Access

A patient's ability to obtain medical services on a timely and convenient basis. Ease of access is determined by such factors as location of facility and hours of operation.

A fee charged for network services, usually per employee per month (PEPM).

The assumptions that an actuary uses in calculating the expected costs and revenues of the plan. Examples include utilization rates, age and sex mix of enrollees, and cost for medical services.

Costs not directly related to providing clinical care. Insurers often incur administrative costs when completing the tasks below.
• Plan marketing
• Premium collection
• Utilization review, quality assurance and risk management programs
• Claims processing

The tendency for people with an impaired health status. or people who avail themselves frequently of health care benefits, to be enrolled in a program in disproportionate numbers. The problem of attracting members who are sicker than the general population (specifically, members who are sicker than was anticipated when the budget for medical costs was developed).

The amount of covered expenses paid by the self-funded plan for all plan participants before Excess Loss Insurance is applied.

Any necessary, reasonable, or customary expense item that is covered in whole or in part by the self-funded plan.

Health care services provided on an outpatient basis, for which no overnight stay in the hospital is required. Caregivers often provide ambulatory services at the locations below.
• Hospital outpatient departments
• Ambulatory care centers
• Physicians' offices
• Patients' homes

Administrative Services Only. A contract between an insurance company and a self-funded plan where the insurance company performs administrative services only and does not assume any risk. Services usually include claims processing but may include other services such as actuarial analysis, utilization review, and so forth. Also see ERISA.

The practice of a provider billing a patient for all charges not paid for by the insurance plan, even if those charges are above the plan's UCR or are considered medically unnecessary. Managed care plans and service plans generally prohibit providers from balance billing except for allowed copays, coinsurance, and deductibles. Such prohibition against balance billing may even extent to the plan's failure to pay at all (e.g., because of bankruptcy).

An individual who is either using or eligible to use insurance benefits, including health coverage, under an insurance contract.

The total amount that the provider bills the patient on a 1500 or UB921 prior to any deductions.

A payment system whereby managed care plans pay health care providers a fixed, preset amount to care for a patient over a given period. Such amounts are often expressed as per member per month (PMPM) rates. The rate may be fixed for all members of the given population, or it may be adjusted for age, sex and other demographic factors.

The process by which a designated physician, nurse or other health professional manages all aspects of a patient's care. Case managers may coordinate and evaluate services to meet an individual's health needs. Case Management is designed to improve resource utilization and to enhance the continuity and accessibility of patient care.

The method by which an insurer reviews an enrollee's health care service claims before remitting, reimbursement. The purpose of claims review is to verify the medical necessity of the provided services and to ensure that the cost of the services is not excessive.

A managed care plan that contracts with physicians on an exclusive basis for services and does not allow those physicians to see patients for another managed care organization. Examples include staff and group model HMOs. Could apply to a large private medical group that contracts with an HMO.

Certificate Of Authority. The state-issued operating license for an HMO.

Coordination Of Benefits. An agreement that uses language developed by the National Association of Insurance Commissioners and prevents double payment for services when a subscriber has coverage from two or more sources. For example, a husband may have Blue Cross and Blue Shield through work, and the wife may have elected an HMO through her place of employment. The agreement gives the order for what organization has primary responsibility for payment and what organization has secondary responsibility for payment.

Consolidated Omnibus Reconciliation Act. A portion of this Act requires employers to offer the opportunity for terminated employees to purchase continuation of health care coverage under the group's medical plan (also see Conversion). Another portion eases a Medicare recipient's ability to disenroll from an HIM0 or CMP with a Medicare risk contract.

A provision in a member's coverage that limits the amount of coverage by the plan to a certain percentage, commonly 80%. Any additional costs are paid by the member out of pocket.

A rating system for establishing capitated rates based upon the average costs of providing health services to all individuals within a geographic region. Community rating is fairly basic, in that it does not adjust for each individual's medical history or the likelihood an individual will use medical services.

A review of a procedure or hospital admission that is performed by a different health professional than the one who is administering the procedure or initiating the admission. The review is performed during the provision or services.

A provision allowing a group health plan to identify duplicate coverage with another plan and to adjust coverage in recognition of the other coverage.

