Glossary

Access
The patient's ability to obtain medical care. How easily care can be accessed is determined by components such as:
Availability of medical services
Patient's acceptance of services
Location of health care facilities
Transportation
Hours of operation
Cost of care

Accountable Health Plan (AHP)
An organization proposed under various health care reform proposals that would combine health insurance and care-giving functions. It would function much like an HMO but could also be a more loosely organized network. (See Organized Delivery Systems.)

Accreditation
Formal process of evaluation by which an agency or organization recognizes an institution or program of study as meeting certain predetermined criteria or standards.

Actuarial
Statistical calculations used to determine the HMO/PPO rates and premiums. These calculations are based on projections of utilization and costs for a defined population.

Actuary
A specialist in the mathematics of insurance. An actuary applies the theory of probability to the business of insurance to determine premiums, reserves, etc.

Adjustable Premium
Used in connection with guaranteed renewable health policies in which the premium is subject to change based on classes of insured.

Adjusted Average Per Capita Cost (AAPCC)
Health Care Financing Administration (HCFA) basis of payment to HMOs and PSOs.

Adjusted Community Rating
A community rating that is influenced by group-specific demographics. Differentiation for age and sex can be made between classes of members by federally qualified HMOs only. (See
Community Rating.)

Administrative Costs
The costs incurred by an insurance company or HMO for services it provides to policy holders. These services include claims processing, billing and enrollment, developing managed care networks, research and development.

Administrative Services Only (ASO)
The services provided by an insurer such as providing claim forms, processing claims, and making payments to health care providers. (See Third Party Administration.)

Admission – Inpatient
Hospital’s formal acceptance of a patient who is to receive health care services while in the hospital.

Admitted Company
An insurance company authorized and licensed to do business in a given state.

Advanced Directive
Written document that says how an individual wants medical decisions to be made if he/she should lose the ability to make their own decisions.  A health care advance directive may include a Living Will and a Durable Power of Attorney for health care.

Adverse Selection
Disproportionate enrollment into a plan by individuals with the potential for higher health services utilization than projected for an average population. An older population and impaired or chronically ill individuals are considered adverse risks. Adverse selection may
cause premiums to be too low to cover actual plan expenses.

Age/Sex Rating
A method of structuring capitation payments based on membership age and sex.

Agency for Health Care Policy and Research (AHCPR)
An agency of the U.S. Public Health Service, Department of Health & Human Services. Does scientific research, assessment of health care technologies, and support of clinical practice guideline development.

Aggregate Indemnity
A maximum dollar amount that may be collected for any disability or period of disability under the health plan policy.

All Patient Refined Diagnosis Related Group (APR-DRG)
A computer software program that expands the 485 Medicare DRG classifications to 1,637, accounting for comorbidities, demographics, and other factors that affect severity of illness. Developed by 3M Health Information Systems and the National Association of Children's Hospitals and Related Institutions (NACHRI) with support from HCFA. A case mix system equally applicable to young and elderly inpatient populations.

All-Payer Contract
An arrangement allowing for payment of health services delivered by a contracted provider regardless of product type (e.g., HMO, PPO, indemnity) or revenue source (e.g., premium or self-funded).

Alliances
Purchasing pools responsible for negotiating health insurance arrangements for employers and/or employees. Alliances use their leverage to negotiate contracts that ensure that care is delivered in economical and equitable ways. Also sometimes referred to as health insurance purchasing cooperatives or health plan purchasing cooperatives.

Allied Health Personnel
Specially trained and licensed (when necessary) health workers who perform tasks which might otherwise be performed by physicians or nurses. The term is sometimes used synonymously with paramedical personnel, such as physician assistants, and occupational, respiratory, and physical therapists.

Allocated Benefits
Benefits for which the maximum amount payable for specific services is itemized in the contract.

Allowable Costs
Charge for services rendered or supplies furnished by a health provider which qualify as covered expenses.

Alternative Care
Medical care received in lieu of inpatient hospitalization. Examples include outpatient surgery, home health care and skilled nursing facility care. Also may refer to nontraditional care delivered by providers such as midwives.

Alternative Delivery System
A method of providing health care benefits that departs from the traditional indemnity methods. HMOs can be classified as alternative delivery systems.

Alternative Medicine
A collective term covering a variety of therapies not conforming to the traditional practices of medicine, such as homeopathy, acupuncture, herbal medicine, chiropractic, massage, relaxation techniques, lifestyle diets, exercise, hypnosis, and others.

Ambulatory Care
Health services rendered to patients who are not confined to a hospital bed as inpatients when services are rendered.

Ambulatory Care Center (freestanding)
Facility, not located within a hospital, with an organized professional staff that provided medical treatment on an outpatient basis only.

Ambulatory Surgery
Any surgical procedure that can be safely and efficiently performed on an outpatient basis.

Ancillary Charge
The fee associated with additional service performed prior to and/or secondary to a significant procedure, such as lab work, x-rays and anesthesia; or a charge in addition to the copayment that the member is required to pay, such as to a pharmacy for a prescription which has been dispensed in nonconformance with a health plan's maximum allowable cost list.

Ancillary Services
Services other than room, board, medical, and nursing services provided to hospital patients in the course of care.  Examples include laboratory, radiology, pharmacy and therapy services.

Anniversary Date
The beginning of a subscriber group's benefit year. A subscriber group with a year coinciding with the calendar year would be said to have a January 1st anniversary.

Annual Benefit Cap
Maximum dollar amount paid for specific medical services.

Annual Statement
A report made by an insurance company at the close of the fiscal year. Report states the company's receipts and disbursements, assets and liabilities.

Anti-Managed Care Legislation
Any legislation or regulation that restricts the ability of managed care companies to practice managed care. For example, laws that prevent managed care companies from contracting with providers of their choice or laws that prohibit or limit utilization review. (See Any
Willing Provider.)

Any Willing Provider
A requirement that managed care plans contract with any health professional willing to meet the health plan's terms and conditions. This undermines the cost saving and quality enhancement features of managed care by prohibiting managed care networks from selecting only the providers with whom they wish to contract. Several states have passed any willing provider legislation.

Appeal
The request for a case review in the event of denial of continued confinement and/or services. An appeal may be requested by the participating provider(s) and/or the patient/member.

Assets
The funds, property goods, securities, rights of action, or resources of any kind owned by an insurance company, less such items as are declared non admissible by state laws.

Assisted Living
Type of living arrangement in which personal care services such as meals, housekeeping, transportation, and assistance with daily activities are available as needed to people who still live on their own in a residential facility.

Association Group
Group insurance issued to an association, as opposed to an employer or union.

Attrition Rate
Disenrollment expressed as a percentage of total membership. An HMO with 50,000 members experiencing a two percent monthly attrition rate would need to gain 1,000 members per month in order to retain its 50,000 member level.

Authorization
Consent or endorsement by a primary care physician for patient referral to ancillary services and specialists.

Average Length of Stay (ALOS)
One measure of use of health facilities reported as an average number of inpatient days spent in a hospital or other health care facility per admission or discharge. It is calculated as follows: total number of days in the facility for all admissions occurring during a period divided by the number of admissions during the same period. Average lengths of stay vary and are measured for patients based upon age, specific diagnoses, or sources of payment.

