affordablehealthinsurancequote's health insurance Glossary

A

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.

agent A person who is authorized by an insurer to act on its behalf to negotiate, sell, and service managed care contracts.

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 out-of-pocket maximum A dollar amount set by the plan which puts a cap on the amount of money the insured must pay out of his or her own pocket for covered expenses over the course of a calendar year.

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.

applicant The person or business that applies for an insurance policy.

B

beneficiary The person or party the owner a life insurance policy names to receive the policy benefit in the event of the insured's death.

brand-name (medications)
Prescription medications that are manufactured by the developer of the medication in question.

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.

C

calendar-year deductible
An amount that the insured person must pay before insurance payments for covered services begin.

captive agents Agents that represent only one health plan or insurer.

certificate of insurance A document that describes the type and length of coverage provided by a group insurance policy that is given to each insured by the group policyholder.

CHAMPUS See Civilian Health and Medical Program of the Uniformed Services.

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.

chiropractic care Not all plans cover chiropractors -- practitioners who manipulate the spine and other structures within the body to relieve pain and tension resulting from posture, stress or strain. Some plans offer chiropractic care as an optional benefit.

Civilian Health and Medical Pro- gram 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 investigation The process of obtaining all the information necessary to determine the appropriate amount to pay on a given claim.

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.

COBRA See Consolidated Omnibus Budget Reconciliation Act.

coinsurance 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 provision A specified percentage of the cost of treatment the insured is required to pay for all covered medical expenses remaining after the policy's deductible has been met.

commission The amount of money, usually a percentage of the premiums, that is paid to an insurance agent for selling an insurance policy.

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.

comprehensive major medical policy A health insurance policy that covers both major medical coverages (i.e., hospitalization and surgeries) and basic medical expense coverages.

Consolidated Omnibus Budget Reconciliation Act (COBRA) A federal act which requires each group health plan to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee, and termination of employment.

copay (1) A fee that many insurance plans require an insured to pay for certain medical services (such as a physician's office visit). (2) An amount that the insured must pay toward the cost of each prescription under a prescription drug plan

copayment A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.

D

deductible A flat amount of covered medical expenses that an insured must incur before the insurer will make any benefit payments under a medical expense policy.

dental benefits Some health plans offer dental care as an optional benefit or rider that you or your employees may decide to add at an additional cost.

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 person for whom the insured has some legal obligation to. For most plans, it is the insured's spouse and/or children. Some plans also allow non-traditional spousal relationships (significant other, life-partner, etc.) to be considered a dependent with some additional certifying paperwork.

DHMO See dental health maintenance organization.

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.

discount dental insurance plan Dental insurance card that provides discounted fees for dentist services.

domestic partnerDomestic partners are commonly defined as "two adults who share an emotional, physical and financial relationship similar to that of a married couple but who either choose not to marry or cannot legally marry. They share a mutual obligation of support for the basic necessities of life." Additionally, some carriers may require that domestic partners own property together to qualify.

drug cards See pharmaceutical cards.

drug utilization review (DUR) 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 See drug utilization review

dual choice Dual choice allows the employer to offer his employees not one, but two health plans. Instead of picking the least expensive plan for all employees, Dual Choice lets employees choose the type of plan that best meets their needs or budgets. Usually, this is a choice of an HMO and PPO, or HMO and POS. The employer will typically pay a portion of the premium in these plans, and the employee will pay the balance. Here are a few approaches:

ý         An employer may pay for the lower cost plan and employees may buy up to the more expensive plan.

ý         An employer may pay a set amount per month for every employee.

ý         An employer may charge all employees the same amount and pay the balance, regardless of the plan each employee selects.

E

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.

effective date The specified date of when the health insurance policy is to begin.

emergency care Most plans cover emergency care in a hospital emergency room if it is an extremely urgent medical emergency, even if the hospital you are taken to is not in the plan's network. It is possible, however, that after your condition has been stabilized, you would be transferred to a participating plan hospital.

emergency-room visit A visit to a hospital for treatment of an accidental injury or for emergency medical care. To qualify as an emergency, the symptoms must be sudden, severe and require immediate medical attention. Some states judge emergencies by the "prudent layperson" law, meaning that the health plan must cover a trip to the emergency room "if a prudent layperson, acting reasonably, would have believed that an emergency medical condition existed." Keep in mind that some plans won't cover a trip to the emergency room if the symptoms appeared more than 24 hours earlier.

employee contribution The amount of premium the employer requires the employee to pay towards his or her health insurance.

