GLOSSARY

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GLOSSARY OF HEALTH CARE TERMS

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Access-An individualís ability to obtain health care services. Access is frequently confused with coverage, which means having insurance or government coverage. People can have access to some health care services such as emergency rooms without having health insurance coverage to pay for those services.

Acute Care-Medical treatment rendered to individuals whose illnesses are of a short-term or episodic nature. Patients receive care in hospitals (in-patient) rather than on an out-patient (ambulatory) basis. Acute care facilities are those hospitals that mainly serve persons with short-term health problems.

Aid to Families with Dependent Children (AFDC)-A state-based federal assistance program which provides cash payments to needy children (and their caretakers). Families had to meet income and resource criteria specified by the state to be eligible. AFDC has been replaced by a new block grant program, but AFDC standards are retained for use in establishing Medicaid eligibility. See Temporary Assistance For Needy Families.

Aggregate Indemnity-The maximum amount of payment provided in cash by an insurer for each covered service. An indemnity insurance contract usually defines these amounts.

All-payer System-A proposal in which prices for health services and payment methods are the same, regardless of who is paying. In an all-payer system, federal or state government, a private insurer, a self-insured employer plan, an individual, or any other payer would pay the same rates. The strategy prevents cost-shifting because everyone is paying the same fees. Also called Multiple Payer system.

Alliance-A type of insurance purchasing cooperative that combines big business,small business and individuals.

Ambulatory Care-All types of health services which are provided on an out-patient basis, in contrast to services that require overnight or in-patient care. Also called out-patient care.

Ancillary Services-Supplemental services, including laboratory, radiology and physical therapy, that are provided in conjunction with medical or hospital care.B

Beneficiary-A person who is eligible for or receiving benefits under an insurance policy or plan, such as Medicare or Medicaid. Employees and their dependents may also be beneficiaries.

Benefits-The specific services members are entitled to under their health plan.

Blue Cross/Blue Shield-Non-profit, tax-exempt insurance service plans which provide coverage for hospital care, physician care and related services. Found in every state, they are separate organizations and have different benefits, premiums and policies. The Blue Cross and Blue Shield Association of America is their national organization.

Board Certified-Status granted to a medical specialist who completes required training and passes and examination in his/her specialized field. Individuals who have met all requirements, but have not completed the exam are referred to as “board eligible.”

Buy-in-The arrangements states make for paying Medicare premiums on behalf of those they required or choose to cover. See Qualified Medicare Beneficiary.C

Capitation-A health insurance payment mechanism which pays a fixed amount of money per person to cover services, without regard to the actual number or nature of services provided to each person in a set period of time. The provider is financially responsible for coordinating patient care within the fees or capitated rate for all patients.

Carrier-A private organization, usually an insurance company, that finances health care.

Catastrophic Health Insurance-Health insurance which provides coverage for treating severe or lengthy illnesses or disability. Generally these policies cover all, or a specified percentage of, medical expenses above an amount that is the responsibility or another insurance policy up to a maximum limit of liability.

Centers for Disease Control and Prevention (CDC)-A division of the U.S. Public Health Service which is responsible for analyzing and fighting infectious diseases as well as responding to public health emergencies.

CHAMPUS-(Civilian Health and Medical Program of the Uniformed Services) A health plan that serves the dependents of active duty military personnel and retired military personnel and their dependents.

Chronic Care-Care and treatment rendered to individuals whose health problems are of a long-term and continuing nature. Chronic care facilities include nursing homes, mental hospitals and rehabilitation facilities.

Chronic Disease-A condition that will not improve, that lasts a lifetime, or reoccurs and may result in long-term care needs. As a result of chronic disease or illness, many individuals receive chronic care services.

Claims-These are bills for services. Claims are sent by physicians, hospitals, labs and other providers. Billed claims are those that providers send to insurers and paid claims are what the plan pays.

COBRA-(Consolidated Omnibus Budget Reconciliation Act of 1985) A legal provision that lets individuals leaving a company buy health insurance from that company at the employerís group rate rather than an individual rate. The act was designed to provide health coverage to workers between jobs.

