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Memorial Hospital Payment Glossary of Terms


ACTUARY An actuary is a health insurance carrier number cruncher responsible for determining what premiums the company needs to charge based in large part on claims paid versus amounts of premium generated. Their job is to make sure a block of business is priced to be profitable.
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ADMITTING PRIVILEGE Admitting privilege is the right granted to a doctor to admit patients to a particular hospital.
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ADVANCE CARE PLANNING CONSULTATIONS A controversial provision of H.R. 3200 would have paid physicians to provide counseling to elderly or terminally ill patients who request the counseling. The provision – ultimately omitted from the passed health reform legislation – would have paid for one counseling session at least every five years, during which patients could discuss advance care planning, advance directives, living wills, palliative care and hospice and possible life-sustaining treatments for the terminally ill. Critics said the proposal would create ”death panels” and described its intent as “guiding you in how to die.”
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ADVANCE DIRECTIVE An advance directive indicates the person designated to make medical decisions for you if you are unable physically or mentally to make those decisions yourself.
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ADVOCACY Any activity done to help a person or group to get something the person or group needs or wants.
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AFFORDABLE CARE ACT (ACA) The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act or ACA – is the landmark health reform legislation passed by the 111th Congress and signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010 and will “continue to be rolled out over the next four years.” Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing conditions.
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AGENT Licensed salespersons who represent one or more health insurance companies and presents their products to consumers.
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ASSOCIATION Associations can offer group health insurance plans specially designed for their members and that give their members purchasing power because of the groups larger pool of enrollees.
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BENEFICIARY The beneficiary is enrolled in a health insurance plan and receives benefits through those policies.
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BENEFIT Benefit refers to the amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.
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BRAND-NAME DRUG Prescription drugs marketed with a specific brand name by the company that manufactures it, usually the company which develops and patents it. When patents run out, generic versions of many popular drugs are marketed at lower cost by other companies. Check your insurance plan to see if coverage differs between name-brand and their generic twins.
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BROKER Licensed insurance salesperson who obtains quotes and plan from multiple sources information for clients.
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CAPITATION Capitation represents a set dollar limit that you or your employer pay to a health maintenance organization (HMO), regardless of how much you use (or don’t use) the services offered by the health maintenance provider.
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CARRIER The insurance company or HMO offering a health plan.
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CASE MANAGEMENT Case management is a system embraced by employers and insurance companies to ensure that individuals receive appropriate, reasonable health care services.
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CERTIFICATE OF INSURANCE The certificate of insurance is a printed description of the benefits and coverage provisions forming the contract between the carrier and the customer. It discloses what is covered, what is not, and dollar limits.
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CLAIM A claim is a request by an individual (or his or her provider) to an individual’s insurance company for the insurance company to pay for services obtained from a health care professional.
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CLAIM A claim is an application for benefits provided by your health plan. You must file a claim before funds will be reimbursed to your medical provider. A claim may be denied based on the carrier’s assessment of the circumstance.
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COBRA COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985, federal legislation that allows you – if you work for an insured employer group of 20 or more employees – to continue to purchase health insurance for up to 18 months if you lose your job, or your employer-sponsored coverage is otherwise terminated.
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COINSURANCE Coinsurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called “copayment.” Coinsurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.
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COOPERATIVES Cooperatives or insurance cooperatives were proposed in the Senate as an alternative to a proposed government plan or public option. The cooperatives, which would have been structured as non-profits and owned by their members, would offer a network of health care providers or contract out for medical services. The concept championed by some Democrats would provide “seed money” for the cooperatives, which would then be sustained by customer premiums. Read this Commonwealth Fund history of health cooperatives
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COPAYMENT Copayment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 copayment for each office visit, regardless of the type or level of services provided during the visit. Copayments are not usually specified by percentages.
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CREDIT FOR PRIOR COVERAGE Credit for coverage may or may not apply when you switch employers or insurance plans. A pre-existing condition waiting period met under while you were under an employer’s (qualifying) coverage can be honored by your new plan, if any interruption in the coverage between the two plans meets state guidelines.
