allowable amount. The
maximum amount determined by a third party payor to be eligible for
consideration of payment for a particular service, supply, or
procedure.
ambulatory care facility (ACF).
A medical care center that provides a wide range of health care
services, including preventive care, acute care, surgery and
outpatient care, in a centralized facility. Also known as a medical
clinic or medical center.
ancillary services.
Auxiliary or supplemental services, such as diagnostic services, home
health services, physical therapy and occupational therapy, used to
support diagnosis and treatment of a patient's condition.
annual maximum benefit
amount. The maximum dollar amount set by a Managed Care
Organization that limits the total amount the plan must pay for all
health care services provided to a subscriber in a year.
behavioral health care. The provision of
mental health and substance abuse services.
calendar year.
For some insurance carriers, calendar year refers to the period
commencing on a January 1 and ending on the next succeeding December
31. Other carriers consider calendar year to be your policy effective
date through a twelve month period.
claim. An itemized
statement of health care 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.
closed formulary. The
provision that only those drugs on a preferred list will be covered by
a Managed Care Organization.
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.
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.
copayment. A specified
dollar amount that a member must pay out-of-pocket for a specified
service at the time the service is rendered.
deductible.
The amount of eligible charges a member must pay before the insurer
will make any benefit payments.
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.
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.
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 schedule. The fee
determined by a Managed Care Organization to be acceptable for a
procedure or service, which the physician agrees to accept as payment
in full.
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 a Managed Care Organization's providers in
prescribing medications.
fully funded plan. A
health plan under which an insurer or Managed Care Organization bears
the financial responsibility of guaranteeing claim payments and paying
for all incurred covered benefits and administration costs.
generic
substitution. The dispensing of a drug that is the generic
equivalent of a drug listed on a Managed Care Organization's
formulary. In most cases, generic substitution can be performed
without physician approval.
grievances. Formal
complaints demanding formal resolution by a managed care plan.
group market. A market
segment that includes groups of two or more people that enter into a
group contract with a Managed Care Organization under which the MCO
provides health care coverage to the members of the group.
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.
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 health care 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 maintenance
organization (HMO). A health care 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.
home health care. The
health care services for which benefits are provided by a carrier when
such services are provided during a visit by a Home Health Agency to
patients confined at home due to a sickness or injury requiring
skilled health care services on an intermittent, part-time basis.
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.
lifetime maximum benefit
amount. The maximum dollar amount set by an Managed Care
Organization that limits the total amount the plan must pay for
covered health care services provided to a subscriber in the
subscriber's lifetime.
managed care. The
integration of both the financing and delivery of health care within a
system that seeks to manage the accessibility, cost and quality of
that care.
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 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.
Medicare Part B. A
voluntary program that is part of Medicare and provides benefits to
cover the costs of physicians' services. Persons wanting Part B
coverage have to pay a premium.
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.
Medicare supplement. A
private medical expense insurance plan that supplements Medicare
coverage. Also known as a Medigap policy.
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 physician.
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 eligible health care 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.
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.
point-of-service (POS) product. A
health care 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.
preferred provider organization (PPO).
A health care benefit arrangement designed to supply services at a
discounted cost by providing incentives for members to use designated
health care providers (who contract with the PPO at a discount), but
which also provides coverage for services rendered by health care
providers who are not part of the PPO network.
premium. A prepaid payment or
series of payments made to a health plan by purchasers, and often plan
members, for medical benefits.
primary care. General
medical care that is provided directly to a patient without referral
from another physician. It is focused on preventive care and the
treatment of routine injuries and illnesses.
primary care physician
(PCP). A physician who serves as a group member's first contact
with a plan's health care system.
self-funded plan. A
health plan under which an employer or other group sponsor, rather
than a Managed Care Organization or insurance company, is financially
responsible for paying plan expenses, including claims made by group
plan members. Also known as a self-insured plan.
skilled nursing facility.
A facility, licensed in accordance with state law and which is
Medicare eligible as a supplier of skilled inpatient nursing care,
that is primarily engaged in providing skilled nursing services and
other therapeutic services.
small group. In Texas,
a group composed of 2 to 50 members for which health coverage is
provided by the group sponsor.
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.
underwriting.
The process of identifying and classifying the risk represented by an
individual or group.
workers'
compensation. A state-mandated insurance program that provides
benefits for health care 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.
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