Abuse - When used as a legal term in the business of healthcare, it normally refers to actions that do not involve intentional misrepresentations in billing but which, nevertheless, result in improper conduct. Consequences can result in civil liability and administrative sanctions. An example of abuse is the excessive use of medical supplies.
Access - The patient's ability to obtain medical care. The ease of access is determined by such components as the availability of medical services and their acceptability to the patient, the location of health care facilities, transportation, and hours of operation and cost of care, and individual's ability to obtain appropriate health care services. Barriers to access can be financial (insufficient monetary resources), geographic (distance to providers), organizational (lack of available providers) and sociological (e.g., discrimination, language barriers). Efforts to improve access often focus on providing/improving health coverage.
Accreditation - The process by which an organization recognizes a provider, a program of study or an institution as meeting predetermined standards. Two organizations that accredit managed care plans are the National Committee for Quality Assurance (NCQA) and the Joint Commission on Accreditation of Health Care Organizations (JCAHO). JCAHO also accredits hospitals and clinics. CARF accredits rehabilitation providers.
Accrual - The amount of money that is set aside to cover expenses. The accrual is the plan's best estimate of what those expenses are, and (for medical expenses) is based on a combination of data from the authorization system, the claims system, lag studies, and the plan's prior history.
Activities of Daily Living (ADL's, ADL) - An individual's daily habits such as bathing, dressing and eating. ADLs are often used as an assessment tool to determine an individual's ability to function at home, or in a less restricted environment of care.
Actuarial - Refers to the statistical calculations used to determine the managed care company's rates and premiums charged their customers based on projections of utilization and cost for a defined population.
Acute Care - A pattern of health care in which a patient is treated for an acute (immediate and severe) episode of illness, for the subsequent treatment of injuries related to an accident or other trauma, or during recovery from surgery. Specialized personnel using complex and sophisticated technical equipment and materials usually give acute care in a hospital. Unlike chronic care, acute care is often necessary for only a short time.
Adjudication - Processing claims according to contract.
Administrative Code Sets - Code sets that characterize a general business situation, rather than a medical condition or service. Under HIPAA, these are sometimes referred to as non-clinical or non-medical code sets, compare to medical code sets.
Admission Certification - Methods of assuring that only those patients who need hospital care are admitted. Certification can be granted before admission (preadmission) or shortly after (concurrent). Length-of-stay for the patient's diagnosed problem is usually assigned upon admission under a certification program.
Adverse Event - An injury to a patient resulting from a medical intervention.
Affiliated Provider - A health care provider or facility that is part of the HMO's network usually having formal arrangements to provide services to the member.
Affiliation - An agreement between two or more otherwise independent entities or individuals that defines how they will relate to one another. Agreements between hospitals may specify procedures for referring or transferring patients. Agreements between providers may include joint managed care contracting.
Agency for Health Care Policy and Research (AHCPR) - The agency of the Public Health Service responsible for enhancing the quality, appropriateness and effectiveness of health care services.
Aid to Families with Dependent Children (AFDC) - The federal AFDC program provides cash welfare to: (1) needy children who have been deprived of parental support and (2) certain others in the household of such child. States administer the AFDC program with funding from both the federal government and state. The Personal Responsibility & Work Responsibility Act of 1996, enacted in August 1996, replaced AFDC with a new program called Temporary Assistance for Needy Families (TANF).
All Inclusive Visit Rate - Aggregate costs for any one patient visit based upon annual operating costs divided by patient visits per year. This rate incorporates costs for all services at the visit.
Allowable Charge - The maximum charge for which a third party will reimburse a provider for a given service. An allowable charge is not necessarily the same as either a reasonable, customary, maximum, actual, or prevailing charge.
Allowed Amount - Maximum dollar amount assigned for a procedure based on various pricing mechanisms.
Allowed Charge - This is the amount Medicare approves for payment to a physician, but may not match the amount the physician gets paid by Medicare (due to co-pay or deductibles) and usually does not match what the physician charges patients. Medicare normally pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. The allowed charge for a nonparticipating physician is 95 percent of that for a participating physician. Non-participating physicians may bill beneficiaries for an additional amount above the allowed charge. The CMS intermediary in each state publishes these rates.
Allowable Costs - Covered expenses within a given health plan.
All Patient Diagnosis Related Groups (APDRG) - An enhancement of the original DRGs, designed to apply to a population broader than that of Medicare beneficiaries, who are predominately older individuals. The APDRG set includes groupings for pediatric and maternity cases as well as of services for HIV-related conditions and other special cases.
All-Payer System - A system in which prices for health services and payment methods are the same, regardless of who is paying. For instance, in an all-payer system, federal or state government, a private insurer, a self-insured employer plan, an individual, or any other payer could pay the same rates. The uniform fee bars health care providers from shifting costs from one payer to another. See cost shifting.
Alternate Delivery Systems - Health services provided in other than an inpatient, acute-care hospital or private practice. A phrase used to describe all forms of health care delivery except traditional fee-for-service, private practice.
Ambulatory Care - Health services provided without the patient being admitted. Also called outpatient care.
Ancillary Services (Ancillary Charges) - Supplemental services, including laboratory, radiology, physical therapy, and inhalation therapy that are provided in conjunction with medical or hospital care.
Anniversary Date - The beginning of an employer group's benefit year.
ANSI - The
American National Standards Institute. A national organization founded to
develop voluntary business standards in the
Antitrust - A legal term encompassing a variety of efforts on the part of government to assure that sellers do not conspire to restrain trade or fix prices for their goods or services in the market.
Any Willing Provider - A requirement that a health plan contract for the delivery of health care services with any provider in the area who would like to provide such services to the plan's enrollees.
Any Willing Provider Laws - Laws that require managed care plans to contract with all health care providers that meet their terms and conditions.
Appropriateness - Appropriate health care is care for which the expected health benefit exceeds the expected negative consequences by a wide enough margin to justify treatment. This term is not to be confused with "usual and customary" or "approved" service. The extent to which a particular procedure, treatment, test, or service is clearly indicated, not excessive, adequate in quantity, and provided in the setting best suited to a patient's or member's needs.
Approval - A term used extensively in managed care and, too many, implies the primary process of "managing" managed care. Approval usually is used to describe treatments or procedures that have been certified by utilization review.
Approved Charge - Limits of expenses paid by Medicare in a given area of covered service. Charges approved by payment by private health plans. Items that are likely to be reimbursed by the insurance company.
Approved Health Care Facility, Hospital or Program - A facility or program authorized to provide health services and allowed by a given health plan to provide services stipulated in contract.
Assignment of Benefits - Method used when a claimant directs that payment be made directly to the health care provider by the health plan.
Assisted Living - Broad range of residential care services, but does not include nursing services. Normally lower in cost than nursing homes.
Attestation - The requirement that the attending physician certify, in writing, the accuracy and completion of the clinical information used for DRG assignment.
Audit of Provider Treatment or Charges - A qualitative or quantitative review of services rendered or proposed by a health provider. The review can be carried out in a number of ways: a comparison of patient records and claim form information, a patient questionnaire, a review of hospital and practitioner records, or a pre- or post-treatment clinical examination of a patient. Some audits may involve fee verification. Something we had better get used to being subjected to since this is usually first type or "first generation" managed care approach.
Autoassignment or Auto Assignment - A term used with Medicaid mandatory managed care enrollment plans. Medicaid recipients who do not specify their choice for a contracted plan within a specified time frame are assigned to a plan by the state.
Authorization – Any document designating any permission. The HIPAA Privacy Rule requires authorization or waiver of authorization for the use or disclosure of identifiable health information for research (among other activities). The authorization must indicate if the health information used or disclosed is existing information and/or new information that will be created. The authorization form may be combined with the informed consent form, so that a patient need sign only one form. An authorization must include the following specific elements: a description of what information will be used and disclosed and for what purposes; a description of any information that will not be disclosed, if applicable; a list of who will disclose the information and to whom it will be disclosed; an expiration date for the disclosure; a statement that the authorization can be revoked; a statement that disclosed information may be re-disclosed and no longer protected; a statement that if the individual does not provide an authorization, s/he may not be able to receive the intended treatment; the subject's signature and date.
Auto assignment - A term used with Medicaid mandatory managed care enrollment plans. Medicaid recipients who do not specify their choice for a contracted plan within a specified time frame are assigned to a plan by the state.
Auto-Enrollment - The automatic assignment of a person to a health insurance plan, typically done under Medicaid plans.
Average Length of Stay (ALOS) - Refers to the average length of stay per inpatient hospital visit. Figure is typically calculated for both commercial and Medicare patient populations.
Average Wholesale Price (AWP) - Commonly used in pharmacy contracting, the AWP is generally determined through reference to a common source of information. Average cost of a non-discounted item to a pharmacy provider by wholesale providers. Drug manufacturers commonly publish suggested wholesale prices.
Balance Billing - The practice of billing a patient for the fee amount remaining after insurer payment and co-payment have been made. Under Medicare, the excess amount cannot be more than 15 percent above the approved charge.
Base Capitation - Specified amount per person per month to cover healthcare cost, usually excluding pharmacy and administrative costs as well as optional coverages such as mental health/substance abuse services.
Base Year Costs - In Medicare, the amount a hospital actually spent to
render care in a previous time period. Depending on the hospital's Medicare
cost reporting period, the base year was the fiscal year ending on or after
Bed Days - Number of inpatient hospital days per 1,000 health plan members for a specified period, usually annual.
Behavioral Health, Behavioral Healthcare - An umbrella term that includes mental health, psychiatric, marriage and family counseling, addictions treatment and substance abuse. Services are provided by a myriad of providers, including social workers, counselors, psychiatrist, psychologists, neurologists and even family practice physicians. Many states have "parity" laws that attempt to require that behavioral health insurance coverage be provided "on par" to physical health coverage.
Behavioral Offset - This is the change in the number and type of services that is projected to occur in response to a change in fees. A 50 percent behavioral offset suggests that 50 percent of the savings from fee reductions will be offset by increased volume and intensity of services.
Benchmark - A goal to be attained. These goals are chosen by comparisons with other providers, by consulting statistical reports available or are drawn from the best practices within the organization or industry. Benchmarks are used in quality improvement programs to encourage improvement of care, efficiencies or services. Benchmarks are also used for length of stay comparisons, costs, utilization review, risk management and financial analysis. The benchmarking process identifies the best performance in the industry (health care or non-health care) for a particular process or outcome, determines how that performance is achieved, and applies the lessons learned to improve performance.
Beneficiary (Also eligible; enrollee; member) - Individual who is either using or eligible to use insurance benefits, including health insurance benefits, under an insurance contract. Any person eligible as either a subscriber or a dependent for a managed care service in accordance with a contract. An individual who receives benefits from or is covered by an insurance policy or other health care financing program.
Beneficiary Liability - The amount beneficiaries must pay providers for Medicare-covered services. Liabilities include copayments, deductibles, and balance billing amounts. CMS has very strict rules about health providers billing patients for their liabilities. Cost based facilities are not allowed to charge non-payment by beneficiaries to bad debt unless a clear history of collection activity is recorded.
Benefit Limitations - Any provision, other than an exclusion, which restricts coverage in the Evidence of Coverage, regardless of medical necessity. Limitations are often expressed in terms of dollar amounts, length of stay, diagnosis or treatment descriptions.
Benefit Package - Aggregate services specifically defined by an insurance policy or HMO that can be provided to patients. The services a payer offers to a group or individual. The package will specify include cost, limitation on the amounts of services, and annual or lifetime spending limits.
Benefit Payment Schedule - List of amounts an insurance plan will pay for covered health care services.
