List of TermsAccess
Activities of Daily Living (ADLs)
Adjusted Community Rate (ACR)
Administrative Services Only (ASO)
Adult Day Care
Aggregate Amount (limit)
Alternative Care Benefit
Alternate Care Facility
Assignment of Benefits
Average Length of Stay
Benefit Increase Options
Centers of Excellence
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
Coordination of Benefits (COB)
Current Procedural Terminology (CPT)
Custodial Care Facilities
Diagnosis-Related Groups (DRGs)
Durable Power of Attorney
Elimination Period Employee Retirement Income Security Act of 1974 (ERISA)
Exclusive Provider Organization (EPO)
Explanation of Benefits (EOB)
Federally Qualified Health Center
Flexible Spending Accounts
Fully Insured Plan
Health Insurance Purchasing Cooperatives (HIPCS)
Health Maintenance Organization (HMO)
Home and Community-Based Care Benefits
Home Health Services
Hospital Bill Audit
Hospital Indemnity Insurance
Inability to Perform Activities of Daily Living
Incurred But Not Reported (IBNR)
Individual or Independent Practice Association (IPA)
Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
Lifetime Aggregate or Maximum
Long-term Care (LTC)
Long-Term Care Facility
Medicare Advantage Plan
Medicare Part A (Hospital Insurance)
Medicare Part B (Medical Insurance)
Medicare Part D (Prescription Drug Coverage)
Medigap-Medicare Supplement Insurance
Mental Health Services
Multiple Employer Trust (MET)
Multiple Employer Welfare Arrangement (MEWA)
Multiple Provider Arrangement
Multi-specialty Group Practice
National Association of Health Underwriters (NAHU)
National Association of Insurance Commissioners (NAIC)
National Committee on Quality Assurance (NCQA)
Network or Mixed-Model HMO
Omnibus Budget Reconciliation Act (OBRA)
Partial Capitation Risk Contracts
Per Member Per Month (PMPM)
Personal Care Advocate
Physician-Hospital Organization (PHO)
Plan of Care
Point of Service Plans (POS)
Preferred Provider Organization (PPO)
Prepaid Group Practice
Primary Care Case Management
Primary Care Physician (PCP)
Qualified Health Plan
Reasonable and Customary
Resource-Based Relative Value Scale (RBRVS)
Retrospective Claim Review Rider (Exclusion)
Second Surgical Opinions
Skilled Nursing Facilities
Social Security Act
Specialty Managed Care Arrangements
Specified Disease Insurance
Staff Model HMO
Third-Party Administrator (TPA)
Twenty-four (24-hour) Coverage
Usual, Customary, and Reasonable (UCR) Fees
Utilization Review (UR)
Waiver of Premium
Workers Compensation Insurance
For additional terms, visit HealthCare.gov.
Acquisition Cost: The cost to acquire a new customer or new business. In the insurance industry, it includes costs such as underwriting the risk, issuing a new policy, paying commissions and other overhead or office expenses.
Activities of Daily Living (ADLs): Everyday activities for self-care. Whether a person can perform any or all of these activities independently is used as a measure of an individual's ability to function independently. These activities include eating, bathing, dressing, toileting and transferring according to the federal government. Some authorities add continence and ambulating to the list of ADLs. ADLs are used to define the disability in long-term care insurance. The loss of some number of ADLs is an insuring or triggering event in all long-term care policies. ADLs and the loss necessary to trigger benefits may vary from state to state.
Actuary: A professional who mathematically analyzes and determines the price of the risk associated with providing insurance coverage. An actuary may also determine the anticipated cost of providing future benefits. Factors considered in an actuarial study include the projection of future claims experience, administrative expenses and anticipated investment return.
Administrative Services Only (ASO): A type of contract with an insurance company or a third-party administrator that provides an employer with administrative services such as claim payment. It does not provide coverage for the risk of insurance protection. The usual expenses covered include claims processing, plan design advice and printing benefit booklets. These contracts are usually entered into by larger employers who can afford the risk of providing insurance protection with their own money.
Administrator: A person who is designated to be responsible for the proper operation and administration of a plan. When the plan sponsor does not designate a person for this duty, ERISA considers the plan sponsor to be the plan administrator.