Co-insurance-A cost-sharing requirement under a health insurance policy in which the insured party pays a share of the costs of covered services.

Competitive Medical Plan (CMP)-A health plan that is eligible for a Medicare risk contract, although it is not a federally qualified HMO, and agrees to assume financial risk for providing care to Medicare recipients on a prospective, prepaid basis.

Cooperatives/Co-ops-Co-ops are: 1. HMOs that are managed by the members of the health plan; and 2. Insurance purchasing arrangements in which businesses or other groups join together to gain the buying power of large employers or groups.

Co-payments-A type of cost sharing under which the insured party is responsible for paying a fixed dollar amount at the time health care service is rendered. Co-payments are usually flat fees for a particular service, such as $10 per doctor visit or $15 per prescription.

Cost Containment-The process of preventing health care costs from rising above a necessary level by controlling or reducing inefficiencies in all areas of the health care system. Such inefficiencies can occur in the consumption, allocation, and production of health care services.

Cost Sharing-A health insurance policy provision that requires the insured party to pay a portion of the costs of covered services. Deductibles, co-insurance and co-payments are types of cost sharing.

Cost Shifting-The condition which occurs when health care providers pass costs for health services one group does not pay to other groups. When health care providers are not reimbursed or not fully reimbursed for providing health care, usually to uninsured or Medicare patients, charges to those who do pay are increased. Employer and insurer discounts on fees, care for the uninsured and government rate-setting contribute to cost shifting.

Coverage-Person has private insurance through their employer, or as an individual, or public other public program. Coverage stems from the meaning that the personís health care costs will be paid either by insurance or by the government.D

Deductible-The amount of money an insured individual or family must pay from their own pocket before the insurer will assume any liability for all or part of the remaining cost of covered services. Deductibles may be either fixed-dollar amounts or the value of specified services (such as one physician visit) and are tied to some reference period over which they must be incurred (such as $100 per calendar year).

Defined Benefits Coverage-An approach to providing health benefits whereby employers and other purchasers promise coverage for a specific package of health benefits.

Defined Contribution Coverage-A funding mechanism for health benefits whereby employers make a specific dollar contribution toward the cost of insurance coverage for employees without defining the services to be provided.

Disposable Personal Income-The amount of oneís income that is left over after money has been spent on basic necessities such as rent, food, and clothing.E

Early and Periodic Screening, Diagnosis, and Treatment Program (EPSDT)-A program mandated by law as part of the Medicaid program. The law requires that all states have in effect a program for eligible children under age 21 to receive a medical assessment, and health care treatments and other measures to correct any defects and chronic conditions discovered.

Elective-A health care procedure that is not an emergency and that the patient and doctor plan in advance.

Emergency Medical Services (EMS)-Services utilized in responding to the perceived individual need for immediate treatment for medical, physiological, or psychological illness or injury.

Employer Contribution-The contribution is the money a company pays for its employeesí health care. Company contributions vary widely and can be based on percentage of costs, length of employment, family circumstances or a flat fee.

Employer Mandate/Employer Based-A plan where employers are required to pay part or all of their employeesí health insurance.

Employee Retirement Income Security Act (ERISA)-A Federal act, passed in 1974, that established new standards for employer-funded pension and health benefit programs. Companies employing self-funded health benefit plans operating under ERISA are exempt from state insurance regulations and health care legislation.

Exclusions-Health conditions that are specifically not covered in an insurance package. A patientís pre-existing health care condition may often be excluded from coverage, although the recently passed Health Insurance Portability and Accountability Act (HIPAA) protects individuals from these exclusions.

Exclusive Provider Organizations (EPO)/Exclusive Provider Arrangement (EPA)-An indemnity or service plan that provides benefits only if care is rendered by the institutional and professional providers with which it contracts, with some exceptions for emergency and out-of-area services.F

Federal Employees Health Benefits Program (FEHBP)-The group health insurance plan for all Federal employees established in 1959 under the Federal Employees Health Benefits Act. Federal employees may choose to participate in one of two plans: a service benefit plan administered by Blue Cross and Blue Shield, or an indemnity plan offered by the insurance industry through the Aetna Life Insurance Company.