B

Bad Debt
Bad debt is the unpaid obligation for care for patient’s who are unwilling to pay for their bill. Typically bad debt arises when the patient has either not requested financial assistance or does not quality for financial assistance.

Balance Billing
A provider's billing to a member for charges above the amount reimbursed by the health plan, (i.e., the difference between billed charges and the amount reimbursed.) This may or may not be appropriate, depending upon the contractual arrangements between the physician and the health plan.

Base Capitation
A stipulated dollar amount to cover the cost of health care per member. Generally excludes mental health and substance abuse services, pharmacy, and administrative costs.

Basic Health Services
Benefits that all federally qualified HMOs must offer; defined under Subpart a, 110.102 of the Federal HMO Regulations.

Beds – licensed
Number of beds that a hospital is licensed or certified by the state to maintain.
Bed – swing
Hospital bed used for both short-term and long-term use, depending on need.

Behavioral Health Care
Assessment and treatment of mental and/or psychoactive substance abuse disorders.

Benchmarking
An ongoing measurement and analysis process that compares administrative and clinical practices, processes or methodologies of an organization or an individual with others. The goal is to learn the best practices of others in order to improve medical practice procedures.
Terms often used are administrative benchmarking and clinical benchmarking.

Benefit Package
A collection of specific services of benefits that are covered by insurance.

Benefit Year
A 12-month period that a group uses to administer its employee fringe benefits program. A majority of subscribers use a January through December benefit year. A benefit year may not match the fiscal year used by a group.

Benefits
The amount payable by the insurance company to a member based upon the specific allowances for coverage in a health insurance plan.

Birthing Center
An outpatient facility used for normal births that do not require admission to a hospital.

Blanket Medical Expense
A provision that entitles a member to collect up to a maximum, as established in the policy, for all hospital and medical expenses incurred, without any limitations on individual types of medical expenses.

Board Certified
Physician or other health professional who has passed an examination given by a medical specialty board and has been certified by that board as a specialist in that area of expertise.

Board Eligible (Active Candidate)
Describes a physician who is eligible to take the specialty board examination by virtue of having graduated from an approved medical school, completed a specific type and length of training, and practiced for a specified amount of ti
me.

C

Capitation
A prepayment system whereby the physician is paid monthly for each member who has chosen him/her as their physician for a specific set of services regardless of whether or not the member is seen. Capitation rates are based on average annual services a physician is
expected to provide to his/her patients and adjusted actuarially for the age and sex of the patient.

Carve Out
A decision to purchase separately a service which is typically a part of an indemnity or HMO plan. Example: a behavioral health benefit may be carved out, and a specialized vendor selected to supply these services on a stand-alone basis. Sometimes referred to as Single
Service Plans (SSP).

Case Management
System of assessment, treatment planning, referral, and follow-up that ensures the provision of comprehensive and continuous service and the coordination of payment and reimbursement for care.

Case Manager
An experienced professional (e.g., 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
Distribution of patients into categories reflecting differences in severity of illness or resource consumption.

Cash Indemnity Benefits
Sums that are paid to insurers for covered services and that require submission of a filed claim. Insurers may assign such payments directly to providers of services (hospitals, physicians, etc.). Payments may or may not fully reimburse insurers for costs incurred.

Centers of Excellence
A network of health care facilities selected for specific services based on criteria such as experience, outcomes, quality, efficiency and effectiveness.

Certificate of Need (CON)
A certificate by a government body to an individual or organization proposing to construct or modify a health facility, acquire major new medical equipment, or offer new or different health service.

Charity Care
Charity care refers to the dollar amount of free care, based on the hospital’s full established rates, provided to patients who are determined by the hospital to be unable to pay their bill.  This inability to pay is based on the hospitals charity care policy.

Children’s Health Insurance Program (CHIP)
Program jointly funded by the state and federal government, which provided medical insurance coverage for uninsured children.

Claim
A demand to the insurer for the payment of benefits under the insurance contract.

Claim Lag Schedules
Reports that are used to trace the lag in time between when a claim is incurred (date of service) and when it is paid. These reports can be used to evaluate the reasonableness of the claim expense accruals developed by a plan.

Clinical Practice Guidelines (CPG)
See Practice Guidelines.

Closed Access
A type of health plan in which a member is required to select a primary care physician from the plan's participating providers. The member is required to see the selected primary care physician for care and referrals to other health care providers within the plan. Typically found in a staff, group or network gatekeeper model.

Closed Panel
Members of a managed care plan are required to see the physicians the plan has contracted with; members cannot see physicians outside the set of providers for routine care covered by the plan.

Coalitions
Associations (most often non-profit) whose purpose is to monitor and control rising health care costs, through instilling efficiency and quality in the provision of health care through education, partnerships, purchasing criteria, exchange of information and promoting cost-effective structuring in local planning efforts.

Co-Insurance
The amount you may be required to pay for services after you pay any plan deductibles.  In the Original Medicare Plan, this is a percentage (like 20% for example) of the Medicare approved amount.  You have to pay this amount after you pay the deductible for Part A and/or Part B.  In a Medicare Prescription Drug Plan, the coinsurance will vary depending on how much you have spent.

Community Health Management Information System (CHMIS)
A system to electronically link providers, payers, employers, and consumers in communities to improve health care quality and promote community wellness.

Community Health Purchasing Alliance (CHPA)
A purchaser of health care benefits on behalf of employer groups.

Community Rating
A method of determining a premium structure that is not influenced by the expected level of benefit utilization by specific groups, but by expected utilization of the population as a whole. Everyone in a specified community would pay the same premium for the same package of benefits, regardless of age, sex, medical history, lifestyle, or place of residence.

Co-morbidity
Coexisting (usually chronic) conditions that may affect overall health and functional status beyond the effect(s) of the condition under consideration.

Complication
Condition that arises during the hospital stay that prolongs the length of stay.

Composite Rate
A uniform premium applicable to all eligible participants in a group regardless of the number of dependents. This rate is common among labor unions and large employer groups and usually does not require any contribution by the union member or employee.

Concurrent Review
A form of review that traditionally is applied to hospital admissions but may also be applied during the patient's hospital stay. This review determines medical necessity, level of care, length of stay, and appropriateness of services. (See also Continued Stay Review.)

Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal law that, among other things, requires employers to offer continued health insurance coverage for a certain length of time to certain employees and their dependents whose group health insurance coverage has been terminated.

Continued Stay Review
A review designed to extend precertification of patient confinement or treatment when necessary.

Continuum of Care
A range of clinical services provided to an individual or group which may reflect treatment rendered during a single patient hospitalization or may include care for multiple conditions over a lifetime. The continuum provides a basis for analyzing quality, cost and utilization over the long term.

Contract
A legal agreement for health insurance benefits with a subscribing group or individual that 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.

Contract Mix
The distribution of members according to contracts classified by dependency categories, for example, the number or percentage of singles, doubles, or families. Contract mix is used to determine average contract size.

Contributory
A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan.

Coordinated Care Network (CCN)
See Organized Delivery Systems.

Coordination of Benefits
Process for determining the respective responsibilities of two or more health plans that have some financial responsibility for a medical claim.  Also called a cross-over.

