Health Insurance Glossary A - L       

A        The Following Terms could be found in Individual, Family and Group Health Insurance Policies with carriers like  Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente, Aetna Health Insurance Company of California, United HealthCare / Pacificare, Assurant, Cigna and Healthnet.

1. Access.  A person's ability to obtain affordable medical care on a timely basis.
2. Accreditation.  An evaluative process in which a healthcare organization undergoes an examination of its operating procedures to determine whether the procedures meet designated criteria as defined by the accrediting body, and to ensure that the organization meets a specified level of quality.
3. ACF.  See ambulatory care facility.
4. Acquisition.  The purchase of one organization by another organization.
5. ACR.  See adjusted community rating.
6. Actuaries.  The insurance professionals who perform the mathematical analysis necessary for setting insurance premium rates.
7. Adjusted community rating (ACR).  A rating method under which a health plan or MCO divides its members into classes or groups based on demographic factors such as geography, family composition, and age, and then charges all members of a class or group the same premium. The plan cannot consider the experience of a class, group, or tier in developing premium rates. Also known as modified community rating or community rating by class.
8. Administrative services only (ASO) contract.  The contract between an employer and a third party administrator.
9. Adverse selection.  See antiselection.
10. Agent.  A person who is authorized by an MCO or an insurer to act on its behalf to negotiate, sell, and service managed care contracts.
11. Aggregate stop-loss coverage.  A type of stop-loss insurance that provides benefits when a group's total claims during a specified period exceed a stated amount.
12. Ambulatory care facility (ACF).  A medical care center that provides a wide range of healthcare services, including preventive care, acute care, surgery, and outpatient care, in a centralized facility. Also known as a medical clinic or medical center.
13. Ancillary services. Auxiliary or supplemental services, such as diagnostic services, home health services, physical therapy, and occupational therapy, used to support diagnosis and treatment of a patient's condition.
14. Annual maximum benefit amount.  The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in a year.
15. Antitrust laws.  Legislation designed to protect commerce from unlawful restraint of trade, price discrimination, price fixing, reduced competition, and monopolies. See also Sherman Antitrust Act, Clayton Act, and Federal Trade Commission Act.
16. Appropriate care.  A diagnostic or treatment measure whose expected health benefits exceed its expected health risks by a wide enough margin to justify the measure.
17. Appropriateness review.  An analysis of healthcare services with the goal of reviewing the extent to which necessary care was provided and unnecessary care was avoided.
18. ASO contract.  See administrative services only contract.
19. Associate medical director.  Manager whose duties are often defined as a subset of the overall duties of the medical director.
20. At-risk.  Term used to describe a provider organization that bears the insurance risk associated with the healthcare it provides.
21. Autonomy.  An ethical principle which, when applied to managed care, states that managed care organizations and their providers have a duty to respect the right of their members to make decisions about the course of their lives.

1. Behavioral healthcare.  The provision of mental health and substance abuse services.
2. Beneficence.  An ethical principle which, when applied to managed care, states that each member should be treated in a manner that respects his or her own goals and values and that managed care organizations and their providers have a duty to promote the good of the members as a group.
3. Benefit design.  The process an MCO uses to determine which benefits or the level of benefits that will be offered to its members, the degree to which members will be expected to share the costs of such benefits, and how a member can access medical care through the health plan.
4. Blended rating.  For groups with limited recorded claim experience, a method of forecasting a group's cost of benefits based partly on an MCO's manual rates and partly on the group's experience.
5. Brand.  A name, number, term, sign, symbol, design, or combination of these elements that an organization uses to identify one or more products.
6. Broker.  A salesperson who has obtained a state license to sell and service contracts of multiple health plans or insurers, and who is ordinarily considered to be an agent of the buyer, not the health plan or insurer.
7. Business integration.  The unification of one or more separate business (nonclinical) functions into a single function.

