Allowed amount

The maximum fee that is reimbursable for a given service.

Ambulatory care

Care provided on an outpatient basis.

Ancillary services

Generally refers to services not categorized as hospital room and board or services provided by an entity or person other than a hospital or physician. Example: laboratory, durable medical equipment, home health care, ambulance, etc.

Appeal

Written or verbal request to reconsider the initial decision to deny a health care service (before service is provided) or claim (after service is provided). Health care organizations usually have separate processes for the review and resolution of denied services and claims.

Balanced Budget Act of 1997

BBA

Federal legislation that enacted significant changes to the laws governing the Medicare and Medicaid programs. This change creates a new Medicare Part C or "Medicare + Choice.

Beneficiary

Also known as Member, Enrollee

A person eligible to receive insurance or health coverage benefits. Frequently used in connection with the Medicare program.

Beneficiary Appeal

A request by a Medicare beneficiary to have a health care decision altered or reversed.

Benefit Period

The period of time used to measure a member’s use of benefits. Frequently, this is used with benefits that have limitations or maximums on a calendar year basis or a cycle of care basis. A common Medicare example:

A Benefit Period begins on the first day of an inpatient hospital or skilled nursing facility stay and ends when the member has been out of a hospital or skilled nursing facility for 60 consecutive days.

Capitation

Cap

A set rate given to a provider each month, in advance on a per-member, per-month (PMPM) basis, for a specified set of services. The capitation amount paid is independent of the number of services rendered. Capitation agreements can be made with almost any type of provider: physicians, hospitals, laboratories, dentists, independent practice associations, etc.

Case management

A systematic, coordinated approach to patient centered care that provides for quality along the continuum, integration of care delivery across many settings, enhancement of the quality of life and encourages education and accountability.

Chronic care

On-going care for a disease or condition that slowly progresses or is long term in nature.

Claim

A billing request to the health care plan or insurance organization to pay for a covered health care service.

Coinsurance

The percentage of the allowed amount that is the member responsibility to pay after meeting a deductible.

Concurrent review

The process by which one assesses the medical necessity of a patient’s need for continuation of inpatient care or to continue a cycle of ongoing ambulatory or ancillary services.

Consolidated Omnibus Budget Reconciliation Act

COBRA

The 1985 federal law that requires employers to offer continued health care coverage to employees who have had their group health care coverage terminated.

Coordination of Benefits

COB

This is a process by which the order of payment is determined when a person is covered under more than one group health plan.

Copayment

Copay

A type of cost sharing where the member pays a specified flat fee for certain services at the time of receiving the service. Example: $10.00 for a physician office visit.

Cost-sharing

A general term referring to financial arrangements in which a covered member must pay a portion of the costs associated with receiving care, e.g. copayment, coinsurance, or deductible.

Covered Services

All medical, institutional and ancillary services and supplies to which a member is entitled to as described in their health care benefit plan.

Credentialing

A formal process to review and evaluate the qualifications of licensed health care practitioners to provide services to a health care organization’s members.

Current Procedural Terminology (Procedure code)

CPT-4

The coding system used to identify physician services, such as injections, in-office procedures, etc. for purposes of reimbursement.

Custodial or Maintenance Care

Care furnished for the purpose of meeting personal needs or assisting with the activities of daily living, which could be safely provided by a person without professional skills or training.

Deductible

A fixed amount that a member must pay before their health care plan begins to pay. The deductible is generally applied on a calendar year or benefit period basis.

Delegation

The formal process whereby a health care organization gives another entity the authority to perform a function on its behalf. Typical functions delegated include claim payment, credentialing, and utilization management.

Denial

A decision by a health care organization to refuse payment for a health care service already provided.

A decision by a health care organization to refuse (deny) an authorization request for services prior to receipt of the health care service.

In some cases, a partial payment, modification of an authorization request, a partial authorization approval, or a termination of current care may also be considered denials.

