The following descriptive terms with brief explanations are presented to assist you in reading this guide. You may find some used interchangeably, or in general terms, as labels for similar offerings. Be sure to check your health care policy to ascertain usage and meaning as it pertains to your coverage. The terms preceded by an asterisk (*) are not used in this publication but are industry terms you may see or hear used.
Activities of Daily Living (ADLs) Routine but necessary daily tasks that usually include eating, dressing, toileting and bathing, moving about to do things such as getting out of bed and continence (ability to maintain control of bowels/bladder).
Allowable Charge A medical or surgical expense approved by the plan.
* Balance Billing Practice of billing patients for all charges over the physician rate paid by insurers. Many plans prohibit this practice.
* Basic Plans A term sometimes used to describe traditional indemnity hospital surgical insurance. See Fee-for-Service Plans and Indemnity Plans.
Board Certified A physician who has successfully completed the national requirements through an examination process for certification set by the respective medical specialty boards. This certification is in addition to the standard state licensing procedure necessary for all medical personnel.
Cognitive Impairment Damage to the functions of thinking, perception and memory.
Co-insurance Portion of incurred medical expenses, usually a fixed percentage, that the patient must pay out of pocket. See Co-payment.
Comprehensive Coverage A major medical form of health insurance policy that provides hospital and surgical coverage.
* Coordination of Benefits (COB) Method of integrating benefits so that the insured's benefits from all sources do not exceed allowable medical expenses.
Co-payment (Co-pay) The flat rate that managed care subscribers pay for a providers medical service. May also refer to a percentage of a cost that the patient must pay under an indemnity plan.
Credentialing Review and documentation of professional providers.
Deductible Amount of covered expenses that must be incurred and paid by an insured (enrollee/member) before benefits are payable by the insurer.
Enrollee The person who is the primary insured. This term is usually used to reference persons covered by an indemnity insurance plan. It is also often used when discussing any insurance plan's enrollment period.
Essential and Standard An insurance industry term for any of various private health insurance plans offered in response to a mandating state statute designed for the protection of those not otherwise covered by medical, surgical or hospital insurance. The plan may be offered as group or individual coverage with premiums paid by the group or individual.
Fee-for-Service Plans Method of payment for provider services based on each visit or service rendered. Also used to describe indemnity forms of health insurance often referred to as Basic Plans or Indemnity Plans.
* Formulary Published list of medical substances and formulas, typically pharmaceuticals.
Gatekeeper The primary care physician in a managed care plan.
* Health Plan Employer Data and Information Set (HEDIS) The portion of data and information accumulated from U.S. employers by the National Committee for Quality Assurance and used primarily for the purpose of measuring, by certain standards, the performance quality of managed health care plans.
Health Care Insurance Plans Any of a group of plans that are designed to help cover the costs of medical, hospital and surgical care as well as many of the services required for long-term care. Some examples are fee-for-service or indemnity plans, health maintenance and preferred provider organizations, point-of-service plans, medical savings accounts and any other plans that may cover a portion of the costs for health care services.
High Deductible Health Plans A high deductible health plan, often called consumer-driven insurance, is a health plan with lower premiums and a higher deductible for major care, like a hospitalization or surgery. At the same time someone enrolls in a high deductible plan, he or she may also need to enroll in a health savings account (HSA.) Generally, the person may put up to the amount of the deductible from income into this account, and the money is not taxed.
Health Maintenance Organization (HMO) Organizations that provide enrollees with a wide range of comprehensive health care services. These health care plans emphasize maintenance or preventive care.
Health Savings Accounts are a type of medical savings account that allow consumers to save for medical expenses on a tax-free basis. They are linked with high deductible health plans (HDHPs), and together these insurance and savings options represent a new approach to health care, commonly referred to as consumer-driven care.
Hospital-Surgical Coverage A form of indemnity insurance that offers coverage of certain costs related to hospitalization and surgical procedures. Generally offered as Comprehensive Coverage.
Indemnity Insurance Plans Health care insurance plans providing benefits for covered health care services. Typically, payment is made on a fee-for-service basis. See Fee-for- Service Plans.
Limits The provision in a health insurance policy that states the limits of the insured's coverage. There are typically two limit categories: the time limit and the dollar limit.
Major Medical Coverage Insurance coverage for expenses associated with lengthy hospital confinements and/or medical conditions requiring a broad range of medical services and supplies. See Comprehensive Coverage.
Managed Care Typically, health care insurance that utilizes a specific group (network) of physicians, hospitals and other health care professionals.
Medicaid State-administered health care program dependent on Federal matching funds to provide financial assistance for health care to qualified persons, regardless of age, whose income and resources are insufficient to pay for other forms of health insurance.
* Medical Savings Account (MSA) A health insurance program that typically combines a high-deductible major medical insurance policy with an insured's qualified savings account. This program of health cost coverage was established as a qualified health plan under the Federal Health Insurance Portability and Accountability Act of 1996. Opportunities for tax advantages relevant to the savings portion of the plan exist in the law.
Medically Necessary (Also called + Medical Necessity) Terms used by insurers to describe medical treatment, equipment or devices that are appropriate and that are rendered in accordance with generally accepted standards of medical practice.
Medicare A national health insurance program for people 65 years of age and older and those with early disabilities or kidney failure. It is offered in two primary fee-for service parts, Medicare Part A and Part B, and, where available, as managed care coverage.
Medigap A coined term used in the insurance industry for any private Medicare supplemental insurance plan. See Medicare Supplemental Insurance.
Members Insured participants in a managed care program. See Enrollee.
National Committee for Quality Assurance (NCQA) A professional organization established for evaluating and accrediting active managed care programs in the U.S. Network The providers-clinics, hospitals, medical groups, physicians and others -that can comprise a managed care health plan.
Out-of-Pocket Fee The insured's portion of a covered claim or benefit paid on an annual basis which may include co-payments. See also Co-payment, Co-insurance, Deductible and Stop-loss Provision.
Point of Service (POS) A feature of a managed care plan that allows insured members to seek care from medical providers outside a network or may add some coverage for preventive care services.
Pre-approval See Pre-authorization and Pre-certification
* Pre-authorization Prior approval for a specialist referral or for non-emergency health care services.
* Pre-certification A requirement of some health plans for the individual or provider to notify the insurer before a hospitalization or surgical procedure.
Preferred Provider Organization (PPO) A network of physicians and hospitals that agree to provide health services for prearranged fees.
Premium The amount charged by the insurance company to provide the insurance coverage detailed in the policy.
Primary Care Physician A physician responsible for coordinating the care of a patient enrolled in a managed care plan, usually an HMO. See Gatekeeper.
Provider The medical professional or facility providing medical service or care.
Stop-loss Provisions A limit in a health insurance policy that provides for 100% payment of expenses after total patient out-of-pocket expenses exceed a certain contractual dollar amount. See Out of Pocket.
Tricare The statutory federal program that provides health benefits for active duty military personnel, retirees, and their dependents or survivors.
Usual, Customary and Reasonable Fees (UCRs) Charges by health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.