Adverse Selection: This is an economic term to describe what happens when a person makes a decision that will have adverse results. In health insurance, it describes what happens when a person makes a decision based on his/her diminished health condition or frequency of needed treatment and is, therefore considered a poorer claims risk than most others in the group.
Agent: This term is used interchangeably with broker when discussing insurance. An agent is licensed by the state, performs many of the functions for sole proprietors and small businesses that Human Resource Departments do for larger businesses, gathers census data, prepares proposals, makes presentations to businesses, explains benefits to employers and employees, delivers policies and certificates, assists in handling claims, and performs other related tasks required by the individual, employer or sole proprietor.
Aggregate Amount (limit): Maximum amount of total losses for which a plan sponsor (employer) is liable for any one-plan year. Aggregate insurance is often purchased by self-funded employers as a financial back-stop to cap their total claims costs in a year.
Alternative Care Benefit: payment for a special arrangement of services specifically designed to allow the person to reside in a setting other than a nursing facility (i.e. services to provide assistance, capital improvements such as a ramp, and/or durable medical equipment.
Alternate Care Facility: (1) A hospice; or (2) a place that provides ongoing care to inpatients in one location and which (a) provides 24-hour care and services sufficient to support needs resulting from inability to perform activities of daily living or cognitive impairment; (b) has a trained and ready-to-respond employee to provide such care; (c) provides three meals a day and accommodates special dietary needs; (d) is appropriately licensed or accredited; (e) has formal arrangements for the services of a physician or nurse to provide emergency medical care; and (f) has appropriate procedures for handling administering drugs.
Alzheimer's Disease: A form of organic dementia resulting in premature mental deterioration, first described in 1906 by German neurologist, Alois Alzheimer. Alzheimer's disease is considered a cognitive impairment, thus triggering benefits under long-term care insurance policies.
Approved Amount: Under Original Medicare, it is the amount Medicare determines is reasonable for a service covered under Medicare Part B. It is the amount that the doctor or supplier that accepts Medicare assignment can be paid. It may be less than the actual charge.
Assessment: A determination of physical and/or medical status by a health professional based on established medical guidelines. The assessment is a central component in home care coverages and the payment of home care claims. Upon the triggering of benefits, due either to the loss of some number of activities of daily living or a cognitive impairment, an assessment is performed by a multidisciplinary team. This "team" usually spearheaded by the insured's physician, determines the level of functional incapacity and develops a plan of care that will be followed in assisting the insured in the performing the ADLs and IADLs (instrumental activities of daily living).
Assignment: An arrangement whereby a physician or medical supplier agrees to accept the amount approved by Medicare as full payment for services and supplies under Part B. Medicare usually pays 80% of the approved amount directly to the physician or supplier after the beneficiary meets the annual Part B deductible. The beneficiary pays the other 20 percent.
Assisted Living: A non-medical institution providing room, board, laundry, some form of personal care and usually recreational and social services. While anyone needing these services can access them, they are typically used by senior citizens. Licensed by state departments of social services, these facilities exist under several names, including domiciliary care facility, sheltered house, board and care, community-based residential care facilities and alternate care facilities.
ASO: A type of contract with an insurance company or a third-party administrator that provides an employer with Administrative Services Only (ASO). It can include coverage for a certain amount of claims risk. The usual administrative expenses include claims processing, plan design advice and printing benefit booklets. Large employers who can afford the risk of providing insurance protection with their own money usually enter into these contracts.
Attachment Point: For aggregate stop-loss insurance, it is the point at which the stop-loss insurance carriers begin to reimburse the employer based upon the cumulative total of claims paid within a policy year. Attachment points are usually set at a level that exceeds expected claims in a plan year (e.g. 125% of expected claims).
Average Length of Stay: One measure of use of health facilities, reported as an average number of inpatient days spent in a hospital or other healthcare facility per admission or discharge. It is calculated as follows: total number of days in the facility for all admissions during a particular period divided by the number of admissions during the same period. Average lengths of stay vary and are measured by age, specific diagnosis, or sources of payment.
Balance Billing: The practice of medical care providers (such as doctors, hospital, or other medical practitioner) billing the insurer for full costs, then billing the insured (patient) for the portion of the bill that was not paid by the insurer. Many health plans prohibit the use of balance billing and may use sanctions against providers who balance bill.