Benefits - Benefits are specific areas of Plan coverage's, i.e., outpatient visits, hospitalization and so forth, that makes up the range of medical services that a payer markets to its subscribers. Also, a contractual agreement, specified in an Evidence of Coverage, determining covered services provided by insurers to members.
Billed Claims - Fees submitted by a health care provider for services rendered to a covered person. Fees billed and fees paid are rarely synonymous.
Biometric Identifier - Identifying information based on a physical characteristic (e.g., a fingerprint). Confidentiality laws and HIPAA privacy rules refer to biometric identifiers.
Bioterrorism or Biological Warfare - The unlawful use, wartime use, or threatened use, of microorganisms or toxins to produce death or disease in humans. Often viewed as the preferred choice of warfare of less powerful groups of people in attempt to wage war or protect themselves from more powerful groups or nations. However, biological agents could be used by individuals or by powerful nations as well.
Block Grant - Federal funds made to a state for the delivery of a specific group of related services, such as drug abuse related services.
Board Certified (Boarded, Diplomat) - Describes a physician who has passed a written and oral examination given by a medical specialty board and who has been certified as a specialist in that area.
Board Eligible - Describes a physician who is eligible to take the specialty board examination by virtue of being graduated from an approved medical school, completing a specific type and length of training, and practicing for a specified amount of time. Some HMOs and other health facilities accept board eligibility as equivalent to board certification, significant in that many managed care companies restrict referrals to physicians without certification.
Bonus Payment - An additional amount paid by Medicare for services provided by physicians in Health Professional Shortage Areas. Currently, the bonus payment is 10 percent of Medicare's share of allowed charges. This is not to be confused with other payments to hospitals, such as the disproportionate share payment or the settlement made to facilities at the end of a cost report year.
Bundled Payment - A single comprehensive payment for a group of related services. Bundled payments have become the norm in recent years and CMS and other payers investigate unbundled services closely. Unbundling service charges has been a common form of fraud as defined by CMS.
Cafeteria Plan - Arrangements under which employees may choose their own benefit structure. Sometimes these are varying benefit plans or add-ons provided through the same insurer or 3rd party administrator, other times this refers to the offering of different plans or HMOs provided by different managed care or insurance companies.
Capital Costs - Capital costs usually involve equipment and physical plant costs, not consumable supplies. Included in these costs can be interest, leases, rentals, taxes and insurance on physical assets like plant and equipment. Capital costs are usually reimbursed to cost based facilities through submission of these costs on annual cost reports to the CMS intermediaries. Depreciation schedules usually apply.
Capitation (Cap, Capped, Capitate) - Specified amount paid periodically to health provider for a group of specified health services, regardless of quantity rendered. Amounts are determined by assessing a payment "per covered life" or per member.
Carrier - An
insurer; an underwriter of risk that finances health care. Also refers to any
organization, which underwrites or administers life, health or other insurance
programs. When an employer has a “self-insured” plan, the carrier (such as
Carve-in - A generic term that refers to any of a continuum of joint efforts between clinicians and service providers; also used specifically to refer to health care delivery and financing arrangements in which all covered benefits (e.g., behavioral and general health care) are administered and funded by an integrated system.
Carve Out - Practice of excluding specific services from a managed care organization's capitated rate. In some instances, the same provider will still provide the service, but they will be reimbursed on a fee-for-service basis.
Case Management - Method designed to accommodate the specific health services needed by an individual through a coordinated effort to achieve the desired health outcome in a cost effective manner. The monitoring and coordination of treatment rendered to patients with specific diagnosis or requiring high-cost or extensive services. The process by which all health-related matters of a case are managed by a physician or nurse or designated health professional. Physician case managers coordinate designated components of health care, such as appropriate referral to consultants, specialists, hospitals, ancillary providers and services. Case management is intended to ensure continuity of services and accessibility to overcome rigidity, fragmented services, and the mis-utilization of facilities and resources. It also attempts to match the appropriate intensity of services with the patient's needs over time.
Case Manager - A nurse, doctor, or social worker who works with patients, providers and insurers to coordinate all services deemed necessary to provide the patient with a plan of medically necessary and appropriate health care.
Case Mix - The mix of patients treated within a particular institutional setting, such as the hospital. Patient classification systems like DRGs can be used to measure hospital case mix.
Case-Mix Index (CMI) - The average DRG weight for all cases paid under PPS. The CMI is a measure of the relative costliness of the patients treated in each hospital or group of hospitals.
Case Rate - Flat fee paid for a client's treatment based on their diagnosis and/or presenting problem.
Case Severity - A measure of intensity or gravity of a given condition or diagnosis for a patient. May have direct correlation with the amount of service provided and the associated costs or payments allowed.
Catastrophic Health Insurance - Policy that provides protection primarily against the higher costs of treating severe or lengthy illnesses or disabilities. Normally these are "add on" benefits that begin coverage once the primary insurance policy reaches its maximum.
Categorically Needy - Medicaid eligibility based on defined indicators of financial need by families with children and pregnant women, and to persons who are aged, blind, or disabled. Persons not falling into these categories cannot qualify, no matter how low their income. The Medicaid statute defines over 50 distinct population groups as potentially eligible, including those for which coverage is mandatory in all states and those that may be covered at a state's option. The scope of covered services that states must provide to the categorically needy is much broader than the minimum scope of services for other groups receiving Medicaid benefits.
Catastrophic Health Insurance - Health insurance, which provides protection against the high cost of treating severe or lengthy illnesses or disability. Generally such policies cover all, or a specified percentage of, medical expenses above an amount that is the responsibility of another insurance policy up to a maximum limit of liability.
Centers for Medicare and Medicaid Services (CMS) - The Centers for Medicare & Medicaid Services (CMS) is a Federal agency within the U.S. Department of Health and Human Services. Programs for which CMS is responsible include Medicare, Medicaid, State Children's Health Insurance Program (SCHIP), HIPAA and CLIA. Formerly was HCFA. Centers for Medicare & Medicaid Services has historically maintained the UB-92 institutional EMC format specifications, the professional EMC NSF specifications, and specifications for various certifications and authorizations used by the Medicare and Medicaid programs. CMS is responsible for oversight of HIPAA administrative simplification transaction and code sets, health identifiers, and security standards. CMS also maintains the HCPCS medical code set and the Medicare Remittance Advice Remark Codes administrative code set.
Certificate of Authority (COA) - Issued by state governments, it gives a health maintenance organization or insurance company its license to operate within the state.
Certificate of Coverage (COC) - Outlines the terms of coverage and benefits available in a carrier's health plan.
Certificate of Need (CON) - In some states, a state agency must review and approve certain proposed capital expenditures, changes in health services provided, and purchases of expensive medical equipment. Before the request goes to the state, a local review panel (the health systems agency or HSA) must evaluate the proposal and make a recommendation. CON is intended to control expansion of facilities and services by preventing excessive or duplicative development of facilities and services. Many states have sunsetted or eliminated their CON processes and requirements.
Certified Health Plan - A managed health care plan, certified by the Health Services Commission and the Office of the Insurance Commissioner to provide coverage for the Uniform Benefits Package to state residents. Regulations vary by state since some states require only HMOs to certify but not PPOs, IPAs or MSOs. Increasingly these regs are becoming more consistent state by state.
CHAMPUS - Civilian Health and Medical Program of the Uniformed Services.
Charges - These are the published prices of services provided by a facility. CMS requires hospitals to apply the same schedule of charges to all patients, regardless of the expected sources or amount of payment. Controversy exists today because of the often wide disparity between published prices and contract prices. The majority of payers, including Medicare and Medicaid, are becoming managed by health plans that negotiate rates lower than published prices. Often these negotiated rates average 40% to 60% of the published rates and may be all-inclusive bundled rates.
Chronic Care - Long term care of individuals with long standing, persistent diseases or conditions. It includes care specific to the problem as well as other measures to encourage self-care, to promote health, and to prevent loss of function.
Claim - A request by an individual (or his or her provider) to that individual's insurance company to pay for services obtained from a health care professional.
Claims Review - The method by which an enrollee's health care service claims are reviewed prior to reimbursement. The purpose is to validate the medical necessity of the provided services and to be sure the cost of the service is not excessive.
Claim Status Codes - A national administrative code set that identifies the status of health care claims. This code set is used in the X12N 277 Claim Status Inquiry and Response transaction, and is maintained by the Health Care Code Maintenance Committee.
Clinical Data Repository - That component of a computer-based patient record (CPR) which accepts, files, and stores clinical data over time from a variety of supplemental treatment and intervention systems for such purposes as practice guidelines, outcomes management, and clinical research. May also be called a data warehouse.
Clinical Decision Support - The capability of a data system to provide key data to physicians and other clinicians in response to "flags" or triggers which are functions of embedded, provider-created rules. A system that would alert case managers that a client's eligibility for a certain service is about to be exhausted would be one example of this type of capacity. Also a key functional requirement to support clinical or critical pathways.
Clinical Laboratory Improvement Amendments (CLIA) - CMS regulates all laboratory testing
(except research) performed on humans in the
Clinical or Critical Pathways - A "map" of preferred treatment/intervention activities. Outlines the types of information needed to make decisions, the timelines for applying that information, and what action needs to be taken by whom. Provides a way to monitor care "in real time." These pathways are developed by clinicians for specific diseases or events. Proactive providers are working now to develop these pathways for the majority of their interventions and developing the software capacity to distribute and store this information.
CMS (formerly HCFA) - See Centers for Medicare and Medicaid Services.
CMS-1450 - The uniform institutional claim form.
CMS-1500 - The uniform professional claim form.
COBRA - See Consolidated Omnibus Budget Reconciliation Act.
Coding - A mechanism for identifying and defining physicians' and hospitals' services. Coding provides universal definition and recognition of diagnoses, procedures and level of care. Coders usually work in medical records departments. Medicare fraud investigators look closely at the medical record documentation, which supports codes and looks for consistency. A national certification exists for coding professionals and many compliance programs are raising standards of quality for their coding procedures.
Co-Insurance (coinsurance) - A cost-sharing requirement under a health insurance policy that provides that the insured will assume a portion or percentage of the costs of covered services. Health care cost which the covered person is responsible for paying, according to a fixed percentage or amount. A policy provision frequently found in major medical insurance policies under which the insured individual and the insurer share hospital and medical expenses according to a specified ratio. A type of cost sharing where the insured party and insurer share payment of the approved charge for covered services in a specified ratio after payment of the deductible. Under Medicare Part B, the beneficiary pays coinsurance of 20 percent of allowed charges. Many HMOs provide 100% insurance (no coinsurance) for preventive care or routing care provided "in network".
Common Rule – Under HIPAA, it outlines the necessity of obtaining informed consent from patients.
Comorbid Condition - A medical condition that, along with the principal diagnosis, exists at admission and is expected to increase hospital length of stay by at least one day for most patients.
Compliance - Accurately following the government's rules on Medicare billing system requirements and other federal or state regulations. A compliance program is a self-monitoring system of checks and balances to ensure that an organization consistently complies with applicable laws relating to its business activities.
Complication - A medical condition that arises during a course of treatment and is expected to increase the length of stay by at least one day for most patients.
Composite Rate - Group rate billed to all subscribers of a given group.
Comprehensive Major Medical Insurance - A policy designed to provide the protection offered by both a basic and major medical health insurance policy. It is generally characterized by a low deductible, a co-insurance feature, and high maximum benefits.
Computer-Based Patient Record (CPR) - A term for the process of replacing the traditional paper-based chart through automated electronic means; generally includes the collection of patient-specific information from various supplemental treatment systems, i.e., a day program and a personal care provider; its display in graphical format; and its storage for individual and aggregate purposes. Also called “digital medical record” or “electronic medical record”.