Copayments (copay)
A cost-sharing arrangement in which a member pays a specific charge for a specified service, such as $10 for an office visit. The member is usually responsible for payment at the time the health care is rendered. Typical copayments are fixed or variable flat amounts for physician office visits, prescriptions or hospital services. Some copayments are referred to as coinsurance, with the distinguishing characteristics that copayments are flat or variable dollar amounts and coinsurance is a defined percentage of the charges for services rendered.

Cost, Allowable
Cost incurred by a provider in the course of providing service that is recognized as payable by a third party payer.

Cost Sharing
A general set of financing arrangements via deductibles, copays and/or coinsurance in which a person covered by the health plan must pay some of the costs to receive care. (See also Copayment and Coinsurance.)

Cost Shift
That portion of a provider's charges which is a mark-up above costs related to an individual patient's care and which reflects the spreading of uncompensated costs among those who pay for services. (See Uncompensated Care Costs.)

Cost-Effectiveness
The degree to which a service or a medical treatment meets a specified goal at an acceptable cost and level of quality.

Coverage
Scope of the protection provided under a contract of insurance.

Covered Lives
All individuals enrolled in a specified health plan.

Covered Service
Any service that is covered under the terms of the contract between the HMO/PPO and the subscriber group.

Credentialing CPT-4
An acronym for the American Medical Association's manual of Current Procedure Terminology, fourth edition. (See also Current Procedural Terminology.)

Credentialing
A process of review to approve a provider who applies to participate in a health plan. Specific criteria and prerequisites are applied in determining initial and ongoing participation in the health plan.

Critical Access Hospital (CAH)
A small, rural hospital that provides limited services in a rural area and that meets federally mandated criteria that enables the hospital to receive cost-based reimbursement for Medicare services.

Critical Pathways
Charts showing the key events that typically lead to the successful treatment of patients in a certain homogeneous population. They organize, sequence, and time the major interventions of nursing staff, physicians, and other departments for a particular case type (such as
asthma), subset, or condition.

Current Procedural Terminology, Fourth Edition (CPT-4)
A list of descriptive terms and identifying code numbers used in reporting medical services and procedures performed by physicians and other providers. This standardized terminology provides a uniform language for accurately describing medical, surgical, and diagnostic services rendered. Each service and/or procedure is identified by its own unique 5-digit code, CPT has become one of the industry's standards for the reporting of physician procedures and services.

Custodial Care
Non-skilled, personal such as help with activities of daily living like bathing, dressing, eating, getting in or out of bed or chair, moving around, and using the bathroom.  Custodial Care is not covered by Medicare.

D

Deductible
Expense the insured must incur before an insurer will assume any liability for all or part of the remaining cost of covered services.

Defensive Medicine
Use of tests, treatments, procedures, or other medical services by physicians solely or primarily to minimize the threat of a malpractice lawsuit.

Dependents
Individuals, generally the subscriber's spouse and/or minor children, who are eligible to receive health care services under the subscriber's contract.

Designated Provider Network (DPN)
DPNs are modified POS plans. Patients can obtain services from any primary care physician. A primary care referral is required for specialty services to be reimbursed at maximum plan benefit levels.

Diagnosis – Admitting
Diagnosis provided on admission, explaining the reason for admission.

Diagnosis – Secondary
Condition that exists at the time of admission or developed subsequently that affects the treatment received and/or length of stay.

Diagnosis Dependent Outcomes
Outcomes based primarily on the diagnosis of an illness by a clinician, as opposed to a diagnosis independent adjustment, based primarily on clinical indicators. Thus, there is a direct relationship between diagnosis, treatment, and clinical outcomes. Examples are CSI
(Computerized Severity of Illness), and Disease Staging.

Diagnosis Independent Outcomes
Outcomes adjusted for severity of illness, based primarily on clinical indicators, independent of the ultimate discharge diagnosis'. Thus, there is no direct correlation between the diagnosis and the treatment interventions and outcomes. Examples are MedisGroups and
APACHE.

Diagnosis Related Group (DRG)
Patient classification system that relates demographic, diagnostic and therapeutic characteristics of patients to length of inpatient stay and amount of resources consumed, provides a framework for specifying hospital case mix, and identifies 468 classifications of illnesses and injuries for which Medicare payment is made under the prospective payment system.

Direct Contracting
Individual employers or business coalitions contract directly with providers for health care services with no HMO/PPO intermediary. Generally, hospitals and physicians form close partnerships to streamline operations and care, as well as to handle risk sharing.

Discharge Planning
Centralized, coordinated program developed by a hospital to ensure that each patient has a planned program for follow-up care.

Dividend
The return of part of the premium paid by a subscriber group.

Do-Not-Resuscitate Order
Order placed on a patient’s chart by the attending physician, with patient or surrogate consent, that directs hospital personnel not to revive the patient if respiratory or cardiac activity ceases.

Drug Formulary
A listing of prescription medications which are preferred for use by the health plan and which will be dispensed through participating pharmacies to members. This list is subject to periodic review and modification by the health plan. A plan that has adopted an open or voluntary formulary allows coverage for both formulary and nonformulary medications. A plan that has adopted a closed, select or mandatory formulary limits coverage to those drugs in the formulary.

Drug Utilization Review (DUR)
A quantitative evaluation of prescription drug use, physician prescribing patterns, or patient drug utilization to determine the appropriateness of drug therapy.

Dual Choice
A health benefit offered by an employment group permitting subscribers of the group a voluntary choice of health plans, usually the employer's primary insurer and an HMO.

Durable Medical Equipment
Medical equipment, such as a respirator, wheelchair, home dialysis system, or monitoring system, that is prescribed by a physician for a patient’s home use.

E

Electronic Connectivity
An information system designed to reduce administrative costs and red tape for consumers, providers, and managed care companies by eliminating paper transactions. This standard, paperless system will be used to check a patient's health plan, submit and pay claims and to
exchange quality data. All of the major health care reform plans call for the development of some type of electronic information system.

Electronic Data Interchange (EDI)
The computer-to-computer exchange of business or other information between organizations. The data may be either a standardized or proprietary format.

Eligibility Determination
Method of verifying eligibility of patients for medical services under particular programs or insurance plans.

Employee Assistance Program (EAP) Emergency
A serious medical condition resulting from injury, sickness, or pregnancy that arises suddenly and requires immediate care and treatment to avoid jeopardy to the life and health of a member.

Employee Assistance Program (EAP)
Services designed to assist employees, their family members, and employers in finding solutions for workplace and personal problems. EAPs also can provide voluntary or mandatory access to behavioral health benefits through an integrated behavioral health program.

Employer Mandate
A requirement by the government that employers provide health insurance to employees. In some reform plans, employer costs would be capped at a specified percentage of their payroll costs.

Encounter
Face-to-face meetings between a member and a health care provider where services are provided. The number of encounters per member per year is calculated as the total number of encounters per year divided by the total number of members per year.

Enrollee
Health plan participant, member, or eligible individual in a managed care program.

Enrollment
The total number of members in a health plan. The term also refers to the process by which a health plan signs up groups and individuals for membership, or the number of employees who sign up from any one group.

Enterprise Liability
A proposed change in medical malpractice that would shift liability from physicians, hospitals, and other health care providers to insurers, HMOs, and other health plans.

Episode of Care
Treatment rendered in a defined time frame for a specific disease. Episodes provide a useful basis for analyzing quality, cost and utilization patterns.

