preferred provider organizations,
to choose to receive care from providers outside the plan's network, at a
higher cost, and still be covered. |
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Out of area |
Beyond or outside the geographical area served by an HMO or
other managed network plan. When HMO members are inside their HMO's service
area, they much have their care provided, arranged, or authorized by their
HMO or HMO doctor in order to get full coverage; when they are temporarily
out of area, different coverage rules apply.
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Out-of-plan services |
Services furnished to patients by providers who are not
members of a patient's managed care network.
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Out-of-pocket costs |
All the health expenses that you pay yourself, including
deductibles, co-payments, and charges not covered by any health plan.
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Outcomes measure |
A tool to assess the impact of health services in terms of
improved quality and/or longevity of life and functioning.
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Outpatient benefits or coverage |
treatment or services received in a setting ( such as a
clinic or doctor's office ) where no room and board is charged. Check the
out-patient benefits in any plan you are considering carefully, since most
of your chid's care will take place on an out-patient basis.
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Participating providers |
A physician who signs a contract with a traditional, PPO, or
HMO plan and agrees to accept the plan's allowable charges.
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Point of service |
A term that applies to certain health maintenance
organizations and preferred provider organizations. Members in point of
service HMO or PPO can go outside the network for care, but their
reimbursement will be less than if they had remained inside.
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Practice guidelines or protocol |
Description of a course of treatment or established practice
pattern. Managed care entities develop and distribute these to providers in
their network to guide clinical treatment decisions.
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Preexisting conditions |
A physical or mental condition that has been treated or
would normally have been treated before enrollment in a insurance plan.
Policies may exclude coverage for such conditions for a specified period of
time. In some cases, preexisting conditions exclude a person completely from
buying health insurance; or the insurance company may decide to charge
higher premiums or offer the insurance but refuse to cover any treatment
relating to the specific condition. |
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Preferred provider organizations (PPO) |
A form of managed care plan in which a group of providers
contract with an insurer and agree to provide services at pre-negotiated
fees. Members must have a primary care physician who is a member of the PPO.
Members are given incentives to use providers within the organization, but
may use providers outside the plane for greater out-of-pocket costs.
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Premium |
The charge that you pay to the insurer for the health
coverage. This may be paid weekly, monthly, quarterly, or annually.
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Prepaid Health Care Act |
Federal law passed in 1973 that sets standards for federally
qualified health maintenance organizations. Among the standards are minimum
benefits and formal grievance. |
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Prepaid plans |
A health insurance plan where you pay a fixed premium to
cover much of the care you receive. Prepaid plans include HMOs and PPOs.
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Preventive care |
Medical services that try to reduce the chances of illness,
injury, or other condition. This contrasts with acute care, which is given
after the condition has occurred. |
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Primary care case management |
When a specific primary care provider acts as gatekeeper by
approving and monitoring all covered services, and is paid for this service.
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Primary care |
Routine medical care, usually provided in a doctor's office.
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Prior authorization |
Before services are rendered, approval from the insurance
plan or a designated primary care physician must be obtained or the service
will not be reimbursed. |
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Prior authorization |
The approval a provider must obtain from an insurer or other
entity before furnishing certain health services, particularly inpatient
hospital care, in order for the service to be covered under the plan. |
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Professional Review Organization (PRO) |
Organization that determines whether care and services
provide are medically necessary and meet professional standards under
Medicare and Medicaid. |
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Prolonged illness clause or extended benefits |
A possible option in your coverage for 100% reimbursement
(instead of partial) for all services relating to your child's condition.
This option may also add to your child's lifetime maximum.
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Provider |
A hospital, skilled nursing facility, outpatient surgical
facility, physician, practitioner, or other individual or organization which
is licensed to provide medical or surgical services and accommodations.
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Quality assurance |
Term that describes attempts by managed care organizations
to measure and monitor the quality of care delivered.
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Rationing |
The allocation of medical care by price of availability of
services. |
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Referral |
A formal process by which a patient is authorized to receive
care from a medical specialist or a hospital. HMOs usually require a
referral from the member's primary care doctor or the HMO in order for
specialty care to be covered. |
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Renewal |
The clause in your insurance plan that describes how you
might renegotiate the contract after the term is finished. Guaranteed
renewability of an insurance policy protects you from loosing your coverage,
although the insurer may still raise the premiums.
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Report card |
A published report for consumers on the premium costs for a
plan and overall quality of a health plan or provider. Report cards
generally include measures of the plan's delivery of appropriate services,
patient outcomes, patient satisfaction and cost structure.
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Rider |
A legal document added to an insurance plan that either
restricts or adds to coverage. States may have regulations about riders.