Concurrent Review - Review of a procedure or hospital admission done by a health care professional (usually a nurse) other than the one providing the care, during the same time frame that the care is provided. Usually conducted during a hospital confinement to determine the appropriateness of hospital confinement and the medical necessity for continued stay. See also Utilization Review, Medical Necessity, Appropriate and Continued Stay Review.
Confidentiality – The protection of individually identifiable information as required by state or federal law or by policy of the healthcare provider.
Consent – See Informed Consent
Consolidated Omnibus Budget Reconciliation Act (COBRA) - Federal law that continues health care benefits for employees whose employment has been terminated. Employers are required to notify employees of these benefit continuation options, and, failure to do so can result in penalties and fines for the employer. An act that allows workers and their families to continue their employer-sponsored health insurance for a certain amount of time after terminating employment. COBRA imposes different restrictions on individuals who leave their jobs voluntarily versus involuntarily (Department of Labor, 2002).
Continued Stay Review - A review conducted by an internal or external auditor to determine if the current place of service is still the most appropriate to provide the level of care required by the client.
Continuous Quality Improvement (CQI) - An approach to health care quality management borrowed from the manufacturing sector. It builds on traditional quality assurance methods by putting in place a management structure that continuously gathers and assesses data that are then used to improve performance and design more efficient systems of care. Also known as quality improvement (QA) and total quality management (TQM).
Contract - A legal agreement between a payer and a subscribing group or individual which specifies rates, performance covenants, the relationship among the parties, schedule of benefits and other pertinent conditions. The contract usually is limited to a 12-month period and is subject to renewal thereafter. Contracts are not required by statute or regulation, and less formal agreements may be made.
Contract Year - A period of twelve (12) consecutive months, commencing with each Anniversary Date. May or may not coincide with a calendar year.
Contract Provider - Any hospital, physician, skilled nursing facility, extended care facility, individual, organization, or agency licensed that has a contractual arrangement with an insurer for the provision of services under an insurance contract.
Contributory Program - Program where the employee and the employer or the union shares the cost of group coverage.
Conversion - In group health insurance, the opportunity given the insured and any covered dependents to change his or her group insurance to some form of individual insurance, without medical evaluation upon termination of his group insurance
Conversion Factor (CF) - The dollar amount used to multiply the Relative Value Schedule (RVS) of a procedure to arrive at the maximum allowable for that procedure.
Conversion Factor Update - Annual percentage change to a conversion factor, either set annually by the government or by the formula reflecting actual expenditure growth from two years falling below or above the original target rate. See Conversion Factor, Sustainable Growth Rate, Sustainable Growth Rate System.
Conversion Privilege - The right of an individual insured under a group policy to certain kinds of individual coverage, without a medical examination, upon termination of his association with the group.
Coordination of Benefits (COB) - Provision regulating payments to eliminate duplicate coverage when a claimant is covered by multiple group plans. The procedures set forth in a Subscription Agreement to determine which coverage is primary for payment of benefits to Members with duplicate coverage. A coordination of benefits, or "non-duplication," clause in either policy prevents double payment by making one insurer the primary payer, and assuring that not more than 100 percent of the cost is covered. Standard rules determine which of two or more plans, each having COB provisions, pays its benefits in full and which becomes the supplementary payer on a claim. Also called cross-over.
Co-Payment, Co-payment, Co-pay - A cost-sharing arrangement in which the HMO enrollee pays a specified flat amount for a specific service (such as $10 for an office visit or $5 for each prescription drug). The amount paid must be nominal to avoid becoming a barrier to care. It does not vary with the cost of the service and is usually a flat sum amount such as $10 for every prescription or doctor visit, unlike co-insurance that is based on a percentage of the cost.
Cost-benefit analysis (Evaluation) - An analytic method in which a program's cost is compared to the program's benefits for a period of time, expressed in dollars, as an aid in determining the best investment of resources. For example, the cost of establishing an immunization service might be compared with the total cost of medical care and lost productivity that will be eliminated as a result of more persons being immunized. Cost-benefit analysis can also be applied to specific medical tests and treatments.
Cost Consequence Analysis (CCA) - A form of analysis that compares alternative interventions or programs in which the components of incremental costs and consequences are listed without aggregation.
Cost Containment - Control of inefficiencies in the consumption, allocation, or production of health care services that contribute to higher than necessary costs. Inefficiencies are thought to exist in consumption when health services are inappropriately utilized; inefficiencies in allocation exist when health services could be delivered in less costly settings without loss of quality; and, inefficiencies in production exist when the costs of producing health services could be reduced by using a different combination of resources. Cost containment is a word used freely in healthcare to describe most cost reduction activities by providers.
Cost Outlier - A case that is more costly to treat compared with other patients in a particular diagnosis related group. Outliers also refer to any unusual occurrence of cost, cases that skew average costs or unusual procedures.
Cost Sharing - Payment method where a person is required to pay some health costs in order to receive medical care. The general set of financing arrangements whereby the consumer must pay out-of-pocket to receive care, either at the time of initiating care, or during the provision of health care services, or both. This includes deductibles, coinsurance and copayments, but not the share of the premium paid by the person enrolled.
Cost Shifting - Charging one group of patients more in order to make up for underpayment by others. Most commonly, charging some privately insured patients more in order to make up for underpayment by Medicaid or Medicare.
Cost Utility Analysis - A form of effectiveness analysis where outcomes are rated in terms of utility, or quality of life.
Coverage - The guarantee against specific losses provided under the terms of an insurance policy.
Covered Services - Services provided within a given health care plan. Health care services provided or authorized by the payer's Medical Staff or payment for health care services.
Covered Benefit - A medically necessary service that is specifically provided for under the provisions of an Evidence of Coverage. A covered benefit must always be medically necessary, but not every medically necessary service is a covered benefit. For example, some elements of custodial or maintenance care, which are excluded from coverage, may be medically necessary, but are not covered.
Covered Entity – Under HIPAA, this is a health plan, a health care clearinghouse, or a health care provider who transmits any health information in electronic form in connection with a HIPAA transaction. For purposes of the HIPAA Privacy Rule, health care providers include hospitals, physicians, and other caregivers, as well as researchers who provide health care and receive, access or generate individually identifiable health care information.
Credentialing - Review procedure where a potential or existing provider must meet certain standards in order to begin or continue participation in a given health care plan, on a panel, in a group, or in a hospital medical staff organization.
Current Procedural Terminology (CPT) - A standardized mechanism of reporting services using numeric codes as established and updated annually by the AMA. A manual that assigns five digit codes to medical services and procedures to standardize claims processing and data analysis. The coding system for physicians' services developed by the CPT Editorial Panel of the American Medical Association; basis of the Medicare coding system for physicians services. A medical code set of physician and other services, maintained and copyrighted by the American Medical Association (AMA), and adopted by the Secretary of HHS as the standard for reporting physician and other services on standard transactions. See Coding.
Customary charge - One of the factors determining a physician's payment for a service under Medicare. Calculated as the physician's median charge for that service over a prior 12-month period.
Day Outlier - A patient with an atypically long length of stay compared with other patients in a particular diagnosis related group.
Decedents - Deceased individuals.
Decision Support Systems - Computer technologies used in healthcare that allow providers to collect and analyze data in more sophisticated and complex ways. Activities supported include case mix, budgeting, cost accounting, clinical protocols and pathways, outcomes, and actuarial analysis.
Deductibles - Amounts required to be paid by the insured under a health insurance contract, before benefits become payable. Usually expressed in terms of an "annual" amount.
Deductible Carry Over Credit - Charge incurred during the last three months of a year that may be applied to the deductible and which may be carried over into the next year.
Defined Care - An umbrella term used for Defined Contribution, Consumer-Driven and Self-Directed health plan arrangements and other consumer-centered initiatives.
Defined Contribution Coverage - A payment process for procurement of health benefit plans whereby employers contribute a specific dollar amount toward the costs of insurance coverage for their employees. Sometimes this includes an undefined expectation of guarantee of the specific benefits to be covered.
Defined Contribution Health Plan - Health Plans that involve employer funding of a fixed (as opposed to variable) dollar amount for health benefits, which employees may then use to purchase benefits from an employer arranged funding mechanism. The benefits could either be group benefits packaged and arranged by the employer, or purchased individually by the employees. See also Variable Contribution Health Plan.
Department of Health and Human Services (HHS) - The federal agency that oversees Medicare, Medicaid and other federal health care programs.
Department of Justice (DOJ) - The federal agency that enforces the law and handles criminal investigations. As the nation's largest law firm, the DOJ protects citizens through effective law enforcement, crime prevention and crime detection. It is the agency that prosecutes those in the health care system guilty of proven "fraudulent" activity.
Dependent - Person covered by someone else's health plan. In a payer's policy of insurance, a person other than the subscriber eligible to receive care because of a subscriber's contract.
Designated Mental Health Provider - Person or place authorized by a health plan to provide or suggest appropriate mental health and substance abuse care.
Diagnosis Related Groups (DRGs) - An inpatient or hospital classification system used to pay a hospital or other provider for their services and to categorize illness by diagnosis and treatment. A classification scheme used by Medicare that clusters patients into 468 categories on the basis of patients' illnesses, diseases and medical problems. Groupings of diagnostic categories drawn from the International Classification of Diseases and modified by the presence of a surgical procedure, patient age, presence or absence of significant comorbidities or complications, and other relevant criteria. System involving classification of medical cases and payment to hospitals on the basis of diagnosis. Used under Medicare's prospective payment system to reimburse inpatient hospitals, regardless of the cost to the hospital to provide services.
Disallowance - When a payer declines to pay for all or part of a claim submitted for payment.
Discharge Planning - Required by Medicare and JCAHO for all hospital patients. A procedure where aftercare services are determined for after discharge from the inpatient facility. See also Case Management.
Disclosure – Refers to the release of identifiable health information, regarding a patient or patient(s). Disclosure involves the release of information to anyone or any entity outside of the covered entity.
Disease Management - A type of product or service now being offered by many large pharmaceutical companies to get them into broader healthcare services. Bundles use of prescription drugs with physician and allied professionals, linked to large databases created by the pharmaceutical companies, to treat people with specific diseases. The claim is that this type of service provides higher quality of care at more reasonable price than alternative, presumably more fragmented, care.
Dual Eligible - A Medicare beneficiary who also receives the full range of Medicaid benefits offered in his or her state. Medicare usually pays the charges for inpatient while Medicaid will pay the co-pay for inpatient care in hospitals. Medicare will be considered the primary insurer for inpatient care.
Duplication of Benefits - When a person is covered under two or more health plans with the same or similar coverage.
Durable Medical Equipment (DME) - Items of medical equipment owned or rented which are placed in the home of an insured to facilitate treatment and/or rehabilitation. DME generally consist of items that can withstand repeated use. DME is primarily and customarily used to serve a medical purpose and is usually not useful to a person in the absence of illness or injury.
Drug Formulary - Varying lists of prescription drugs approved by a given health plan for distribution to a covered person through specific pharmacies. Health plans often restrict or limit the type and number of medicines allowed for reimbursement by limiting the drug formulary list. Formularies are either "closed," including only certain drugs or "open," including all drugs. Both types of formularies typically impose a cost scale requiring consumers to pay more for certain brands or types of drugs.
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) - EPSDT program covers screening and diagnostic services to determine physical or mental defects in recipients under age 21, as well as health care and other measures to correct or ameliorate any defects and chronic conditions discovered.
Effective Date - The date on which a policy's coverage of a risk goes into effect.
Electronic Claim - A digital representation of a medical bill generated by a provider or by the provider's billing agent for submission using telecommunications to a health insurance payer. Most claims are electronically submitted.