Employee Retirement Income Security Act of 1974 (ERISA)
Public law 93-406 that regulates pensions and employee benefit plans, including health coverage. ERISA exempts employer and union-sponsored health benefits plans from state regulation. As a result, employers operating ERISA plans must comply with one set of
federal rules, rather than with state rules that might be more restrictive with respect to plan design and operation and/or more expansive with respect to plan sponsors' obligations to plan participants.

Exclusions
Charges, services, or supplies that are not a covered benefit under a health plan.

Exclusive Provider Organization (EPO)
A managed care organization that designates specific providers who can provide health care services. The term is derived from the phrase preferred provider organization (PPO). However, a PPO generally extends coverage for non-preferred provider services as well as
preferred provider services. An EPO provides coverage only from contracted providers. Technically, many HMOs also can be described as EPOs.

Experience
The relationship, usually expressed as a percentage or ratio of premiums collected, to claims paid for a plan, coverage, or benefits, during a stated period of time.

Experience Rated Premium
A premium calculation method that takes into account the actual utilization of the-group rather than the combined utilization of all groups. The purpose is to more closely match a group's premiums to its costs.

Experience Rating
The process of setting rates based partially or in whole on previous claims experience and projected required revenues for a future policy year for a specific group or pool of groups. Federally qualified HMOs are not allowed to use experience rating.

Extended Care
An alternate level of care when the acute care of the hospital setting is no longer necessary.

Extended Care Facility
A nursing home or nursing center which is licensed to provide 24-hour nursing care, in accordance with all applicable state and local laws. Such a facility may offer skilled, intermediate, or custodial levels of care, or any combination of these levels of care.

F

Federally Qualified
Voluntary federal certification for HMOs.

Fee Maximum
The maximum amount a participating provider may be paid for a health care service provided to a member under a specific health plan. A comprehensive listing of fee maximums used to reimburse a physician and/or other provider on a fee-for-service basis is called a fee schedule.

Fee-For-Service
A term which refers to the method of reimbursing service providers on an individual fee basis after services are rendered rather than reimbursing providers on a prepaid basis such as capitation.

Fee Schedule
Maximum dollar or unit allowances for health services that apply under a specific contract.

First-Dollar Coverage
Feature of a health care plan in which the plan does not require its members to pay any deductibles or copayments before benefits are received.

Formulary
A list of drugs covered by a plan.

Fully-Insured
A funding mechanism whereby an insurance company contracts with an employer group to provide a specific combination of benefits for all members of their organization.

Functionality
A quality of life indicator that relates to whether a patient has the potential to respond to treatment options and, as a result, be able to function in a normal life.

G

Gatekeeper
A primary care physician who serves as the patient's initial contact for medical care, and who makes referrals to specialists. His/her gatekeeper function is to reduce health care utilization and costs. Also called closed access or closed panel.

Global Budgets
Pre-set limits on the total amount of expenditures in a health care system.

Global Fees
Negotiated fees that are all-inclusive (one fee is paid for the entire range of services provided for a specific episode or episodes of care).

Group Contract
A contract of insurance made with an employer or other entity that covers a group of persons identified as employees by reference to their relationship to the entity.

Group Practice Without Walls (GPWW)
An organizational structure created to link physicians together by sharing central services, forming a unit for contracting purposes, and yet have autonomy by keeping their own offices. Also known as "clinics without walls."

Group Model HMO
A health care model involving contracts with physicians organized as a partnership, professional corporation, or other association. The health plan compensates the medical group for contracted services at a negotiated rate, and that group is responsible for compensating its physicians and contracting with hospitals for care of their patients.

H

Health Alliance (or Health Purchasing Cooperative)
A state or regional body that combines consumer's purchasing power in order to negotiate prices with competing health plans.

Health Care Financing Administration (HCFA)
A branch of the U.S. Department of Health and Human Services. In addition to its many other functions, HCFA is the contracting agency for HMOs who seek direct contractor/provider status for delivery of the Medicare benefit package.

Health Care Prepayment Plan (HCPP)
HCFA program allowing managed care groups that organize, finance, and deliver Medicare Part B services to be reimbursed for such services on a reasonable cost basis.

Health Care Quality Improvement Initiative (HCQII)
The 4th Scope of work designed by HCFA to reshape the approach to improve the quality of care delivered to Medicare enrollees.

Health Insurance
Protection that provides payment of benefits for a covered sickness or injury.

Health Insurance Portability and Accountability Act (HIPAA)
Regulates health insurance portability, electronic health care transactions including electronic claims submission and the privacy of patients’ medical information.

Health Plan Employer Data and Information Set (HEDIS)
A core set of performance measures to assist employers and other health purchasers in understanding the value of health care purchases and evaluating health plan performance. Used by the National Center for Quality Assurance to review HMOs.

Health Maintenance Organization (HMO)
Organization that has management responsibility for providing comprehensive health care services on a prepayment basis to voluntarily enrolled individuals within a designated population.

Health Security Card
A plastic card resembling a credit card that President Clinton proposes each American would carry and use when seeking medical attention. It would have a magnetic strip providing information about the patient's available benefits.

Health Status
An overall evaluation of an individual's degree ofwellness or illness, with a number of indicators, including quality of life and functionality. A form often used for this purpose is SF-36.

Home Health Agency (HHA)
A facility or program licensed, certified or otherwise authorized pursuant to state and federal laws to provide health care services in the home.

Home Health Care
Provision of health services such as nursing, therapy and health-related homemaker or social services in the patient’s home.

Hospice Care
Care that addresses the physical, spiritual, emotional, psychological, social, and financial needs of the dying patient and his or her family.

Hospital
An institution operated pursuant to law that (1) is primarily engaged in providing, for compensation from its patients, diagnostic and surgical services for the care and treatment of injured or sick individuals by, or under the supervision of, a staff of physicians, (2) has 24-hour nursing services by registered graduate nurses (R.N.) and (3) is not primarily a place for rest, custodial care of the aged, or a nursing home, convalescent home, or similar institution.

Hospital Affiliation
A contractual relationship between a health plan and one or more hospitals whereby the hospital provides the inpatient benefits offered by the health plan.

Hospitalist
Doctor who primarily takes care of patients when they are in the hospital.  He or she assumes care from the patient’s primary doctor when the patient is hospitalized, communicates frequently with the primary doctor and returns the patient to the care of the primary doctor when the patient leaves the hospital.

I

ICD-9-CM
An acronym for the International Classification of Diseases which includes diagnoses and their identifying summary codes- (See International Classification of Diseases.}

Identification Card
A card issued by your HMO to each member; two copies of this card are provided to members who have eligible family dependents. This card must be presented at the physician's office or the hospital when services are received.

Incentive Withhold
A pre-arranged percentage of provider payments that are withheld and distributed annually as an incentive for participating providers to share in the responsibility of cost containment.

Incurred But Not Reported (IBNR)
A reserve established for claims estimated to be received. In an HMO environment a reserve established for services that have been provided to HMO members at the date the reserve is established. The reserve will include amounts for which the HMO is aware of the service being provided amounts based on actuarial calculations for services of which the HMO is through the prior authorization process but no bill has been received, plus it will also include unaware, but which have, in fact, occurred.

