Glossary / Health

Health Insurance Glossary

Access: A person's ability to obtain affordable medical care on a timely basis.
Accreditation: An evaluative process in which a healthcare organization undergoes an examination of its operating p
Acquisition: The purchase of one organization by another organization.
Actuaries: The insurance professionals who perform the mathematical analysis necessary for setting insurance pr
Actuary: A mathematician working for a health insurance company responsible for determining what premiums the
Adjusted Community Rating (ACR): A rating method under which a health plan or MCO divides its members into classes or groups based on
Administrative Services Only (ASO) Contract: The contract between an employer and a third party administrator.
Admitting Privileges: The right granted to a doctor to admit patients to a particular hospital.
Advocacy: Any activity done to help a person or group to get something the person or group needs or wants.
Agent: A person who is authorized by an MCO or an insurer to act on its behalf to negotiate, sell, and serv
Aggregate Stop-Loss Coverage: A type of stop-loss insurance that provides benefits when a group's total claims during a specified
Ambulatory Care Facility (ACF): A medical care center that provides a wide range of healthcare services, including preventive care,
Ancillary Services: Auxiliary or supplemental services, such as diagnostic services, home health services, physical ther
Annual Maximum Benefit Amount: The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healt
Antitrust Laws: Legislation designed to protect commerce from unlawful restraint of trade, price discrimination, pri
Appropriate Care: A diagnostic or treatment measure whose expected health benefits exceed its expected health risks by
Appropriateness Review: An analysis of healthcare services with the goal of reviewing the extent to which necessary care was
Associate Medical Director: Manager whose duties are often defined as a subset of the overall duties of the medical director.
Association: A group. Often, associations can offer individual health insurance plans specially designed for thei
At-Risk: Term used to describe a provider organization that bears the insurance risk associated with the heal
Autonomy: An ethical principle which, when applied to managed care, states that managed care organizations and
Behavioral Healthcare: The provision of mental health and substance abuse services.
Beneficence: An ethical principle which, when applied to managed care, states that each member should be treated
Benefit: Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suf
Benefit Design: The process an MCO uses to determine which benefits or the level of benefits that will be offered to
Blended Rating: For groups with limited recorded claim experience, a method of forecasting a group's cost of benefit
Brand: A name, number, term, sign, symbol, design, or combination of these elements that an organization us
Brand-Name Drug: Prescription drugs marketed with a specific brand name by the company that manufactures it, usually
Broker: A salesperson who has obtained a state license to sell and service contracts of multiple health plan
Business Integration: The unification of one or more separate business (nonclinical) functions into a single function.
Capitation: A method of paying for healthcare services on the basis of the number of patients who are covered fo
Capitation: Capitation represents a set dollar limit that you or your employer pay to a health maintenance organ
Captive Agents: Agents that represent only one health plan or insurer.
Carrier: The insurance company or HMO offering a health plan.
Carve-Out: Specialty health service that an MCO obtains for members by contracting with a company that speciali
Carve-Out Companies: Organizations that have specialized provider networks and are paid on a capitation or other basis fo
Case Management: A process of identifying plan members with special healthcare needs, developing a health-care strate
Categorically Needy Individuals: Enrollees in Medicaid programs who meet traditional Medicaid age and income requirements.
Certificate Of Authority (COA): The license issued by a state to an HMO or insurance company which allows it to conduct business in
Certificate Of Insurance: The printed description of the benefits and coverage provisions forming the contract between the car
Childrens Health Insurance Program (CHIP): A program, established by the Balanced Budget Act, designed to provide health assistance to uninsure
Civilian Health And Medical Program Of The Uniformed Services (CHAMPUS): A program of medical benefits available to inactive military personnel and military spouses, depende
Claim: An itemized statement of healthcare services and their costs provided by a hospital, physician's off
Claim Form: An application for payment of benefits under a health plan.
Claimant: The person or entity submitting a claim.