1. Capitation.  A method of paying for healthcare services on the basis of the number of patients who are covered for specific services over a specified period of time rather than the cost or number of services that are actually provided.
2. Capped fee.  See fee schedule.
3. Captive agents.  Agents that represent only one health plan or insurer.
4. Carve-out.  Specialty health service that an MCO obtains for members by contracting with a company that specializes in that service. See also carve-out companies.
5. Carve-out companies.  Organizations that have specialized provider networks and are paid on a capitation or other basis for a specific service, such as mental health, chiropractic, and dental. See also carve-out.
6. Case management.  A process of identifying plan members with special healthcare needs, developing a health-care strategy that meets those needs, and coordinating and monitoring the care, with the ultimate goal of achieving the optimum healthcare outcome in an efficient and cost-effective manner. Also known as large case management (LCM).
7. Case-mix adjustment.  See risk-adjustment.
8. Categorically needy individuals.  Enrollees in Medicaid programs who meet traditional Medicaid age and income requirements.
9. Certificate of authority (COA).  The license issued by a state to an HMO or insurance company which allows it to conduct business in that state.
10. CHAMPUS.  See Civilian Health and Medical Program of the Uniformed Services.
11. Children's Health Insurance Program (CHIP).  A program, established by the Balanced Budget Act, designed to provide health assistance to uninsured, low-income children either through separate programs or through expanded eligibility under state Medicaid programs.
12. CHIP.  See Children's Health Insurance Program.
13. Civilian Health and Medical Pro- gram of the Uniformed Services (CHAMPUS).  A program of medical benefits available to inactive military personnel and military spouses, dependents, and beneficiaries through the Military Health Services System of the Department of Defense. See also TRICARE.
14. Claim.  An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.
15. Claim form.  An application for payment of benefits under a health plan.
16. Claimant.  The person or entity submitting a claim.
17. Claims administration.  The process of receiving, reviewing, adjudicating, and processing claims.
18. Claims analysts.  See claims examiners.
19. Claims examiners.  Employees in the claims administration department who consider all the information pertinent to a claim and make decisions about the MCO's payment of the claim. Also known as claims analysts.
20. Claims investigation.  The process of obtaining all the information necessary to determine the appropriate amount to pay on a given claim.
21. Claims supervisors.  Employees in the claims administration department who oversee the work of several claims examiners.
22. Clayton Act.  A federal act which forbids certain actions believed to lead to monopolies, including (1) charging different prices to different purchasers of the same product without justifying the price difference and (2) giving a distributor the right to sell a product only if the distributor agrees not to sell competitors' products. The Clayton Act applies to insurance companies only to the extent that state laws do not regulate such activities. See also antitrust laws.
23. Clinic model.  See consolidated medical group.
24. Clinical integration.  A type of operational integration that enables patients to receive a variety of health services from the same organization or entity, which streamlines administrative processes and increases the potential for the delivery of high-quality healthcare.
25. Clinical practice guideline.  A utilization and quality management mechanism designed to aid providers in making decisions about the most appropriate course of treatment for a specific clinical case.
26. Clinical status.  A type of outcome measure that relates to improvement in biological health status.
27. Closed access.  A provision which specifies that plan members must obtain medical services only from network providers through a primary care physician to receive benefits.
28. Closed formulary.  The provision that only those drugs on a preferred list will be covered by a PBM or MCO.
29. Closed-panel HMO.  An HMO whose physicians are either HMO employees or belong to a group of physicians that contract with the HMO.
30. Closed PHO.  A type of physician-hospital organization that typically limits the number of participating specialists by type of specialty.
31. Closed plans.  According to the NAIC's Quality Assessment and Improvement Model Act, managed care plans that require covered persons to use participating providers.
32. CMP.  See competitive medical plan.
33. COA.  See certificate of authority.
34. COBRA.  See Consolidated Omnibus Budget Reconciliation Act.
35. Coinsurance.  A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.
36. Community rating.  A rating method that sets premiums for financing medical care according to the health plan's expected costs of providing medical benefits to the community as a whole rather than to any sub-group within the community. Both low-risk and high-risk classes are factored into community rating, which spreads the expected medical care costs across the entire community.
37. Community rating by class (CRC).  The process of determining premium rates in which a managed care organization categorizes its members into classes or groups based on demographic factors, industry characteristics, or experience and charges the same premium to all members of the same class or group. See adjusted community rating (ACR).
38. Compensation committee.  Committee of the board of directors that sets general compensation guidelines for a managed care plan, sets the CEO's compensation, and approves and issues stock options.
39. Competitive advantage.  A factor, such as the ability to demonstrate quality, that helps a managed care organization compete successfully with other MCOs for business.
40. Competitive medical plan (CMP).  A federal designation that allows a health plan to enter into a Medicare risk contract without having to obtain federal qualification as an HMO.
41. Concurrent authorization.  Authorization to deliver healthcare service that is generated at the time the service is rendered.
42. Conflict of interest.  For an MCO board member, a conflict between self-interest and the best interests of the plan.
43. Consolidated medical group.  A large single medical practice that operates in one or a few facilities rather than in many independent offices. The single-specialty or multi-specialty practice group may be formed from previously independent practices and is often owned by a parent company or a hospital. Also known as a medical group practice or clinic model.
44. Consolidated Omnibus Budget Reconciliation Act (COBRA).  A federal act which requires each group health plan to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee, and termination of employment.
45. Consolidation.  A type of merger that occurs when previously separate providers combine to form a new organization with all the original companies being dissolved.
46. Contract management system.  An in- formation system that incorporates membership data and reimbursement arrangements, and analyzes transactions according to contract rules. The system may include features such as decision support, modeling and forecasting, cost reporting, and contract compliance tracking.
47. Copayment.  A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.
48. Corporation.  A type of organizational structure that is an artificial entity, invisible, intangible, and existing only in contemplation of the law.
49. CRC.  See community rating by class.
50. Credentialing.  The process of obtaining, reviewing, and verifying a provider's credentials—the documentation related to licenses, certifications, training, and other qualifications—for the purpose of determining whether the provider meets the MCO's preestablished criteria for participation in the network.
51. Credentialing committee.  Committee, which may be a subset of the QM committee, that oversees the credentialing process.
52. Credibility.  A measure of the statistical predictability of a group's experience.
53. Cure provision.  A provider contract clause which specifies a time period (usually 60--90 days) for a party that breaches the contract to remedy the problem and avoid termination of the contract.