Indemnity or Indemnity Plan
A traditional form of health insurance in which the insured person is reimbursed for covered expenses. In return for a fixed monthly premium, an insurance company pays all or part of each insured person's health care costs. Claims are submitted by the patient, physician or hospital for payment by the insurance company.

Individual Mandate
Requirement that all individuals purchase health insurance, much the same as is done in auto insurance. This proposal is usually combined with some strategy for aiding low-income workers and the unemployed with the costs of such coverage.

Individual Practice Association (IPA)
A health care model that contracts with an entity, which in turn contracts with physicians, to provide health care services in return for a negotiated fee. Physicians continue in their existing individual or group practices and are compensated on a per capita, fee schedule, or
fee-for-service basis.

Infection – Nosocomial
Infection acquired during hospitalization that is neither present nor incubating at the time of hospital admission.

Informed Consent
Legal concept requiring a patient or a patient’s guardian to be advised of and to understand the risks associated with a proposed procedure or treatment prior to approving such procedure or treatment, usually indicated by a signed written statement.

Inpatient
Person who receives medical, dental or other health-related services while lodged in a hospital or other health care institution for at least one night.

Inpatient Services
The care provided to a bed patient in a hospital or other facility such as a nursing home.

Insurance
Protection by written contract against the financial hazards (in whole or in part) of the happenings of specified fortuitous events.

Insurance – Catastrophic
Insurance that protects the insured against all or a percentage of loss that is not covered by other insurance or prepayment plan or that is incurred under specified circumstances or insurance in excess of specified amounts or other dollar or benefit limits.

Integrated Delivery System (IDS)
A generic term referring to a combination of providers to deliver health care in an integrated way. Some models of integration include physician-hospital organization, a management service organization, group practice without walls, integrated provider organization and
medical foundation. (See Organized Delivery Systems.)

Integrated Service Networks (ISN)
See Integrated Delivery System

International Classification of Diseases, 9th Edition (Clinical Modification) (ICD-9-CM)
A list of diagnoses and identifying codes used by physicians for reporting diagnoses of health care plan enrollees. The coding and terminology provide a uniform language that can accurately designate primary and secondary diagnoses and provide for reliable, consistent
communications on claim forms.

Intensity of Service (IOS)
Level of care (service) received by a patient matched to the patient's severity of illness (SOI) and the outcome used to ascertain whether the patient is receiving the optimum level of care. The SOI and IOS determine level of care needed to cost effectively meet the patient's clinical needs. (See Severity of Illness.)

J

Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
Private, not-for-profit organization composed of representation of the American College of Surgeons, American College of Physicians and American Hospital Association, which establishes standards for the operation of health facilities and surveys facilities to ensure compliance with standards.

K

L

Length of Stay (LOS)
The number of days that a member stayed in an inpatient facility.

Long-Term Care
Provision of health, social and/or personal care services on a recurring or continuous basis to individuals with chronic physical or mental conditions who live in environments ranging from institutions to their own homes.

M

Malpractice
Incorrect or negligent treatment of a patient by persons responsible for health care, such as physicians and nurses.

Managed Care
A system of providing health care through which access, cost and quality are controlled by direct interventions before, during or after service delivery.  Managed care organizations use a variety of techniques, such as utilization review, quality assurance programs, and preadmission certification to manage the care delivered.

Managed Care Lite
A term referring to managed care plans that take on fee-for-service attributes by allowing members direct access to specialists, allowing members to see physicians outside the plan's network, or other out-of-network benefits.

Managed Competition
A proposed policy approach whereby health plans would compete on the basis of cost and other factors. Purchasers would join cooperatives and be given the ability to compare plans across several dimensions of performance. The principle behind this approach is improvement of the health economy through increased health plan competition'.

Managed Indemnity
Use of utilization controls in traditional fee-for-service health insurance plans in order to reduce cost and inappropriate care.

Management Service Organization (MSO)
A legal entity that provides practice management, administrative and support services to individual physicians or group practices. An MSO may be a direct subsidiary of a hospital or may be owned by physicians or other investors.

Mandated Benefits
Health care coverage required by state law to be included in health insurance contracts.

Medicaid
Federal program administrated by states that provide health care benefits to indigent and medically indigent individuals.

Medical Management Procedures
See Utilization Management

Medical Necessity Medical Necessity
Term used by insurers to describe medical treatment that is appropriate and rendered in accordance with generally accepted standards of medical practice.

Medical Treatment Effectiveness Program (MEDTEP)
A component ofAHCPR to study and improve the effectiveness and appropriateness of clinical practice.

Medicare
Federal program that provides health insurance benefits primarily to individuals over the age of 65 and others eligible for Social Security benefits.

Medicare Part A
Compulsory portion of Medicare that covers inpatient hospitalization.

Medicare Part B
Voluntary portion of Medicare that covers things like physicians’ services and hospital outpatient services.  Participants may enroll on a monthly premium basis.

Medicare Provider Analysis and Review (MEDPAR)
A databank containing information on 200 million Medicare discharges.

Medicare Risk Contract

Federal Medicare contract with HMOs or PSOs that pays a prospective monthly capitation payment for each Medicare member in the plan. The capitation payment is figured at an adjusted average per capita cost (AAPCC) at no more than 95 percent of projected rates.

Medicare SELECT
Federal program designed to introduce Medicare beneficiaries to managed care systems through Preferred Provider Organization supplemental health insurance.

Medicare Supplement Policy
A policy guaranteeing that a health plan will pay a policyholder's coinsurance, deductible and copayments and will provide additional health plan or non Medicare coverage for services up to a predefined benefit limit. In essence, the policy pays for the portion of the cost of services not covered by Medicare.

Medicare Wrap
See Medicare Supplement Policy.

Medigap
See Medicare Supplement Policy.

Member
Any person eligible to receive reimbursement for Healthcare services expenses pursuant to the terms and conditions of a health care plan. The term includes the subscriber and enrolled dependents in the health care plan, if any.

Morbidity
An actuarial determination of the incidence and severity of sicknesses and accidents in a well-defined class or classes of persons.
Mortality
An actuarial determination of the death rate at each age as determined from prior experience. A mortality study (table) shows the probability of death and survival at each age for a unit of population.

Multiple Option Plans
Multiple Option Plans typically include indemnity, PPO, and HMO plans through one insurer. Multiple Option Plans, in theory, prevent "adverse selection" by placing all employees in a single-risk pool.

N

National Association of Insurance Commissioners (NAIC)
National organization of state officials charged with regulating insurance. It has no official power but wields tremendous influence. The association was formed to promote national uniformity in insurance regulations.

National Committee on Quality Assurance (NCQA)
Private, voluntary accrediting organization for managed care. It assesses quality, credentialing utilization management, customer rights, preventive health services and medical records. Developer of the Health Plan Employer Data Set (HEDIS).

National Health Board
A national organization that is proposed to be created by various health care reform proposals for a variety of purposes, such as oversight of the entire program, specification of a basic benefit package, supervision of the proposed alliances, etc.

Negotiated Fees
Managed care plans and physicians mutually agree on a set fee for each service. This negotiated rate is usually based on services defined by the Current Procedural Terminology (CPT) codes, generally at a discount from the provideris usual charge.

Network Model HMO
An HMO type in which the HMO contracts with more than one physician group, and may contract with single - and multi-specialty groups. The physician may share in utilization savings, but does not necessarily provide care exclusively for HMO members.