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.

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.

 enrollment or eligibility period The time during which a new group member may first enroll for group insurance coverage.

exclusions and limitations Conditions, situations and services not covered by the health plan.

F

family health insurance plan A individual health insurance plan paid by the insured. See individual health insurance plan

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.

Federal Trade Commission Act 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.

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.

formulary 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. 

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.

fully insured plan A group insurance plan for which an insurance company bears the responsibility of making all claim payments.

fully self-insured plan A group insurance plan under which the employer takes complete responsibility for all claim payments and related expenses rather than purchasing coverage from an insurance company.

G

gatekeeper A term used to describe the primary care physician's role in a managed care plan; this role is to authorize all services delivered to the insured by other physicians or health care providers. Thus, whenever you wish to see a physician other than your primary care physician, you must first obtain his or her permission (via a referral).

generic (medications) When a new drug is put on the market, the pharmaceutical company patents it under a brand name. The company has the exclusive right to sell the drug under this name, but once its patent expires, other companies can sell the same drug under its chemical, or generic, name. Generic drugs are typically cheaper than brand-name drugs, but the Food and Drug Administration requires generic drug manufacturers to show that a generic drug "delivers the same amount of active ingredient in the same time frame as the original product."

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.

group health insurance plans Paid by employers for their employees.

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.

group model HMO 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.

guaranteed issue An insurance policy provision under which all eligible persons who apply for insurance coverage and who meet certain conditions are automatically issued an insurance policy.

guaranteed renewable policy A health insurance policy that the insurer is required to renew -- as long as premiums are paid -- at least until the insured attains the age limit specified in the policy, or the policy is cancelled by the insured. The insurer may increase the premium rate for any class of guaranteed renewable policies.

H

health care provider A doctor, hospital, laboratory, nurse or anyone else who delivers medical or health-related care.

health insurance A type of insurance that provides protection against the risk of financial loss resulting from the insured person's sickness, accidental injury or disability.

HCQIA See Health Care Quality Improvement Act.

HCQIP See Health Care Quality Improvement Program.

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 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) 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. Health insurance portability and accountability act of 1996 (HIPAA) under this federal law (known as HIPAA), group health plans cannot deny coverage based soley on an individual's health status. This law also gives employees who change or lose their jobs better access to health coverage, guarantees renewability and availability to certain employees and limits exclusions for pre-existing conditions. For example, under this law, group health plans must credit any employee the amount of time that they spent on any health plan prior to the new plan, which is known as "prior credible coverage." A pre-existing condition will be covered without a waiting period when an employee joins a new group plan if the employee has been insured for the previous 12 months with credible health insurance, with no lapse in coverage of 63 days or more. This means that if an employee has been insured for 12 months or more, the employee will be able to go from one job to another and his or her pre-existing coverage will remain intact -- without additional waiting periods. However, if an employee has a pre-existing condition and was not covered previously for 12 months before joining a new plan, the longest the employee will have to wait for their pre-existing coverage to be covered is 12 months.

health maintenance organization (HMO) A healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.

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 Skilled medical care and other health care services that you receive in your home for the treatment of an illness or injury. Some insurance plans don't provide this kind of coverage, or provide it only for a limited amount of time.

I

indemnity plan Also called a fee-for-service plan. A health insurance plan that allows the insured to use any medical provider that he or she chooses. As such, there are no networks to utilize.

independent agents Agents that represent the products of several health plans or insurers.

independent 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 plan A health insurance plan for one individual (not group health insurance).

individual market A market segment composed of customers not eligible for Medicare or Medicaid who are covered under an individual contract for health coverage.

individual stop-loss 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.

inpatient surgery Medical procedures which require the patient to spend at least one night at the hospital. Most plans limit the amount of time an inpatient may stay at the hospital following surgery.

insurance agent A person authorized by an insurance company to represent the company in its dealings with applicants for insurance.

insured The person whose life or health is insured under an insurance policy. Also referred to as a "member."