Electronic Data Interchange (EDI) - The automated exchange of data and documents in a standardized format. In health care, some common uses of this technology include claims submission and payment, eligibility, and referral authorization. Refers to the exchange of routine business transactions from one computer to another in a standard format, using standard communications protocols.
Electronic Medical Record (EMR) - A computer-based record containing health care information. This technology, when fully developed, meets provider needs for real-time data access and evaluation in medical care.
Electronic Remittance Advice - Any of several electronic formats for explaining the payments of health care claims.
Eligible Dependent - Person entitled to receive health benefits from someone else's plan.
Eligible Employee - Employee who qualifies to receive benefits.
Eligible Expenses - Charges covered under a health plan. See also Covered Services, Approved Services.
Eligible Person - Person who meets the qualifications of a health plan contract.
Elimination Period - Most often used to designate the waiting period in a health insurance policy.
Emergency - Sudden unexpected onset of illness or injury which requires the immediate care and attention of a qualified physician, and which, if not treated immediately, would jeopardize or impair the health of the Patient.
Emergency Medical Treatment and Labor Act (EMTALA) - An act pertaining to emergency medical situations. EMTALA requires hospitals to provide emergency treatment to individuals, regardless of insurance status and ability to pay.
Employee Assistance Program (EAP) - A service, plan or set of benefits that are designed for personal or family problems, including mental health, substance abuse, gambling addiction, marital problems, parenting problems, emotional problems or financial pressures. This is usually a service provided by an employer to the employees, designed to assist employees in getting help for these problems so that they may remain on the job.
Employee Retirement Income Security Act of 1974 (ERISA) - Also called the Pension Reform Act, this
act regulates the majority of private pension and welfare group benefit plans
Encounter - A contact between an individual and the health care system for health care service or set of services related to one or more medical conditions.
Enrollee (Also beneficiary; individual; member) - Any person eligible as either a subscriber or a dependent for service in accordance with a insurance plan.
Enrollment - Initial process whereby new individuals apply and are accepted as members of a plan. T
Episode of Care - A term used to describe and measure the various health care services and encounters rendered in connection with identified injury or period of illness.
Evidence or Explanation of Coverage (EOC) or Explanation of Benefits (EOB) - A booklet/statement provided by the carrier to the insured summarizing benefits under an insurance plan.
Exclusions - Conditions or situations not considered covered under contract or plan.
Exclusive Provider Arrangement (EPA) - An indemnity or service plan that provides benefits only if care is rendered by the institutional and professional providers with which it contracts (some exceptions for emergency and out-of-area services).
Exclusive Provider Organization (EPO) - A plan that limits coverage of non-emergency care to contracted health care providers. Operates similar to an HMO plan but is usually offered as an insured or self-funded product. S
Explanation of Benefits (EOB) - A statement sent to covered individuals explaining services provided, amount to be billed, and payments made. A summary of benefits provided subscribers by the carrier.
Extended Care Facility (ECF) - A nursing or convalescent home offering skilled nursing care and rehabilitation services on a 24-hour basis.
Extension of Benefits - Insurance policy provision that allows medical coverage to continue past termination of employments. See also COBRA.
External Quality Review Organization (EQRO) - States are required to contract with an entity that is external to and independent of the State and its HMO and HIO contractors to perform an annual review of the quality of services furnished by each HMO or HIO contractor.
Federal Bureau of Investigation (FBI) - As an agency under the DOJ, the FBI investigates violations of federal criminal law and provides law enforcement assistance to federal, state, local and international agencies. The FBI has investigated hospitals for fraud and abuse.
Fee Disclosure - Physicians and caregivers discussing their charges with patients prior to treatment.
Fee-For-Service (FFS) - Traditional method of payment for health care services where specific payment is made for specific services rendered. Usually people speak of this in contrast to capitation, DRG or per diem discounted rates, none of which are similar to the traditional fee for service method of reimbursement.
Fee Schedule - A listing of accepted fees or established allowances for specified medical procedures. As used in medical care plans, it usually represents the maximum amounts the program will pay for the specified procedures.
Fiduciary - Relating to, or founded upon, a trust or confidence. A legal term. A fiduciary relationship exists where an individual or organization has an explicit or implicit obligation to act in behalf of another person's or organization's interests in matters which affect the other person or organization. This fiduciary is also obligated to act in the other person's best interest with total disregard for any interests of the fiduciary. Traditionally, it was generally believed that a physician had a fiduciary relationship with patients.
Fiscal Intermediary - The agent (e.g., Blue Cross) that has contracted with providers of service to process claims for reimbursement under health care coverage.
Fiscal Soundness - The requirement that managed care organizations have sufficient operating funds, on hand or available in reserve, to cover all expenses associated with services for which they have assumed financial risk.
Fixed Costs - Costs that do not change with fluctuations in census or in utilization of services.
Flexible Benefit Plan - Program offered by some employers in which employees may choose among a number of health care benefit options. Also known as a Cafeteria Plan.
Flexible Spending Account (FSA) - A plan that provides employees a choice between taxable cash and non-taxable benefits for un-reimbursed health care expenses or dependent care expenses. This plan qualifies under Section 125 of the IRS Code. See also Medical Spending Account.
Formulary - An approved list of prescription drugs; a list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost effective for patient care.
Funding Level - Amount of revenue required to finance a medical care program.
Fraud - Intentional misrepresentations that can result in criminal prosecution, civil liability and administrative sanctions.
Freedom of Choice - A principle of Medicaid that allows a recipient the freedom to choose among participating Medicaid providers. This term is also used by indemnity plans to indicate that subscribers may use the providers of their choice.
Gatekeeper - A
primary care physician, utilization review, case management, local agency or
managed care entity responsible for determining when and what services a
patient can access and receive reimbursement for. An arrangement in which a primary
care provider serves as the patient's agent, arranges for and coordinates
appropriate medical care and other necessary and appropriate referrals. A PCP
is involved in overseeing and coordinating all aspects of a patient's medical
care. In order for a patient to receive a specialty care referral or hospital
admission, the PCP must preauthorize the visit, unless there is an emergency.
The term gatekeeper is also used in health care business to describe anyone
(EAP, employer based case manager,
Gatekeeping - The process by which a primary care physician directly provides primary care and coordinates all diagnostic testing and specialty referrals required for a patient's medical care. Referrals and procedures usually are preauthorized by gatekeepers except in cases of emergency care.
Genetics - The study of how particular traits are passed from parents to children.
Global Fee - A total charge for a specific set of services, such as obstetrical services that encompass prenatal, delivery and post-natal care. Managed care organizations will often seek contracts with hospitals that contain set global fees for certain sets of services. Outliers and carve-outs will be those services not included in the global negotiated rates.
Grace Period - Period past the due date of a premium during which coverage may not be cancelled.
Grievance Procedures - The process by which an insured can air complaints and seek remedies.
Group Insurance - Any insurance policy or health services contract by which groups of employees (and often their dependents) are covered under a single policy or contract, issued by their employer or other group entity.
Health and Human Services (HHS) - The Department of Health and Human Services that is responsible for health-related programs and issues. Formerly HEW, the Department of Health, Education, and Welfare. The Office of Health Maintenance Organizations (OHMO) is part of HHS and detailed information on most companies is available here through the Freedom of Information Act.
HCFA 1500 - The Health Care Finance Administration's standard form for submitting provider service claims to third party companies or insurance carriers. HCFA is now called CMS, see CMS.
Health - The state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity.
Health Benefits Package - The services and products a health plan offers.
Health Care, Healthcare - Care, services, and supplies related to the health of an individual. Health care includes preventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care, and counseling, among other services. Healthcare also includes the sale and dispensing of prescription drugs or devices.
Health Care Financing Administration (HCFA) - The federal government agency within the Department of Health and Human Services which directs and oversees the Medicare and Medicaid programs (Titles XVIII and XIX of the Social Security Act) and conducts research to support those programs. It is now called CMS and generally it oversees the state's administrations of Medicaid, while directly administering Medicare. See CMS, or Center for Medicare and Medicaid Services.
Health Care Operations - Institutional activities that are necessary to maintain and monitor the operations of the institution. Examples include but are not limited to: conducting quality assessment and improvement activities; developing clinical guidelines; case management; reviewing the competence or qualifications of health care professionals; education and training of students, trainees and practitioners; fraud and abuse programs; business planning and management; Billing, reimbursements, collection and customer service.
Health Care Provider - Providers of medical or health care or researchers who provide health care are health care providers. Normally health care providers are clinics, hospitals, doctors, dentists, psychologists and similar professionals.
Health Information - Information in any form (oral, written or otherwise) that relates to the past, present or future physical or mental health of an individual. That information could be created or received by a health care provider, a health plan, a public health authority, an employer, a life insurer, a school, a university or a health care clearinghouse. All health information is protected by state and federal confidentiality laws and by HIPAA privacy rules.
Health Insurance - Financial protection against the health care costs of the insured person. May be obtained in a group or individual policy.
Health Insurance Portability and Accountability Act of 1996
(HIPAA) - A Federal law
that allows persons to qualify immediately for comparable health insurance
coverage when they change their employment relationships. This legislation sets
a precedent for Federal involvement in insurance regulation. It sets minimum
standards for regulation of the small group insurance market and for a set
group in the individual insurance market in the area of portability and
availability of health insurance. As a result of this law, hospitals, doctors
and insurance companies are now required to share patient medical records and
personal information on a wider basis. This wide-based sharing of medical
records has led to privacy rules, greater computerization of records and
consumer concerns about confidentiality.
In addition, HIPAA required the creation of a federal law to protect
personally identifiable health information; if that did not occur by a specific
date (which it did not), HIPAA directed the Department of Health and Human
Services (DHHS) to issue federal regulations with the same purpose. DHHS has
issued HIPAA privacy regulations (the HIPAA Privacy Rule) as well as other
regulations under HIPAA. HIPAA gives HHS the authority to mandate the use of
standards for the electronic exchange of health care data; to specify what
medical and administrative code sets should be used within those standards; to
require the use of national identification systems for health care patients,
providers, payers (or plans), and employers (or sponsors); and to specify the
types of measures required to protect the security and privacy of personally
identifiable health care information. Also known as the Kennedy-Kassebaum Bill,
the Kassebaum-Kennedy Bill,
Health Maintenance Organization (HMO) - HMOs offer prepaid, comprehensive health coverage for both hospital and physician services. The HMO is paid monthly premiums or capitated rates by the payers, which include employers, insurance companies, government agencies, and other groups representing covered lives. The HMO must meet the specifications of the federal HMO act as well as meeting many rules and regulations required at the state level. There are 4 basic models: group model, individual practice association, network model and staff model. An HMO contracts with health care providers, e.g., physicians, hospitals, and other health professionals. The members of an HMO are required to use participating or approved providers for all health services and generally all services will need to meet further approval by the HMO through its utilization program. Members are enrolled for a specified period of time. HMOs may turn around and sub-capitate to other groups. For example, it may carve-out certain benefit categories, such as mental health, and subcapitate these to a mental health HMO. Or the HMO may subcapitate to a provider, provider group or provider network. HMOs are the most restrictive form of managed care benefit plans because they restrict the procedures, providers and benefits.
Health Plan - An entity that assumes the risk of paying for medical treatments, i.e. uninsured patient, self-insured employer, payer, or HMO.
Health Maintenance Organization (HMO) - An entity that provides, offers or arranges for coverage of designated health services needed by members for a fixed, prepaid premium. There are three basic models of HMOs: group model, individual practice association (IPA), and staff model.