Non-Participating Provider
A term used to refer to physicians and facilities not under contract as health care providers for the HMO/PPO.

Nonprofit insurers
Persons organized under special state laws to provide hospital, medical, or dental insurance on a nonprofit basis—for example. Blue Cross and Blue Shield. The laws exempt them from certain types of taxes.

Nursing Home
Residence that provides a room, meals, and help with activities of daily living and recreation along with health care needs.  Generally, nursing home residents have physical or mental problems that keep them from living independently and typically require assistance.

O

Office of Health Maintenance Organizations (OHMO)
Office of Health Maintenance Organizations, with headquarters in Rockville, Maryland. A component of the U.S. Department of Health and Human Services, charged with responsibility for directing the federal HMO program. Also known as the Central Office in HMO circles.

Open Access
A self-referral arrangement allowing members to see participating providers for open panel specialty care without a referral from another physician. Typically found in an IPA model HMO.

Open-Ended HMO
Hybrid HMO product that allows members to use physicians outside the plan in exchange for additional personal liability in the form of a deductible, coinsurance, or copayment.

Open Panel
A managed care plan that contracts with private physicians to deliver care in their own offices to plan members. These physicians may also provide services to patients outside the managed care plan.

Optionally Renewable Contract
A health insurance contract in which the insurer reserves the right to terminate the coverage at any anniversary date but does not have the right to terminate coverage between such dates.

Organized Delivery Systems (ODS)
Networks of providers and payers that provide care and compete with other systems for enrollees in their region. Systems could include hospitals, primary care physicians, specialty care physicians, and other providers and sites that could offer a full range of preventive and
treatment services. Also referred to as accountable health plans (AHP), coordinated care networks (CCN), integrated delivery systems (IDS), and integrated service networks (ISN).

Out-of-Network Care
Medical services obtained by managed care plan members from unaffiliated or noncontracted health care providers. In many plans, such care will not be reimbursed unless previous authorization for such care is obtained.

Out-of-PIan Referral Authorization
A system in which referrals to specialist physicians who are not participating physicians must be preauthorized by the utilization management company as designated by the insurance company or employer.

Out-of-Pocket
The amount of money the insured will pay out of his or her pocket before the insurance company will pay benefits.

Outcome Measures
Assessments which gauge the effect or results of treatment for a particular disease or condition. Outcome measures include the patient's perception of restoration of functional status, as well as measures of mortality, morbidity, cost, quality of life, patient satisfaction, and others.

Outcomes Management
A term coined by Paul Elwood in a seminal article in 1988. Definitions vary, but it generally involves collection and analysis of results of medical processes and performances according to agreed-on specifications and the use of that information to optimize health care provisions through the collaborative efforts of patients, payers, and providers.

Outliers
A patient who varies significantly from other patients in the same DRG, such as a longer or shorter length of stay, complications, death, leaving against medical advice etc.

Outpatient
Person who receives medical, dental or other health-related services in a hospital or other health care institution but who is not lodged there.

Outpatient Services
The care provided in the outpatient department of a hospital, in a clinic or other medical facility, or in a physician's office.

P

Partial Capitation Risk Contracts
State Medicaid contracts with HMOs or similar managed care organizations to accept risk for a defined set of services (for example, physician services and either laboratory, x-ray, or clinic services). Other services are reimbursed on a fee-for-service basis.

Participating Provider
A provider who has contracted with a health plan to provide medical services to members. The provider may be a hospital, pharmacy, other facility, or a physician who has contractually accepted the terms and conditions set forth by the health plan.

Partnering
A "value driven" business relationship. Often centered on identifying and maintaining cost effective care.

Pathways
Multi-disciplinary treatment intervention roadmaps for a specific diagnostic group which promote effective use of resources, decreased length of stay and collaboration. See Critical Pathways.

Patient Outcome Research Team (PORT)
Five year studies funded by AHCPR comparing the outcomes of different ways of preventing, diagnosing, treating, and/or managing a particular condition, such as diabetes, pneumonia, heart attack, stroke prevention, prostate disorders, low birth weight, and back pain-. These
studies are conducted by experts from multiple clinical and scientific fields. Typical cost of a PORT is $1 million per year, with an anticipated five years of funding.

Payer
Any individual or organization that pays for health care services-including insurance companies, labor unions, third party administrators, employers, and various government programs such as Medicare and Medicaid.

Peer Review Organization (PRO)
An entity established by the Tax Equity and Fiscal Responsibility act of 1982 (TEFRA) to review quality of care and appropriateness of admissions, readmissions and discharges for Medicare and Medicaid. These organizations are held responsible for maintaining and lowering admission rates, and reducing lengths of stay while insuring against inadequate treatment. Also known as professional standards review organizations (PSRO).

Per-diem
The amount that will be paid for hospital services on a daily basis, regardless of actual charges. Per-diem rates are often used in conjunction with hospital contracts with managed care plans.

Per Member Per Month (PMPM)
Computational designation for each enrollee in a managed care program. It is commonly abbreviated as PMPM.

Physician-Hospital Organization (PHO)
A legal entity formed and owned by one or more hospitals and physician groups' in order to obtain payer contracts and to further mutual interests. Physicians maintain ownership of their practices while agreeing to accept managed care patients under the terms of the PHO agreement. The PHO serves as a negotiating, contracting, and marketing unit. Although direct contracting with local employers is possible with this structure, it also is possible for a PHO to contract with HMOs, insurance companies, and third party administrators.

Physician Payment Review Commission (PPRC)
A bipartisan congressional advisory group established in 1986 to advise Congress on setting Medicare and Medicaid reimbursement. In 1990, PPRC's responsibilities were expanded to include other payment policy issues.

Point of Service HMO (POS)
POS plans are HMO plans with an out-of-plan option to obtain health care services. Higher copayments and deductibles apply if services are received from non-HMO providers. POS plans are often subject to federal and state regulations. Also known as Open Ended HMOs.

Portability
Insurance benefit plans moveable from one job to another, one state to another so as to provide continuous coverage for the individual and his/her family.

Practice Guidelines
Systematically developed statements on medical practice that assist a physician and a patient in making decisions about appropriate health care for specific medical conditions. Guidelines are frequently used to evaluate appropriateness and medical necessity of care. Outcomes can be used as information to modify or improve guidelines. Terms used synonymously include practice parameters, standard treatment protocols and clinical practice guidelines.

Preadmission Review and Authorization
A system in which all elective admissions are reviewed based upon medical information provided by the patient's physicians and approved by the utilization management company designated by the employer or insurance company.

Preadmission Testing
To the extent possible, testing performed before the patient is admitted to the hospital. Use of preadmission testing may eliminate at least one inpatient day stay.

Precertification
A method of providing assurance to the employee or provider that the admission to an institution is a covered benefit, hi addition, precertification provides information as to the approved length of coverage. Traditionally, this type of review is used for hospital inpatient admissions.

Preexisting Condition
Any medical condition that has been diagnosed or treated within a specified period immediately preceding the member's effective date of coverage.

Preferred Provider Organization
Type of managed care where the covered patient may use doctors, hospitals and other providers that belong to a network.  Providers outside the network may be used at an additional cost.

Premium
The fee that is paid on a regular basis for enrollment in a health plan.

Prevailing Charges
Amounts charged by health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.