A specified dollar amount that a plan requires its enrollees to pay in order to cover a portion of their health care costs. Plan enrollees typically pay a co-payment each time they visit a provider. The plan, in turn, reimburses the provider for the remaining charges. That portion of a claim or medical expense that a member must pay out of pocket. Usually a fixed amount, such as $5 in many HMOs.

Plan activities or provisions aimed at holding down the cost of medical care or reducing the rate of its increase.

Charging one set of patients a disproportionately high amount in order to offset underpayment by another set of patients. Typically this involves charring privately insured patients more in order to recoup losses from Medicaid and Medicare patients. Recently, HMOs have stymied providers' cost-shifting practices by refusing, to pay more than the cost of care for their covered populations.

Expenses for medical care or supplies rendered to a person covered under the plan for which the plan is responsible to pay.

A standard unit of measurement of utilization. Refers to an annualized use of the hospital or other institutional care. It is the number of hospital days that are used in a year for each thousand covered lives.

The amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs. Insurance plans are based on yearly deductible.

Refusal by an insurance company to honor a request by an individual (or his or her provider) to pay for health care services.

A system used by Medicare and other payers to categorize illnesses according to diagnoses and treatments. Under the DRG system, payers determine inpatient reimbursement in advance and pay providers on a per-case basis according to fixed DRG rate. A statistical system of classifying any inpatient stay into groups for purposes or payment. DRGs may be primary or secondary outline classification also exists' This is the form of reimbursement that ties HCFA uses to pay hospitals for Medicare recipients. Also used by a few states for all payers and by some private health plans for contracting purposes.

A discount from provider billed charges as a result of negotiation with the provider.

The offering of both an HMO and a traditional insurance plan by one carrier.

EPSDT programs cover screening and diagnostic services to determine physical or mental defects in recipients under age 21. In addition, EPSDT covers measures to treat any defects and chronic conditions discovered during screening.

Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program.

Explanation of Benefits. A statement mailed to a member or covered insured explaining how and why a claim was or was not paid: the Medicare version is called an EOMB (also see ERISA).

Exclusive Provider Organization. An EPO is similar to an HMO in that it often uses primary physicians as gatekeepers, often capitates providers, has a limited provider panel, and uses an authorization system, etc. It is referred to as exclusive because the member must remain within the network to receive benefits. The main difference is that EPOs are generally regulated under insurance statutes rather than HMO regulations. Not allowed in many states that maintain that EPOs are really HMOs.

Abbreviation for Employee Retirement Income Security Act of 1974, as amended. This requires that persons who administer, supervise or manage an employee benefit plan do so with the care, skill, prudence, and diligence that a prudent person familiar with such matters would use. It requires the plan to comply with certain reporting to the federal government and with certain disclosure of information to plan participants. Plans sponsored by federal, state, or any governmental entity, or church plans, are not subject to ERISA and may be subject to comply with state insurance laws.

Coverage protecting a plan sponsor from unexpected, catastrophic medical claims loss, above designated specific attachment point and aggregate attachment point amounts.

Clauses in a health plan contract that deny coverage for select conditions, procedures, groups, locations or risks.

A rating system for assessing the risk of an individual or group by analyzing the applicant's health history. Using experience ratings to determine premium rates is fairly controversial, and some legislators want to outlaw such practices.

HMOs that meet certain federally stipulated criteria aimed at protecting consumers. Examples of qualification criteria are listed below.
• HMO offers a broad range of basic health services
• HMO is financially solvent
• HMO monitors its quality of patient care

Traditional payment systems whereby patients pay health care providers for services rendered and then bill insurers or the government for reimbursement.

A comprehensive listing of fees that a health plan or the government uses to reimburse physicians and other providers on a fee-for-service basis.

A list of selected pharmaceuticals and their appropriate dosages felt to be the most effective in terms of both cost and quality. HMO's often require physicians to prescribe from mandated formularies.

In exchange for payment of premiums, an insurance company has complete risk for covered charges after the deductible, copays and/or coinsurance are satisfied.

A primary care physician who coordinates and oversees all aspects of a patient's medical care. In order for a patient to visit a specialist or be admitted to a hospital, the gatekeeper must give preauthorization, except in cases of emergency.

An HMO that contracts with a medical group for the provision of health care services. The relationship between the HMO and the medical group is generally very close, although there are wide variations in the relative independence of the group from the HMO. A form of closed panel health plan.