Benefit Increase Options: Also known as automatic benefit increase option, automatic increase benefit, and cost of living adjustment benefit. Benefit increase options are most common in long-term care policies.
Benefit Period: A benefit period is a way of measuring a beneficiary's use of hospital and skilled nursing facility (SNF) services covered by Original Medicare. A benefit period begins the day the beneficiary is admitted as an inpatient in a hospital or SNF. It ends after the beneficiary has been out of the hospital or other facility that primarily provides skilled nursing for rehabilitation services (or, if in the latter type of facility, has not received skilled care there) for 60 days in a row. If the beneficiary is hospitalized after 60 days, a new benefit period begins, most Medicare Part A benefits are renewed, and the beneficiary must pay a new inpatient hospital deductible. There is no limit to the number of benefit periods a beneficiary can have.
Cafeteria Plan: A plan which offers a choice between two or more benefits, or a choice between cash and one or more qualified benefits, and which complies with Section 125 of the Internal Revenue Code. (Also known as flexible benefit plans or "flex" plans).
Case Management: Planned approach to manage service or treatment to an individual with a serious medical problem. Its dual goal is to contain costs and promote more effective intervention to meet patient needs. Often referred to as large case management.
Chronic Care: Care for illness continuing over a long period of time or recurring frequently. Chronic conditions often begin inconspicuously and symptoms are less pronounced than acute conditions. Long term care insurance is designed to assist people who have a loss of capacity due to chronic illnesses.
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS): Federal program providing cost-sharing health benefits for dependents and survivors of active duty personnel and for retirees and their dependents and survivors.
Coalitions: An association of healthcare plan sponsors who pool their resources to negotiate with insurers or other healthcare payers and providers. A coalition may also be a group of individuals or others who cooperate and join forces around a specific agenda or purpose.
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985): A federal law that requires most employers to allow eligible employees and their beneficiaries to continue to self-pay for their coverage after it normally terminates for up to 18, 24, 29 or 36 months.
Cognitive Impairment: Deterioration in intellectual capacity which (1) requires regular supervision to protect patients and others; (2) must be determined by clinical diagnosis or test; and (3) may be the result of Alzheimer's disease, senile dementia, or other nervous or mental disorders of organic origin.
Co-insurance: An agreement between the insured and the insurance company where payment is shared for all claims by the policy. A typical arrangement is 80%/20% up to $5,000. The insurance company pays 80% of the first $5,000 and the insured pays 20%. Usually after 80% of $5,000, the insurance company then pays 100% of covered expenses during the remainder of the calendar year up to any limits of the policy.
Community-Rated: Method of developing group-specific capitation rates by a health plan that generally does not account for unique characteristics of the group. The rate is based on the total experience of a given geographic area or "community."
Community-Rating: A rating method that determines a single average premium based on the characteristics and claims experience of an entire defined population. Age, lifestyle, industry, health factors and gender are not used to determine rates.
Coordination of Benefits (COB): A contractual provision to prevent an insured from receiving benefits under more than one health insurance plan so that the insured's benefits from all sources do not exceed allowable medical expenses or eliminate appropriate patient incentives to contain cost.
Cost Sharing: The sharing of costs between the payment of premium cost and medical expenses by the healthcare plan and its insured through employee contributions, deductibles, co-insurance and co-payments.
Custodial Care Facilities: A licensed facility that provides personal assistance to persons who are unable to care for themselves due to age, illness, physical or mental infirmity, but who do not require daily nursing care.
Customer: User of healthcare services, such as patients getting care or providers getting support services from laboratories; payer of service, such as individuals, employers, or the government; or the general public.
Defensive Medicine: Extensive use of laboratory testing, treatment, increased hospital admissions, and extended hospital stays that are not medically necessary for the treatment of the patient; the sole purpose of such services is to reduce the possibility of malpractice suits by the patient or providing a good legal defense in the event of such lawsuits.
Dementia: The severe impairment of cognitive functions (thinking, memory and personality). Of the elderly population in the U.S., 5 to 6 percent have dementia. Alzheimer's disease causes approximately one-half of these causes, vascular disorders (multiple strokes) case one-fourth and the other dementia's are caused by alcoholism, heart disease, infections, toxic reaction to medication and other rarer conditions. While impairment from Alzheimer's disease and vascular disorders is permanent, dementia caused by other conditions can usually be corrected.
