Access - A person's ability to obtain affordable medical care on a timely basis.
Acute Care - A pattern of health care in which a patient is treated for an acute (immediate and severe) episode of illness, for the subsequent treatment of injuries related to an accident or other trauma, or during recovery from surgery.
Ambulatory Care Facility (ACF) - A medical care center that provides a wide range of healthcare services, including preventive care, acute care, surgery, and outpatient care, in a centralized facility. Also known as a medical clinic or medical center.
Ancillary Services - Auxiliary or supplemental services, such as diagnostic services, home health services, physical therapy, and occupational therapy, used to support diagnosis and treatment of a patient's condition.
Assisted Living - Broad range of residential care services, but does not include nursing services. Normally lower in cost than nursing homes.
Authorization - A health plan's system of approving payment of benefits for services that satisfy the plan's requirements for coverage.
Benefit Design - The process an MCO uses to determine which benefits or the level of benefits that will be offered to its members, the degree to which members will be expected to share the costs of such benefits, and how a member can access medical care through the health plan.
Business Integration - The unification of one or more separate business (nonclinical) functions into a single function.
Carrier - An insurer; an underwriter of risk that finances health care.
Chronic Case - A patient with one or more medical conditions that persist for long periods of time or for the patient's lifetime.
Claim - An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.
Claims Examiners - Employees in the claims administration department who consider all the information pertinent to a claim and make decisions about the MCO's payment of the claim. Also known as claims analysts.
Clinical Integration - A type of operational integration that enables patients to receive a variety of healthcare services from the same organization or entity, which streamlines administrative processes and increases the potential for the delivery of high-quality health-care.
Clinical Practice Guideline - A utilization and quality management mechanism designed to aid providers in making decisions about the most appropriate course of treatment for a specific clinical case.
Closed Formulary - The provision that only those drugs on a preferred list will be covered by a PBM or MCO.
Coinsurance - A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.
Consolidated Omnibus Budget Reconciliation Act (COBRA) - A federal act which requires each group health plan to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee, and termination of employment.
Consolidation - A type of merger that occurs when previously separate providers combine to form a new organization with all the original companies being dissolved.
Coordinated Care Plans (CCPs) - The Medicare+Choice delivery option that includes HMOs (with or without a point-of-service component), preferred provider organizations (PPOs), and provider-sponsored organizations (PSOs).
Copayment - A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.
Deductible - A flat amount a group member must pay before the insurer will make any benefit payments.
Diagnostic and Treatment Codes - Special codes that consist of a brief, specific description of each diagnosis or treatment and a number used to identify each diagnosis and treatment.
Due Process Clause - A provider contract provision which gives providers that are terminated with cause the right to appeal the termination.
Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) Services - A Medicaid program for recipients younger than 21 that provides screening, vision, hearing, and dental services at intervals that meet recognized standards of medical and dental practices and at other intervals as necessary to determine the existence of physical or mental illnesses or conditions.
Electronic Medical Record (EMR) - A computerized record of a patient's clinical, demographic, and administrative data. Also known as a computer-based patient record.
Ethics in Patient Referrals Act - A federal act which, along with its amendments, prohibits a physician from referring patients to laboratories, radiology services, diagnostic services, physical therapy services, home health services, pharmacies, occupational therapy services, and suppliers of durable medical equipment in which the physician has a financial interest. Also known as the Stark Laws.
Exclusive Provider Organization (EPO) - A healthcare benefit arrangement that is similar to a preferred provider organization in administration, structure, and operation, but which does not cover out-of-network care.
Extranet - A private computer network that incorporates Web-based technologies and links selected resources of an MCO to external entities or individuals.
Fee schedule - The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.
Formulary - A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in prescribing medications.
Functional Status - A patient's ability to perform the activities of daily living.
Generic Substitution - The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physician approval.
Geographic Availability - The number of primary care providers within a given radius of a particular target.