Federal Employee Health Benefit Program (FEP)-Health insurance program for Federal workers and their dependents.

Federally Qualified Health Center (FQHC)-A federal payment option that allows qualified health care providers in medically underserved areas to receive cost-based Medicare and Medicaid reimbursement. It allows for the direct reimbursement of nurse practitioners, physician assistants and certified nurse midwives.

Fee-for-Service-A method of billing for health services under which a physician or other practitioner charges separately for each patient encounter or service rendered. It is based on an insurance company paying hospitals and doctors the fees they set and charge. Under this system, expenditures increase if the fees themselves increase. This system contrasts with prepayment systems, where the payment to the physician is not changed with the number of services actually used. It is the dominant system of paying for health care services in the United States.

First Dollar Coverage-A system in which the insurer pays for all employee out-of-pocket health care costs. Under first dollar coverage, the beneficiary has no deductible and no co-payments.G

Gatekeeper-The person, in a managed care organization, who controls a patientís access to health care services. The case manager or primary care provider determines whether a patient needs to see a specialist or requires other non-routine services. The goal of this gatekeeper system is to guide a patient to appropriate services while avoiding costly referrals to specialists.

General Practice-A form of practice in which physicians without specialty training provide a wide range of primary health care services to patients.

Global Budgeting-A method of hospital cost containment in which participating hospitals share a budget, setting the maximum amount of money that will be paid for health care. This can be done on a national or state level. Methods for allocating funds among hospitals may vary but the key is that participating hospitals agree to an aggregate cap on revenues that they will receive each year.

Group Insurance-This system of health insurance is the most common in the United States. More than 75% of all health insurance is offered through business, union trusts or other groups and associations. Most groups are full-time employees. The cost of insurance is based on the age, sex, health status and occupation of the people in the group, which is why insurance costs vary from one group to another.

Guaranteed Issue-The requirement that an insurer accept everyone who applies for coverage and guarantee the renewal of that coverage as long as the covered individual continues to pay the policy premium.H

Health Care Benefits-The specific services and procedures covered by a health plan or insurer.

Health Care Financing Administration (HCFA)-The federal government agency within the Department of Health and Human Services which directs the Medicare and Medicaid programs, (Titles XVIII and XIX of the Social Security Act) conducts research to support these programs and oversees more than a quarter of all health care costs in the United States.

Health Insurance-Financial protection against the health care costs arising from disease or accidental injury. Health insurance usually covers all or part of the medical costs of treating the illness or injury.

Health Insurance Portability and Accountability Act (HIPAA)-Also known as Kennedy-Kassebaum law which guarantees that people losing group health insurance will have access to coverage in the individual insurance market, regardless of pre-existing medical problems. The law also allows employees to secure health insurance from their new employer when they switch jobs despite having a pre-existing medical condition.

Health Insurance Purchasing Cooperatives (HIPCs)-Public or private organizations which work to secure health insurance coverage for certain populations of people. The goal is to consolidate purchasing responsibilities to obtain greater leverage with insurers in order to reduce administrative costs of buying, selling and managing insurance policies. This is done by combining everyone in a specific geographic region and basing insurance rates on the people in that area. Private cooperatives are usually voluntary associations of employers in a geographic region who band together to purchase insurance for their employees. Public cooperatives are established by state governments to purchase insurance for public employees and Medicaid beneficiaries.

Health Maintenance Organization (HMO)-A managed care business that organizes health care services for its members, either on a for-profit or a not-for-profit basis. HMOs have the following specific and distinct characteristics: the use of primary care providers to coordinate patient care; the regulation of specific providers and facilities members must use; and the existence of a fixed fee structure as opposed to having providers pay for specific services rendered.

Health Plan Employer Data and Information Set (HEDIS)-A core set of performance measures designed by the National Committee for Quality Assurance to enable participating managed health plans and employers to understand the value of their health care and accurately track trends in health plan performance in a comparative manner.