Claims Administration: The process of receiving, reviewing, adjudicating, and processing claims.
Claims Examiners: Employees in the claims administration department who consider all the information pertinent to a cl
Claims Investigation: The process of obtaining all the information necessary to determine the appropriate amount to pay on
Claims Supervisors: Employees in the claims administration department who oversee the work of several claims examiners.
Clayton Act: A federal act which forbids certain actions believed to lead to monopolies, including (1) charging d
Clinical Integration: A type of operational integration that enables patients to receive a variety of health services from
Clinical Practice Guideline: A utilization and quality management mechanism designed to aid providers in making decisions about t
Clinical Status: A type of outcome measure that relates to improvement in biological health status.
Closed Access: A provision which specifies that plan members must obtain medical services only from network provide
Closed Formulary: The provision that only those drugs on a preferred list will be covered by a PBM or MCO.
Closed PHO: A type of physician-hospital organization that typically limits the number of participating speciali
Closed Plans: According to the NAIC's Quality Assessment and Improvement Model Act, managed care plans that requir
Closed-Panel HMO: An HMO whose physicians are either HMO employees or belong to a group of physicians that contract wi
Co-Insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible
Co-Payment: Co-payment is a predetermined (flat) fee that an individual pays for health care services, in additi
COBRA: Federal legislation that lets you, if you work for an insured employer group of 20 or more employees
Community Rating: A rating method that sets premiums for financing medical care according to the health plan's expecte
Community Rating By Class (CRC): The process of determining premium rates in which a managed care organization categorizes its member
Compensation Committee: Committee of the board of directors that sets general compensation guidelines for a managed care pla
Competitive Advantage: A factor, such as the ability to demonstrate quality, that helps a managed care organization compete
Competitive Medical Plan (CMP): A federal designation that allows a health plan to enter into a Medicare risk contract without havin
Concurrent Authorization: Authorization to deliver healthcare service that is generated at the time the service is rendered.
Conflict Of Interest: For an MCO board member, a conflict between self-interest and the best interests of the plan.
Consolidated Medical Group: A large single medical practice that operates in one or a few facilities rather than in many indepen
Consolidated Omnibus Budget Reconciliation Act (COBRA): A federal act which requires each group health plan to allow employees and certain dependents to con
Consolidation: A type of merger that occurs when previously separate providers combine to form a new organization w
Contract Management System: An in- formation system that incorporates membership data and reimbursement arrangements, and analyz
Corporation: A type of organizational structure that is an artificial entity, invisible, intangible, and existing
Covered Expenses: An amount customarily charged for or covered for similar services and supplies which are medically n
Credentialing: The process of obtaining, reviewing, and verifying a provider's credentials—the documentation rela
Credentialing Committee: Committee, which may be a subset of the QM committee, that oversees the credentialing process.
Credibility: A measure of the statistical predictability of a group's experience.
Credit For Prior Coverage: This is something that may or may not apply when you switch employers or insurance plans. A pre-exis
Cure Provision: A provider contract clause which specifies a time period (usually 60--90 days) for a party that brea
Deductible: A flat amount a group member must pay before the insurer will make any benefit payments.
Deductible: The amount an individual must pay for health care expenses before insurance (or a self-insured compa
Demand Management: The use of strategies designed to reduce the overall demand for and use of healthcare services, incl
Denial Of Claim: Refusal by an insurance company or carrier to honor a request by an individual (or his or her provid
Dental Health Maintenance Organization (DHMO): An organization that provides dental services through a network of providers to its members in excha
Dental Point Of Service (Dental POS) Option: A dental service plan that allows a member to use either a DHMO network dentist or to seek care from
Dental Preferred Provider Organization (Dental PPO): An organization that provides dental care to its members through a network of dentists who offer dis
Dependent Worker: A worker in a family in which someone else has greater personal income.
Dependents: Spouse and/or unmarried children (whether natural, adopted or step) of an insured.