J

Sorry, we have no glossary items beginning with the letter J.

K

Sorry, we have no glossary items beginning with the letter K.

L

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 250, 500, 1,000, or some other number of members, depending on the MCO.

life dependent This option is offered by some plans to provide a set amount of life insurance for the insured's spouse, domestic partner or children.

lifetime maximum The maximum amount of money a plan will pay towards healthcare services over the course of the insured's lifetime.

M

major medical insurance plan A type of traditional medical expense coverage that provides substantial benefits for hospital surgical expenses and physicians' fees.

managed care A method of integrating the financing and delivery of health care within a system that seeks to manage the cost, accessibility and quality of care.

maternity coverage Many individual plans and some small-group plans for groups of fewer than 15 employees don't cover the costs associated with pregnancy and birth. However, federal law requires that group plans cover maternity if a group has 15 employees or more.

mail-order pharmacy programs Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.

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.

manual rating A rating method under which a health plan uses the plan's average experience with all groupsýand sometimes the experience of other health plansýrather than a particular group's experience to calculate the group's premium. An MCO often lists manual rates in an underwriting or rating manual.

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 savings account (MSA) 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.

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, and Medicare Part C.

Medicare Part A The part of Medicare that provides basic hospital insurance coverage automatically for most eligible persons. See also Medicare.

Medicare Part B A voluntary program that is part of Medicare and provides benefits to cover the costs of physicians' services. See also Medicare.

Medicare Part C 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.

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.

Medicare supplement A private medical expense insurance plan that supplements Medicare coverage. Also known as a Medigap policy.

Medigap policy See Medicare supplement.

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 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.

member The person whose life or health is insured under an insurance policy. Also referred to as the "insured."

mental health - inpatient Inpatient mental health care is generally reserved for severe mental health problems, such a schizophrenia and severe depression. State laws vary widely on the degree to which insurance companies must cover mental illness. Most plans do provide some coverage, though there may be limitations such as the severity or nature of the illness and the duration of care.

mental health - outpatient Outpatient mental health benefits are generally divided into two categories, severe and non-severe health care. State laws vary widely on the degree to which insurance companies must cover mental illness. Most plans do provide some coverage, though there may be limitations such as the severity or nature of the illness and the duration of care.

msa -- benefits The newest choice in health insurance for the self-employed, Medical Savings Accounts (MSAs) allow you to build up a tax-free savings account to pay for routine medical expenses. You build the account with tax-free dollars, and they remain tax-free while your MSA is active. Your MSA is used in conjunction with a high-deductible insurance policy. With the high-deductible insurance plan, the cost of an MSA can be kept competitively low. Tax-free dollars and an affordable price save you money.

N

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.

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.

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-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.

NPDB See National Practitioner Data Bank

non-formulary drugs Non-formulary drugs often require a higher copayment. Non-formulary drugs are those that have not yet been reviewed or have been denied formulary status, typically because they offer no extra benefit over the drugs already on a plan's formulary list.

non-severe mental health Non-severe mental health problems are generally psychologically-based, such as phobias, manias and mild-to-moderate depression. In most cases, these problems can be treated without a stay at a treatment facility.

O

OBRA See Omnibus Budget Reconciliation Act of 1990.

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.

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 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.

out-of-pocket maximums Dollar amounts set by MCOs that limit the amount a member has to pay out of his or her own pocket for particular healthcare services during a particular time period.

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

office visit Any time you visit a doctor at his or her office for medical care.

out-of-network Health care services received outside the HMO, POS or PPO network.

out-of-pocket expense Any medical care costs not covered by insurance, which must be paid by the insured.

outpatient surgery Surgery that does not involve an overnight stay in a hospital.

P

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 See primary care provider.

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 See primary care provider.

personal care provider See primary care provider.

personal health insurance plan A health insurance plan paid for by insured. See also individual health insurance plan.

pharmaceutical cards 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.

pharmaceuticals Also known as a prescription benefit management plan. 