Discharge Planning: Assessment of an inpatient's medical condition for the purpose of arranging for appropriate continuing care upon leaving the facility. This planning includes how long the patient will be in the hospital, the expected outcome, and whether there are special needs or requirements on discharge.
Employee Retirement Income Security Act of 1974 (ERISA): A federal law that originally set minimum standards for funding, vesting and termination of employer-sponsored pension plans. ERISA also contains provisions to protect the interests of participants and beneficiaries in welfare plans. Welfare plans must be in written form, describe the benefits and name the persons responsible for the operation of the plan.
Exclusive Provider Organization (EPO): Arrangement consisting of a group of providers who have a contract with an insurer, employer, third-party administrator, or other sponsoring group. Criteria for provider participation may be the same as those in PPOs but have more restrictive provider selection and credentialing process or otherwise forfeit reimbursement altogether.
Explanation of Benefits (EOB): A document sent to an insured when the plan or insurance company processes a claim. The document explains how reimbursement was made, or why the claim was not paid, and if any additional information is needed to have the claim reconsidered. The appeals procedure should be outlined to advise the insured of his/her rights if there is dissatisfaction with the decision.
Extended Benefits: Benefits which continue, or become payable, after the termination of coverage from a plan or insurance contract, for example a hospitalization which continues after coverage would normally cease.
Flexible Spending Accounts: Special accounts typically funded by an employee's voluntary salary reduction to help pay certain expenses not covered by the employer's plan or insurance contract. The advantage of these accounts is that after-tax dollars are converted to before-tax dollars, thereby reducing the actual cost of expenses.
Gatekeeper Question: A qualifying question asked by an insurance company at the time of application to help identify risk(s). Example: "Have you ever been treated for a heart attack or heart condition?"
Grace Period: Time period that follows the premium due date when the coverage and policy remain in force. If a late premium is paid before the end of the grace period, coverage continues as if the premium had been paid timely.
Guaranteed Issue: A requirement that health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. Except in some states, guaranteed issue doesn't limit how much you can be charged if you enroll.
Health Insurance Purchasing Cooperatives (HIPCS): Variations of cooperatives have been around for many years. But, they are seeing a resurgence due to PPACA. PPACA provides loans for consumer operated and originated health plans. They are expected to be nonprofit integrated care and delivery systems that will be sold through the state health exchanges.
Health Maintenance Organization (HMO): An organization that provides a wide range of comprehensive healthcare services for a specified group of enrollees for a fixed, pre-paid premium. There are several models of HMOs: Group Model, Individual Practice Association (IPA), Staff Model and Network Model.
Home and Community-Based Care Benefits: To be eligible for long-term care insurance Home and Community-Based Care Benefits, you must require covered services while your policy is in force that are due to (1) medical necessity, or (2) your inability to perform two or more activities of daily living, or (3) cognitive impairment.
Hospital Bill Audit: Independent examination of hospital bills by a third party to determine if services and supplies charged to the patient were actually delivered, and if the price charged was correct.
Hospital Indemnity Insurance: Hospital indemnity coverage is insurance that pays a fixed cash amount for each day you are hospitalized up to a designated number of days. Some coverage may have added benefits such as surgical benefits or skilled nursing home confinement benefits. Some policies have a maximum number of days or a maximum payment amount.
Inability to Perform Activities of Daily Living: Dependence on someone else because of need, due to injury, sickness, or frailty of age, for regular human assistance or supervision in performing normal activities of daily living. Activities of Daily Living are commonly referred to as ADLs.
Incontestability: Provision in a life insurance policy which allows an insurance company to contest the validity of a claim after the policy has been in force for a certain period, usually two or three years.
Indemnity Insurance: Healthcare insurance plan providing benefits in a predetermined amount for covered services. Traditionally, the insurer pays on a fee-for-service basis with no involvement in the actual delivery of healthcare services.
Individual or Independent Practice Association (IPA): Association of individual physicians that provides services on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis. It is one model of HMO managed care. IPAs may also serve non-HMO patients.