Hospital Alliances-Groups of hospitals that join together on a voluntary basis to cut their costs by purchasing services and equipment in bulk.I

Indemnity-A system of health insurance in which the insurer pays for the costs of covered services after care has been rendered. An indemnity insurance contract usually defines the maximum amounts which will be paid for covered services. This is the most common type of insurance in the United States.

Indigent Care-Care provided at no cost to people that are medically indigent, meaning they do not have health insurance or are not covered by Medicare, Medicaid, or other public programs. This does not necessarily refer to people who are indigent or homeless.

In-patient-A person who has been admitted to a hospital or other health facility, or has a physician overseeing health care services for a period of at least 24 hours.

Insurable Risk-The physical, moral, occupational, and financial status of a risk that make it acceptable to the insurer.

Integrated Delivery System (IDS)-An organization which usually includes a hospital, a large medical group, and an insurance vehicle such as an HMO or PPO. All provider revenues usually flow through the organization.

Integrated Provider (IP)-A group of providers that offer comprehensive and coordinated care. These groups usually provide a range of medical care facilities and service plans including hospitals, group practices, a health plan and other related health care services.J

Joint Commission on the Accreditation of Health Care Organizations (JCAHO)-A national private, non-profit organization that accredits health care organizations and agencies and establishes guidelines of operation for these facilities.KL

Limited Service Hospital-A hospital, often located in rural areas, that provides a limited set of medical and surgical services.

Long-term Care-Health care, personal care and social services provided to people who have lost, or never acquired, some degree of functional capacity. This care can take place in an institution or at home, on a long-term basis. These conditions often exist with the chronically ill, aged, disabled, or retarded.M

Malpractice Insurance-Coverage for medical professionals which pays the costs of legal fees and/or any damages assessed by the court in a lawsuit brought against a professional who has been charged with negligence.

Managed Care-Any system of health service payment or delivery arrangements where the health plan attempts to control or coordinate use of health services by its enrolled members in order to contain health expenditures, improve quality, or both. Arrangements often involve a defined delivery system of providers with some form of contractual arrangement with the plan. See Health Maintenance Organization, Independent Practice Association, Point of Service, Preferred Provider Organization.

Mandated Benefits-Services which all health plans in a given state are required by law to offer. Mandated benefits are often regarded as a reason for cost increases.

Mandated Providers-Any group of health care providers required by federal or state law to be included in any health plan.

Means Test-A test in which an individualís or familyís income or assets are evaluated in order to determine if that individual or family is eligible for public support, such as Medicaid.

Medicaid-A federally funded, state-administered insurance program for people who are unable to afford health care. Authorized by title XIX of the Social Security Act, Medicaid covers certain categories of low-income people who are deemed eligible by the states according to broad federal guidelines. States also determine specific benefits covered, rates of payment for providers and methods of administering the program.

Medically Indigent-A term used in the medical industry to describe a person who does not have insurance and is not covered by Medicaid, Medicare or other public programs.

Medical IRAs-Personal accounts which, like individual retirement plans, allow a person to accumulate funds for future use, but stipulate that those funds be used solely to pay for medical services. After setting up such an account, an individual decides how much money he or she will spend on health care, and therefore assumes much of the responsibility for insurance decisions that normally would fall to the employer.

Medicare-A national health insurance program created in 1965 for people aged 65 and over, and for people who have been eligible for social security disability payments for more than two years. Funding for Medicare comes from payroll taxes and the premiums of beneficiaries. Medicare consists of two separate programs: A and B. Medicare Part A, which is automatic at age 65, covers hospital costs and is financed largely by employer payroll taxes. Medicare Part B covers outpatient care and is financed through taxes and individual payments toward a premium.

Medicare Supplements or Medigap-A privately purchased health insurance policy available to Medicare beneficiaries to cover costs of care not paid by Medicare. All Medicare supplemental policies are regulated by federal guidelines and must cover certain expenses, such as hospital fees incurred after a personís Medicare payments have been exhausted. Some policies cover additional costs, such as those of preventative care, out-patient prescription drugs, or at-home recovery.