Health Resources and Services Administration (HRSA) - HRSA is a component of the U.S. Department of Health and Human Services. Included in HRSA responsibilities is administration of the Ryan White Care funds with a budget to support a continuum of care services for persons with HIV infection.
Health Service Agreement (HSA) - Detailed explanation of procedures and benefits provided to an employer by a health plan.
Home Health Care - Full range of medical and other health related services such as physical therapy, nursing, counseling, and social services that are delivered in the home of a patient, by a provider.
Hospice - Facility or program providing care for the terminally ill.
Hospital - Any institution duly licensed, certified, and operated as a Hospital. In no event shall the term "Hospital" include a convalescent facility, nursing home, or any institution or part thereof which is used principally as a convalescence facility, rest facility, nursing facility, or facility for the aged.
Hospital Affiliation - A contractual agreement between a health plan and one or more hospitals whereby the hospital provides the inpatient services offered by the health plan.
Hospital Alliances - Groups of hospitals joined together to share services and develop group-purchasing programs to reduce costs. May also refer to a spectrum of contracts, agreements or handshake arrangements for hospitals to work together in developing programs, serving covered lives or contracting with payers or health plans. See also Network, Integrated Delivery System, PHO, or Provider Health Plan.
Incidence - In epidemiology, the number of cases of disease, infection, or some other event having their onset during a prescribed period of time in relation to the unit of population in which they occur. Incidence measures morbidity or other events as they happen over a period of time.
Incurred Claims - All claims with dates of service within a specified period.
Incurred Claims Loss Ratio - Incurred claims divided by premiums.
Indemnify - To make good a loss through compensation or reimbursement.
Indemnity - Health insurance benefits provided in the form of cash payments rather than services. Insurance program in which covered person is reimbursed for covered expenses. An indemnity insurance contract usually defines the maximum amounts that will be paid for covered services.
Indemnity Carrier - Usually an insurance company or insurance group that provides marketing, management, claims payment and review, and agrees to assume risk for its subscribers at some pre-determined rate.
Indemnity Plan (Indemnity health insurance) - A plan that reimburses physicians for services performed, or beneficiaries for medical expenses incurred. Such plans are contrasted with group health plans, which provide service benefits through group medical practice.
Individual Plans - A type of insurance plan for individuals and their dependents who are not eligible for coverage through employer group coverage.
Informed Consent – Refers to requirements (by HIPPA, Medicare, State and Federal Laws) that healthcare providers and researchers explain the purposes, risks, benefits, confidentiality protections, and other relevant aspects of the provision of medical care, a specific procedure or participation in medical research. Informed consent is also required for the authorization of release or disclosure of individually identifiable health care information, under HIPAA.
Inpatient Care - Care given a registered bed patient in a hospital, nursing home or other medical or post acute institution.
In-Plan Services - Services that are covered under the state Medicaid plan and included in the patient's managed care contract and/or are furnished by a participating provider.
Insolvency - A legal determination occurring when a managed care plan no longer has the financial reserves or other arrangements to meet its contractual obligations to patients and subcontractors.
Institutional Review Board (IRB) – A group of medical professionals formed together for the purpose of providing peer review to protect the rights of human subjects in medical research and clinical trials. HIPAA privacy regulations require an IRB also to protect the privacy rights of research subjects in specific ways.
Internal Medicine - Generally, that branch of medicine that is concerned with diseases that do not require surgery, specifically, the study and treatment of internal organs and body systems; it encompasses many subspecialties; internists, the doctors who practice internal medicine, often serve as family physicians to supervise general medical care.
International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM, ICD-10-CM) - This is the universal coding method used to document the incidence of disease, injury, mortality and illness. A diagnosis and procedure classification system designed to facilitate collection of uniform and comparable health information. The ICD-9-CM was issued in 1979. This system is used to group patients into DRGs, prepare hospital and physician billings and prepare cost reports. Classification of disease by diagnosis codified into six-digit numbers.
Intervention Strategy - A generic term used in public health to describe a program or policy designed to have an impact on an illness or disease. Hence a mandatory seat belt law is an intervention designed to reduce automobile-related fatalities.
J-Codes - A subset of the HCPCS Level II code set with a high-order value of "J" that has been used to identify certain drugs and other items.
Job-Lock - Laws have now been enacted by congress which include continuance of benefits (COBRA) and other requirements which eliminate pre-existing clauses for those individuals who change coverage plans but have maintained continuance of coverage overall. The inability of individuals to change jobs because they would lose crucial health benefits.
Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) - Formerly called JCAH, or Joint Commission on Accreditation of Hospitals, this is the peer review organization which provides the primary review of hospitals and healthcare providers. Many insurance companies require providers to have this accreditation in order to seek 3rd party payment, although, many small hospitals cannot afford the cost of accreditation. JCAHO usually surveys organizations once every 3 years, sending in a medical and administrative team to review policies, patient records, professional credentialing procedures, governance and quality improvement programs. JCAHO revises its "standards" annually.
Key Contributor Plan
This refers to a little known performance-based program with incentives for the purpose of attracting, motivating and retaining key individuals or small groups.
Large Claim Pooling - System that isolates claims above a certain level and charges them to a pool funded by charges of all groups who share the pool. Designed to help stabilize significant premium fluctuations.
Legend Drug - Drug that the law says can only be obtained by prescription.
Length of Stay (LOS) - The duration of an episode of care for a covered person. The number of days an individual stays in a hospital or inpatient facility. May also be reviewed as Average Length of Stay (ALOS).
Licensing - A process most States employ, which involves the review and approval of applications from HMOs prior to beginning operation in certain areas of the State. Areas examined by the licensing authority include: fiscal soundness, network capacity, MIS, and quality assurance. The applicant must demonstrate it can meet all existing statutory and regulatory requirements prior to beginning operations.
Lifetime Limit - A cap on the benefits paid under a policy. Many policies have a lifetime limit of $1 million, which means that the insurer agrees to cover up to $1 million in covered services over the life of the policy.
Local Codes - A generic term for code values that are defined for a State or other local division or for a specific payer. Commonly used to describe HCPCS Level III Codes.
Lock-in - A contractual provision by which members are required to use certain health care providers in order to receive coverage (except in cases of urgent or emergent need).
Long-term care (LTC) - A set of health care, personal care and social services required by persons who have lost, or never acquired, some degree of functional capacity (e.g., the chronically ill, aged, disabled, or retarded) in an institution or at home, on a long-term basis. The term is often used more narrowly to refer only to long-term institutional care such as that provided in nursing homes, homes for the retarded and mental hospitals. Ambulatory services such home health care, which can also be provided on a long-term basis, are seen as alternatives to long-term institutional care.
Long-term care insurance - Insurance designed to pay for some or all of the costs of long term care.
Major Medical Expense Insurance - Policies designed to help offset the heavy medical expenses resulting from catastrophic or prolonged illness or injury. They generally provide benefits payments for 75 to 80 percent of most types of medical expenses above a deductible paid by the insured.
Malpractice Insurance - Insurance against the risk of suffering financial damage due to professional misconduct or lack of ordinary skill. Malpractice requires that the patient prove some injury and that the injury was the result of negligence on the part of the professional. A practitioner is liable for damages or injuries caused by malpractice.
Managed Care - Systems and techniques used to control the use of health care services. Includes a review of medical necessity, incentives to use certain providers, and case management. The body of clinical, financial and organizational activities designed to ensure the provision of appropriate health care services in a cost-efficient manner. Managed care techniques are most often practiced by organizations and professionals that assume risk for a defined population (e.g., health maintenance organizations) but this is not always the case.
Managed Care Organization (MCO) - A health plan that seeks to manage care. Generally, this involves contracting with health care providers to deliver health care services on a capitated (per-member per-month) basis. For specific types of managed care organizations, see also health maintenance organization and independent practice association.
Managed Care Plan - A health plan that uses managed care arrangements and has a defined system of selected providers that contract with the plan. Enrollees have a financial incentive to use participating providers that agree to furnish a broad range of services to them. Providers may be paid on a pre-negotiated basis. (See also Health Maintenance Organization, Point-of-Service Plan, and Preferred Provider Organization.)
Managed Health Care Plan - An arrangement that integrates financing and management with the delivery of health care services to an enrolled population. It employs or contracts with an organized system of providers that delivers services and frequently shares financial risk.
Management Information System (MIS) - The common term for the computer hardware and software that provides the support of managing the plan.
Master Patient / Member Index - An index or file with a unique identifier for each patient or member that serves as a key to a patient's or member's health record.
Maximum Out-of-Pocket Expenses - Limit on total number of co-payments or limit on total cost of deductibles and co-insurance under a benefit plan.
Medicaid (Title XIX) - Government entitlement program for the poor, blind, aged, disabled or members of families with dependent children.
Medically Necessary, Medical Necessity, Medical Necessary Services - Services or supplies which meet the following tests: They are appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition; They are provided for the diagnosis or direct care and treatment of the medical condition; They meet the standards of good medical practice within the medical community in the service area; They are not primarily for the convenience of the plan member or a plan provider; and They are the most appropriate level or supply of service which can safely be provided.
Medically Needy - Persons who are categorically eligible for Medicaid and whose income, less accumulated medical bills, are below state income limits for the Medicaid program. Often seen as a problem among the "working poor" or among the senior population. See spend down.
XVIII) - A federal program for the
elderly and disabled, regardless of financial status. It is not necessary, as
with Medicaid, for Medicare recipients to be poor. A
Medicare Approved Charge - The amount Medicare approves for payment to a physician. Typically, Medicare pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. Physicians may bill beneficiaries for an additional amount (the balance) not to exceed 15 percent of the Medicare approved charge.
Medicare Supplemental Policy - A policy that pays for the cost of services not covered by Medicare, such as coinsurance and deductibles.
Medigap - Private health insurance plans that supplement Medicare benefits by covering some costs not paid for by Medicare. MediGap plans are supplements to Medicare insurance.
Member - Used synonymously with the terms enrollee and insured. A member is any individual or dependent who is enrolled in and covered by a managed health care plan.
Mental Health Provider - Psychiatrist, social worker, hospital or other facility licensed to provide mental health services.
Morbidity - The extent of illness, injury, or disability in a defined population. It is usually expressed in general or specific rates of incidence or prevalence.
Mortality - Death. Used to describe the relation of deaths to the population in which they occur. The mortality rate (death rate) expresses the number of deaths in a unit of population within a prescribed time and may be expressed as crude death rates (e.g., total deaths in relation to total population during a year) or as death rates specific for diseases and, sometimes, for age, sex, or other attributes (e.g., number of deaths from cancer in white males in relation to the white male population during a given year).
National Provider Identifier - A system for uniquely identifying all providers of health care services, supplies, and equipment. A term proposed by the Secretary of HHS as the standard identifier for health care providers.
Network - An affiliation of providers through formal and informal contracts and agreements. Networks may contract externally to obtain administrative and financial services. A list of physicians, hospitals and other providers who provide health care services to the beneficiaries of a specific managed care organization.
Neonatal Intensive Care Unit (Neo ICU) - A hospital unit with special equipment for the care of premature and seriously ill newborn infants.
Non-Participating Physician (or Provider) - A provider, doctor or hospital that does not sign a contract to participate in a health plan, usually which requires reduced rates from the provider. In the Medicare Program, this refers to providers who are therefore not obligated to accept assignment on all Medicare claims. In commercial plans, non-participating providers are also called out of network providers or out of plan providers. If a beneficiary receives service from an out of network provider, the health plan (other than Medicare) will pay for the service at a reduced rate or will not pay at all.
Non-Plan Provider - A health care provider without a contract with an insurer. Same as nonparticipating provider.