Preventive Care
Comprehensive care emphasizing priorities for prevention, early detection and early treatment of conditions, generally including routine physical examinations, immunizations, cancer screenings, and guidance on health promotion.

Primary Care
Provision of basic or general health care by a primary care physician, emphasizing those medical services required to maintain health or to treat simpler and more common diseases.

Primary Care Case Management
Single provider is responsible for coordinating, arranging, and monitoring all patient care even for those patients with no serious medical conditions.

Primary Care Network (PCN)
A group of primary care physicians who have joined together to share the risk of providing care to their patients who are covered by a given health plan.

Primary Care Physician (PCP)
A participating physician who satisfies any requirements for primary care physicians set forth in the HMO/PPO's rules and regulations; who has elected to be designated as a primary care physician; and who is primarily responsible for providing, or arranging for the provision and coordination of all health care services for enrollees who select him/her as their personal physician.

Primary Data
Information obtained from medical records or other primary sources of clinical findings, such as diagnostic tests and physical examination results.

Prior Authorization Number
An authorization number which may be required by employers or insurance companies for major scheduled outpatient services and for elective inpatient hospital admissions. The objective is to provide an opportunity to the entity responsible for payment of the medical
services to make a determination of medical necessity.

Private Duty Nursing
Precertified healthcare delivered by an R.N., L.P.N., or home health aid, as determined by the attending physician.

Professional Review Organization (PRO)
A physician-sponsored organization charged with reviewing the services provided patients. The purpose of the review is to determine if the services rendered are medically necessary; provided in accordance with professional criteria, norms and standards; and provided in the appropriate setting.

Professional Standards Review Organization (PSRO)
See Professional Review Organization.

Profiling
Systematic method of collecting, collating, and analyzing patient data to develop provider-specific information about medical practice.

Prospective Payment
Method of third party payments by which rates of payment to providers for services to patients are established in advance for the coming fiscal year, and providers are paid these rates for services delivered regardless of the costs actually incurred in providing the services.

Prospective Payment Assessment Commission (ProPAC)
A federal commission established under the Social Security Act amendments of 1983 to advise and assist Congress and the Department of Health and Human Services in maintaining and updating the Medicare prospective payment system.

Prospective Reimbursement
Any method of paying hospitals or other health care providers for a defined period (usually one year) according to amounts or rates of payment established in advance.

Prospective Review
Data-gathering technique that uses projected figures or current data to determine future costs or services.

Provider
A physician, hospital, group practice, dentist, nursing home, home care agencies, pharmacy, or any individual or group of individuals that provides a health care service.

Provider Sponsored Organization (PSO)
Entity designed to capture covered lives through the integration of select hospital and physician providers across the entire continuum of care. Capable of accepting global capitation risk for Medicare beneficiaries through a direct contract with HCFA and able to provide 90% of care within the contracted entities. Requires state and/or federal approval similar to HMO licensing requirements.

Q

Quality
The features of a product or service that bear on its ability to satisfy the stated or implied needs of the user, or consumer.

Quality Assessment
An evaluation of the quality indicators for a specific product or service. Quality assessment should include consumers' evaluations of how well a product or service meets their needs and expectations with respect to process, outcomes and perceived value.

R

Reasonable and Customary (R&C)
See Usual, Reasonable, and Customary.

Reengineering
A fundamental rethinking and radical redesign of processes and systems (administrative and clinical) to achieve dramatic improvements in medical outcomes, cost, quality, capital, service, and speed.

Referral
Primary care physician-directed transfer of a patient to a specialty physician or specialty care.

Referral Pool
Capitation set-aside for referrals or inpatient medical services. If utilization targets are met at the end of the year, primary care physicians may share what is left in the pool.

Referral Provider
A provider (usually a specialty physician or health care facility) that renders a service to a patient who has been sent by a participating provider in a health plan.

Reimbursement – Cost based
Payment by a third payor to a hospital of all allowable costs incurred by the hospital in the provision of services to patients covered by the contract.

Reinsurance
Insurance coverage taken out by a health plan or self-funded employer to provide protection from losses resulting from claims greater than a specific dollar amount per member per year or for total plan expenditures per year. Purchased from insurance companies specializing in underwriting specific risks for a stipulated premium.
Typical reinsurance risk coverages are:
1) individual stop-loss,
2) aggregate stop-loss,
3) out-of-area, and
4) insolvency protection.

Relative Value of System (RVS)
A system that assigns specific values to medical procedures based on a defined standard unit of measure.

Report Card
A collection of performance data for an individual or health care group in major areas of accountability, such as health care quality and utilization, outcomes, customer satisfaction, administrative efficiencies, financial stability, and cost control. (See also Health Plan
Employer Data Information Set.)

Reserves
A fiscal method for providing a fund for committed but as yet undelivered health services or other financial liabilities.

Resource Based Relative Value Scale (RBRVS)
A fee schedule introduced by HCFA to reimburse physicians' Medicare fees based on the amount of time, resources, and expertise expended in selected procedures. Adjustments are made for regional variations in rents, wages, rents, and other geographical differences.
Developed by Dr. William Hsiao and a Harvard research team, it divides Medicare treatments into 7,000 procedures with specific RBRVS scales.

Retrospective Review
Determination of medical necessity and/or appropriate billing practice for services already rendered.

Reverse Capitation
A form of physician reimbursement in which primary care physicians are paid fee for service while other specialists receive capitated payment.

Risk
The chance or possibility of loss. In insurance terms, it is the probability of loss associated with a given population. The term may also include physicians, who may be held at risk if hospitalization rates exceed agreed-upon thresholds. The sharing of risk is often employed as a utilization control mechanism within an HMO setting.

Risk Adjustment
Correction of capitation or fee rates based upon factors that can cause an increase in medical costs such as age or sex.

Risk Analysis
The process of evaluating expected medical care costs for a prospective group and determining what product, benefit level and price to offer in order to bear the amount of acceptable risk.

Risk Sharing
Apportionment of chance of incurring financial loss by insurers, managed care organizations, and health care providers.

Rural Referral Center
Rural hospital that is paid the appropriate urban rate by Medicare, adjusted by the rural area wage index, because it meets specified criteria.

S

Same Day Admission
An admission on the day of surgery. Following surgery, the patient is taken from the recovery room to a hospital room for continued care and an approved inpatient stay.

Second Opinion Program
Reimbursement incentive which encourages employees to obtain a second opinion prior to inpatient admission for certain elective surgical procedures and medical conditions. (A much lower level of reimbursement will take place if the second opinion is not obtained.)


Secondary Data
Information obtained from electronic discharge-abstract data that are based on DRGs and which create billing records in the Uniform Billing Form (UB 82 or UB 92) format. This record also has more detailed diagnostic data in the form ofICD-9 CM codes.

Section 125 Plan
A term used to refer to flexible benefit plans. The reference derives from the section of the IRS code which defines such plans and stipulates that employee contributions to such plans may be made with pre-tax dollars.

Self-Funded Plan
See Self-Insurance.

Self-Funding
See Self-Insurance.

Self-Insurance
An entity itself assumes the risk of coverage and makes appropriate financial arrangements to pay medical claims direct rather than purchasing insurance from a third party and paying a premium for this coverage. (See also Reinsurance and Third Party Administrator.)