Member-The person enrolled in a health plan.

Mid-level Practitioners-Any health professional such as a nurse, nurse midwife, or physicianís assistant, who is permitted to administer medical care under the sponsorship of a practicing physician.

Multiple Employer Trust (MET)-A group of small employers brought together by a plan sponsor to provide group health coverage to their employees either through insurance or self-funding.

Multiple Payer-Also known as an All-Payer system, in which the government, a private insurer, an individual, or any other payer all pays the same rate for health care services. Under such a system, providers are prevented from shifting costs of service from one payer to another.N

National Committee on Quality Assurance (NCQA)-A national organization representing consumers, purchasers and providers of managed health care, which reviews and accredits quality assurance programs in the managed care industry.

Network-A group of affiliated providers, such as those which make up an HMO, PPO, or Point of Service plan, linked by contract or agreement.

Non-contributory Plan-A group insurance plan which does not require an employee to pay for any of his or her health care coverage.

Non-participating Provider-A health care provider who is not part of a health plan. Patients of such providers must pay their own health care costs.O

Open Enrollment Period-A designated period of time during which employees or members are permitted to change health plans. Such a period is intended to allow people to join any available health plan they choose without presenting evidence of insurability, as long as the choice is made within that given period of time.

Outcomes-Measures of the effectiveness of particular kinds of medical treatment.

Out-of-Pocket Expenditures-The portion of medical expenses a patient is responsible for paying.

Out-patient Care-Health care services that do not require a patient to receive overnight care in a hospital.

P

Participating Physician-Physicians who are part of a health plan and provide health care services to members of that plan.

Payer-The person or organization responsible for the costs of health care services. A payer may be private insurance, the government or an employerís self-funded plan.

Peer Review Organization (PRO)-A formal agency established to monitor the quality and appropriateness of medical care delivered to Medicare and Medicaid patients. Such organizations are made up of health care professionals who conduct reviews of other professionals with similar training and experience.

Percent of Poverty-A term used to describe the income levels one must have in order to qualify for Medicaid assistance.

Physician Hospital Organizations (PHOs)-An organization that contracts with payers on behalf of one or more hospitals and affiliated physicians. The PHO may also undertake utilization review, credentialing, and quality assurance. Physicians retain ownership of their own practices, maintain significant business outside the PHO, and typically continue in their traditional style of practice.

Play or Pay-A system that would guarantee coverage for all people by requiring businesses to either “play,” by offering insurance to their employees, or “pay” into a fund that would be used to cover the costs of uninsured and unemployed people.

Point of Service (POS)-A program of health insurance in which members are given the option to choose an HMO, PPO, or fee for service delivery system when they are in need of health care services, rather than during the open enrollment period. Usually, members are required to pay more to see PPO or non-participating providers than to see HMO providers.

Portability-A personís ability to maintain his or her health coverage during periods of unemployment or while moving between health plans. Portability is particularly important for a person with a disease or disability, for without it one is unable to leave a job without losing health insurance.

Post-natal Care-Health care services received by a woman immediately following the delivery of her child

Pre-existing Condition-A medical condition a person develops before applying for a particular health insurance policy. Such a condition will often prevent a person from qualifying for that insurance. Other times an insurance company will provide coverage but will specifically exclude treatment for such a condition from that personís coverage.

Preferred Provider Organization (PPO)-A managed care plan that contracts with networks or panels of providers to furnish services and to be paid on a negotiated fee schedule. Enrollees are offered a financial incentive to use providers on the preferred list, but may use non-network providers as well.

Premium-An amount paid periodically to purchase health insurance coverage. Premium amounts for employment-related insurance are often split between employers and employees.

Premium Cap-A set, upper limit on fees, which is the maximum amount of money an insurance company can charge for services.

Preventive Care-Health care services which are aimed at preventing disease or its consequences. It includes health care programs aimed at warding off illnesses (e.g., immunizations), early detection of disease (e.g., Pap smears) and inhibiting further deterioration of the body (e.g., exercise, smoking cessation).