Health Insurance Portability and Accountability Act (HIPAA) - A federal law that outlines the requirements that employer-sponsored group insurance plans, insurance companies, and managed care organizations must satisfy in order to provide health insurance coverage in the individual and group healthcare markets.
Health Maintenance Organization (HMO) - A healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.
HSA – Health Savings Account - An account that allows individuals to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax free basis.
Immunization Programs - Preventive care programs designed to monitor and promote the administration of vaccines to guard against childhood illnesses, such as chicken pox, mumps, and measles, and adult illnesses, such as pneumonia and influenza.
Information Technology - The wide range of electronic devices and tools used to acquire, record, store, transfer, or transform data or information.
Integration - For provider organizations, the unification of two or more previously separate providers under common ownership or control, or the combination of the business operations of two or more providers that were previously carried out separately and independently.
Internet - A public, international collection of interconnected computer networks.
Intranet - An internal (private) computer network, built on Web-based technologies and standards, that is only available to members of the computer network.
Justice/Equity - An ethical principle, which, when applied to managed care, states that managed care organizations and their providers allocate resources in a way that fairly distributes benefits and burdens among the members.
Large group - A large pool of individuals for which health coverage is provided by the group sponsor. A large group may be defined as more than 250, 500, 1,000, or some other number of members, depending on the MCO.
Length of Stay (LOS) - The number of days, counted from the day of admission to the day of discharge, that a plan member is confined to a hospital or other facility for each admission.
Liabilities - All debts and obligations of a company.
Loss Rate - The number and timing of losses that will occur in a given group of insureds while the coverage is in force.
Mail-order Pharmacy Programs - Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.
Medicaid - A joint federal and state program that provides hospital expense and medical expense coverage to the low-income population and certain aged and disabled individuals.
Medical Director - The health plan physician executive who is responsible for the quality and cost-effectiveness of the medical care delivered by the plan's providers. Also known as a chief medical officer. medical underwriting. The evaluation of health questionnaires submitted by all proposed plan members to determine the insurability of the group.
Medicare - A federal government program established under Title XVIII of the Social Security Act of 1965 to provide hospital expense and medical expense insurance to elderly and disabled persons.
Medicare Part A - The Medicare component that provides basic hospital insurance to cover the costs of inpatient hospital services, confinement in nursing facilities or other extended care facilities after hospitalization, home care services following hospitalization, and hospice care.
Medicare Part B - The Medicare component that provides benefits to cover the costs of physicians' professional services, whether the services are provided in a hospital, a physician's office, an extended-care facility, a nursing home, or an insured's home.
Medicare Supplement - A private medical expense insurance policy that provides reimbursement for out-of-pocket expenses, such as deductibles and coinsurance payments, or benefits for some medical expenses specifically excluded from Medicare coverage.
Medigap Policies - Individual medical expense insurance policies sold by state-licensed private insurance companies.
Member Services - The broad range of activities that an MCO and its employees undertake to support the delivery of the promised benefits to members and to keep members satisfied with the company.
Network - The group of physicians, hospitals, and other medical care professionals that a managed care plan has contracted with to deliver medical services to its members.
New Business Underwriting - The risk evaluation an MCO performs when it first issues coverage to a group.
Newborns' and Mothers' Health Protection Act (NMHPA) - A law which specifies that group health plans or group healthcare insurers cannot mandate that hospital stays following childbirth be shorter than 48 hours for normal deliveries or 96 hours for cesarean births.
Open Aaccess - A provision that specifies that plan members may self-refer to a specialist, either in-network or out-of-network, at full benefit or at a reduced benefit, without first obtaining a referral from a primary care provider.
Open Formulary - The provision that drugs on the preferred list and those not on the preferred list will both be covered by a PBM or MCO.
Out-of-Pocket Maximums - Dollar amounts set by MCOs that limit the amount a member has to pay out of his or her own pocket for particular healthcare services during a particular time period.