Diagnostic And Treatment Codes: Special codes that consist of a brief, specific description of each diagnosis or treatment and a num
Disease Management (DM): A coordinated system of preventive, diagnostic, and therapeutic measures intended to provide cost-ef
Drive Time: A measure of geographic accessibility determined by how long members in the plan's service area have
Drug Utilization Review (DUR): A review program that evaluates whether drugs are being used safely, effectively, and appropriately.
Due Process Clause: A provider contract provision which gives providers that are terminated with cause the right to appe
Early And Periodic Screening Diagnostic And Treatment (EPSDT) Services: Services, including screening, vision, hearing, and dental services, provided under Medicaid to chil
Edits: Criteria that, if unmet, will cause an automated claims processing sys- tem to 'kick out' a claim fo
Effective Date: The date your insurance is to actually begin. You are not covered until the policies effective date.
Electronic Data Interchange (EDI): The application-to-application interchange of business data between organizations using a standard d
Electronic Medical Record (EMR): An automated, on-line medical record containing clinical and demographic information about a patient
Employee Assistance Programs (EAPS): Mental health counseling services that are sometimes offered by insurance companies or employers. Ty
Employee Benefits Consultant: A specialist in employee benefits and insurance who is hired by a group buyer to provide advice on a
Employee Retirement Income Security Act (ERISA): A broad-reaching law that establishes the rights of pension plan participants, standards for the inv
Employer-Sponsored Health Insurance: Of Americans who have health coverage, nearly 60 percent secure that coverage through an employer-sp
Employment-Model IDS: An IDS that generally owns or is affiliated with a hospital and establishes or purchases physician p
Enterprise Scheduling Systems: Information systems that control the use of facilities and resources for such organizations as physi
Ethics In Patient Referrals Act: A federal act and its amendments, commonly called the Stark laws, which prohibit a physician from re
Exchange: The act of one party giving something of value to another party and receiving something of value in
Exclusions: Medical services that are not covered by an individual's insurance policy.
Exclusive Provider Organization (EPO): A healthcare benefit arrangement that is similar to a preferred provider organization in administrat
Exclusive Remedy Doctrine: A rule which states that employees who are injured on the job are entitled to workers' compensation
Executive Committee: Committee whose purpose is to provide rapid access to decision making and confidential discussions f
Executive Director: In a managed care plan, individual responsible for all operational aspects of the plan. All other of
Experience: The actual cost of providing healthcare to a group during a given period of coverage.
Experience Rating: A rating method under which an MCO analyzes a group's recorded healthcare costs by type and calculat
Expert System: Software that attempts to replicate the process an expert uses to solve a problem in order to arrive
Explanation Of Benefits: The insurance company's written explanation to a claim, showing what they paid and what the client m
Federal Employee Health Benefits Program (FEHBP): A voluntary health insurance program administered by the Office of Personnel Management (OPM) for fe
Federal Trade Commission Act: A federal act which established the Federal Trade Commission (FTC) and gave the FTC power to work wi
Fee Schedule: The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees
Fee-For-Service (FFS) Payment System: A system in which the insurer will either reimburse the group member or pay the provider directly fo
Finance Committee: Committee of the board of directors whose duty it is to review financial results, approve budgets, s
Finance Director: Chief financial officer responsible for the oversight of all financial and accounting operations, su
Formulary: A listing of drugs, classified by therapeutic category or disease class, that are considered preferr
Fully Funded Plan: A health plan under which an insurer or MCO bears the financial responsibility of guaranteeing claim
Functional Status: A patient's ability to perform the activities of daily living.
Funding Vehicle: In a self-funded plan, the account into which the money that an employer and employees would have pa
Generic Drug: A 'twin' to a 'brand name drug' once the brand name company's patent has run out and other drug comp
Generic Substitution: The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit manag
Geographic Accessibility: Health plan accessibility, generally determined by drive time or number of primary care providers in
Grievances: Formal complaints demanding formal resolution by a managed care plan.