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DEDUCTIBLE The deductible is the amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs. Often, insurance plans are based on yearly deductible amounts.
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DENIAL OF CLAIM Denial of claim is the refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.
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DEPENDENT A dependent is a person or persons relying on the policy holder for support may include the spouse and/or unmarried children (whether natural, adopted or step) of an insured.
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DEPENDENT WORKER A worker in a family in which someone else has greater personal income.
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EFFECTIVE DATE The effective date is the date your insurance coverage commences.
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ELECTRONIC HEALTH RECORD An electronic health record is a long-term aggregate of a patient’s health information and may be a record of a variety of providers and types of medical care. This record is sometimes confused with an electronic medical record, which is a record of a patient’s health maintained by a physician as a record primarily of the physician’s care of the patient.
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ELECTRONIC MEDICAL RECORD An electronic medical record is a record of patient health maintained by the patient’s physician as a record of that physician’s care of the patient. This record is often confused with an electronic health record, which is a more comprehensive, long-term aggregate of a patient’s health information and may be a record of a variety of providers and types of medical care.
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EMPLOYEE ASSISTANCE PROGRAMS (EAPS) Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program.
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EMPLOYER MANDATE The new health reform legislation requires employers with 50 or more employees to provide health coverage to those employees and sets a minimum baseline of coverage and employer contributions. Employers who do not comply will face annual penalties based on the number of employees in the firm.
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EMPLOYER TAX CREDITS Employer tax credits – or Small Business Health Care Tax Credits – provide a tax credit of up to 35 percent of small business premium costs in 2010 – with that rate increasing to 50 percent in 2014. Who’s eligible? Employers with fewer than 25 full-time workers and average annual wages less than $50,000. Read more about the credit.
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EMPLOYER-SPONSORED HEALTH INSURANCE Of Americans who have health coverage, nearly 60 percent secure that coverage through an employer-sponsored plan, often called group health insurance. Millions take advantage of the coverage for reasons as obvious as employer responsibility for a significant portion of the health care expenses. Group health plans are also guaranteed issue, meaning that a carrier must cover all applicants whose employment qualifies them for coverage. In addition, employer-sponsored plans typically are able to include a range of plan options from HMO and PPO plan to additional coverage such as dental, life, short- and long-term disability. Read more about group health insurance. Read recent news articles about employer-sponsored health insurance.
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EMPLOYER-SPONSORED HEALTH PLANS Employer-sponsored health plans currently provide some level of health coverage for approximately 160 million Americans. Employer-sponsored health plans are more likely to be provided by larger companies; in fact, an estimated 99 percent of companies with 200 or more workers offer health benefits, according to recent testimony in Congress. However, the plans face rapidly escalating premiums – up 119 percent since 1998 – and even at larger firms, up to 21 percent of workers may not be eligible for coverge, even it it’s offered. Health reform legislation proposals in Congress may include an employer mandate, designed to increase participation by employers and by more of their employees.
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EXCHANGE A health insurance exchange mechanism is a key provision of health reform legislation, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans msut meet standards established and enforced by the Health Choices Administration. For instance, participating plans will not be allowed to discriminate against applicants based on health history (pre-existing conditions) or future risk. Competition between the plan providers would, in theory, encourage the providers to improve the quality and pricing of offered plans.
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EXCLUSION An exclusion is a provision within a health insurance policy that eliminates coverage for certain acts, property, types of damage or locations.
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EXPLANATION OF BENEFITS An explanation of benefits is the insurance company’s written explanation regarding a claim, showing what they paid and what the client must pay. The document is sometimes accompanied by a benefits check.
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FEE-FOR SERVICE Fee-for-service is a system of health insurance payment in which a doctor or other health care provider is paid a free for each particular service rendered..
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GENERIC DRUG Once a company’s patent on a brand-name prescription drug has expired, other drug companies are allowed to sell the same drug under a generic label. Generic drugs are less expensive, and most prescription and health plans reward clients for choosing generic drugs.
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GROUP HEALTH INSURANCE Coverage through an employer or other entity that covers all individuals in the group. Read more aboutgroup health insurance.