Primary Care-Basic or general health care which emphasizes the point when the patient fist seeks assistance from the medical system and the care of the simpler and more common illnesses.

Private Insurance-Health insurance that is provide by private insurance companies such as commercial insurers and Blue Cross plans, self funded plans sponsored by employers and insurance provided through health plans such as HMOs and other managed care arrangements.

Professional Standards Review Organization (PSRO)-These entities were established in 1972 to physician review of services provided under the Medicare and Medicaid programs.

Provider-An individual or institution which gives medical care.

Provider-Sponsored Organization (PSO)-Any organization created through the formal affiliation of health care providers that seeks to act as insurer for an enrolled population. PSOs can be physician-based, hospital-based, or a combination of both; typically, they are local health delivery systems.Q

Quality of care-The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Doing the right thing right the first time.

Quality Improvement Organization (QIO)-An organization contracting with HCFA to review the medical necessity and quality of care provided to Medicare beneficiaries. Previously, these were called Peer Review Organizations.

Quality Assessment-Measurement of the quality of care.

Quality Assurance-A formal, systematic process to improve quality of care that includes monitoring quality, identifying inadequacies in delivery of care, and correcting those inadequacies.

R

Rate Setting-Also known as hospital rate setting or prospective reimbursement programs. These programs were developed by several states in the 1970ís to establish in advance by regulation, the amount that hospitals would be paid regardless of the costs they incurred that year.

Reimbursement-The amount paid to providers for services provided to patients

Report Card-Any systematic presentation of information that assesses the performance of plans or providers, including consumer satisfaction, meeting certain standards, performance of certain processes, provision of certain services, or achieving medical outcomes.

Risk Sharing-A method, such as partial capitation, that places a health plan at less than full risk by covering the cost of selected services, providing additional payment amounts for high cost patients or to offset plan losses.S

Self-insured Health Plan-Employer-provided health insurance in which the employer, rather than an insurer, is at risk for its employeesí medical expenses.

Single Payer System-This health care reform proposal advocates having heath care paid for by tax dollars rather than by the employer and employee. It has been roughly based on the Canadian model of health care delivery. In this system, states would have health care budgets, individuals would have coverage paid by the government, and the government would set rates it would pay to hospitals and doctors.

Socialized Medicine-This phrase usually refers to health care system in which the doctors are paid by the government, and health care facilities are run by the government. In its broadest sense, it is government-run health care vs. market-based health care.

Standard Benefit Package-A defined set of benefits provided to all insureds or enrollees, which are usually outlined in health care reform proposals that are either government-run or market-based.T

Third Party Administrator (TPA)-Organization that processes health plan claims without bearing any insurance risk.

Third Party Payer-An organization other than the patient or health care provider involved in the financing of personal health services.

Title XVIII (Medicare)-The title of the Social Security which contains the principal legislative authority for the Medicare program.

Title XIX (Medicaid)-The title of the Social Security Act which contains the principal legislative authority for the Medicaid program.U

Uncompensated Care-Health care rendered to persons unable to pay and not covered by private or governmental health insurance plans; includes both unbilled charity care and bad debts (services billed but not paid).

Underinsured-Refers to people who have some type of health insurance, such as catastrophic care, but not enough insurance to cover all their health care costs. The underinsured may have high deductibles of $1000 to $5000 per year, with no coverage until that limit has been met, or they have insurance policies that have specific exclusions.

Underwriting-This process analyzes the health status, claims experience (cost), age and general health risks of the individual or group seeking insurance coverage.

Uninsured-Individuals who do not have health insurance coverage of some type. Over 80 percent of the uninsured are working adults and their family members.

Universal Coverage-Phrase used in policy discussions to mean that all individuals or residents could get health insurance no matter how it is financed.

Utilization Review-Study of the appropriateness of the use of particular services and the appropriateness of the volume of services used.V

Vertical Integration-A health care system that includes the entire range of health care services from out-patient to hospital and long-term care.

W

Waiting Period-The time a person must wait from the date of acceptance into an eligible class (or from application) to the date the insurance becomes effective.

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