Group Health Insurance: Coverage through an employer or other entity that covers all individuals in the group. Read more abo
Group Market: A market segment that includes groups of two or more people that enter into a group contract with an
Group Model HMO: An HMO that contracts with a multi-specialty group of physicians who are employees of the group prac
Group Practice Without Walls (GPWW): A legal entity that combines multiple independent physician practices under one umbrella organizatio
Guaranteed Issue: An insurance policy provision under which all eligible persons who apply for insurance coverage and
Health Care Decision Counseling: Services, sometimes provided by insurance companies or employers, that help individuals weigh the be
Health Care Quality Improvement Act (HCQIA): A federal act which exempts hospitals, group practices, and HMOs from certain antitrust provisions a
Health Care Quality Improvement Program (HCQIP): A program, established by the Balanced Budget Act of 1997, that seeks to improve the quality of care
Health Cooperatives: Health Cooperatives have been proposed in the Senate as an alternative to a proposed government plan
Health Information Network (HIN): An electronic system that uses telecommunications devices to link various healthcare entities within
Health Insurance Portability And Accountability Act (HIPAA): A federal act that protects people who change jobs, are self-employed, or who have pre-existing medi
Health Maintenance Organization (HMO): A healthcare system that assumes or shares both the financial risks and the delivery risks associate
Health Maintenance Organizations (Hmos): Health Maintenance Organizations represent 'pre-paid' or 'capitated' insurance plans in which indivi
Healthcare Quality: The degree to which health services for individuals and populations increase the likelihood of desir
HIPAA: A Federal law passed in 1996 that allows persons to qualify immediately for comparable health insura
HMO Act: 1973 federal law that ensured access for HMOs to the employer-based insurance market.
Hold Harmless Provision: A contract clause which forbids providers from seeking compensation from patients if the health plan
In-Network: Providers or health care facilities which are part of a health plan's network of providers with whic
Incorporation By Reference: The method of making a document a part of a contract by referring to it in the body of the contract.
Indemnity Health Plan: Indemnity health insurance plans are also called 'fee-for-service.' These are the types of plans tha
Indemnity Wraparound Policy: An out-of-plan product that an HMO offers through an agreement with an insurance company.
Independent Agents: Agents that represent the products of several health plans or insurers.
Independent Practice Association (IPA): An organization comprised of individual physicians or physicians in small group practices that contr
Independent Practice Associations: IPAs are similar to HMOs, except that individuals receive care in a physician's own office, rather t
Individual Health Insurance: Health insurance coverage on an individual, not group, basis. The premium is usually higher for an i
Individual Market: A market segment composed of customers not eligible for Medicare or Medicaid who are covered under a
Individual Stop-Loss Coverage: A type of stop-loss insurance that provides benefits for claims on an individual that exceed a state
Integrated Delivery System (IDS): A provider organization that is fully integrated operationally and clinically to provide a full rang
Integration: For provider organizations, the unification of two or more previously separate providers under commo
IPA Model HMO: A health maintenance organization which contracts with one or more associations of physicians in ind
Joint Venture: A type of partial structural integration in which one or more separate organizations combine resourc
Large Group: A large pool of individuals for which health coverage is provided by the group sponsor. A large grou
Lifetime Maximum Benefit: (or Maximum Lifetime Benefit) the maximum amount a health plan will pay in benefits to an insured in
Lifetime Maximum Benefit Amount: The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healt
Limitations: a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Cer
Long-Term Care Policy: Insurance policies that cover specified services for a specified period of time. Long-term care poli
Long-Term Disability Insurance: Pays an insured a percentage of their monthly earnings if they become disabled.
LOS: LOS refers to the length of stay. It is a term used by insurance companies, case managers and/or emp
Loss Rate: The number and timing of losses that will occur in a given group of insureds while the coverage is i
Mail-Order Pharmacy Programs: Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.