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GUARANTEED ISSUE Guaranteed issue refers to health insurance coverage that is guaranteed to be issued to applicants regardless of their health status, age, or income – and guarantees that the policy will be renewed as long as the policy holder continues to pay the policy premium.
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HEALTH CARE DECISION COUNSELING Services, sometimes provided by insurance companies or employers, that help individuals weigh the benefits, risks and costs of medical tests and treatments. Unlike case management, health care decision counseling is non-judgmental. The goal of health care decision counseling is to help individuals make more informed choices about their health and medical care needs, and to help them make decisions that are right for the individual’s unique set of circumstances.
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HEALTH CHOICES ADMINISTRATION Health reform legislation called for the creation of the Health Choices Administration, a federal agency that would oversee its provisions, including the establishment of health plan benefit standards, establishment and operation of the health insurance exchanges, and administration of individual affordability credits or subsidies. The commission’s additional responsibilities would include prevention of abuses within the Health Insurance Exchange system.
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HEALTH CHOICES COMMISSIONER Health reform legislation called for the creation of a federal agency called the Health Choices Administration. Overseeing that agency would be the Health Choices Commissioner, an individual appointed by the President to oversee provisions of health reform, including the establishment of health plan benefit standards, establishment and operation of the health insurance exchanges, and administration of individual affordability credits or subsidies. The commissioner’s additional responsibilities would include prevention of abuses within the Health Insurance Exchange system.
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HEALTH INSURANCE EXCHANGE A health insurance exchange mechanism is a key provision of health reform legislation, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans must meet standards established and enforced by the Health Choices Administration. For instance, participating plans will not be allowed to discriminate against applicants based on health history (pre-existing conditions) or future risk. Competition between the plan providers would, in theory, encourage the providers to improve the quality and pricing of offered plans.
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HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (HIPAA) The Health Insurance Portability and Accountability Act of 1996 (HIPAA) allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care.
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HEALTH MAINTENANCE ORGANIZATIONS (HMOS) Health maintenance organizations represent “pre-paid” or “capitated” insurance plans in which individuals or their employers pay a fixed monthly fee for services instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided. Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of the HMO, services may be provided in a central facility, or in a physician’s own office (as with IPAs.)
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INDEMNITY HEALTH PLAN Indemnity health insurance plans are also called “fee-for-service.” These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.
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INDEPENDENT PRACTICE ASSOCIATIONS IPAs are similar to HMOs, except that individuals receive care in a physician’s own office, rather than in an HMO facility.
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INDIVIDUAL AFFORDABILITY CREDITS Individual affordability credits are included in the health reform legislation to help ensure the goals of the legislation’s individual mandate. Legislation provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level to help them purchase coverage through the health insurance exchanges.
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INDIVIDUAL HEALTH INSURANCE Health insurance coverage on an individual, not group, basis. The premium is usually higher for an individual health insurance plan than for a group policy, but you may not qualify for a group plan. Read more about individual health insurance. Read recent news articles about individual health insurance.
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INDIVIDUAL MANDATE The individual mandate provision of the recently passed health reform legislation requires citizens to have insurance coverage that meets minimum standards set as part of health insurance exchanges, including guaranteed access to affordable coverage, essential benefits and other consumer protections. The legislation imposes a tax penalty on individuals – with some exceptions – who do not purchase coverage.
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INDIVIDUAL SUBSIDIES Individual subsidies – or individual affordability credits – are included in the health reform legislation to help ensure the goals of the legislation’s individual mandate. Legislation provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level to help them purchase coverage through the health insurance exchanges.
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IN-NETWORK In-network refers to providers or health care facilities that are part of a health plan’s network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.
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INSURANCE COOPERATIVES Cooperatives or insurance cooperatives were proposed in the Senate as an alternative to a proposed government plan or public option. The cooperatives, which would have been structured as non-profits and owned by their members, would offer a network of health care providers or contract out for medical services. The concept championed by some Democrats would provide “seed money” for the cooperatives, which would then be sustained by customer premiums. Read this Commonwealth Fund history of health cooperatives
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INSURANCE EXCHANGE A health insurance exchange mechanism is a key provision of health reform legislation, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans msut meet standards established and enforced by the Health Choices Administration. For instance, participating plans will not be allowed to discriminate against applicants based on health history (pre-existing conditions) or future risk. Competition between the plan providers would, in theory, encourage the providers to improve the quality and pricing of offered plans.