Joint Commission on Accreditation of Healthcare Organizations (JCAHO): Also referred to as “The Joint Commission.” Private voluntary accrediting organization for all types of healthcare organizations. Its focus is the outcome, process, and excellence in healthcare.
Long-term Care (LTC): Continuum of maintenance, custodial, and health services to the chronically ill, disabled, or mentally impaired over a lengthy period of time. Services may be provided in long-term care or on an outpatient basis (subacute care, rehabilitation facility, nursing home, mental hospital, outpatient, or at-home basis).
Long-Term Care Facility: A place which is (1) licensed by the state; (2) provides skilled, intermediate, or custodial nursing care on an inpatient basis under the supervision of a physician; (3) keeps a daily medical record of each patient.
Malpractice Reform: Proposed changes to laws meant to redress malpractice, may include limits on pain and suffering awards, required arbitration and limits to the amount of attorney's fees as well as a host of other requirements.
Managed Care: Term used to describe the coordination of financing and provision of healthcare to produce high-quality healthcare for the lowest possible cost. A system that imposes control on the utilization of medical services and on the providers who renders the care. Managed care is provided through managed indemnity plans; Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPOs), Health Maintenance Organizations (HMOs), or any other cost management environment.
Medicare: Federally sponsored program under the Social Security Act that provides hospital benefits, supplementary medical care, and catastrophic coverage to persons 65 years of age and older and to some younger persons who are covered under Social Security benefits.
Medicare Advantage Plan: This is another Medicare health plan choice. These are sometimes called “Part C” or “MA Plans.” A Medicare Advantage Plan provides Part A and Part B coverage. They typically also include additional coverage such as vision, hearing, dental or wellness programs. They generally provide Part D, prescription drug coverage, as well.
Medicare-Approved Amount: Medicare has a fee schedule that lists the dollar amount that Medicare considers to be the reasonable charge for the services provided by a doctor that Medicare approves for a covered service provided by a doctor is the lesser of the Medicare fee schedule amount for a particular service or the amount charged by the doctor.
Medigap-Medicare Supplement Insurance: Medigap insurance is specifically designed to supplement Medicare's benefits and is regulated by federal and state law. It must be clearly identified as Medicare supplemental insurance and it must provide specific benefits that help fill the gaps in your Medicare coverage. Other kinds of insurance may help you with out-of- pocket healthcare costs but they do not qualify as Medigap plans.
Multiple Employer Welfare Arrangement (MEWA): An employee welfare arrangement designed to provide benefits to employees of two or more employers. These plans have often been poorly regulated – states are limited in their ability to regulate them and the federal government through the United State Department of Labor and ERISA, has not made regulation of MEWAs a priority.
Multi-specialty Group Practice: Independent physicians' group that is organized to contract with a managed care plan to provide medical services to enrollees. The physicians are not employees of the HMO, but are employed by the group practice.
National Association of Health Underwriters (NAHU): A professional organization founded in 1929. NAHU represents more than 100,000 licensed health insurance agents, brokers, consultants and benefit professionals who serve the health insurance needs of employers and individuals seeking health insurance coverage.
National Association of Insurance Commissioners (NAIC): The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Its initiatives assist state insurance departments and help draft models laws.
National Committee on Quality Assurance (NCQA): Private, voluntary organization for accrediting managed care. It assesses quality, credentialing utilization management, customer rights, preventive health services, and medical records.
Negotiated Fees: Managed care plans and providers mutually agree on set fees for each service. This negotiated rate is usually based on services defined by the Current Procedural Terminology (CPT) codes, generally at a discount from what the provider would usually charge. Providers cannot charge more than this fee.
Network or Mixed-Model HMO: Provider arrangements that contract with a number of Independent Practice Associations or group practices to provide physician services to HMO enrollees in return for higher patient volume. This model is a multiple provider arrangement that can be either an open or closed panel.
Network Providers: Limited grouping or panels of providers in a managed care arrangement with several delivery points. Enrollees may be required to use only network providers or may have greater liability for costs when using non-network providers for medical services.
Non-Forfeiture Benefits: A guarantee for a refund of all of the life insurance premiums paid in one of two ways; (1) to a named beneficiary at the death of the insured, or, (2) as an "extended term" type benefit for as long as all premiums accrued will last with the balance (if any) left to a named beneficiary. See Return of Premium
Omnibus Budget Reconciliation Act (OBRA): Term given by Congress to many of its annual tax and budget reconciliation acts. Most of these tax and budget acts have language or provisions related to healthcare and managed care, particularly in relation to Medicare.