Managed Behavioral Health Organization (MBHO): An organization that provides behavioral health services using managed care techniques.
Managed Care: A medical delivery system that attempts to manage the quality and cost of medical services that indi
Managed Care Organization (MCO): Any entity that utilizes certain concepts or techniques to manage the accessibility, cost, and quali
Managed Dental Care: Any dental plan offered by an organization that provides a benefit plan that differs from a traditio
Managed Indemnity Plans: Health insurance plans that are administered like traditional indemnity plans but which include mana
Management Services Organization (MSO): An organization, owned by a hospital or a group of investors, that provides management and administr
Manual Rating: A rating method under which a health plan uses the plan's average experience with all groups—and s
Market Segmentation: The process of dividing the total market for a product or service into smaller, more manageable subs
Market Segments: Subsets or manageable groups of customers in a total market.
Marketing Director: Individual responsible for marketing a managed care plan, whose duties include oversight of marketin
Maximum Dollar Limit: The maximum amount of money that an insurance company (or self-insured company) will pay for claims
Mccarran-Ferguson Act: A federal act that placed the primary responsibility for regulating health insurance companies and H
Medicaid: A jointly funded federal and state program that provides hospital expense and medical expense covera
Medical Advisory Committee: Committee whose purpose is to review general medical management issues brought to it by the medical
Medical Director: Manager in a healthcare organization responsible for provider relations, provider recruiting, qualit
Medical Foundation: A not-for-profit entity, usually created by a hospital or health system, that purchases and manages
Medical Savings Account (MSA): A trust that employees of small businesses may establish to pay for out-of-pocket medical expenses.
Medical Underwriting: The evaluation of health questionnaires submitted by all proposed plan members to determine the insu
Medically Needy Individuals: Enrollees in Medicaid programs whose income or assets exceed the maximum threshold for certain feder
Medicare: A federal government hospital expense and medical expense insurance plan primarily for elderly and d
Medicare Choice MSAS: Accounts created by contributions from HCFA to pay out-of-pocket medical expenses for Medicare benef
Medicare Part A: The part of Medicare that provides basic hospital insurance coverage automatically for most eligible
Medicare Part B: A voluntary program that is part of Medicare and provides benefits to cover the costs of physicians'
Medicare Part C: The part of Medicare that expands the list of different types of entities allowed to offer health pl
Medicare Supplement: A private medical expense insurance plan that supplements Medicare coverage. Also known as a Medigap
Medigap Insurance Policies: Medigap insurance is offered by private insurance companies, not the government. It is not the same
Member Services: The department responsible for helping members with any problems, handling member grievances and com
Mental Health Parity Act (MHPA): A federal act which prohibits group health plans that offer mental health benefits from applying mor
Merger: A type of structural integration that occurs when two or more separate providers are legally joined.
Messenger Model: A type of independent practice association (IPA) that simply negotiates contract terms with MCOs on
Monthly Operating Report (MOR): A document that reports the month- and year-to-date financial status of a managed care plan.
Multiple Employer Trust (MET): A trust consisting of multiple small employers in the same industry, formed for the purpose of purch
National Accounts: Large group accounts that have employees in more than one geographic area that are covered through a
National Practitioner Data Bank (NPDB): A database maintained by the federal government that contains information on physicians and other me
Network: A group of doctors, hospitals and other health care providers contracted to provide services to insu
Network Model HMO: An HMO that contracts with more than one group practice of physicians or specialty groups.