Nosocomial Infections - Infections that are acquired while a patient is in a hospital are referred to as nosocomial infections; a term derived from 'nosos' the Greek word for 'disease'. Often nosocomial infections become apparent while the patient is still in the hospital but in some cases symptoms may not show up until after the affected patient is discharged.
Nurse Practitioner (NP) - A registered nurse qualified and specially trained to provide primary care, including primary health care in homes and in ambulatory care facilities, long-term care facilities, and other health care institutions. Normally, NPs are licensed and possess masters degrees. Nurse practitioners generally function under the supervision of a physician but not necessarily in his/her or her presence.
Occupancy Rate - A measure of inpatient health facility use, determined by dividing available bed days by patient days. It measures the average percentage of a hospital's beds occupied and may be institution-wide or specific for one department or service.
Occupational Health - OSHA, county health departments and regulatory bodies oversee occupational health hazards in workplaces, including hospitals. Occupational health programs include the employer activities undertaken to protect and promote the health and safety of employees in the workplace, including minimizing exposure to hazardous substances, evaluating work practices and environments to reduce injury, and reducing or eliminating other health threats.
Office of Inspector General (OIG) - The office responsible for auditing, evaluating and criminal and civil investigating for HHS, as well as imposing sanctions, when necessary, against health care providers.
Open Access - A term describing a member's ability to self-refer for specialty care. Open access arrangements allow a member to see a participating provider without a referral from another doctor.
Open Enrollment Period - A period during which subscribers in a health benefit program have an opportunity to select among health plans being offered to them, usually without evidence of insurability or waiting periods.
Outcome - A clinical outcome is the result of medical or surgical intervention or nonintervention, or the results of a specific health care service or benefit package. The valued results of care as experienced primarily by the patient but also by physicians and all other participants in the processes contributing to the outcomes.
Outcomes Measurement - System used to systematically track clinical treatment and responses to that treatment. The methods for measuring outcomes are quite varied among providers.
Out of Area Benefits - Benefits supplied to a patient by a payer or managed care organization when the patient needs services while outside the geographic area of the network.
Out of Network Benefits - With most HMOs, a patient cannot have any services reimbursed if provided by a hospital or doctor who is not in the network. With PPOs and other managed care organizations, there may exist a provision for reimbursement of "out of network" providers.
Out-of-Network Provider - A health care provider with whom a managed care organization does not have a contract to provide health care services. Because the beneficiary must pay either all of the costs of care from an out-of-network provider or their cost-sharing requirements are greatly increased, depending on the particular plan a beneficiary is in, out-of-network providers are generally not financially accessible to Medicaid beneficiaries.
Out of Pocket Expenses, Out of Pocket Costs - Costs borne by the member that are not covered by health care plan. Portion of health services or health costs that must be paid for by the plan member, including deductibles, co-payments and co-insurance. In the age of managed care, out of pocket expenses can also refer to the payment of services not covered by or approved for reimbursement by the health plan.
Outpatient Care - Care given a person who is not bedridden. Also called ambulatory care. Many surgeries and treatments are now provided on an outpatient basis, while previously they had been considered reason for inpatient hospitalization. Some say this is the fastest growing segment of healthcare.
Participating physician or Participating Provider - Simply refers to a provider under a contract with a health plan. A physician or hospital that has agreed to provide services for a set payment provided by a payer, or who agrees to other arrangements, or who agrees to provide services to a set of covered lives or defined patients.
Patient Liability - The dollar amount that an insured is legally obligated to pay for services rendered by a provider. These may include co-payments, deductibles and payments for uncovered services.
Participating Physician - A primary care physician in practice in the payer's managed care service area who has entered into a contract.
Part A Medicare - Refers to the inpatient portion of benefits under the Medicare Program, covering beneficiaries for inpatient hospital, home health, hospice, and limited skilled nursing facility services. Beneficiaries are responsible for deductibles and co-payments. Part A services are financed by the Medicare.
Part B Medicare - Refers to the outpatient benefits of Medicare. Medicare Supplementary Medical Insurance (SMI) under Part B of Title XVII of the Social Security Act covers Medicare beneficiaries for physician services, medical supplies, and other outpatient treatment. Beneficiaries are responsible for monthly premiums, co-payments, deductibles, and balance billing. Part B services are financed by a combination of enrollee premiums and general tax revenues.
Participating Provider - Any provider licensed in the state of provision and contracted with an insurer.
PCP - Primary care physician who often acts as the primary gatekeeper in your health plans. Often the PCP must approval referrals to specialists, particularly in HMOs and some PPOs, all members must choose or are assigned a PCP.
Peer Review - The mechanism used by the medical staff to evaluate the quality of total health care provided by the Organization.
Peer Review Organization (PRO) - An organization established by the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 to review quality of care and appropriateness of admissions, readmissions, and discharges for Medicare and Medicaid.
Performance Measurement – Measures and results that describe the health care being provided and the outcomes. Performance may be stated in terms of health outcome, quality of care, timeliness, correctness, percentage of goals attained or percentage of mistakes made. Performance measures may also indicate whether a health plan or provider has appropriately provided certain services expected to lead to desirable outcomes.
Per Diem Rates - A form of payment for services in which the provider is paid a daily fee for specific services or outcomes, regardless of the cost of provision. Per diem rates are paid without regard to actual charges and may vary by level of care, such as medical, surgical, intensive care, skilled care, psychiatric, etc. Per diem rates are usually flat all-inclusive rates.
Personal Representative - A person authorized under state or other law to act on behalf of the individual in making health-related decisions. Examples include a court-appointed guardian with medical authority, a health care agent under a health care proxy, and a parent acting on behalf of an un-emancipated minor (with exceptions where state law gives minors the right to make health decisions). For a decedent, the personal representative may be an executor, administrator, or other authorized person.
Physician Attestation - The requirement that the attending physician certify, in writing, the accuracy and completion of the clinical information used for DRG assignment.
Physician Current Procedural Terminology (CPT) - List of services and procedures performed by providers, with each service/procedure having a unique 5-digit identifying code. CPT is the health care industry's standard for reporting of physician services and procedures. Used in billing and records.
Plan Document - The document that contains all of the provisions, conditions, and terms of operation of a pension or health or welfare plan. This document may be written in technical terms as distinguished from a summary plan description (SPD) that, under ERISA, must be written in a manner calculated to be understood by the average plan participant.
Point-of-Service Plan (POS) - A health services delivery organization that offers the option to its members to choose to receive a service from participating or a nonparticipating provider. Generally the level of coverage is reduced for services associated with the use of non-participating providers. Managed care plan that specifies that those patients who go outside of the plan for services may pay more out of pocket expenses.
Portability - Requirement that health plans guarantee continuous coverage without waiting periods for persons moving between plans. The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.
Practical Nurses - Practical nurses, also known as vocational nurses,
provide nursing care and treatment of patients under the supervision of a
licensed physician or registered nurse. Licensure as a licensed practical nurse
(L.P.N.) or in
Preadmission Review, Pre-Admission Certification, Pre-Certification, or Pre-authorization - Review of "need" for inpatient care or other care before admission. This refers to a decision made by the payer, or insurance company prior to admission.
Pre-Authorization - A cost containment feature of many group medical policies whereby the insured must contact the insurer prior to a hospitalization or surgery and receive authorization for the service.
Pre-existing Condition, Preexisting Condition - A medical condition developed prior to issuance of a health insurance policy that may result in the limitation in the contract on coverage or benefits. Some policies exclude coverage of such conditions is often excluded for a period of time or indefinitely.
Preferred Provider Organization (PPO) - A health care delivery system that contracts with providers of medical care to provide services at discounted fees to members. Members may seek care form non-participating providers but generally are financially penalized for doing so by the loss of the discount and subjection to co-payments and deductibles.
Premium - Amount paid to a carrier for providing coverage under a contract. Money paid out in advance for insurance coverage.
Preventive Care - Health care that emphasizes prevention, early detection and early treatment, thereby reducing the costs of healthcare in the long run. Health care that seeks to prevent or foster early detection of disease and morbidity and focuses on keeping patients well in addition to health them while they are sick.
Primary Care - Basic or general health care usually rendered by general practitioners, family practitioners, internists, obstetricians and pediatricians -- who are often referred to as primary care practitioners or PCPs. Professional and related services administered by an internist, family practitioner, obstetrician-gynecologist or pediatrician in an ambulatory setting, with referral to secondary care specialists, as necessary.
Primary Care Network (PCN) - A group of primary care physicians who share the risk of providing care to members of a given health plan.
Primary Care Physician, (PCP) - A "generalist" such as a family practitioner, pediatrician, internist, or obstetrician. In a managed care organization, a primary care physician is accountable for the total health services of enrollees including referrals, procedures and hospitalization.
Primary Care Provider (PCP) - The provider that serves as the initial interface between the member and the medical care system. The PCP is usually a physician, selected by the member upon enrollment, who is trained in one of the primary care specialties who treats and is responsible for coordinating the treatment of members assigned to his/her plan.
Primary Coverage - Plan that pays its expenses without consideration of other plans, under coordination of benefits rules.
Principal Diagnosis - The medical condition that is ultimately determined to have caused a patient's admission to the hospital. The principal diagnosis is used to assign every patient to a diagnosis related group. This diagnosis may differ from the admitting and major diagnoses.
Prior Authorization - A formal process requiring a provider obtain approval to provide particular services or procedures before they are done. This is usually required for non-emergency services that are expensive or likely to be abused or overused.
Privacy - For purposes of the HIPAA Privacy Rule, privacy means an individual's interest in limiting who has access to personal health care information.
Privacy Notice – Institution-wide notice describing the practices of the covered entity regarding protected health information. Health care providers and other covered entities must give the notice to patients and research subjects and should obtain signed acknowledgements of receipt.
Professional Review Organization - An organization that reviews the services provided to patients in terms of medical necessity professional standards; and appropriateness of setting.
Prospective Payment System (PPS) - A payment method that establishes rates, prices or budgets before services are rendered and costs are incurred. Providers retain or absorb at least a portion of the difference between established revenues and actual costs.
Protected Health Information – Under HIPAA, this refers to individually identifiable health information transmitted or maintained in any form.
Provider - Usually refers to a hospital or doctor who "provides" care. A health plan, managed care company or insurance carrier is not a healthcare provider. Those entities are called payers.
Psychotherapy Notes - These include notes recorded by the health care provider who is a mental health professional during a counseling session, either in a private session or in a group. These notes are separate from documentation placed in the medical chart and do not include prescriptions. Specific patient authorization is required for use and disclosure of psychotherapy notes.
Public Health Authority - A federal, state, local or tribal person or organization that is required to conduct public health activities.
Quality - Quality is, according to the Institute of Medicine (IOM), the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Quality can be defined as a measure of the degree to which delivered health services meet established professional standards and judgments of value to consumers. Quality may also be seen as the degree to which actions taken or not taken maximize the probability of beneficial health outcomes and minimize risk and other untoward outcomes, given the existing state of medical science and art.
Quality Assurance (QA) - Activities and programs intended to assure the quality of care in a defined medical setting. Such programs include peer or utilization review components to identify and remedy deficiencies in quality. The program must have a mechanism for assessing its effectiveness and may measure care against pre-established standards. Also called quality improvement.
Quality Improvement (QI) - Also called performance improvement (PI), QI is a management technique to assess and improve internal operations. QI focuses on organizational systems rather than individual performance and seeks to continuously improve quality rather than reacting when certain baseline statistical thresholds are crossed. The process involves setting goals, implementing systematic changes, measuring outcomes, and making subsequent appropriate improvements.
Quality Management (QM) - Used interchangeably with Quality Assurance (QA), Quality Management usually involves an internal review process that audits the quality of care delivered and implements corrective actions to remedy any deficiencies identified in the quality of direct patient care, administrative services or support services.