Out-of-Network Care: Medical services obtained by managed care plan members from unaffiliated or non-contracted healthcare providers. In many plans, such care will not be reimbursed or be reimbursed at a reduced rate.
Partial Capitation Risk Contracts: State Medicaid contracts with HMOs or similar managed care organizations that accept risk for a defined set of services (for example, physician services and laboratory, x-ray, or clinic services). Other services are reimbursed on a fee-for-services basis.
Peer Review: Traditional quality assurance program to monitor standard processes of care or adverse outcomes of provider practice by other professional peers. The goal of peer review is to find and correct medical practices that do not conform to the professional standards of care.
Per Diem: Literally, per day. Term that is applied to determining costs for one day of care. It is an average cost and does not reflect true cost for each patient. Some contracts with hospitals may call for insurer payments on a per diem basis as an all-encompassing contractual payment arrangement.
Physician-Hospital Organization (PHO): Group practice arrangement that occurs when hospitals and physicians organize for purposes of contracting with managed care organizations. These relationships are formally organized, contractual, or corporate in character and include physicians outside the boundaries of a hospital's medical staff.
Plan of Care: Also known as Home Care Plan. It is the result of an assessment; a program for providing home care services. In most policies, a physician and the multi-disciplinary team will prepare such a program. It will be appropriate for the level of care needed for the physician's diagnosis. All long term care policies qualifying under California Senate Bill 1943 require plans of care.
Point of Service Plans (POS): Combination of HMO and PPO features. They provide a comprehensive set of health benefits and offer a full range of health services much the same as the HMO. However, the member does not have to choose how or where to receive services until they need them. The member can then opt to use the defined managed care program, or can go out-of-plan for services but pay the difference for non-plan benefits (e.g. 100 percent coverage for managed care vs. 80 percent coverage out-of-plan).
Pool (ing): Used by insurance companies to combine all premiums, claims and expenses in order to spread the risk of insurance coverage. This process ensures that small employers will not be singled out and unfairly assessed with a large rate increase due to unanticipated medical catastrophic claims of insured employee(s). Pooling is used to level out premium fluctuations that would otherwise occur when you have individuals or small groups where one or a few large claims would exceed premiums paid by that individual or group in one year.
Practice Guidelines: Specific, professionally agreed upon recommendation for medical practice used within healthcare organizations to standardize the practice to achieve consistent quality outcomes. Practice guidelines may be instituted when triggered by specific clinical indicators.
Pre-authorization: Previous approval required for referral to a specialist or non-emergency healthcare services. This practice is not as common as it once was, but may still be applicable in certain settings or for certain services.
Pre-certification: Utilization management program that requires the individual or provider to notify the insurer before a medical or dental procedure. Notification allows the insurer to authorize payment and to recommend alternate courses of action. This practice is not as common as it once was, but may still be applicable in certain settings or for certain services.
Preferred Provider Organization (PPO): Managed care arrangement consisting of a group of hospitals, physicians, and other providers who have contracts with an insurer, employer, third-party administrator, or other sponsoring group to provide healthcare services to covered persons in exchange for prompt payment and increased patient volume.
Preventive Medicine: Wellness and health promotion services that are part of the basic benefits package of a managed healthcare plan. The list of preventive services that must be covered by health plans as a result of PPACA is comprehensive. A list of these covered services is available on www.HealthCare.gov.
Primary Care Physician (PCP): Primary deliverers and managers of healthcare, central to controlling costs and utilization. The PCP provides basic care to the enrollee, initiates referrals to a specialist, and provides follow-up care. Usually defined as a physician practicing in such areas as internal medicine, family practice, and pediatrics.
Protocol: Tool for enhancing quality in a healthcare organization by developing customary methods for medical interventions. Treatment protocols are developed for clinical areas of medicine where diagnostic or therapeutic approaches are defined. Technology assessment and quality studies are used to establish decision protocols for particular diseases or treatments.