Health Care Financing Administration. The federal agency that oversees all aspects of health financing for Medicare and also oversees the Office of Prepaid Health Care Operations and Oversight (OPHCOO).

A claims form used by professionals to bill for services. Required by Medicare and generally used by private insurance companies and managed care plans.

Health plans that offer prepaid, comprehensive health coverage for both hospital and physician services. An HMO contracts with a "network" of health care providers, and members are required to use providers in the network for all health care services. Members are enrolled for a specific time period.

A set of performance measures that the National Committee for Quality Assurance (NCQA) has established to standardize the way health plans report data to employers. HEDIS currently measures five major areas of health plan performance:
• Quality
• Access and patient satisfaction
• Membership and utilization
• Health plan management
• Finance

Claims that are paid, not yet paid, or not yet reported, for which the plan is responsible to pay under the terms of the plan.

A physician organization that contracts with individual physicians to form a network. IPA-model HMOs build their provider base by contracting with one or more IPAs. The IPA physicians practice in their own office and continue to see patients outside of the HMO.

Insurance plans that, unlike managed care plans, reimburse on a fee-for-service basis. Indemnity plans have traditionally been the most popular type of insurance but are now being supplanted by managed care.

Services furnished to a patient who has been admitted to the hospital. Inpatient services include bed and board as well as nursing, diagnostic, therapeutic, medical or surgical services.

A report that tells managers how old the claims are that are being processed and how much is paid out each month (both for that month and for any earlier months, by month) and compares these to the amount of money that was accrued for expenses each month. A powerful tool used to determine whether the plan's reserves are adequate to meet all expenses. Plans that fail to perform lag studies properly may find themselves staring into the abyss.

LOS the length of hospital stay. A term used by insurance companies to describe the amount of time an individual stays in a hospital or in-patient facility.

A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease.

Benefits that a health plan are required to provide by law. This is generally used to refer to benefits above and beyond routine insurance-type benefits, and it generally applies at the state level (where there is high variability from state to state). Common examples include in-vitro fertilization, defined days of inpatient mental health or substance abuse treatment, and other special-condition treatments. Self-funded plans are exempt from mandated benefits under ERISA.

The portion of the available market that a company has captured. Market share is typically expressed as a percentage of the total market potential.

Managed Care Organization. A generic term applied to a managed care plan. Some people prefer it to the term HMO because it encompasses plans that do not conform exactly to the strict definition of an HMO (although that definition has itself loosened considerably). May also apply to a PPO, EPO, or OWA.

A legal entity formed by a group of licensed physicians for the purposes of sharing equipment, facilities and personnel. According to the Medical Group Management Association, a group practice must contain at least three licensed physicians.

The ratio between the cost to deliver medical care and the amount of money that was taken in a by a plan.

Those covered services that a plan enrollee requires to maintain his or her health, according to standards of medical practice.

Management Information System. The common term for the computer hardware and software that provides the support for managing the plan.

A group practice composed of physicians from different medical specialty areas.

A nonprofit managed care industry organization designed to improve patient care and health plan performance. NCQA performs accreditation audits of requesting health plans. It serves managed care plans, purchasers and the public sector.

A designated time period in which individuals may enroll in, or transfer between, available health plans. The period when an employee may change health plans; usually occurs once per year. A general rule is that most managed care plans will have around half their membership up for open enrollment in the fall for an effective date of January 1.

The result of a medical or surgical intervention or nonintervention. Providers track outcomes in order to discern which treatments are most effective for patients. Outcomes tracking is required to develop clinical protocols.

An individual who does not fall within the norm. This term often refers to providers who use significantly more or less resources than their peers. For example, any provider whose utilization differs two standard deviations from the mean on a bell curve may be deemed an outlier. The term "outlier" can also refer to enrollees who consume significantly more or less resources than most patients with their diagnoses.

The coverage provided to plan members for emergency situations. that require treatment outside of the plan's geographic service area.

This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.

Same as ambulatory care.

A health care provider who contracts with a managed care plan to provide services to enrollees.

Primary care physician. Generally applies to internists, pediatricians, family physicians, and general practitioners and occasionally to obstetrician/gynecologists.

A review by health care professionals of the quality of care provided to a patient. Peer reviews often analyze the items listed below.
• Documentation of care
• Conclusions reached by caregiver
• Diagnostic steps and therapy
• Resource utilization
• Claim charges

A reported claim for which final payment action has not yet been taken.