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LENGTH OF STAY (LOS) LOS refers to the length of stay. It is a term used by insurance companies, case managers and/or employers to describe the amount of time an individual stays in a hospital or in-patient facility.
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LIFETIME MAXIMUM BENEFIT (OR MAXIMUM LIFETIME BENEFIT) the maximum amount a health plan will pay in benefits to an insured individual during that individual’s lifetime.
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LIMITATIONS a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.
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LONG-TERM CARE POLICY Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.
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LONG-TERM DISABILITY INSURANCE Pays an insured a percentage of their monthly earnings if they become disabled.
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MANAGED CARE A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease. Recent statistics show that about 90 percent of the insured populations uses some form of managed care.
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MAXIMUM DOLLAR LIMIT The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year.
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MEDICAID Medicaid is a health insurance program for low-income individuals who can not otherwise affordMedicare or other commercial health insurance plans. Medicaid is funded in part by the government and by the state where the enrollee lives. Learn more about Medicare benefits and eligibility.
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MEDICAL UNDERWRITING Medical underwriting is a process used by insurance companies to evaluate whether to accept an applicant for health coverage and/or to determine the premium rate for the policy.
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MEDICARE Medicare is the federal health insurance program created to provide health coverage for Americans aged 65 and older and later expanded to cover younger people who have permanent disabilities or who have been diagnosed with end-stage renal disease or amyotrophic lateral sclerosis (ALS). Learn more about Medicare benefits and eligibility.
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MEDIGAP INSURANCE POLICIES Medigap plans offer supplemental benefits sold by private companies to extend traditional Medicare. Fifteen plans offer varying combinations of benefits, ranging from coverage of copaymentsand deductibles to coverage of foreign travel emergency expenses, at-home care and preventive care. Learn more about Medicare benefits and eligibility.
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MULTIPLE EMPLOYER TRUST (MET) A trust consisting of multiple small employers in the same industry, formed for the purpose of purchasing group health insurance or establishing a self-funded plan at a lower cost than would be available to each of the employers individually.
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NETWORK A group of doctors, hospitals and other health care providers contracted to provide services to insurance companies customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.
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NON-PROFIT COOPERATIVES Non-profit cooperatives or insurance cooperatives have been proposed in the Senate as an alternative to a proposed government plan. The cooperatives, which would be structured as non-profits and owned by their members, could offer a network of health care providers or contract out for medical services. The concept championed by some Democrats would provide “seed money” for the cooperatives, which would then be sustained by customer premiums. Read more about insurance cooperatives.
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OPEN-ENDED HMOS HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full coverage and payment for the professional’s services under a traditional indemnity plan.
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OUT-OF-PLAN (OUT-OF-NETWORK) This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual’s health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual’s insurance company.
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OUT-OF-POCKET MAXIMUM A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual’s health care expenses.
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OUTPATIENT An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.
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PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act or ACA – is the landmark health reform legislation passed by the 111th Congress and signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010 and will “continue to be rolled out over the next four years.” Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing conditions.
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PLAN ADMINISTRATION Supervising the details and routine activities of installing and running a health plan, such as answering questions, enrolling individuals, billing and collecting premiums, and similar duties.
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PRE-ADMISSION CERTIFICATION Also called pre-certification review, or pre-admission review. Approval by a case manager or insurance company representative (usually a nurse) for a person to be admitted to a hospital or in-patient facility, granted prior to the admittance. Pre-admission certification often must be obtained by the individual. Sometimes, however, physicians will contact the appropriate individual. The goal of pre-admission certification is to ensure that individuals are not exposed to inappropriate health care services (services that are medically unnecessary).
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PRE-ADMISSION REVIEW A review of an individual’s health care status or condition, prior to an individual being admitted to an inpatient health care facility, such as a hospital. Pre-admission reviews are often conducted by case managers or insurance company representatives (usually nurses) in cooperation with the individual, his or her physician or health care provider, and hospitals.