1. Deductible.  A flat amount a group member must pay before the insurer will make any benefit payments.
2. Demand management.  The use of strategies designed to reduce the overall demand for and use of healthcare services, including any benefit offered by a plan that encourages preventive care, wellness, member self-care, and appropriate utilization of health services.
3. Dental health maintenance organization (DHMO).  An organization that provides dental services through a network of providers to its members in exchange for some form of prepayment.
4. 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 a dentist not in the HMO network. Members choose in-network care or out-of-network care at the time they make their dental appointment and usually incur higher out-of-pocket costs for out-of-network care.
5. Dental POS option.  See dental point of service option.
6. Dental PPO.  See dental preferred provider organization.
7. Dental preferred provider organization (dental PPO).  An organization that provides dental care to its members through a network of dentists who offer discounted fees to the plan members.
8. DHMO.  See dental health maintenance organization.
9. Diagnostic and treatment codes.  Special codes that consist of a brief, specific description of each diagnosis or treatment and a number used to identify each diagnosis and treatment.
10. Direct response marketing.  See direct marketing.
11. Disease management (DM).  A coordinated system of preventive, diagnostic, and therapeutic measures intended to provide cost-effective, quality healthcare for a patient population who have or are at risk for a specific chronic illness or medical condition. Also known as disease state management.
12. Disease state management.  See disease management.
13. DM.  See disease management.
14. Drive time.  A measure of geographic accessibility determined by how long members in the plan's service area have to drive to reach a primary care provider.
15. Drug cards.  See pharmaceutical cards.
16. Drug utilization review (DUR).  A review program that evaluates whether drugs are being used safely, effectively, and appropriately.
17. Due process clause.  A provider contract provision which gives providers that are terminated with cause the right to appeal the termination.
18. DUR.  See drug utilization review.

