Server: Microsoft-IIS/3.0 Date: Thu, 18 Dec 1997 08:59:29 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Mon, 25 Aug 1997 15:22:14 GMT Content-Length: 16577 Coming To Terms With Health Insurance

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Basic definitions for commonly used (but not necessarily understood) terms relating to health insurance.

HMO...PPO...EOB...

With so many new insurance-related terms and acronyms on the horizon, today it seems harder than ever to keep up-to-date with the terminology we need to understand in order to select the health plans that best meet our needs.

To "come to terms," just type in the term you're looking for, or page down and read them all! If you're looking for a word we haven't included, please e-mail us at corpcomm@jalden.com so that we may add it.

Access - Refers to an insured's ability to obtain medical or healthcare services from physicians, hospitals and other healthcare facilities. Factors including the availability of medical services in an area, the location of healthcare facilities and hours of operation help determine accessibility.

Ancillary Services - Services, other than those provided by a physician or hospital, which are related to a patient's care, such as laboratory work, x-rays and anesthesia.

Board Certified - Indicates that a physician has passed an examination given by and otherwise satisfies the board certification requirements of, a medical specialty board and has been certified as a specialist in a specific medical area.

Board Eligible - Indicates a physician who is eligible to take the specialty board examination because he or she has met specific requirements established by a certification board including graduating from an approved medical school and practicing for a certain length of time.

Capitation - A payment method under which a provider of healthcare services is paid a pre-determined dollar amount per person, per month, to render medical services without regard to the type, frequency or cost of services rendered to the individual.

Case Management - A program in which a case manager (physician, nurse or other healthcare professional) monitors a patient who requires long-term medical care due to a catastrophic illness or injury and works with the patient's attending physician to help improve the continuity, quality and cost efficiency of care.

Case Manager - A healthcare professional, such as a nurse or physician, who works closely with patients, providers and insurers to help improve the continuity, quality and cost efficiency of care.

Certificate of Coverage - A document given to insureds that describes the benefits, limitations and exclusions of coverage provided by an insurance company.

Claim - Information a medical provider or insured submits to an insurance company to request payment for medical services rendered to the insured.

Co-insurance - The portion of incurred, covered healthcare costs, expressed in terms of a percentage of covered charges, for which the insured is financially responsible. Co-insurance usually applies after the insured meets his or her deductible requirements.

Consolidated Omnibus Budget Reconciliation Act (COBRA) - A federal law that, among other things, requires some employers continue to offer group health insurance coverage to certain employees and their beneficiaries who have lost group health insurance coverage for specified reasons for specified periods of time.

Coordination of Benefits (COB) - A provision in the Certificate of Coverage requiring that, when an insured is covered under more than one medical plan, payment of benefits be coordinated between the medical plans in order to avoid duplication of benefits.

Co-payment - A cost-sharing arrangement in which an insured, as part of the total cost of a service or supply, pays a specified amount for a service or supply (for example, $5 for prescription drugs). The insured is usually responsible for paying the provider the co-payment when the medical service or supply is provided.

Deductible - The dollar amount of covered medical expenses that must be incurred and paid by an insured before benefits become payable to the insured, under the Certificate of Insurance. The insured generally must satisfy a deductible each calendar year.

Eligible Dependent - An eligible employee's spouse, child, or other dependent who meets all requirements for coverage listed in the Certificate of Coverage, and for whom health insurance premium is paid.

Eligible Employee - An employee who meets all requirements of employment to qualify for coverage, as listed in the Certificate of Coverage, and for whom health insurance premium is paid. Requirements may include being an active, full-time employee and working a certain number of hours per week.

Exclusive Provider Organization (EPO) - Similar to an HMO, an EPO is an integrated healthcare delivery system in which the members of the EPO must obtain medical services and supplies from network providers in order to receive benefits. Any services rendered by non-network providers are not covered.

Experience Rating - Creating premium rates for a group by taking into consideration the previous claims experience of the group.

Explanation of Benefits (EOB) - A statement sent by health insurance companies to insureds after a claim has been filed which details the medical services provided, the amounts billed, payments made or denied and the reasons.