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PREADMISSION TESTING Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.
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PRE-EXISTING CONDITION A pre-existing condition is a medical condition that is excluded from coverage by an insurance company because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company.
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PREFERRED PROVIDER ORGANIZATION (PPO) A preferred provider organization (PPO) is a managed care organization of health providers who contract with an insurer or third-party administrator (TPA) to provide health insurance coverage to policy holders represented by the insurer or TPA. Policy holders receive substantial discounts from health care providers who are partnered with the PPO. If policy holders use a physician outside the PPO plan, they typically pay more for the medical care.
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PRIMARY CARE PROVIDER (PCP) A health care professional (usually a physician) who is responsible for monitoring an individual’s overall health care needs. Typically, a PCP serves as a “quarterback” for an individual’s medical care, referring the individual to more specialized physicians for specialist care.
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PRIVATE HEALTH INSURANCE Private health insurance – insurance plans marketed by the private health insurance industry – currently dominates the U.S. health care landscape, with approximately two-thirds of the non-elderly population covered by private health insurance. Coverage includes policies obtained through employer-sponsored insurance, with approximately 62 percent of non-elderly Americans receiving insurance provided as a benefit of employment. Another 5 percent of the non-elderly group bought coverage outside of the workplace on the individual health insurance market. Click private health insurance.
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PROVIDER Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.
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PUBLIC OPTION A public option – also referred to as a public plan – was a proposal within the recently passed health reform legislation that would have created a qualified health benefit plan to compete with other plans that qualify for health insurance exchanges. The public option, which ultimately was omitted from the final Affordable Care Act, would have been subject to the same requirements – regarding benefit levels, provider networks, consumer protections and cost sharing – that would apply to other plans within the exchanges.
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PUBLIC PLAN A public plan – also referred to as a public option – was a proposal within the recently passed health reform legislation that would have created a qualified health benefit plan to compete with other plans that qualify for health insurance exchanges. The public plan, which ultimately was omitted from the passed Affordable Care Act, would have been subject to the same requirements – regarding benefit levels, provider networks, consumer protections and cost sharing – that would apply to other plans within the exchanges.
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RATIONING Rationing – actually the threat of rationing – is one of the most powerful arguments leveled against proposals for an expanded government control of the U.S. health care system. Critics of such expanded control – which might take the form of a public plan or public option – argue that in order to control costs in a revamped system, the government would have to restrict (or ration) care, by refusing to pay for certain procedures or medication or by putting limits on care for the elderly or terminally ill. Some proponents of increased government control argue that health care is already, in effect, rationed in the United States, as consumers are limited in their ability to get adequate health insurance – and health care – by rapidly climbing health care costs.
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REASONABLE AND CUSTOMARY FEES The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference. Sometimes, however, if an individual questions his or her physician about the fee, the provider will reduce the charge to the amount that the insurance company has defined as reasonable and customary.
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RESCISSION Rescission is an insurance industry practice in which an insurer takes action retroactively to cancel a policy holder’s coverage by citing omissions or errors in the customer’s application, even if the policy holder has been diligently keeping their policy current. As of September 2010, rescission is no longer allowed except where fraud is proven. Related term: pre-existing condition
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RIDER A modification made to a Certificate of Insurance regarding the clauses and provisions of a policy (usually adding or excluding coverage).
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RISK The chance of loss, the degree of probability of loss or the amount of possible loss to the insuring company. For an individual, risk represents such probabilities as the likelihood of surgical complications, medications’ side effects, exposure to infection, or the chance of suffering a medical problem because of a lifestyle or other choice. For example, an individual increases his or her risk of getting cancer if he or she chooses to smoke cigarettes.
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SECOND OPINION It is a medical opinion provided by a second physician or medical expert, when one physician provides a diagnosis or recommends surgery to an individual. Individuals are encouraged to obtain second opinions whenever a physician recommends surgery or presents an individual with a serious medical diagnosis.
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SECOND SURGICAL OPINION These are now standard benefits in many health insurance plans. It is an opinion provided by a second physician, when one physician recommends surgery to an individual.