1. Early and periodic screening, diagnostic, and treatment (EPSDT) services.  Services, including screening, vision, hearing, and dental services, provided under Medicaid to children under age 21 at intervals which meet recognized standards of medical and dental practices and at other intervals as necessary in order to determine the existence of physical or mental illnesses or conditions. Plans offering Medicaid coverage to EPSDT participants must provide any service that is necessary to treat an illness or condition that is identified by screening.
2. EDI.  See electronic data interchange.
3. Edits.  Criteria that, if unmet, will cause an automated claims processing sys- tem to "kick out" a claim for further investigation.
4. Electronic data interchange (EDI).  The application-to-application interchange of business data between organizations using a standard data format.
5. Electronic medical record (EMR).  An automated, on-line medical record containing clinical and demographic information about a patient that is available to providers, ancillary service departments, pharmacies, and others involved in patient treatment or care.
6. Employee benefits consultant.  A specialist in employee benefits and insurance who is hired by a group buyer to provide advice on a health plan purchase.
7. Employee Retirement Income Security Act (ERISA).  A broad-reaching law that establishes the rights of pension plan participants, standards for the investment of pension plan assets, and requirements for the disclosure of plan provisions and funding.
8. Employer purchasing coalitions.  See purchasing alliances.
9. Employment-model IDS.  An IDS that generally owns or is affiliated with a hospital and establishes or purchases physician practices and retains the physicians as employees.
10. EMR.  See electronic medical record.
11. Enterprise scheduling systems.  Information systems that control the use of facilities and resources for such organizations as physician groups, hospitals, and staff model HMOs.
12. EPO.  See exclusive provider organization.
13. EPSDT services.  See early and periodic screening, diagnostic, and treatment services.
14. ERISA.  See Employee Retirement Income Security Act.
15. Ethics in Patient Referrals Act.  A federal act and its amendments, commonly called the Stark laws, which prohibit a physician from referring patients to laboratories, radiology services, diagnostic services, physical therapy services, home health services, pharmacies, occupational therapy services, and suppliers of durable medical equipment in which the physician has a financial interest.
16. Exchange.  The act of one party giving something of value to another party and receiving something of value in return.
17. Exclusive provider organization (EPO).  A healthcare benefit arrangement that is similar to a preferred provider organization in administration, structure, and operation, but which does not cover out-of-network care.
18. Exclusive remedy doctrine.  A rule which states that employees who are injured on the job are entitled to workers' compensation benefits, but they cannot sue their employers for additional amounts.
19. Executive committee.  Committee whose purpose is to provide rapid access to decision making and confidentialdiscussions for an MCO board of directors.
20. Executive director.  In a managed care plan, individual responsible for all operational aspects of the plan. All other officers and key managers report to this person, who in turn reports to the board of directors.
21. Experience.  The actual cost of providing healthcare to a group during a given period of coverage.
22. Experience rating.  A rating method under which an MCO analyzes a group's recorded healthcare costs by type and calculates the group's premium partly or completely according to the group's experience.
23. Expert system.  Software that attempts to replicate the process an expert uses to solve a problem in order to arrive at the same decision that an expert would reach.

1. Federal Employee Health Benefits Program (FEHBP).  A voluntary health insurance program administered by the Office of Personnel Management (OPM) for federal employees, retirees, and their dependents and survivors.
2. Federal Trade Commission Act.  A federal act which established the Federal Trade Commission (FTC) and gave the FTC power to work with the Department of Justice to enforce the Clayton Act. The primary function of the FTC is to regulate unfair competition and deceptive business practices, which are presented broadly in the Act. As a result, the FTC also pursues violators of the Sherman Antitrust Act. See also antitrust laws.
3. Fee allowance.  See fee schedule.
4. Fee-for-service (FFS) payment system.  A system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.
5. Fee maximum.  See fee schedule.
6. Fee schedule.  The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.
7. FEHBP.  See Federal Employee Health Benefits Plan.
8. FFS payment system.  See fee-for-service payment system.
9. Finance committee.  Committee of the board of directors whose duty it is to review financial results, approve budgets, set and approve spending authorities, review the annual audit, and review and approve outside funding sources.
10. Finance director.  Chief financial officer responsible for the oversight of all financial and accounting operations, such as billing, management information services, enrollment, and underwriting as well as accounting, fiscal reporting, and budget preparation.
11. Formulary.  A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in prescribing medications.
12. Fully funded plan.  A health plan under which an insurer or MCO bears the financial responsibility of guaranteeing claim payments and paying for all incurred covered benefits and administration costs.
13. Functional status. A patient's ability to perform the activities of daily living.
14. Funding vehicle.  In a self-funded plan, the account into which the money that an employer and employees would have paid in premiums to an insurer or MCO is deposited until the money is paid out.