Readmission: Patient admission to a hospital for the same or similar diagnosis as a previous, recent admission. Often used as a quality of care measure measuring whether there was an inappropriate discharge or treatment from the first admission.
Reinsurance: The transfer of part of the insurance risk to another insurer or insurers--self-funded plans generally buy specific and/or aggregate stop-loss coverage to cover losses in excess of certain limits (also known as excess loss coverage). (See Attachment Point)
Reserves: A specific amount of money pre-funded and set aside to assure adequate funds to cover future claims. Both insurance companies and self-insured employers must "reserve" in order to preserve cash flow and protect solvency.
Resource-Based Relative Value Scale (RBRVS): This is the basis used to determine the payment for medical providers for Medicare. The RBRVS is determined using three factors: physician work, practice expense and malpractice expense.
Risk Adjustment: Correction of capitation or fee rates based upon factors that can cause an increase in medical costs such as age or sex. It is also, more broadly, a means of leveling the playing field to adjust for uneven exposure to risk by transferring the higher than expected costs from one entity to another with lower than expected costs. This may be accomplished by using a reinsurance mechanism.
Self-Insurers: Also referred to as self-funding – see below. Employers, businesses, and other entities that choose to assume the responsibilities of an insurance company to insure their beneficiaries. Functions include: collection of employee premium contributions; establishment of plan of benefits; claim payment; appeals for claims, etc. Coverage provided by a self-insured entity may not need to comply with state insurance laws.
Specified Disease Insurance: Specified disease insurance, which is not available in some states, provides benefits for only a single disease, such as cancer, or for a group of specified diseases. The value of such coverage depends on the chance you will get the specific disease or diseases covered. Benefits are usually limited to payment of a fixed amount for each type of treatment. This coverage is often provided on a voluntary basis in an employer-based plan.
Staff Model HMO: HMO that owns the clinical facilities used by patients enrolled in the HMO. The HMO directly employs the physicians providing service and they provide service only to patients enrolled in the HMO plan.
Third-Party Administrator (TPA): Method by which an outside person or firm, not a party to a contract, provides specific administrative duties (including premium accounting, claims review and payment, arranges for utilization review and stop-loss coverage) for a self- funded plan. Entity may also handle payment of claims.
Tort Reform: The purpose of reform is to reduce overall healthcare costs by reforming the medical malpractice arena. Tort reform often contemplates eliminating unnecessary practices and testing, which are performed defensively by a physician with little or no value to the person seeking treatment. It may also include reasonable limits placed on non-economic damages paid to a patient or beneficiary.
Total Disability: Generally, a disability that prevents an insured from performing all occupational duties. Contract language may be more or less restrictive in insurance policies and should be reviewed as necessary.
Trend Factor: The percentage of increase used by an insurance company or plan to reflect the projected rise in healthcare costs. Calculation factors also include inflation, utilization, technology and geographic area.
Twenty-four (24-hour) Coverage: Any combination of traditional health insurance and workers' compensation insurance that attempts to dissolve the occupational and non-occupational boundaries between the two coverages.
Unbundling: This is a billing practice to increase the reimbursement paid by a plan or insurance contract, each medical procedure is billed under a separate code as a separate item, instead of part of one overall procedure.
Utilization: Patterns of usage for a single medical service or type of service (hospital care, prescription drugs, physician visits). Measurement of utilization of all medical services in combination usually is done in terms of dollar expenditures. Use is expressed in rates per unit of population at risk for a given period, such as the number of annual admissions to a hospital per 1,000 persons in the plan.
Utilization Review (UR): Programs designed to reduce unnecessary or inappropriate medical services, both inpatient and outpatient. Utilization reviews may be prospective, retrospective, concurrent, or in relation to discharge planning.
Waivers: Term usually associated with the Medicare or Medicaid programs by which the government waives certain regulations or rules for a managed care or insurance program to operate in a certain geographic area. Can also relate to exclusions in life and disability insurance (reference "Rider").
Withhold Arrangements: Portion of a provider's salary, fees, or capitation that is held back until performance in relation to quality and utilization are examined at the end of each year. If performance was at least satisfactory, withholds are released to the provider.
Workers’ Compensation Insurance: Programs mandated by the states to provide benefits for workers who are injured on the job or killed on the job. Benefits for work related injuries include payment for medical care and lost salary.Back to top