Dependent

Any individual who receives health care coverage through the plan covering their parent, spouse or other family member.

Diagnosis

Dx

Establishing the nature or cause of a disease or condition through evaluation and examination.

Discharge planning

The process of coordinating and evaluating a patient's health care needs in order to arrange for appropriate care following discharge from a hospital or other institutional care setting.

Disenrollment

The termination of health care coverage.

Durable Medical Equipment

DME

Equipment that is used at home, can withstand repeated use, is customarily used for medical purposes, and is generally not useful to a person in the absence of illness or injury.

Emergency Care

Also see related definitions:

Emergency Medical Condition

Emergency Services

Prudent Layperson

Urgent Care

ER

The emergency definitions come from the Code of Federal Regulations as they are used in Medicare, Medicaid and many commercial health plans and insurers.

Emergency Medical Condition

[42 CFR §422.113] Means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, with an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:

1.     Serious jeopardy to the health of the individual or, in the case of a pregnant woman, the health of the woman or her unborn child;

2.     Serious impairment to bodily functions; or

3.     Serious dysfunction of any bodily organ or part.

Emergency Services

[42 CFR §422.113] Means covered inpatient and outpatient services that are:

1.     Furnished by a provider qualified to furnish emergency services; and

2.     Needed to evaluate or stabilize an emergency condition.

Enrollee

Also known as Member, Beneficiary

Any person who is enrolled in a health care plan and who is a recipient of services from that plan.

Employee Retirement Income Security Act

ERISA

A 1974 federal regulation mandating certain reporting and disclosure requirements for group health care and life plans. Allows exemptions from some state laws for certain self-insured plans.

Evidence of coverage

Also called certificate of coverage

EOC

COC

Any certificate, agreement, contract, brochure, or letter of entitlement issued to an enrollee setting forth the coverage and its conditions to which an enrollee is entitled.

Exclusive Provider Organization

EPO

EPO is an insured product marketed by health insurance companies as a variation of a PPO product, usually with a more limited provider network. In most EPO’s, members choose a Primary Care Provider who is responsible for coordinating care, and members must use the EPO limited network to obtain maximum benefits. If a member chooses to go outside the EPO network, the services may not be paid or may be paid only at a lesser benefit level.

Expedited Appeal

Also known asurgent/emergent appeal

An appeal where there is an imminent and serious threat to the health of the member, including, but not limited to, potential loss of life, limb, or major bodily function. This type of appeal request usually requires an immediate resolution. More frequently state and federal regulators set the timeframe for resolution.

Medicare: 72 hours

Explanation of Benefits

EOB

A written (usually computer generated) document describing the disposition of a claim. The EOB usually includes details about the service, provider, amount allowed, amount paid, cost sharing details, member liability, denial reasons, and appeal rights.

Fee for Service

FFS

A system of payment for healthcare services whereby a fee is charged for each service delivered and a provider is paid a fee according to each service rendered.

Grievance

A verbal or written expression of dissatisfaction with the quality of care or services provided. This usually includes any complaints that are not considered to be an appeal.

Health Care Financing Administration

HCFA

The old federal agency responsible for administering Medicare since renamed Centers for Medicare & Medicaid Services (CMS).

Health Maintenance Organization

also known as Health Care Plans or Managed Care Organizations

HMO

MCO

An organized system that arranges or provides a set of health care services to members in return for a prepaid or periodic charge paid by or on the behalf of the enrollees. (There are varying federal and state definitions for these entities.)

Health Insurance Portability and Accountability Act

HIPAA

1996 federal legislation that included health care coverage protections for employees and their families leaving or changing a job. This Act also includes provisions for health data security, standardizing electronic claim data and formats, and the requirement to enact medical confidentiality laws.

Hospice

A medical and psychosocial program designed to provide for and relieve the suffering of terminally ill people.

