Appeal- a request by a member or
provider for re-evaluation of a decision, such as coverage of
a specific therapy, or a benefit payment, with the goal of finding
a mutually acceptable solution.
Benefit Limitations - or benefit
caps are limits set by the insurance company on the amount of
money or product that they cover. For example, you may have prescription
coverage up to $2000 per year. If you have spent more than $2000
in prescription costs, your insurance company will not cover your
prescription costs over $2000 for the rest of the year. Another
type of benefit limitation is a limit on the number of prescriptions
allowed in a given period (e.g. you may have a limit of three
prescriptions per month). Benefit caps or limits can be for different
time periods: annual or lifetime. An annual benefit cap or limitation
is for one year. It is important to ask your insurance company
if you have an annual benefit cap and if so, what year do they
use? Do they go by the calendar year (January to December) or
do they use a fiscal year or plan year (for example, from when
your policy became effective-i.e., August 1 to July 31)?
Catastrophic Coverage - coverage
provided by the insurance/payer company after the beneficiary
has personally paid a certain amount of medical expenses as predetermined
by the payer.
CHAMPVA- a health benefit program
for the families of veterans with 100 percent service-connected
disability and surviving spouse or children of a veteran who dies
from a service-connected disability.
Claim - information submitted to the
insurer by the member or health care provider for the payment
of services under a policy.
Copayment- or copay is a set amount
determined by the insurance company that you pay when you receive
covered services.
Coinsurance- a set percentage
of the total amount determined by the insurance company that you
pay when you receive covered services.
Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA) - a federal law that allows individuals
leaving a company to continue the health insurance policy they
had when employed. COBRA applies when individuals lose or leave
a job. The individual is allowed to pay group rates plus a set
administrative fee, usually for up to 18 months.
Deductible - is the amount of money
that you could have to pay before your insurance plan pays for
any medical care or prescriptions. Deductibles can vary between
the insured and eligible family members. An individual deductible
would need to be paid before the insurance company will pay for
medical care. If the whole family is covered under one family
member's insurance, then a family deductible is the amount of
money that the entire family would have to pay first before the
health insurance company would pay or reimburse for medical care
or prescriptions.
Durable Medical Equipment (DME) - medical
equipment which: can withstand repeated use; is not disposable;
serves a medical purpose; is generally not useful to an individual
in the absence of sickness or injury, and is appropriate for use
in the home.
Explanation of Benefits (EOB) - A description,
sent to patients & health care providers by health plans, of benefits
received & services for which health care provider has requested
payment.
Formulary- an approved list of
prescription drugs.
Health Insurance- protection that
provides payment of benefits for covered illness or injury.
Health Maintenance Organization (HMO)
-a payer that provides services for members in a particular geographic
area. Services are provided through a network of doctors, hospitals
and other medical providers selected by the plan. Members are
required to obtain care from this network of providers in order
for their care to be covered, except in cases of emergency.
High Risk Insurance Pools-state
programs that enable people with health problems to join together
to purchase health insurance; even with subsidies, premium rates
are high because pool members are high risk.
Indemnity Plans - also known as
traditional health insurance, it pays a certain percentage of
the charges billed by the provider, and the patient is responsible
for the balance.
In-Network- is a list of providers
who participate in the health plan's provider network. By using
in-network providers, you may have lower copayments, and may not
need prior authorization for services.
Lifetime Maximum Benefit- a lifetime
maximum benefit is the highest amount of money that your insurance
company will pay to cover you for healthcare expenses. For example,
you may have a $1 million lifetime maximum benefit. If your healthcare
costs go over $1 million, then your healthcare costs will no longer
be covered by that insurance plan.
Managed Care Plans- are plans which
implement health care measures to control costs associated with
heath care services. These measures may include the : pre-admission
review for all hospital admissions, second surgical opinions,
discharge planning, case management, prior authorization, physician
networks.
Medicaid- a federal program administered
and operated on the state level. Provides medical benefits to
eligible low income persons needing health care.
Medically Necessary- medical information
justifying that the service rendered was reasonable and appropriate
for the diagnosis or treatment of a medical condition or illness.
Medicare Advantage- a Medicare managed
care program that provides members with choices among health plans.
Members receiving Part A and B are eligible to select a Medicare
Advantage plan. These plans must offer the same benefits as Traditional
Medicare and may offer additional benefits as well.
Medicare Part D- Medicare prescription
drug plan effective 2006. All Medicare members will be eligible
to enroll.
Medigap (Medicare Supplement) -
a Medicare supplemental insurance policy sold by private insurance
companies to fill in the gaps in Traditional Medicare coverage.
There are ten standardized plans (A-J).
National Drug Code (NDC) - a numeric
code assigned to a prescription drug by the FDA. If a drug has
multiple strengths then there will be a different NDC for each
strength.
Out-of-Network- Providers who do
not participate in the network of a managed care plan.
Payer- a public or private organization
that pays or underwrites coverage for health care expenses.
Pharmacy Benefit Manager- a PBM is a
company specializing in the administration of commercial pharmacy
benefits.
Point of Service (POS) - health plans
which provide members the option of using in-network or out-of-network
providers and referrals within the network are not usually required.
Preferred Provider Organization (PPO)
- groups of health care providers that contract with employers,
insurance companies, or other third party payers to provide medical
care services at a reduced fee. Typically, enrollees covered by
traditional insurance arrangements are offered incentives to use
preferred providers, such as reduced deductibles and copayments,
or increased benefits such as preventive health care.
Premium- the payment made by an
employer or individual to purchase insurance.
Prior Authorization (Pre-Certification,
Pre-Determination, or Pre-Authorization) - Review of services
to determine medical appropriateness before services are rendered.
The payer will decide to cover/not cover the charges prior to
the services being provided.
Primary Care Physician (PCP) - a physician,
who oversees the general healthcare needs of a patient and may
serve as the first contact in a managed care system.
Provider - Institutions & individuals
that are licensed to provide health care services; for example,
hospitals, physicians, pharmacists, etc.
Qualifying event- events that would
cause an individual to lose health coverage under COBRA.
Reimbursement- payment made by a payer
to a provider for approved medical services.
State and Community Health Plans-
programs that provide coverage and services with minimal private
commercial and federal involvement. Funding and administration
occurs at the state, county or local level.
Statement of Medical Necessity-
official documentation from the medical provider to the payer
which contains medical information to justify that the service
rendered was reasonable and appropriate for the diagnosis or treatment
of a medical condition or illness.
Out-of-Pocket (OOP) maximum- The
total dollar amount of the expenses a member would have to pay
for covered medical charges during a specified period of time.
The out-of-pocket maximum may also be called stop-loss limit cost
or catastrophic expense limit.
Traditional Medicare- a federal
program that provides health insurance coverage to qualified elderly
and disabled individuals. Coverage rules and reimbursement methods
vary based on the site of service.
Tricare- Department of Defense
managed health care program for active duty military, active duty
service families, retirees and their families, and other beneficiaries.
Department of Veterans Affairs (VA) -
An independent agency of the federal government created in 1930
responsible for providing federal benefits to veterans and their
dependents
This resource was developed in 2004. Some of the content may be out of date or no longer relevant. PHA is working to update and re-organize this guide. We apologize for any inconvenience.