Outpatient Care - Treatment that is provided to a patient who is able to return home after care without an overnight stay in a hospital or other inpatient facility.
Parent Company - A company that owns another company.
Pharmaceutical Cards - Identification cards issued by a pharmacy benefit management plan to plan members. These cards assist PBMs in processing and tracking.
Plan Funding - The method that an employer or other payor or purchaser uses to pay medical benefit costs and administrative expenses.
Preadmission Testing - A utilization management technique that requires plan members who are scheduled for inpatient care to have preliminary tests, such as X-rays and laboratory tests, performed on an outpatient basis prior to admission.
Pre-existing Condition - In group health insurance, generally a condition for which an individual received medical care during the three months immediately prior to the effective date of coverage.
Premium - A prepaid payment or series of payments made to a health plan by purchasers, and often plan members, for medical benefits.
Quality - In a managed care context, an MCO's success in providing health-care and other services in such a way that plan members' needs and expectations are met.
Quality Improvement System for Managed Care (QISMC) - A Health Care Financing Administration program designed to strengthen MCOs' efforts to protect and improve the health and satisfaction of Medicare and Medicaid enrollees.
Rating - The process of calculating the appropriate premium to charge purchasers, given the degree of risk represented by the individual or group, the expected costs to deliver medical services, and the expected marketability and competitiveness of the MCO's plan.
Renewal Underwriting - The process by which an underwriter reviews each year all the selection factors that were considered when the contract was issued, then compares the group's actual utilization rates to those the MCO predicted to determine the group's renewal rate.
Screening Programs - Preventive care programs designed to determine if a health condition is present even if a member has not experienced symptoms of the problem.
Senior Market - A market segment that is comprised largely of persons over age 65 who are eligible for Medicare benefits.
Specialty Services - Healthcare services that are generally considered outside standard medical-surgical services because of the specialized knowledge required for service delivery and management.
Standard of Care - A diagnostic and treatment process that a clinician should follow for a certain type of patient, illness, or clinical circumstance.
Termination with Cause - A contract provision, included in all standard provider contracts, that allows either the MCO or the provider to terminate the contract when the other party does not live up to its contractual obligations.
Third Party Administrator (TPA) - A company that provides administrative services to MCOs or self-funded health plans but that does not have the financial responsibility for paying benefits.
Two-tier Copayment Structure - A pharmacy benefit copayment system under which a member is required to pay one copayment amount for a generic drug and a higher copay-ment amount for a brand-name drug.
Unbundling - A coding inconsistency that involves separating a procedure into parts and charging for each part rather than using a single code for the entire procedure.
Underwriting - The process of identifying and classifying the risk represented by an individual or group.
Underwriting Manual - A document that provides background information about various underwriting impairments and suggests the appropriate action to take if such impairments exist.
Underwriting Requirements - Requirements, sometimes relating to group characteristics or financing measures, that MCOs at times impose in order to provide healthcare coverage to a given group and which are designed to balance a health plan's knowledge of a proposed group with the ability of the group to voluntarily select against the plan (antiselection).
Usual, Customary, and Reasonable (UCR) Fee - The amount commonly charged for a particular medical service by physicians within a particular geographic region. UCR fees are used by traditional health insurance companies as the basis for physician reimbursement.
Variances - The differences obtained from subtracting actual results from expected or budgeted results.
Wait Time - The length of time, on average, that members must stay on the telephone before they receive assistance.
Web Site - A specific location on the Web that provides users access to a group of related text, graphics, and, in some cases, multimedia and interactive files.
Withhold- A percentage of a provider's payment that is "held back" during the plan year to offset or pay for any cost overruns for referral or hospital services. Any part of the withhold not used for these purposes is distributed to providers.
Women's Health and Cancer Rights Act (WHCRA) - A law which requires health plans that offer medical and surgical benefits for mastectomy to provide coverage for reconstructive surgery following mastectomy.