PHO See physician-hospital organization.

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.

physician profiling 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.

physical therapy Not all plans cover physical therapy -- a program of special exercises that can help an injury heal without restricting movement or limiting function.

plan funding The method that an employer or other payor or purchaser uses to pay medical benefit costs and administrative expenses.

policy A written document that contains the terms of the contractual agreement between an insurance company and the owner of policy.

policy year The period of time that the policy is to remain in force.

policyowner The person or business that owns an insurance policy.

portable coverage Group insurance coverage that can be continued by an insured employee who leaves the covered group.

point-of-service (POS) product 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.

POS product See point-of-service product.

PPA See preferred provider arrangement.

PPM company See Physician Practice Management Company.

PPO see preferred provider organization.

practice guideline See clinical practice guideline.

pre-admission certification A component of utilization review under which the utilization review organization determines whether an insured's proposed non-emergency hospital stay or some other type of care is most appropriate and what the length of an approved hospital stay may be.

precertification See prospective authorization.

pre-existing condition In group health insurance, generally a condition for which an individual received medical care during the three months immediately prior to the effective date 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).

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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 benefit management plan See pharmacy benefit management plan.

prescription cards See pharmaceutical cards.

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 See primary care provider.

primary care provider (PCP) 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 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.

probationary period The length of time that a new group member must wait before becoming eligible to enroll in a group insurance plan.

Provider Manual A document that contains information concerning a provider's rights and responsibilities as part of a network.

Provider-Sponsored Organization (PSO) A healthcare organizationýestablished and organized, or operated, by a healthcare provider or a group of affiliated healthcare providers to arrange for the delivery, financing, and administration of healthcareýthat meets requirements established by the Balanced Budget Act of 1997 and that has the authority to contract directly with Medicare.

PSO See Provider-Sponsored Organization.

physical therapy Not all plans cover physical therapy -- a program of special exercises that can help an injury heal without restricting movement or limiting function.

Q

QM See quality management.

QM committee MCO committee responsible for oversight of the quality management programýincluding the setting of standards, review of data, feedback to providers, follow-up, and approval of sanctionsýand for the quality of care delivered to members.

quality In a managed care context, an MCO's success in providing healthcare and other services in such a way that plan members' needs and expectations are met.

quality management (QM) An organization-wide process of measur-ing and improving the quality of the healthcare provided by an MCO.

quality program An organization-wide initiative to measure and improve the service and care provided by an MCO.

quote The preliminary amount of premium the insured and/or group will pay per month before underwriting factors are considered.

quotes The preliminary amount of premium the insured and/or group will pay per month before underwriting factors are considered.

quotes/quote The preliminary amount of premium the insured and/or group will pay per month before underwriting factors are considered.

R

rating The process of calculating the appropriate premium to charge purchasers, given the degree of risk represented by the individual or group, the expected costs to deliver medical services, and the expected marketability and competitiveness of the MCO's plan.

renewal underwriting The process by which an underwriter reviews each year all the selection factors that were considered when the contract was issued, then compares the group's actual utilization rates to those the MCO predicted to determine the group's renewal rate.

risk-adjustment The statistical adjustment of outcomes measures to account for risk factors that are independent of the quality of care provided and beyond the control of the plan or provider, such as the patient's gender and age, the seriousness of the patient's illness, and any other illnesses the patient might have. Also known as case-mix adjustment.

renewal date The specified date of when the health insurance coverage will renew for another period, typically one year.

routine annual exam A yearly medical "checkup," during which your doctor will perform simple medical care such as checking your height, weight, vision and blood pressure, as well as screening for problems like colon cancer, cervical cancer, prostate cancer and high cholesterol.

rx drug: formulary/non-formulary Some plans divide all drugs into two categories: formulary or non-formulary. If you have drug coverage, your prescription (RX) copayment may be different for formulary and non-formulary drugs.