Gatekeeper Plan - A managed care plan that requires insureds to select a Primary Care Physician (PCP) and to coordinate all medical services through their Primary Care Physician or "gatekeeper." The "gatekeeper" PCP is generally required to provide all primary care services. Before obtaining services from a specialist, the insured would be required to get a referral to the specialist from the "gatekeeper" in order to maximize benefits.

Group Insurance - A contract of insurance issued to an employer or other policyholder which provides health insurance coverage for a group of persons based on their relationship to the employer or other policyholder. The coverage is evidenced by the Certificate of Coverage.

Health Maintenance Organization (HMO) - An organization that offers pre-paid, comprehensive healthcare coverage to members for hospital physician services and ancillary services. Medical care and services must be received from participating providers. When care is rendered by participating providers, members are usually only charged a small co-payment or fee for office visits and other medical services. Benefits are generally not available for non-emergency services obtained from non-participating providers.

Indemnity Plans - Traditional health insurance plans that pay for all or part of the cost of covered services, regardless of which physician, hospital or other licensed healthcare provider is used. In addition, insureds choose when and where to get their healthcare services. When a claim is filed for covered services, an indemnity plan either reimburses the medical provider or the insured, based on plan provisions. Typically, an insured will have some out-of-pocket costs, including an annual deductible and a co-insurance amount.

Insured - A person entitled to health insurance coverage under a health insurance plan.

Integrated Delivery System (IDS) - A corporation, partnership, joint venture or any type of alliance between physicians, hospitals, ancillary providers and an insurance company or HMO. There is often sharing of risk, revenues, capital, planning, governance, management and information systems among these affiliated parties.

Managed Care - A healthcare delivery system under which physicians, hospitals and other healthcare professionals are organized into a group or "network" in order to manage the cost, quality and access to healthcare. Managed care organizations include Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), Exclusive Provider Organizations (EPOs) and Point-of-Service (POS) plans. Managed care programs often provide incentives which encourage preventive care, with the goal of keeping people healthy.

Medically Necessary - Generally, a medical service or supply which is considered appropriate for a patient's condition and consistent with his or her diagnosis and which complies with currently accepted medical standards.

Open Access - Describes a plan design in which an insured may see a participating specialty provider without first getting a referral from his or her primary care physician or "gatekeeper."

Participating Provider - A medical provider who has contracted with a health insurance company, HMO or other managed care organization to render medical services or supplies to insureds at a pre-negotiated fee. Providers include hospitals, physicians and other medical facilities.

Pre-existing Condition - A medical condition that exists prior to the effective date of coverage under a health insurance plan. Generally, the plan requires that the insured experience symptoms and/or receive a diagnosis or treatment for the condition within a specified period before the effective date of coverage.

Preferred Provider Organization (PPO)- A healthcare delivery arrangement which offers insureds access to participating providers at reduced costs. PPOs provide insureds incentives, such as lower deductibles and co-payments, to use providers in the network. Network providers agree to negotiated fees in exchange for their preferred status.

Premium - The dollar amount paid to an insurance company for providing health insurance coverage.

Primary Care Physician (PCP) - A physician chosen by the insured to be responsible for providing, prescribing, authorizing and coordinating all medical care and treatment. This includes referrals to specialists. PCPs include physicians practicing family medicine, internal medicine, pediatrics and often, OBGYNs.

Provider - A physician, hospital, clinic, group practice, nursing home or any entity, individual or group of individuals who provide healthcare services or supplies.

Reinsurance (or Stop-loss Insurance) - Coverage purchased from an insurance company by an HMO, another insurance company or employer group which self-funds their health benefits plan to protect itself against losses beyond a pre-determined amount.

Self-funded - Employers or other authorized groups which fund healthcare benefits with their own resources instead of purchasing insurance coverage. Employers may administer their own health benefits plans or contract with a company, such as a Third Party Administrator (TPA).

Third Party Administrator - A company that processes claims and administers the health benefit plans for self-funded employer groups.

Underwriting - The act of reviewing and evaluating prospective insureds for risk assessment and appropriate premium.

Usual, Customary and Reasonable - The most commonly charged rates for medical services and supplies in a certain geographic area.

Utilization Review - The process of evaluating the necessity and appropriateness of healthcare services. For example, a healthcare professional may review information about a proposed treatment or hospitalization with respect to the health insurance plan in order to help maximize the benefits available to the insured.


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