Referral - The process of sending a patient from one practitioner to another for health care services. Health Plans may require that designated primary care providers authorize a referral for coverage of specialty services.
Registered Nurses (R.N.'s) - Registered nurses are responsible for carrying out the physician's instructions. They supervise practical nurses and other auxiliary personnel who perform routine care and treatment of patients. Registered nurses provide nursing care to patients or perform specialized duties in a variety of settings from hospital and clinics to schools and public health departments. A license to practice nursing is required in all states. For licensure as a registered nurse (R.N.), an applicant must have graduated from a school of nursing approved by the state board for nursing and have passed a state board examination.
Renewal - Continuance of coverage for a new policy term.
Report Card - An accounting of the quality of services, compared among providers over time. The report card measures and compares providers on predetermined, measurable quality and other outcome indicators. Consumers use report cards to choose a health plan or provider, while policy makers may use report card results to determine overall program effectiveness, efficiency, and financial stability.
Research – When used by HIPAA, this term refers to a systematic investigation, including research development, testing and evaluation, designed to develop or contribute to generalizable knowledge.
Retrospective Rating (Retro) - Insurance coverage that provides for premium determination at the end of the coverage period, subject to a minimum and maximum based upon actual experience.
Retrospective Review Process - System for analyzing medical necessity and appropriateness of services rendered. A review that is conducted after services are provided to a patient. The review focuses on determining the appropriateness, necessity, quality, and reasonableness of health care services provided. Becoming seen as least desirable method; supplanted by concurrent reviews.
Risk Assessment - Anticipating the cost of providing health care to groups of enrollees. Actuarial assessments examine utilization history, demographics, health characteristics, environmental attributes, and other sociological, economic and market characteristics. Risk assessment can also include, less commonly, the identification of etiology of health problems.
Risk Factor - Any characteristic, behavior, or condition which, based on history, utilization, or theory, is thought to directly influence susceptibility to a specific health problem, increase costs or result in increased utilization.
Rural health clinic (RHC) - A public or private hospital, clinic or physician practice designated by the federal government as in compliance with the Rural Health Clinics Act (Public Law 95-210). The practice must be located in a Medically Underserved area or a Health Professions Shortage Area and use a physician assistant and/or nurse practitioners to deliver services. A rural health clinic must be licensed by the state and provide preventive services. These providers are usually qualified for special compensations, reimbursements and exemptions.
Rural Health Clinics Act - Establishes a reimbursement mechanism to support the provision of primary care services in rural areas. Public Law 95-210 was enacted in 1977 and authorizes the expanded use of physician assistants, nurse practitioners and certified nurse practitioners; extends Medicare and Medicaid reimbursement to designated clinics; and raises Medicaid reimbursement levels to those set by Medicare.
Sanction - Reprimand that gives binding force to a law or rule, or secures obedience to it, as the penalty for breaking it, or a reward for carrying it out. The government and its agencies can sanction hospitals, providers and health plans. Health plans sometimes seek to sanction hospitals and physicians. Medical staffs sometimes seek sanctions against its members.
SCHIP - See State Children's Health Insurance Program, below.
Secondary Care - Services provided by medical specialists who generally do not
have first contact with patients (e.g., cardiologist, urologists,
dermatologists). In the
Secondary Coverage - Health plan that pays costs not covered by primary coverage under coordination of benefits rules. Any insurance that supplements Medicare coverage. The three main sources for secondary insurance are employers, privately purchased Medigap plans, and Medicaid.
Section 1115 Medicaid Waiver - The Social Security Act grants the secretary of HHS broad authority to waive certain laws relating to Medicaid for the purpose of conducting pilot, experimental or demonstration projects which are "likely to promote the objectives" of the program. Section 1115 demonstration waivers allow states to change provisions of their Medicaid programs, including: eligibility requirements, the scope of services available, the freedom to choose a provider, a provider's choice to participate in a plan, the method of reimbursing providers, and the statewide application of the program. Health plans and capitated providers can seek waivers through their state intermediaries.
Section 1915(b) Medicaid Waiver - Section 1915(b) waivers allow states to require Medicaid recipients to enroll in HMOs or other managed care plans in an effort to control costs. The waivers allow states to: implement a primary care case-management system; require Medicaid recipients to choose from a number of competing health plans; provide additional benefits in exchange for savings resulting from recipients' use of cost-effective providers; and limit the providers from which beneficiaries can receive non-emergency treatment. The waivers are granted for two years, with two-year renewals. Often referred to as a "freedom-of-choice waiver"
Self-Funding - Employer or organization assumes complete responsibility for health care losses of its covered employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization. In this case, the employer does not pay premiums to an insurance carrier, but, rather pays administrative costs to the insurance company or health plan, and, in essence, treats them as a third party administrator (TPA) only. However, the employee may not be able to detect any difference because the plan description and membership card may carry the name of the insurance company not the employer. Same as self-insured, see below.
Self-Insurance or Self-Insured - An individual or organization that assumes the financial risk of paying for health care. This term is usually used to describe the type of insurance that an employer provides. When an employer is self-insured, this means that the payer or managed care company manages the employer's funds whether than requiring the employer to pay premiums. Many employers choose to self-insure because they are then exempted from certain insurance laws and also think that they will spend less money in the short run. Employers assume the risks involved and also have full rights to all insurance claim information. Typically, the self-insured employer is a large employer. The employees or patients will not be able to discern if their employer is self-insured easily since all paperwork or benefits cards usually contain the name of the insurance company.
Sentinel Event - Adverse health events that may have been avoided through appropriate care or alternate interventions. Providers are required to alert JCAHO and often state licensing authorities of all sentinel events, including a review of risk factors, preventative measures and case analysis.
Shared Savings - A provision of most prepaid health care plans where at least part of the providers' income is directly linked to the financial performance of the plan. If costs are lower than projections, a percentage of these savings are referred to the providers.
Skilled Nursing Facility (SNF) - A licensed institution, as defined by Medicare, which is primarily engaged in the provision of skilled nursing care. SNFs are usually DRG or PPS exempt and are located within hospitals, but sometimes are located in rehab facilities or nursing homes.
Solo Practice, Solo Practitioner - A physician who practices alone or with others but does not pool income or expenses. This form of practice is becoming increasingly less common as physicians band together for contracting, overhead costs and risk sharing.
Specific Stop Loss - The form of excess risk coverage that provides protection for the employer against high claim on any one individual. This is protection against abnormal severity of a single claim rather than abnormal frequency of claims in total. Also see Reinsurance and Stop Loss.
Spend Down - A term used in Medicaid for persons whose income and assets are above the threshold for the state's designated medically needy criteria, but are below this threshold when medical expenses are factored in. The amount of expenditures for health care services, relative to income, that qualifies an individual for Medicaid in States that cover categorically eligible, medically indigent individuals. Eligibility is determined on a case-by-case basis.
State Children's Health Insurance Program (SCHIP) - Although Medicaid has made great strides in enrolling low-income children, significant numbers of children remain uninsured. From 1988 to 1998, the proportion of children insured through Medicaid increased from 15.6% to 19.8%. At the same time, however, the percentage of children without health insurance increased from 13.1% to 15.4%. The increase in uninsured children is mostly the result of fewer children being covered by employer-sponsored health insurance. The Balanced Budget Act of 1997 created a new children's health insurance program called the State Children's Health Insurance Program. This program gave each state permission to offer health insurance for children, up to age 19, who are not already insured. SCHIP is a state administered program and each state sets its own guidelines regarding eligibility and services.
Sub-Capitation - An arrangement that exists when an organization being paid under a capitated system contracts with other providers on a capitated basis, sharing a portion of the original capitated premium. Can be done under Carve Out, with the providers being paid on a PMPM basis.
Subrogation - Procedure where insurance company recovers from a third party when the action resulting in medical expense (e.g. auto accident) was the fault of another person. The recovery of the cost of services and benefits provided to the insured of one health plan when other parties are liable.
Subscriber - Person responsible for payment of premiums, or person whose employment is the basis for membership in a health plan.
Subscriber Contract - A written agreement that describes the individual's health care policy. Also called subscribe certificate or member certificate.
Supplemental Security Income (SSI) - A federal cash assistance program for low-income aged, blind and disabled individuals established by Title XVI of the Social Security Act. States may use SSI income limits to establish Medicaid eligibility.
Supplemental Services - Optional services a health plan covers or provides.
Supplemental Insurance - Any private health insurance plan held by a Medicare beneficiary or commercial beneficiary, including Medigap policies and post-retirement health benefits. Supplemental usually pays the deductible or co-pay and sometimes will pay the entire bill when the primary carrier's benefits are exhausted.
Supplemental Medical Insurance (SMI) - Part B of the Medicare program. Part B normally covers the outpatient services, as opposed to Part A that covers inpatient. This voluntary program requires payment of a monthly premium, which covers 25 percent of pro-ram costs. Beneficiaries are responsible for a deductible and coinsurance payments for most covered services. See also Part B.
Surplus Lines Tax - A tax imposed by state law when coverage is placed with an insurer not licensed or admitted to transact business in the state where the risk is located. Unlike premium tax for admitted insurers, the surplus lines tax is not included in the premium and must be collected from the policyholder and remitted to the state.
Standing Referral - A referral to a specialist provider that covers routine visits to that provider. It is a common practice to permit the gatekeeper to make referrals for only a limited number of visits (often 3 or fewer). In cases where the medical condition requires regular visits to a specialist, this type of referral eliminates the need to return to the gatekeeper each time the initial referral expires.
State Children’s Health Insurance Plan (SCHIP) - Under Title XXI of the Balanced Budget Act of 1997, the availability of health insurance for children with no insurance or for children from low-income families was expanded by the creation of SCHIP. SCHIPs operate as part of a State's Medicaid program.
Stop Loss Insurance - Insurance purchased by an insurance company or health plan from another insurance company to protect itself against losses. Reinsurance purchased to protect against the single overly large claim or the excessively high aggregated claim during a set period. Stop Loss may also be used by providers when purchasing Malpractice, Workers Comp and Liability coverage. Also see Reinsurance and Specific Stop Loss.
Subscriber - Employment group or individual that contracts with an insurer for medical services. Usually synonymous with enrollee, covered individual or member.
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) - The Federal law that created the current risk and cost contract provisions under which health plans contract with HCFA. Legislation that created the target rate of increase cost based limits on reimbursements for inpatient operating costs. These limits are considered per Medicare discharges total amounts. A facility's target amount is derived from costs in its base year (1st full fiscal year of operation with application to CMS as same) updated to the current fiscal year by the annual allowable rate of increase. Medicare payments for operating costs generally may not exceed the facility's target amount and still be paid by CMS. These provisions apply to hospitals and units excluded from PPS and DRG. When cost reports fall short of the TEFRA limit, certain paybacks are provided. If costs exceed TEFRA, facilities can submit an exception report and may or may not be provided additional payment. Many facilities that established TEFRA limits in the early 1980s are finding they consistently exceed their TEFRA limits. Units normally under the TEFRA rules are psychiatric units, rehab units, free standing specialty hospitals, oncology outpatient clinics and others.
Termination Date - Date that a group contract expires or an individual is no longer eligible for benefits.
Tertiary Care - Services provided by highly specialized providers such as neurosurgeons, thoracic surgeons and intensive care units. These services often require highly sophisticated technology and facilities.
Therapeutic Alternatives - Drug products that provide the same pharmacological or chemical effect in equivalent doses. Also see Drug Formulary.