S

severe mental health As defined by the American Psychiatric Association in their Diagnostic and Statistical Manual (DSM), severe mental illness includes the following disorders: schizophrenia, schizoaffective disorder, bipolar disorder (manic-depressive illness), major depressive disorders, panic disorder, obsessive-compulsive disorder, pervasive developmental disorder or autism, anorexia nervosa and bulimia nervosa. Such problems generally require at least occasional inpatient care.

short-term disability This type of coverage pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation). The per-week amount is usually 50, 60 or 66 2/3 percent of your weekly salary, and lasts for a period of time specified by the plan.

short-term medical coverage Similar to flex-term medical coverage. Short-term medical coverage is a major medical plan designed to protect you in the event of an illness or injury during "gaps" in your traditional medical coverage -- when you are between jobs or plans, a recent graduate, on strike, etc. Short-term plans are not meant to cover routine exams and preventive care; if you are looking for a choice of plan types and the ability to renew your plan beyond one year, a traditional medical plan, while typically more expensive, may be a better fit for your health insurance needs.

skilled nursing A level of care for patients who need intensive, 24-hour nursing supervision. This can take place in the home or in skilled nursing facilities, which offer services such as rehabilitation and specialized nutrition.

small-group plan A health insurance plan that is specifically designed for employers with a number of employees under a specified amount.

standard industrial classification (SIC) The Standard Industrial Classification (SIC) system is a series of number codes that attempts to classify all business establishments by the types of products or services they make available. Establishments engaged in the same activity, whatever their size or type of ownership, are assigned the same SIC code. These definitions are important for standardization. Insurance companies use SIC codes to determine specific rates for various industries. HealthInsurance.com uses these codes to ensure that you receive the best possible rate for your occupation.

self employed health insurance plan Refers to a individual policy paid for by the insured.

self-funded plan A health plan under which an employer or other group sponsor, rather than an MCO or insurance company, is financially responsible for paying plan expenses, including claims made by group plan members. Also known as a self-insured plan.

self-insured plan See self-funded plan.

senior market A market segment that is comprised largely of persons over age 65 who are eligible for Medicare benefits.

Sherman Antitrust Act A federal act which established as national policy the concept of a competitive marketing system by prohibiting companies from attempting to (1) monopolize any part of trade or commerce or (2) engage in contracts, combinations, or conspiracies in restraint of trade. The Act applies to all companies engaged in interstate commerce and to all companies engaged in foreign commerce. See also antitrust laws.

small group Although each MCO's size limit may vary, generally a group composed of 2 to 99 members for which health coverage is provided by the group sponsor.

specialty health maintenance organization (specialty HMO). An organization that uses an HMO model to provide healthcare services in a subset or single specialty of medical care.

specialty HMO See specialty health maintenance organization.

specialty services Services that are provided by independent, specialty organizations rather than by the MCO providing the basic health plan.

specific stop-loss coverage See individual stop-loss coverage.

staff model HMO A closed-panel HMO whose physicians are employees of the HMO.

standard community rating A type of community rating in which an MCO considers only community-wide data and establishes the same financial performance goals for all risk classes. Also known as pure community rating.

standard of care A diagnostic and treatment process that a clinician should follow for a certain type of patient, illness, or clinical circumstance.

Stark laws See Ethics in Patient Referrals Act.

statutory solvency An insurer's ability to maintain at least the minimum amount of capital and surplus specified by state insurance regulators.

stop-loss insurance A type of insurance coverage that enables provider organizations or self-funded groups to place a dollar limit on their liability for paying claims and requires the insurer issuing the insurance to reimburse the insured organization for claims paid in excess of a specified yearly maximum.

structural integration The unification of previously separate providers under common ownership or control.

structure measures Healthcare quality indicators related to the nature and quality of the resources that a managed care organization has available for patient care.

subauthorization The authorization of one healthcare service concurrently with the authorization of another service. For example, an authorization for hospitalization may cover surgery, anesthesia, pathology, and radiology performed during the hospitalization.

subsidiary A company that is owned by another company, its parent.

surplus The amount that remains when an insurer subtracts its liabilities and capital from its assets.

standard risk rate The risk category that is composed of proposed insureds who have a likelihood of loss that is not significantly greater than average.

stop-loss provision A major medical policy provision under which the insurer will pay 100 percent of the insured's eligible medical expenses after the insured has incurred a specified amount of out-of-pocket expenses in deductible and coinsurance payments.

supplemental accident This kind of coverage provides extra financial security for you and your family in the event of accidental death or dismemberment.