Newborns And Mothers Health Protection Act (NMHPA): A federal law which mandates that coverage for hospital stays for childbirth cannot generally be les
No Balance Billing Provision: A provider contract clause which states that the provider agrees to accept the amount the plan pays
Non-Group Market: A market segment that consists of customers who are covered under an individual contract for health
Non-Maleficence: An ethical principle which, when applied to managed care, states that managed care organizations and
Omnibus Budget Reconciliation Act (OBRA) Of 1990: A federal act which established the Medicare SELECT program, a Medicare supplement that uses a prefe
Open Access: A provision that specifies that plan members may self-refer to a specialist, either in-network or ou
Open Formulary: The provision that drugs on the preferred list and those not on the preferred list will both be cove
Open PHO: A type of physician-hospital organization that is available to all of a hospital's eligible medical
Open-Ended Hmos: HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full
Open-Panel HMO: An HMO in which any physician who meets the HMO's standards of care may contract with the HMO as a p
Operational Integration: The consolidation into a single operation of operations that were previously carried out separately
Operations Director: Individual who typically oversees claims, management information services, enrollment, underwriting,
Out-Of-Plan (Out-Of-Network): This phrase usually refers to physicians, hospitals or other health care providers who are considere
Out-Of-Pocket Maximum: A predetermined limited amount of money that an individual must pay out of their own savings, before
Outcomes Measures: Healthcare quality indicators that gauge the extent to which healthcare services succeed in improvin
Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis,
Outpatient Care: Treatment that is provided to a patient who is able to return home after care without an overnight s
Parent Company: A company that owns another company.
Patient Bill Of Rights: Refers to the Consumer Bill of Rights and Responsibilities, a report prepared by the President's Adv
Patient Perception: A type of outcomes measure related to how the patient feels after treatment.
Peer Review: The analysis of a clinician's care by a group of that clinician's professional colleagues. The provi
Peer Review Organizations (Pros): According to the Balanced Budget Act of 1997, organizations or groups of practicing physicians and o
Pended: A claims term that refers to a situation in which it is not known whether an authorization has or wi
Performance Measures: Quantitative measures of the quality of care provided by a health plan or provider that consumers, p
Pharmaceutical Cards: Identification cards issued by a pharmacy benefit management plan to plan members. These cards assis
Pharmacy And Therapeutics Committee: Committee charged with developing a formulary, reviewing changes to that formulary, and reviewing ab
Pharmacy Benefit Management (PBM) Plan: A type of managed care specialty service organization that seeks to contain the costs, while promoti
Physician Practice Management (PPM) Company: A company, owned by a group of investors, that purchases physicians' practice assets, provides pract
Physician Profiling: In the context of a pharmacy benefit plan, the process of compiling data on physician prescribing pa
Physician-Hospital Organization (PHO): A joint venture between a hospital and many or all of its admitting physicians whose primary purpose
Plan Administration: Supervising the details and routine activities of installing and running a health plan, such as answ
Plan Funding: The method that an employer or other payor or purchaser uses to pay medical benefit costs and admini
Point-Of-Service (POS) Product: A healthcare option that allows members to choose at the time medical services are needed whether th
Pooling: The practice of underwriting a number of small groups as if they constituted one large group.
Pre-Admission Certification: Also called pre-certification review, or pre-admission review. Approval by a case manager or insuran
Pre-Admission Review: A review of an individual's health care status or condition, prior to an individual being admitted t
Pre-Existing Condition: In group health insurance, generally a condition for which an individual received medical care durin
Pre-Existing Conditions: A medical condition that is excluded from coverage by an insurance company, because the condition wa
Preadmission Testing: Medical tests that are completed for an individual prior to being admitted to a hospital or inpatien
Preferred Provider Arrangement (PPA): As defined in state laws, a contract between a healthcare insurer and a healthcare provider or group
Preferred Provider Organization (PPO): A healthcare benefit arrangement designed to supply services at a discounted cost by providing incen
Preferred Provider Organizations (Ppos): You or your employer receive discounted rates if you use doctors from a pre-selected group. If you u
Premium: A prepaid payment or series of payments made to a health plan by purchasers, and often plan members,
Premium Taxes: State income taxes levied on an insurer's premium income.
Prepaid Care: Healthcare services provided to an HMO member in exchange for a fixed, monthly premium paid in advan
Prepaid Group Practices: Term originally used to describe healthcare systems that later became known as health maintenance or
Primary Care: General medical care that is provided directly to a patient without referral from another physician.