Third Party Administrator (TPA) - An independent organization that provides administrative
services including claims processing and underwriting for other entities, such
as insurance companies or employers. Often insurance companies will contract as
TPAs with other insurance companies or health plans. TPAs are not always
insurance companies. TPAs are organizations with expertise and capability to
administer all or a portion of the claims process. Self-insured employers will
often contract with TPAs to handle their insurance functions. Insurance
companies will sometimes outsource the claims,
Third-Party Payment - Payment by a financial agent such as an HMO, insurance company or government rather than direct payment by the patient for medical care services. The payment for health care when the beneficiary is not making payment, in whole or in part, in his own behalf.
Third-party payer - Any organization, public or private that pays or insures health or medical expenses on behalf of beneficiaries or recipients. An individual pays a premium for such coverage in all private and in some public programs; the payer organization then pays bills on the individual's behalf. Such payments are called third-party payments and are distinguished by the separation among the individual receiving the service (the first party), the individual or institution providing it (the second party), and the organization paying for it (third party).
Title XVIII (Medicare) - The title of the Social Security Act that contains the principal legislative authority for the Medicare program and therefore a common name for the program.
Title XIX (Medicaid) - The title of the Social Security Act that contains the principal legislative authority for the Medicaid program and therefore a common name for the program.
Tort Reform - Legislative limits or changes or judicial reform of the rules governing medical malpractice lawsuits and other lawsuits. Tort simply refers to lawsuit. Reform implies that limits can be placed on individual rights to sue or on the amounts or situations for which they can seek relief. Tort is considered to be by some as the primary cause of the rising costs of health care. Reform, then, would lower health care costs. On the other hand, patient advocates are against tort reform, claiming that the health care industry and managed care industries require monitoring and that lawsuits keep health care providers and payers in check. Congress debates tort reform each session, but, to date, few restrictions have been placed on tort cases.
Total Budget - Otherwise known as a "global" budget, a cap on overall health spending.
Total Margin - A measure that compares total hospital revenue and expenses for inpatient, outpatient, and non-patient care activities. The total margin is calculated by subtracting total expenses from total revenue and dividing by total revenue.
Total Quality Management - Related to quality management, TQM identifies required system elements to measure, design, and select processes that consistently deliver superior outcomes. These fundamentals make up the basis for TQM. See also Quality Improvement.
Tracking of Disclosures - The HIPAA Privacy Rule gives individuals the right to request an accounting of disclosures of protected health information over the previous six years. If an individual authorizes uses or disclosures for research, the disclosures do not need to be tracked, but disclosures must be tracked if the researcher receives an IRB-approved waiver of authorization. The accounting of disclosures generally must include: the date of the disclosure, the name of the entity or person (and address if known) who received the protected health information, a brief description of the information disclosed, and a brief statement of the purpose of the disclosure. The Rule allows for an alternative tracking option is available for research involving 50 or more people.
Transaction – Usually refers to the exchange of information for administrative or financial purposes such as health insurance claims or payment. Under HIPAA, this is the exchange of information between two parties to carry out financial or administrative activities related to health care.
Transfer - Movement
of a patient between hospitals or between units in a given hospital. In
Medicare, a full DRG rate is paid only for transferred patients that are
defined as discharged. In managed care, transfers are often suggested by
Treatment - The provision of health care by one or more health care providers. Treatment includes any consultation, referral or other exchanges of information to manage a patient's care. The HIPAA Privacy Notice explains that the HIPAA Privacy Rule allows Partners and its affiliates to use and disclose protected health information for treatment purposes without specific authorization.
Treatment Episode - The period of treatment between admission and discharge from a modality, e.g., inpatient, residential, partial hospitalization, and outpatient, or the period of time between the first procedure and last procedure on an outpatient basis for a given diagnosis. Many healthcare statistics and profiles use this unit as a base for comparisons.
Trending - Methods of estimating future costs of health services by reviewing past trends in cost and utilization of these services. Also see Actuarial.
Triage - Triage is the act of categorizing patients according to acuity and by determining that need services first. Most commonly occurs in emergency rooms, but, can occur in any healthcare setting. Classification of ill or injured persons by severity of condition. Designed to maximize and create the most efficient use of scarce resources of medical personnel and facilities. Managed care organizations, health plans and provider systems are setting up programs or clinics called "triage centers". These centers serve as an extension of the utilization review process, as diversions from emergency room care or as case management resources. These triage centers also serve to steer patients away from more costly care (for example, a child with a cold is steered away from an emergency room). Triage can also be handled on the telephone and be called a pre-authorization center, crisis center, call center or information line.
Triage Providers - Medical personnel who classify ill or injured persons by severity of condition. When providers or insurance companies manage triage on the telephone, this service may be referred to as pre-authorization center, crisis center, call center or information line. Providers may also manage triage in emergency rooms, walk-in centers, disaster scenes or outreach centers.
Triple Option Plan - A plan (usually offered by a single carrier or a joint venture between two or more carriers) that gives subscribers or employees a choice among HMO, PPO and traditional indemnity plans. Also see Cafeteria Plan.
UB-92 - Uniform Billing Code of 1992 - Bill form used to submit hospital insurance claims for payment by third parties. Similar to HCFA 1500, but reserved for the inpatient component of health services. An electronic format of the CMS-1450 paper claim form that has been in general use since 1993.
Unbundling - The practice of providers billing for a package of health care procedures on an individual basis when a single procedure could be used to describe the combined service.
Uncompensated Care - Service provided by physicians and hospitals for which no payment is received from the patient or from third-party payers. Some costs for these services may be covered through cost-shifting. Not all uncompensated care results from charity care. It also includes bad debts from persons who are not classified as charity cases but who are unable or unwilling to pay their bill. See cost shifting.
Underinsured - People with public or private insurance policies that do not cover all necessary health care services, resulting in out-of-pocket expenses that exceed their ability to pay. See cost shifting.
Underwriting - Process of selecting, classifying, analyzing and assuming risk according to insurability. The insurance function bearing the risk of adverse price fluctuations during a particular period. Analysis of a group that is done to determine rates or to determine whether the group should be offered coverage at all.
Uninsured - People who lack public or private health insurance.
Universal Access - The right and ability to receive a comprehensive, uniform, and
affordable set of confidential, appropriate, and effective health services.
Universal service is a reality in countries with national medicine programs or
socialized healthcare, such as the
Universal Coverage - A type of government sponsored health plan that would provide
healthcare coverage to all citizens. This is an aspect of
Urgent Services - Benefits covered in an Evidence of Coverage that are required in order to prevent serious deterioration of an insured's health that results from an unforeseen illness or injury.
Use – Under HIPAA, this term refers to the sharing of individually identifiable health information within a covered entity. For Partners' purposes, a use is the sharing of such information within the Partners affiliated covered entity.
Usual, Customary and Reasonable (UCR) Charges - The amount a health plan will recognize for payment for a particular medical procedure. It is typically based on what is considered "reasonable" for that procedure in your service area. Commonly charged fees for health services in a certain area. The use of fee screens to determine the lowest value of provider reimbursement based on: (1) the provider's usual charge for a given procedure, (2) the amount customarily charged for the service by other providers in the area (often defined as a specific percentile of all charges in the community), and (3) the reasonable cost of services for a given patient after medical review of the case. Most health plans provide reimbursement for usual and customary charges, although no universal formula has been established for these rates.
Utilization - Use
of services and supplies. Utilization is commonly examined in terms of patterns
or rates of use of a single service or type of service such as hospital care,
physician visits, and prescription drugs. Measurement of utilization of all
medical services in combination is usually 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 admissions to the hospital per 1,000 persons
over age 65 per year, or the number of visits to a physician per person per
year for an annual physical. See also
Utilization Management (UM) - The process of evaluating the necessity, appropriateness and efficiency of health care services against established guidelines and criteria. Evaluation of the necessity, appropriateness, and efficiency of the use of health care services, procedures, and facilities. UM usually includes new actions or decisions based on the overall analysis of the utilization.
Utilization Review (
Utilization Risk - The risk that actual service utilization might differ from utilization projections.
Variable Contribution Health Plan – In contrast to a fixed contribution plan, a variable contribution involves employers committing to a specified level of benefits funding for its employees, regardless of the actual benefit price. Employers are thus locked into variable contribution arrangements because they are committed to funding a certain benefit structure without knowing what the future costs may be if premiums are raised. See also Fixed Contribution Health Plan.
Vertical Integration - Organization of production whereby one business entity controls or owns all stages of the production and distribution of goods or services. In health care, vertical integration can take many forms, but, generally implies that physicians, hospitals and health plans have combined their organizations or processes in some manner to increase efficiencies, increase competitive strength or to improve quality of care. Integrated delivery systems or healthcare networks are generally vertically integrated. Also see IDS, AHP, horizontal integration.
Vital Statistics - Statistics relating to births (natality), deaths (mortality),
marriages, health, and disease (morbidity). Vital statistics for the
Waiting Periods - The length of time an individual must wait to become eligible for benefits for a specific condition after overall coverage has begun.
Waiver - Approval that the Centers for Medicare and Medicaid Services (CMS, formerly called HCFA), the federal agency that administers the Medicaid program, may grant to state Medicaid programs to exempt them from specific aspects of Title XIX, the federal Medicaid law. Most federal waivers involve loss of freedom of choice regarding which providers beneficiaries may use, exemption from requirements that all Medicaid programs be operated throughout an entire state, or exemption from requirements that any benefit must be available to all classes of beneficiaries (which enables states to experiment with programs only available to special populations).
Waiver of Authorization – Under HIPAA, under limited circumstances, a waiver of the requirement for authorization for use or disclosure of private health information may be obtained from the IRB by the researcher. A waiver of authorization can be approved only if specific criteria have been met. See Authorization also.
Wellness - A dynamic state of physical, mental, and social well-being; a way of life which equips the individual to realize the full potential of his/her capabilities and to overcome and compensate for weaknesses; a lifestyle which recognizes the importance of nutrition, physical fitness, stress reduction, and self-responsibility. Wellness has been viewed as the result of four key factors over which an individual has varying degrees of control: human biology, environment, health care organization and lifestyle. Preventive medicine associated with lifestyle and preventive care that can reduce health- care utilization and costs. "Wellness" programs became popular with the advent of managed care in the 1980s, with the philosophy and business idea that health plans needed to emphasize keeping their beneficiaries well. However, there has been a drop off in these programs in the 1990s as health plans recognize the difficulty in assessing efficacy and they found that subscribers tend to change plans regularly, thus reducing benefit of keeping one population "well".
Withhold - Portion of a claim deducted and held by a health plan before payment is made to a capitated physician. A form of compensation whereby a health plan withholds payment to a provider until the end of a period at which time the plan distributes any surplus based on some measure of provider efficiency or performance. That portion of the monthly capitated payment to providers withheld by the MCO to create an incentive for efficient or reduced utilization of care or services. A provider that exceeds their withhold amount does not receive a dispersion at the end of the contract period. See also PCR or physician contingency reserve.
Withhold Pool - The aggregate amount withheld from all providers' capitation payments as an amount to cover excess expenditures of his or a groups referral or other pool. See also risk pool, capitation or sub-capitation. See also Risk Pool, Capitation, and Shared Risk.
Workers' Compensation - A state-mandated program providing insurance coverage for work-related injuries and disabilities. Several states have either enacted or are considering changes to the Workers Compensation Laws to allow employers to cover occupational injuries and illnesses within their own existing group medical plans. Some employers pay premiums to the state or to insurance companies for this coverage. Others are self-funded and use third party case management or administrative services to manage the processes. See also Occupational Health.
Zero-Sum Budgeting - A "deficit neutral" budget process in which new expenditures are paid through cuts in existing programs or increases in revenue. The end result is the same bottom line and no increase in the deficit (if governmental) or debt (if referring to private or public corporation or company).