T

term life insurance A type of life insurance that provides a death benefit if the insured dies during a specific period.

termination provision A provider contract clause that describes how and under what circumstances the parties may end the contract.

termination with cause A contract provision, included in all standard provider contracts, that allows either the MCO or the provider to terminate the contract when the other party does not live up to its contractual obligations.

termination without cause A contract provision that allows either the MCO or the provider to terminate the contract without providing a reason or offering an appeals process.

therapeutic substitution The dispensing of a different chemical entity within the same drug class of a drug listed on a pharmacy benefit management plan's formulary. Therapeutic substitution always requires physician approval.

third party administrator (TPA) A company that provides administrative services to MCOs or self-funded health plans.

TPA See third party administrator.

treatment codes See diagnostic and treatment codes.

TRICARE A healthcare plan, avail-able to more than 6 million military personnel and their families, which is administered by private contractors who are selected for participation through a competitive procurement process. TRICARE offers members three plan options: TRICARE Prime (a capitated HMO with nominal premiums and copayments), TRICARE Extra (a PPO with standard CHAMPUS deductibles), and TRICARE Standard (the current fee-for-service CHAMPUS plan with provider choice and no premiums). See also Civilian Health and Medical Program of the Uniformed Services.

U

UCR fee See usual, customary, and reasonable fee.

UM See utilization management.

underwriters Insurance company employees who are responsible for identifying and classifying the degree of risk represented by a proposed insured.

underwriting The process of identifying and classifying the risk represented by an individual or group.

underwriting impairments Factors that tend to increase an individual's risk above that which is normal for his or her age.

underwriting manual A document that provides background information about various underwriting impairments and suggests the appropriate action to take if such impairments exist.

underwriting requirements Requirements, sometimes relating to group characteristics or financing measures, that MCOs at times impose in order to provide healthcare coverage to a given group and which are designed to balance a health plan's knowledge of a proposed group with the ability of the group to voluntarily select against the plan (antiselection).

urgent care Urgent care is appropriate when a medical urgency arises which necessitates immediate care, but has not reached the level of extreme emergency. Most managed care plans require you to seek urgent care at a participating urgent care facility or hospital.

URO See utilization review organization.

usual, customary, and reasonable (UCR) fee The amount commonly charged for a particular medical service by physicians within a particular geographic region. UCR fees are used by traditional health insurance companies as the basis for physician reimbursement.

utilization management (UM) Managing the use of medical services to ensure that a patient receives necessary, appropriate, high-quality care in a cost-effective manner.

utilization review (UR) The evaluation of the medical necessity, efficiency, and/or appropriateness of healthcare services and treatment plans.

utilization review committee Committee that reviews utilization issues brought to it by the medical director, often approving or reviewing policy regarding coverage, reviewing utilization patterns of providers, and approving or reviewing the sanctioning process against providers.

utilization review organization (URO) External reviewers who assess the medical appropriateness of suggested courses of treatment for patients, thereby providing the patient and the purchaser increased assurance of the appropriateness, value, and quality of healthcare services.

V

variances The differences obtained from subtracting actual results from expected or budgeted results.

vision care coverage A type of specified expense coverage that provides benefits for expenses the insured incurs in obtaining eye examinations and corrective lenses.

W

well baby care The goals of well baby care are 1) to immunize; 2) to provide parents with reassurance and counseling on safety, nutrition and behavioral problems; and 3) to identify and treat physical and developmental problems.

withhold A percentage of a provider's payment that is "held back" during the plan year to offset or pay for any cost overruns for referral or hospital services. Any part of the withhold not used for these purposes is distributed to providers.

workers' compensation A state-mandated insurance program that provides benefits for healthcare costs and lost wages to qualified employees and their dependents if an employee suffers a work-related injury or disease.

workers' compensation indemnity benefits Benefits that replace an employee's wages while the employee is unable to work because of a work-related injury or illness.

X

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Y

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Z

Sorry, we have no glossary terms beginning with the letter Z.