Ambulatory care Ambulatory care is care given in the doctor’s office or surgical center without an overnight stay.
Authorization Authorization is the approval of care, such as hospitalization, by an insurer or health plan. Your insurer or health plan may require pre-authorization before you’re admitted or non-HMO providers treat you.
Balance billing Balance billing is the practice of a provider billing you for all charges not paid by your insurance plan, even if those charges are above the plan’s usual, customary and reasonable (UCR) charges or are considered medically unnecessary. Managed care plans and service plans generally prohibit providers from balance billing except for allowed copayments, coinsurance and deductibles. Such prohibition against balance billing may even extend to the plan’s failure to pay at all (for example, because of bankruptcy).
Benefit Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.
Carrier The insurance company or HMO offering a health plan.
Certificate of Insurance The printed description of the benefits and coverage provisions forming the contract between the carrier and the customer. Discloses what it covered, what is not, and dollar limits.
Claim 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.
Claims review Claims review is the review your insurer or health plan performs before paying your doctor or reimbursing you. This review allows the insurer to validate the medical appropriateness of the services given and review the charges related to your care.
Co-Insurance Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. Co-insurance 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.
Co-Payment Co-payment 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 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.
Coordination of benefits (COB) Coordination of benefits is an agreement between your insurers to prevent double payment of your care when more than one plan provides coverage. The agreement determines which insurer has primary responsibility for payment and which has secondary responsibility. These rules are established by state and federal government guidelines.
Current Procedural Terminology (CPT-4) codes Medical professionals use this set of five-digit codes for billing.
Deductible 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.
Dependents Spouse and/or unmarried children (whether natural, adopted or step) of an insured.
Diagnosis-related groups (DRGs) DRGs are a system of classifying inpatient stays for payment. The Centers for Medicare & Medicaid Services uses DRGs to derive standard reimbursement rates for medical procedures and to pay hospitals for Medicare recipients. Some states use DRGs for all payers, and some private health plans use DRGs for contracting.
Effective Date The date your insurance is to actually begin. You are not covered until the policies effective date.
Exclusions Medical services that are not covered by an individual's insurance policy.
Explanation of Benefits An explanation of benefits is a statement mailed to an insured person that details which services it has paid for and which services the insurer did not cover, along with an explanation on why it wasn’t covered. Medicare recipients receive a Medicare Summary Notice (MSN).
Group Insurance Coverage through an employer or other entity that covers all individuals in the group.
HCFA 1500 form The HCFA 1500 form is required by Medicare and used by some private insurance companies and managed care plans for billing.
Health Maintenance Organizations (HMOs) Health Maintenance Organizations represent "pre-paid" 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 generally use primary care doctors to determine whether members receive care from specialists.
HIPAA A Federal law passed in 1996 that 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. Full name is "The Health Insurance Portability and Accountability Act of 1996."
In-network Providers or health care facilities which 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.
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.
Internal Classification of Disease (ICD) codes ICD codes are an international disease classification system used in diagnosis and treatment.
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.
Limitations A limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.
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.
Managed Health Care Managed health care refers to a system of health care delivery that tries to manage the costs and quality of health care and access to care. It often involves use of contracted provider networks, limitations on benefits for care given by noncontracted providers (unless authorized to do so) and use of care authorization systems. Managed care includes managed indemnity plans, preferred provider organizations, point-of-service plans, open-panel HMOs and closed-panel HMOs.
Medicaid Medicaid is a program financed jointly by the federal government and the states that provides health care coverage and nursing home care for low-income people. Benefits vary widely from state to state.
Medicare Medicare is the federal program insuring people age 65 and older and people who have disabilities of all ages. Medicare Part A covers hospitalization, skilled nursing facility care and/or for services from a home health agency and is a compulsory benefit. Medicare Part B covers outpatient services for physicians, surgeons or any professional technician’s fees and is a voluntary benefit.
Medigap Medigap is private insurance that supplements Medicare reimbursement for medical services. Medicare often reimburses care at lower rates than those charged by doctors. Medigap is meant to cover the gap between Medicare reimbursement and provider charges so that the Medicare recipient doesn’t have to pay the difference.
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.
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-network health professionals may not be covered, or covered only in part by an individual's insurance company.
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.
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.
Pre- Certification Pre-certification is the process of obtaining authorization from the health plan for routine hospital admissions (inpatient or outpatient). Failure to obtain pre-certification often results in reduced reimbursement or denial of claims.
Preadmission Testing Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.
Preferred Provider Organizations (PPOs) Preferred provider organizations contract with independent providers for services. The doctors in a PPO are paid on a fee-for-service schedule that is discounted below standard fees. The panel of providers is limited, and the PPO usually reviews health care utilization. PPO members sometimes can use a doctor outside the PPO network, but usually must pay a bigger portion of the fee.
Primary Care Provider (PCP) A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs, referring the individual to more specialized physicians for specialist care.
Provider Provider is a term used for health professionals who provide health care services such as doctors, hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.
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.
Second Opinion It is a medical opinion provided by a second physician or medical expert. Individuals are encouraged to obtain second opinions whenever a physician recommends surgery or presents an individual with a serious medical diagnosis.
Self-insured plan In self-insured (self-funded) plans, the employer (rather than an insurance company or managed care plan) assumes the risk of medical costs. Self-funded plans are exempt from state laws and regulations such as insurance premium taxes and mandatory benefits. Self-funded plans often contract with insurance companies or third party administrators to administer the benefits.
Skilled nursing facility (SNF) A skilled nursing facility generally is an institution for convalescence or a nursing home. Skilled nursing facilities provide a high level of specialized care for long-term or acute illness.
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%. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.
Usual, Customary and Reasonable (UCR) or Covered Expenses Reflect the prevailing fees for service in an area. Many insurers and managed care plans reimburse providers based on UCR charges.
Waiting Period A period of time when you are not covered by insurance for a particular problem.