Indemnity or Traditional Health Care Insurance

Coverage for health care services is provided on a fee for service basis. These policies frequently include deductibles and co-insurance amounts, maximum benefit limitations per service or overall policy. Members can generally receive care from any provider at any location and time they wish. If the provider is non-participating with the insurance plan, then the member is usually responsible for obtaining authorizations, submitting claim forms and liable for any balances for covered services.

Independent Practice Association

Also known as Participating Medical Group, Primary Medical Group

IPA

PMG

A partnership, association, corporation, or other legal entity which delivers or arranges for the delivery of health services and which has entered into a written services arrangement with health professionals, the majority of whom are licensed to practice medicine.

International Classification of Disease, 9^th Edition (Clinical Modification)

ICD-9

A standard list of diagnoses and codes used for reporting patient diagnoses.

Joint Commission on Accreditation of Healthcare Organizations

JCAHO

This is a non-profit organization that reviews and accredits health care organizations such as hospitals, skilled nursing facilities, home care agencies, managed care plans, provider organizations and other healthcare delivery organizations.

Managed Care Organizations

MCO

A general term used to describe health care organizations that manage the quality, utilization, and cost of health care delivery. This term is usually applied to HMO, PPO, POS, and PSO entities.

Mandated benefits

Health benefits that health care plans or insurers are required by state or federal law to provide to members.

Medicaid (Medi-Cal in California)

M/C

A health welfare program jointly funded by federal and state governments and run by individual states, to provide medical benefits to certain low-income people. The state, under broad federal guidelines, determines what benefits are covered, who is eligible, and how much providers will be paid.

Medical management

Formal processes and systems utilized to help assure that members receive timely and appropriate health care and services.

Medically Necessary

Services or supplies which meet the following conditions:

Are appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition;

Are provided for the diagnosis or direct care and treatment of medical conditions;

Meet professionally recognized standards of practice at the time of treatment;

Are not primarily for the convenience of the patient or provider;

Are at the most appropriate level or supply of service that can safely be provided.

Medicare

A nationwide, federal health insurance program for people aged 65 and older, people with disabilities, or people with End-Stage Renal Disease (ESRD). Medicare Part A covers hospital insurance; Medicare Part B covers physicians' services.

Medicare + Choice

M+C

The program that replaces previous Medicare managed care risk programs. Effective 1/1/99 all Medicare risk contractors converted to the Medicare + Choice contract. These are now called Coordinated Care Plans and include HMO, POS, PPO, and PSO.

Medicare risk

A contractual relationship between CMS and managed care plans where the plan provides specific health care benefits to beneficiaries in exchange for a prepaid fixed monthly amount from CMS. These benefits replace traditional Medicare benefits

National Committee for Quality Assurance

NCQA

Is an independent, not-for-profit organization dedicated to assessing and reporting on the quality of managed care plans, managed behavioral health care organizations, physician organizations, and credentials verification organizations.

Open enrollment

The period of time when a member can enroll in or change health insurance. Open enrollment is usually an annual event.

Out of Area

OOA

Outside of the geographical service area served by the health care organization.

Out of Plan

Within the health care organization’s geographical service area but the services of non-participating or non-contracted providers are being used.

Out of Pocket Costs

Refers to any portion of payment for medical services that are a member’s responsibility.

Peer review

The process in which practicing health care professionals evaluate the performance or services of other health care professionals who have similar types of practices and degrees of expertise.

Physician

An individual with an MD, DO, DDS, DMD, DC or DPM degree who is currently licensed to practice medicine.

Point of Service Plan

POS

A plan that offers HMO coverage along with a benefit for members to obtain care from providers outside of the HMO network. Usually the services obtained outside the HMO network are subject to higher patient cost sharing requirements.

Practitioner

Any individual entitled by training and experience to practice a profession. Established laws govern practice licensure and the practice boundaries.

Pre-existing Condition

A medical condition that existed prior to the member’s effective date of coverage.

Preferred Provider Organization