Primary Care Case Manager (PCCM): In states that have obtained a Section 1915(b) waiver, a primary care provider who contracts directl
Primary Care Provider (PCP): A health care professional (usually a physician) who is responsible for monitoring an individual's o
Primary Source Verification: A process through which an organization validates credentialing information from the organization th
Prior Authorization: In the context of a pharmacy benefit management (PBM) plan, a program that requires physicians to ob
Private Health Insurance: Private health insurance – insurance plans marketed by the private health insurance industry – c
Process Measures: Healthcare quality indicators related to the methods and procedures that a managed care organization
Promise Keeping-Truthtelling: An ethical principle which, when applied to managed care, states that managed care organizations and
Prospective Authorization: Authorization to deliver healthcare service that is issued before any service is rendered. Also know
Provider: Provider is a term used for health professionals who provide health care services. Sometimes, the te
Provider Manual: A document that contains information concerning a provider's rights and responsibilities as part of
Provider-Sponsored Organization (PSO): A healthcare organization—established and organized, or operated, by a healthcare provider or a gr
Purchasing Alliances: Locally based, privately operated organizations that offer affordable group health coverage to busin
QM Committee: MCO committee responsible for oversight of the quality management program—including the setting of
Quality: In a managed care context, an MCO's success in providing healthcare and other services in such a way
Quality Management (QM): An organization-wide process of measur-ing and improving the quality of the healthcare provided by a
Quality Program: An organization-wide initiative to measure and improve the service and care provided by an MCO.
Rate Spread: The difference between the highest and lowest rates that a health plan charges small groups. The NAI
Rating: The process of calculating the appropriate premium to charge purchasers, given the degree of risk re
Reasonable And Customary Fees: The average fee charged by a particular type of health care practitioner within a geographic area. T
Rebate: A reduction in the price of a particular pharmaceutical obtained by a PBM from the pharmaceutical ma
Recredentialing: Reexamination by an MCO of the qualifications of a provider and verification that the provider still
Relative Value Scale (RVS): A method used by MCOs of determining provider reimbursement that assigns a weighted value to each me
Renewal Underwriting: The process by which an underwriter reviews each year all the selection factors that were considered
Report Card: A set of performance measures applied uniformly to different health plans or providers.
Rescission: is a controversial insurance industry practice that has come under fire as an unfair tactic used to
Reserves: Estimates of money that an insurer needs to pay future business obligations.
Resource-Based Relative Value Scale (RBRVS): A method used by MCOs of determining provider reimbursement that attempts to take into account, when
Retrospective Authorization: Authorization to deliver healthcare service that is granted after service has been rendered.
Revenues: The amounts earned from a company's sales of products and services to its customers.
Rider: A modification made to a Certificate of Insurance regarding the clauses and provisions of a policy (
Risk: The chance of loss, the degree of probability of loss or the amount of possible loss to the insuring
Risk-Adjustment: The statistical adjustment of outcomes measures to account for risk factors that are independent of
Second Opinion: It is a medical opinion provided by a second physician or medical expert, when one physician provide
Second Surgical Opinion: These are now standard benefits in many health insurance plans. It is an opinion provided by a secon
Section 1115 Waivers: Waivers that states could obtain from the federal government which allowed them to set up managed ca
Section 1915(B) Waivers: Waivers that states could obtain from the federal government that allowed them to restrict a Medicai
Self-Funded Plan: A health plan under which an employer or other group sponsor, rather than an MCO or insurance compan
Senior Market: A market segment that is comprised largely of persons over age 65 who are eligible for Medicare bene
Service Quality: An MCO's success in meeting the nonclinical customer service needs and expectations of plan members.