1. Generic substitution.  The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physician approval.
2. Geographic accessibility.  Health plan accessibility, generally determined by drive time or number of primary care providers in a service area.
3. GPWW.  See group practice without walls.
4. Grievances.  Formal complaints demanding formal resolution by a managed care plan.
5. Group market.  A market segment that includes groups of two or more people that enter into a group contract with an MCO under which the MCO provides healthcare coverage to the members of the group.
6. Group model HMO.  An HMO that contracts with a multi-specialty group of physicians who are employees of the group practice. Also known as a group practice model HMO.
7. Group practice model HMO.  See group model HMO.
8. Group practice without walls (GPWW).  A legal entity that combines multiple independent physician practices under one umbrella organization and performs certain business operations for the member practices or arranges for these operations to be performed. The GPWW may maintain its own facility for business operations or it may hire another company to provide this function.
9. Guaranteed issue.  An insurance policy provision under which all eligible persons who apply for insurance coverage and who meet certain conditions are automatically issued an insurance policy.

1. HCQIA.  See Health Care Quality Improvement Act.
2. HCQIP.  See Health Care Quality Improvement Program.
3. Healthcare quality.  The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.
4. Health Care Quality Improvement Act (HCQIA).  A federal act which exempts hospitals, group practices, and HMOs from certain antitrust provisions as they apply to credentialing and peer review so long as these entities adhere to due process standards that are outlined in the Act.
5. Health Care Quality Improvement Program (HCQIP).  A program, established by the Balanced Budget Act of 1997, that seeks to improve the quality of care provided to Medicare beneficiaries by requiring Medicare+Choice coordinated care plans to undergo periodic quality review by a peer review organization.
6. Health Information Network (HIN).  An electronic system that uses telecommunications devices to link various healthcare entities within a geographic region in order to exchange patient, clinical, and financial information in an effort to reduce costs and practice better medicine.
7. Health Insurance Portability and Accountability Act (HIPAA).  A federal act that protects people who change jobs, are self-employed, or who have pre-existing medical conditions. HIPAA standardizes an approach to the continuation of healthcare benefits for individuals and members of small group health plans and establishes parity between the benefits extended to these individuals and those benefits offered to employees in large group plans. The act also contains provisions designed to ensure that prospective or current enrollees in a group health plan are not discriminated against based on health status.
8. Health insurance purchasing co-ops (HPCs).  See purchasing alliances.
9. Health maintenance organization (HMO).  A healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.
10. HIN.  See Health Information Network.
11. HIPAA.  See Health Insurance Portability and Accountability Act.
12. HMO.  See health maintenance organization.
13. HMO Act.  1973 federal law that ensured access for HMOs to the employer-based insurance market.
14. Hold Harmless Provision.  A contract clause which forbids providers from seeking compensation from patients if the health plan fails to compensate the providers because of insolvency or for any other reason.

1. IBNR claims.  See incurred but not reported claims.
2. IDS.  See integrated delivery system.
3. Incorporation by reference.  The method of making a document a part of a contract by referring to it in the body of the contract.
4. Indemnity wraparound policy.  An out-of-plan product that an HMO offers through an agreement with an insurance company.
5. Independent agents.  Agents that represent the products of several health plans or insurers.
6. Independent practice association (IPA).  An organization comprised of individual physicians or physicians in small group practices that contracts with MCOs on behalf of its member physicians to provide healthcare services.
7. Individual market.  A market segment composed of customers not eligible for Medicare or Medicaid who are covered under an individual contract for health coverage.
8. Individual stop-loss coverage.  A type of stop-loss insurance that provides benefits for claims on an individual that exceed a stated amount in a given period. Also known as specific stop-loss coverage.
9. Integrated delivery system (IDS).  A provider organization that is fully integrated operationally and clinically to provide a full range of healthcare services, including physician services, hospital services, and ancillary services.
10. Integration.  For provider organizations, the unification of two or more previously separate providers under common ownership or control, or the combination of the business operations of two or more providers that were previously carried out separately and independently.
11. IPA.  See independent practice association.
12. IPA model HMO.  A health maintenance organization which contracts with one or more associations of physicians in independent practice who agree to provide medical services to HMO members.

1. Joint Venture.  A type of partial structural integration in which one or more separate organizations combine resources to achieve a stated objective. The participating companies share ownership of the venture and responsibility for its operations, but usually maintain separate ownership and control over their operations outside of the joint venture.

1. Large Group.  A large pool of individuals for which health coverage is provided by the group sponsor. A large group may be defined as more than 250, 500, 1,000, or some other number of members, depending on the MCO.
2. Lifetime maximum benefit amount.  The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in the sub-scriber's lifetime.
3. Loss rate.  The number and timing of losses that will occur in a given group of insureds while the coverage is in force.
   

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