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SHORT-TERM DISABILITY An injury or illness that keeps a person from working for a short time. The definition of short-term disability (and the time period over which coverage extends) differs among insurance companies and employers. Short-term disability insurance coverage is designed to protect an individual’s full or partial wages during a time of injury or illness (that is not work-related) that would prohibit the individual from working.
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SHORT-TERM HEALTH INSURANCE Short-term major medical health insurance policies were designed to provide coverage for individuals who need temporary health insurance coverage for a short period of time, usually from 30 days to six months. The policies – offered by private health insurance companies – are intended to provide a safety net in the event of a health crisis that might otherwise cause a serious financial hardship.
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SINGLE-PAYER SYSTEM Single-payer system is a health care system in which one entity – a single payer – collects all health care fees and pays for all health care costs. Proponents of a single-payer system argue that because there are fewer entities involved in the health care system, the system can avoid an enormous amount of administrative waste. Instead, all health care providers in a single-payer system would bill one entity for their services. Within a single-payer system, all citizens would receive high-quality, comprehensive medical care PLUS the freedom to choose providers. Paperwork would be dramatically reduced with the elimination of bills, co-pays and deductibles. A single-payer system – like the system in Canada – is NOT socialized medicine. Read more about the difference between a single-payer system and socialized medicine.
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SMALL BUSINESS HEALTH CARE TAX CREDITS Employer tax credits – or Small Business Health Care Tax Credits – provide a tax credit of up to 35 percent of small business premium costs in 2010 – with that rate increasing to 50 percent in 2014. Who’s eligible? Employers with fewer than 25 full-time workers and average annual wages less than $50,000. Read more about the credit.
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SMALL EMPLOYER GROUP Generally means groups with 1-99 employees. The definition may vary between states.
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SOCIALIZED MEDICINE Socialized medicine is, by definition, a health care system in which the government owns and operates health care facilities and employs the health care professionals, thus also paying for all health care services. Examples abroad include the British National Health Service, and national health systems in countries such as Finland and Spain, but NOT including Canada’s Medicare system (which is publicly funded but which does not own all of the health facilities). Closer to home, the Veterans Health Administration is, as one author points out, “actually socialized medicine, where the government owns the hospitals and employs the doctors.” Read more about the difference between a single-payer system and socialized medicine. Learn more about the U.S. Medicare system and its history.
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STATE MANDATED BENEFITS When a state passes laws requiring that health insurance plans include specific benefits.
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STOP-LOSS The dollar amount of claims filed for eligible expenses at which point you’ve paid 100 percent of your out-of-pocket and the insurance begins to pay at 100 percent. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.
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STUDENT HEALTH INSURANCE In recent years, many colleges have begun requiring proof of health insurance for students. Coverage options include insurance through family policies and coverage through school-sponsored student health plans, now offered by more than 80 percent of public four-year colleges. Students may also seek coverage through an employer’s plan if they’re employed full time, or they can purchase their own individual health insurance plan from a licensed health insurance provider. And, depending on the state in which a student resides, the student may also be eligible for coverage by a state-sponsored risk pool, a program that provides coverage for individuals denied insurance by private insurers because of their health condition. Read more about student health insurance. Read recent news articles about student health insurance.
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SUBSIDIES Individual subsidies – or individual affordability credits – are included in the health reform legislation to help ensure the goals of the legislation’s individual mandate. Legislation provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level to help them purchase coverage through the health insurance exchanges.
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UNDERWRITER The company that assumes responsibility for the risk, issues insurance policies and receives premiums.
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USUAL, CUSTOMARY AND REASONABLE (UCR) OR COVERED EXPENSES An amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor, or required for treatment.
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WAITING PERIOD Waiting periods were among the fears vocalized by opponents of single-payer health care systems. Critics of single-payer systems in countries such as Canada cite lengthy waits for some elective surgeries. Proponents of single-payer systems note that a high percentage of Americans already are being unable to obtain medical care – including medication, testing and treatment – because of costs, while a much smaller percentage of residents in single-payer systems report that costs had limited their access to care.