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Risk |
Possibility that revenues of the insurer will not be
sufficient to cover expenditures incurred in the delivery of contractual
services. A managed care provider is at risk if actual expenses exceed the
payment amount. |
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Risk |
An insurance term related to financial responsibility for
medical care. A "high-risk" individual is someone who has a high likelihood
of having a serious illness, because of past medical history, family
history, or health-related behavior, such as smoking or alcohol abuse. "At
risk" or "risk-bearing" means being responsible for the cost of care for a
group of people. For instance, if an HMO pays a hospital a fixed amount of
money per member to provide all of the care he or she needs, the hospital is
"at risk" for the member. "Risk adjustment" means paying a health plan an
extra amount if its members are, on average, sicker and more expensive to
care for. |
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Risk pools |
Arrangements by states to provide health insurance to the
unhealthy uninsured who have been rejected for coverage by insurance
carriers. |
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Risk-sharing |
A situation in which the managed care entity assumes
responsibility for services for a specific group but in which it is
protected against unexpectedly high costs by a pre-arranged agreement for
higher payment for those individuals who need significantly more costly
services. Risk is usually shared by the managed care entity and the state.
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Second opinion review |
A managed care technique in which a second physician is
consulted regarding diagnosis or course of treatment. Though to be of
questionable effectiveness in reducing costs.
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Secondary Care |
A level of medical care between primary care and tertiary
care, usually provided by medical specialists and usually requiring a
referral from an HMO member's primary care doctor.
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Self-insured |
Some places of employment write their own plans to cover
health care costs for employees. Benefits and costs are determined by the
employer. These plans may be administered by an insurance company, or
involve and insurance company. |
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Self-referral |
The ability for an HMO patient to refer himself or herself,
under certain circumstances, for specialty medical care, without receiving a
formal referral or prior authorization form the patient's HMO or primary
care doctor. |
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Service Area |
The geographical area within which an HMO or other managed
care network plan provides and arranges medical care for its members. This
area is sometimes the same as the plan's enrollment area, but not always.
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Single-payer system |
A health care financing arrangement in which money, usually
from a variety of taxes, is funneled to a single government entity which
then pays the medical bills for all citizens.
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Single-point of entry |
An individual can gain access to services only through a
primary-care provider who decides what services are needed (see Gatekeeper).
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Skimming |
A practice by which insurers or health plans try to avoid
enrolling people whose medical care may be very expensive, including people
who are elderly or have a history of illness.
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Socialized medicine |
A health care financing and delivery system in which doctors
work for the government and receive a salary for their services.
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Sole-source option |
A term meaning that an employer has chosen a single insurer
or health plan to cover all of its employees. If the sole-source option is
an HMO, it will usually offer both a standard lock-in plan and a
point-of-service plan that allows members to choose to get care out-side the
HMO network, at a higher cost. |
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Staff-model HMO |
An HMO that directly employs on a salaried basis the doctors
and other providers who furnish care.
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State insurance regulations |
Every state has laws and regulations that govern insurance
companies operating within the state. There is also a state process for
filing complaints and appeals. Check with your state Commissioner of
Insurance for information and assistance.
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Stop-loss |
A clause that limits your liability to a specified amount on
medical expenses covered by the policy. After expenses reach that amount,
the insurance company would pay all of your remaining covered medical
expenses for the year including deductibles and co-payments.
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Targeted case management |
Medical term for case management services covered under
Title XIXX of the Social Security Act (as of November 1995). Federal law
defines Targeted Case Management as services that will assist individuals
eligible under the state Medicaid plan in gaining access to needed medical,
social, educational, and other services.
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Tertiary care |
The upper level of medical care and services, usually
provided in hospitals by highly trained "sub-specialists" using the most
advanced medical technology. |
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Third party administrator |
An organization not a party to an insurance contract that
maintains records and pays claims of those insured under the contract.
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Third party payment |
Payment for health care by a party other than the
beneficiary. |
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Uncompensated care |
Charity care provided by doctors and hospitals for which no
reimbursement or payment is made. |
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Underwriting |
An insurance company practice of assessing risks of illness
and costs, and setting premiums based on these assumptions.
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Usual, customary, and reasonable (UCR) |
A fee controlling system to determine the lowest value of
physician reimbursement bases on: 1) the physician's usual charge for a
given procedure, 2) the amount customarily charged for the service by other
physicians in the area, and 3) the reasonable cost of services for a given
patient after medical review of the case. |
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Utilization |
The amount of medical services used by a given population,
usually over a specific period of time or as an average related to the
number of people in the population. For instance, an HMO's utilization rate
for doctors' office visits might be five visits per member per year.
Hospital utilization is often reported as the number of days in the
hospital, on average, for each 1,000 members of the group being measured
(days/1,000). In the interest of reducing costs, health plans and insurers
try to reduce unnecessary or inappropriate utilization through "utilization
management" or "utilization review."
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Utilization review |
A managed care technique in which the managed care firm or
insurance company attempts to reduce the length of hospital stays and the
number of unnecessary hospital admissions.
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Waiting periods |
The period of time required by the insurance company after a
person is covered by a policy before specific health services are covered by
the plan. This time can vary from a number of months to a number of years.
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Wrap-around |
A supplementary insurance plan designed to pay for
additional health benefits not covered by another plan. A wrap-around policy
can provide more comprehensive benefits for a child with extensive needs.
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Unknown source
Alan Raymond, The HMO Health Care Companion.
Health Law, Managing Managed Care. Bazalon
center |
