List of Definitions:
Term:
Allowed
Amount
Definition: The
amount of the billed charge the insurance company deems is payable
by the plan.
Term: Ambulatory
Care
Definition:
Medical care on an out-patient basis, such as hospital
outpatient clinics and ER Departments, physician's office and home
health care are examples.
Term: Ancillary
Services
Definition:
The name given to professional services such as
laboratory tests and radiology exams.
Term: Assignment
of Benefits
Definition: The patient or guardian
signs the Assignment of Benefits form so that the physician or
medical provider will receive the insurance payment directly.
Term: Authorization
Definition: If a
physician wants to perform a surgery, order a medical supply, or
refer the patient to a specialist an authorization and approval by
the health plan is required.
Term: Average
Wholesale Price
Definition: This
value is generally accepted as a standard measure of evaluating
the cost of a particular medication.
Term:
Benefit Penalty
Definition: A
method used by the insurance company to reduce payment on a claim
when the patient or medical provider does not fulfill the rules of
the health plan.
Term: The
Birthday Rule
Definition: A method of determining
coordination of benefits under both parent's plans of medical
insurance.
Term: Bundling
Definition: A method by which the
insurance company decides to combine payment for two or more
medical services.
Term: Capitation
Definition: A payment methodology
in which the physician is paid a set dollar amount determined by a
per member per month (pmpm) calculation to deliver medical
services to a specified group of people.
Term: Carve-out
Definition: Medical services that
are separated from a contract and paid under a different
arrangement.
Term: Case
Management
Definition: A
method by which a health plan attempts to control costs by
directing all of the procedures for care of an individual through
a nurse or other health care professional.
Term: Claim
Definition: A request for payment
by a medical provider for a given medical service or item.
Term: COBRA
Definition: Consolidated Omnibus
Budget Reconciliation Act
Term: Co-insurance
Definition: A
percentage the patient is responsible for on a given insurance
claim
Term: Contracted
Provider
Definition: A
medical provider that has an agreement with a health plan to
accept their patients at a previously agreed upon rate for
payment.
Term: Conversion
Plan
Definition:
When an individual terminates
his/her group policy, an option to continue coverage is by
purchasing an individual health plan called a conversion policy.
Term: Co-payment
Definition: A per
occurrence payment
Term: Cost
Containment
Definition: When
the insurance company devises a way to reduce the benefit payment
or costs associated with the health plan.
Term:
Covered
Expense
Definition: A
medical procedure or item that is deemed payable by the insurance
plan.
Term: Deductible
Definition: A set
dollar amount which must be satisfied within a specific time frame
before the health plan begins making payments on claims
Term: Exclusions
Definition:
Those items or medical services
that are not covered by the health plan.
Term: Exclusive
Provider Organization (EPO)
Definition:
A health plan that has the
characteristics of an HMO or PPO plan.
Term: Explanation
of Benefits
Definition: A summary of the payment made by
your health plan to the medical provider.
Term:
Extension
of Benefits
Definition: The
health plans offers an additional 12 months of coverage due to a
disabling condition
Term: Fee
for Service
Definition: A
method of payment for medical services rendered
Term: Fee
Schedule
Definition: A list
of CPT codes and dollar amounts an insurance company will pay for
a particular medical service
Term: Formulary
Definition: A
listing of pharmaceuticals the health plan pays for.
Term: Fully
Insured
Definition: An
Employer purchases insurance coverage from a licensed insurance
company and the insurance company assumes all of the risk.
Term: HMO
Definition: Health
Maintenance Organization
Term: ICD-9
(International Classification of Diseases 9th Edition)
Definition:
A standard format of identifying
the illness, injury or diseases by using a three digit code.
Term: Indemnity
Plan
Definition: A non
PPO or HMO plan, a plan that does not have preferred provider
networks or many cost containment features.
Term: Integrated
Delivery System
Definition:
An organization that combines
hospital, physician and other medical services as part of a larger
health care system.
Term: IPA
(Independent Practice Association)
Definition: An
organization of physicians who are contracted with an HMO plan.
Term: Managed
Care
Definition: A
method by which cost containment features are applied to a health
plan either by limiting the reimbursement levels paid to providers
or by reducing utilization.
Term: Medical
Loss Ratio
Definition:
The amount of the premium revenues
actually spent on paying for medical services.
Term: Medical
Necessity
Definition: A
medical procedure or service must be performed only for the
treatment of an accident, injury or illness and is not considered
experimental, investigational or cosmetic.
Term: Off-label
Use
Definition:
The prescribing of a medication for
use not approved by the FDA (Federal Drug Administration).
Term: Out
of Pocket Expense
Definition: The
amount the patient must pay themselves and not paid for by the
insurance plan
Term: Participating
Provider
Definition:
A physician or other medical
provider has agreed to accept a set fee for services provided to
members of a specific health plan. They are deemed to be
"in-network".
Term: PCP
Definition:
Primary Care Physician
Term: PPO
Definition: Preferred
Provider Organization
Term: Pre-Existing
Definition: A
medical condition diagnosed prior to the effective date of the
health plan.
Term: Self-Insured
Definition: An
Employer who underwrites their own risk. This may is good for
groups with a favorable claims history.
Term: Usual
& Customary
Definition: A
reduction in the payment of benefits on a claim which is justified
by the insurance company as "the going rate" to be paid
in that geographical area.
Term: Untimely
Submission
Definition: A
medical claim must be submitted within the time frame given by the
insurance company or the claim will be denied.
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