Sherman Antitrust Act: A federal act which established as national policy the concept of a competitive marketing system by
Short-Term Disability: An injury or illness that keeps a person from working for a short time. The definition of short-term
Short-Term Health Insurance: Temporary coverage for an individual for a short period of time, usually from 30 days to six months.
Small Employer Group: Generally means groups with 1 99 employees. The definition may vary between states.
Small Group: Although each MCO's size limit may vary, generally a group composed of 2 to 99 members for which hea
Specialty Health Maintenance Organization (Specialty HMO): An organization that uses an HMO model to provide healthcare services in a subset or single specialt
Specialty Services: Services that are provided by independent, specialty organizations rather than by the MCO providing
Staff Model HMO: A closed-panel HMO whose physicians are employees of the HMO.
Standard Community Rating: A type of community rating in which an MCO considers only community-wide data and establishes the sa
Standard Of Care: A diagnostic and treatment process that a clinician should follow for a certain type of patient, ill
State Mandated Benefits: When a state passes laws requiring that health insurance plans include specific benefits.
Statutory Solvency: An insurer's ability to maintain at least the minimum amount of capital and surplus specified by sta
Stop-Loss: The dollar amount of claims filed for eligible expenses at which which point you've paid 100 percent
Stop-Loss Insurance: A type of insurance coverage that enables provider organizations or self-funded groups to place a do
Structural Integration: The unification of previously separate providers under common ownership or control.
Structure Measures: Healthcare quality indicators related to the nature and quality of the resources that a managed care
Student Health Insurance: In recent years, many colleges have begun requiring proof of health insurance for students. Coverage
Subauthorization: The authorization of one healthcare service concurrently with the authorization of another service.
Subsidiary: A company that is owned by another company, its parent.
Surplus: The amount that remains when an insurer subtracts its liabilities and capital from its assets.
Termination Provision: A provider contract clause that describes how and under what circumstances the parties may end the c
Termination With Cause: A contract provision, included in all standard provider contracts, that allows either the MCO or the
Termination Without Cause: A contract provision that allows either the MCO or the provider to terminate the contract without pr
Therapeutic Substitution: The dispensing of a different chemical entity within the same drug class of a drug listed on a pharm
Third Party Administrator (TPA): A company that provides administrative services to MCOs or self-funded health plans.
TRICARE: A healthcare plan, avail-able to more than 6 million military personnel and their families, which is
Triple-Option: Insurance plans that offer three options from which an individual may choose. Usually, the three opt
Underwriter: The company that assumes responsibility for the risk, issues insurance policies and receives premium
Underwriting: The process of identifying and classifying the risk represented by an individual or group.
Underwriting Impairments: Factors that tend to increase an individual's risk above that which is normal for his or her age.
Underwriting Manual: A document that provides background information about various underwriting impairments and suggests
Underwriting Requirements: Requirements, sometimes relating to group characteristics or financing measures, that MCOs at times
Usual Customary And Reasonable (UCR): An amount customarily charged for or covered for similar services and supplies which are medically n
Usual Customary And Reasonable (UCR) Fee: The amount commonly charged for a particular medical service by physicians within a particular geogr
Utilization Management (UM): Managing the use of medical services to ensure that a patient receives necessary, appropriate, high-
Utilization Review (UR): The evaluation of the medical necessity, efficiency, and/or appropriateness of healthcare services a
Utilization Review Committee: Committee that reviews utilization issues brought to it by the medical director, often approving or
Utilization Review Organization (URO): External reviewers who assess the medical appropriateness of suggested courses of treatment for pati
Variances: The differences obtained from subtracting actual results from expected or budgeted results.
Waiting Period: A period of time when you are not covered by insurance for a particular problem.
Withhold: A percentage of a provider's payment that is 'held back' during the plan year to offset or pay for a
Workers Compensation: A state-mandated insurance program that provides benefits for healthcare costs and lost wages to qua
Workers Compensation Indemnity Benefits: Benefits that replace an employee's wages while the employee is unable to work because of a work-rel

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