Self-Insured Employer
An employer who elects to use a plan of self-insurance to provide health care benefits to employees and dependents. (See Self-Insurance.)

Self-Referral
Choice by the insured or patient of medical specialists or specialty services without need for primary care physician or health plan controls.

Severity of Illness (SOI)
A measure of the intensity or complexity of illness often in conjunction with other pre-existing conditions, usually estimated at the time of admission. It is often used when adjusting the outcomes of care to the sickness of the patient on admission. Some of the measures
relate to the likelihood of death, some to loss or impairment of function, some to clinical efficiency of care (resources used per case), others to more abstract concepts. (See also Intensity of Services.)

Service Area
The geographical area served by an HMO/PPO.

Short Form with 36 questions (SF36)
A health status questionnaire designed to measure overall functional status and well being for adult patients, including physical, social, and mental status. The 36 items were selected by John Ware, PhD., based on surveys as part of RAND'S Medical Outcomes Study.

Single-Payer System
A health care financing arrangement in which money, usually from a variety of taxes, is tunneled to a single entity (usually the government) which is then responsible for the financing and administration of the health system. The controlling entity typically imposes various forms of price controls and rate setting. Single payer systems can be regional, statewide, or nationwide.

Single Service Plans
See Carve Out.

Skilled Nursing Facility
Facility with an organized professional staff that provides medical, continuous nursing and various other health and social services to patients who are not in an acute phase of illness but who require primarily restorative or skilled nursing care on an inpatient basis.

Small Area Analysis
An analysis of variations in the rates for surgical procedures from one community to another, associated most often with the pioneering studies by Dr. John Wennberg at Dartmouth University.

Sole Community Provider
Hospital that due to either isolated location and/or absence of other hospitals is the sole source of inpatient hospital services reasonably available to Part A Medicare beneficiaries in a geographic area.

Specialty Physicians
Those physicians practicing in areas other than internal medicine, family practice or pediatrics.

Specialty PPO's
PPO delivery concept as it specifically relates to individual areas of specialization: Workers Compensation, mental health, pharmacy, etc.

Staff Model HMO
A health care model that employs physicians to provide health care to its members. All premiums and other revenues accrue to the HMO, which compensates physicians by salary and incentive programs.

Standard Benefit Package
A specified set of minimum medical benefits available to all persons.

Standard of Care
Term used typically with malpractice action to denote a degree of reasonable skill, care and diligence exercised by members of the same health profession practicing in the same or similar locality in light of medical or surgical science.

Stop Loss Insurance
See Reinsurance.

Subscriber
The primary person eligible and enrolled in a health care plan. The term refers to the employee or the person who has executed the health plan documents to obtain coverage but does not generally include dependents, if any.

Sub-Acute
A level of care for patients not requiring the intensity of services of a hospital but that require some support services.

Subrogation
The assignment of the right of recovery from one party to another. For example, if an individual receives treatment for injuries related to an automobile accident, the individual's insurer may file a claim with the responsible party's automobile insurance company. Subrogation differs from COB in that under COB, the liability is shared between the parties on a contractual or legal basis as opposed to subrogation which assigns the responsibility to one party.

T

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
The federal law which created the current risk and cost contract provisions under which health plans contract with HCFA, and which defined the primary and secondary coverage responsibilities of the Medicare program.

Termination of Benefits
The written process used to notify the patient and the providers that acute care is no longer necessary. Further care provided would be the financial responsibility of the patient.

Tertiary Care
Sophisticated treatment of complex or serious conditions provided by highly trained staff in specialized units.

Third Party Administrator (TPA)
An independent person or corporate entity (third party) that administers group benefits, claims, and administration for a self-insured employer. A TPA does not underwrite the risk.

Third Party Payor
Organization either private or public that pays for or insures at least some of the health care expenses of its beneficiaries.

Title XVIII
Synonymous with the Medicare program.

Title XIX
Synonymous with the Medicaid program.

Total Quality Management (TQM)
An organization-wide process of improving the quality of products and services in any organization. It is also often referred to as Continuous Quality Improvement (CQI), or as TQM/CQI.

Transitional Care
Level of skilled care provided to hospital patients after the acute phase of their illness.  This care is usually short term and provided to patients waiting for an open nursing home bed or until other arrangements for their care can be made.

Triage
The classification of sick or injured persons according to severity in order to direct care and ensure the efficient use of medical services and facilities.

TRICARE
Health care program for active duty members of the military, military retirees and their eligible dependents, formerly called CHAMPUS.

Triple Option
Multiple option plans which typically include indemnity, PPO and HMO plans through one insurer. Triple option plans, in theory, prevent "adverse selection" by placing all employees in a single-risk pool.

24-Hour Coverage
Any combination of traditional health insurance and workers’ compensation insurance that attempts to dissolve the occupational and non-occupational boundaries between the two coverages.

U

Unbundling
Separately packaged units that might otherwise be packaged together. For claims processing, this includes providers billing separately for health care services that might be combined according to industry standards or commonly accepted billing practices.

Uncompensated Care
Medical care that is billed to the recipient of care but is not paid, including bad debts and charity care.

Underwriting
The process by which an insurer determines whether or not, and on what basis, an application for insurance will be accepted.

Uniform Billing Code of 1982 (UB-82)
A government approved standard form that provides a summary of a hospital claim. This form also provides specific information about the hospital admission.

Uniform Billing Code of 1992 (UB-92)
A revised version of the UB-82, a federal directive requiring hospitals to follow specific billing procedures, itemizing all services included and billed for on each invoice.

Uniform Clinical Data Set (UCDS)
A computerized system to assist PROs in collecting medical record data and identifying cases with potential utilization or quality problems.

Universal Access
A system requiring that medical services be available to everyone with or without insurance coverage.

Universal Coverage
A system requiring that everyone be covered by medical insurance.

Upcoding
In claims submission, using a higher level procedure code than the level of service actually provided.

Usual, Customary and Reasonable (UCR)
A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community.

Utilization
The extent to which the members of a covered group use a program or obtain a particular service, or category of procedures, over a given period of time. Usually expressed as the number of services used per year or per 1,000 persons eligible for the service.

Utilization Review (UR)
A formal assessment of the medical necessity, efficiency, and/or appropriateness of health care services and treatment plans on a prospective, concurrent or retrospective basis.

V

W

Waivers
Term usually associated with the Medicare or Medicaid programs by which the government waives certain regulations or rules for a managed care or insurance program to operate in a certain geographic area.

Withhold
A percentage of payment to the provider held back until the cost of referral or hospital services has been determined. Physicians exceeding the amount determined as appropriate lose the amount of payment withheld.

Women, Infants and Children (WIC)
Federally funded supplement nutrition program that serves low and moderate income pregnant and breast-feeding women, infants and children up to 5 years of age.

Workers Compensation
A state-governed system designed to address work-related injuries. Under the system, employers assume the cost of medical treatment and wage losses arising from a worker's job-related injury or disease, regardless of who is at fault. In return, employees give up the right to sue employers, even if injuries stem from employer negligence.

Wrap-Around Coverage
Programs ofHMOs that, in some states, were prevented by state law from taking on financial risk for out-of-plan care and joined with insurers to cover the out-of-plan portion of care. Such programs led to the development ofpoint-of-service plans (POS).

X

Y

Z