Standards an individual provider is expected to meet. Standards typically address the quality of care as well as the volume of care that is expected to be delivered over a given time period.

Physician-Hospital Organization. These are legal (or perhaps informal) organizations that bond hospitals and the attending medical staff. Frequently developed for the purpose of contracting with managed care plans. Sometimes called a MeSH.

Per Member Per Month. Specifically applies to a revenue or cost for each enrolled member each month.

Any employee or former employee, or any dependent or former dependent, who is or may become covered by the benefit plan.

The employer, employee organization, association, or other entity who maintains a benefit plan for employees or members of the group.

The firm that performs various administrative functions for the self-funded plan, including actuarial, benefit design, claims processing, employee communications, government reporting, etc. The contract for services may be for Administrative Services Only (ASO).

Plans that encourage, but do not require, members to choose a primary care physician. POS plans are also referred to as "open-ended HMOs". In POS plans, as in traditional HMOs, the primary care physician acts as a "gatekeeper" to control specialist referrals. Plan members may, however, choose to visit non-network physicians at their discretion. Members choosing not to use a primary care physician must pay higher deductibles and copays than those using network providers.

The practice of reviewing requests for inpatient admission before the patient enters the hospital in order to assure that the admission is medically necessary.

A system whereby payers evaluate the need for medical services before they are performed. Preauthorization is designed to curb overutilization.

A health plan that offers enrollees incentives to use providers within the plan's network. Members who prefer to use non-network physicians may do so, but at a higher cost. Patients may access specialists without visiting a primary care "gatekeeper".

A medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company.

A system intended to assure the quality of care in a defined medical setting. Such programs include extensive reviews to identify and remedy deficiencies in quality. Quality assurance programs have mechanisms for assessing, their own effectiveness and often measure care against preset standards.

Insurance purchased by a health plan to protect it against extremely high cost cases (also see Stop loss).

The possibility or probability of loss. In insurance terms, risk is defined as the possibility of loss associated with covering a given population. HMOs often share risk with providers in order to control utilization; by having providers feel the negative repercussions of overutilization, HMOs promote More cost-effective behavior.

The plan sponsor assumes the entire risk for medical plan benefits and purchases Excess Loss Insurance for protection from unexpected catastrophic medical claims.

The practice of an employer assuming the responsibility for the health care benefits of its employees in order to realize cost savings by removing the insurer or health plan. Employers typically establish funds against which claims payments are drawn. Employers often employ independent companies, called third-party administrators (TPAs), to handle claims processing.

The amount of covered medical expenses paid by the self-funded plan for each plan participant before Excess Loss Insurance is applied.

An HMO that employs providers directly, and those providers see members in the HMO's own facilities. A form of closed panel HMO.

(See Excess Loss Insurance)

A detailed description of the employee benefit plan, including a statement of eligibility, coverage, employee rights, and an appeal procedure. This document summarizes plan benefits.

Specialized care typically provided at a teaching or university-affiliated hospital. Tertiary care often requires extensive diagnostic equipment and technical expertise.

The company that collects premiums, processes claims, and/or provides administrative services.

The offering of an HMO, PPO, and a traditional insurance plan by one carrier.

The common claim form used by hospitals to bill for services. Some managed care plans demand greater detail than is available on the UB-92, requiring the hospitals to send additional itemized bills.

The practice of a provider billing for multiple components of service that were previously included in a single fee. For example, if dressings and instruments were included in a fee for a minor procedure, the fee for the procedure remains the same, but there are now additional charges for the dressings and instruments.

The practice of a provider billing for a procedure that pays better than the service actually performed. For example, an office visit that would normally be reimbursed at $45 is coded as one that is reimburses at $53.

A health plan's practice to pay a physician's full charges if they are reasonable and do not exceed the physician's usual charges or the amount typically charged for the same service by other area physicians.

The amount that a given population uses a specific service within a specific time period. An example of a utilization indicator is the number of hospital admissions per year per 1,000 HMO enrollees.

A systematic method for reviewing an acute episode of care to determine if care is appropriate. Utilization review, which is also known as utilization management and utilization control, can also measure the appropriateness and quality of care (in addition to quantity).

A period of time when you are not covered by insurance for a particular problem.