Glossary of Terms
A B C D E F G H I J L M N O P Q R S T U V W X Y Z
Select the first letter of the word from the list above to jump to that glossary section.
Actuary: A professional who determines the anticipated cost of providing future insurance benefits. Factors considered include past claims experience, administrative expenses and anticipated investment return.
Acute Care: Medical care for an illness that is sudden, severe, and of short duration.
Administrative Services Only (ASO): Larger employers who can afford the risk of providing insurance protection may contract with an insurance company or third party for ASO, including claims processing, plan design advice, printing benefit books, etc.
Administrator: The person or group responsible for the operation of a plan. If a doctor, hospital, or clinic does not specifically designate such a person, ERISA considers the doctor, hospital, or clinic to be the administrator.
Admitting privileges: The authorization a hospital gives to a doctor to admit a patient to that facility.
Advance directive: A document designating someone else to make health decisions when the patient is not able to make these decisions.
Agent: A person licensed by the state to sell and service insurance. The agent gathers information about clients, prepares proposals, makes presentations, explains benefits, and performs other related tasks. Richard Whitaker Insurance Services, Inc. is an agent. We give you as many options as possible and help you decide which meets your needs.
Aggregate Amount Limit: Maximum amount an insurance company is liable for any losses.
Alternative Medicine: Doctors do not have all the answers. The power of faith, magic, and prayer. Many Americans make use of alternative treatments to the tune of $14 billion of their out of pocket money annually. Some medical schools are researching the effects of nontraditional treatments. You may want to explore mind-body medicine, hypnotherapy, energy treatments, metabolic therapy, naturopathy, homeopathy, therapeutic touch, acupuncture, prayer, aura readings, and the use of herbs. There's an Office of Alternative Medicine (OAM), part of the National Institutes of Health (NIH). Call them for information at (301) 402-2466.
American Board of Medical Specialists (ABMS): The organization that oversees the medical specialty boards that approve residency programs in 25 specialties and govern standards within each specialty.
Assignment of Benefits: Authorization by you, the insured, which allows the insurer or claims payer to pay benefits directly to the care provider. This automates the payment process and often eliminates the need for the patient to fill out forms.
Attending physician: The physician who is primarily responsible for the care of a patient in a hospital.
- B - Back to Top
Bad Doctors: Unfortunately, a few doctors have a history
of professional problems, usually involving over-prescribing
or mis-prescribing of medications, alcohol or drug abuse, sexual
misconduct or criminal convictions. Some, after being disciplined,
have received the help they needed and are actually better and
more compassionate for the experience. There is a book entitled 10,289 (the number changes with each new edition) Questionable
Doctors, published by the Public Citizens Health Research
Group, which lists those disciplined by any state. A National
Practitioner Data Bank became operational in 1990. It lists
those who have had proceedings to revoke their license to practice
medicine, a malpractice judgment or a legal settlement against
them. You can learn of actions taken, but the details of the
offenses are confidential. Any HMO, hospital or state licensing
board has this information. LEXIS/NEXIS, a computerized legal
information service, will search for malpractice awards or settlements
by a court against a doctor. Call (800) 955-0906. It may cost
$60 - $70 to get a report on a single doctor.
Beneficiary: A person entitled to receive benefits under a plan.
Board Certified: A medical provider who has passed a national examination in a particular specialty such as anesthesiology, family practice, or surgery.
Board Eligible: A physician who has the requisite training in his specialty but hasn't passed all the necessary exams to become Board Certified. Be cautious if someone is board eligible many years beyond medical school graduation
- C - Back to Top
Cafeteria Plan: Also called flexible benefit or flex plans and usually found in large companies. Offers choice among a range of benefits. For example, you might opt for less health coverage and apply the savings to child care.
Capitation: A system used by HMOs to pay providers a regular per member/per month fee in return for delivering all the necessary health services which the insured might need. This differs from fee-for-service in which doctors got paid per visit or per procedure.
Case management: A plan for coordinating a person's health care needs.
Certificate of coverage or certificate of insurance: The document that describes the benefits, providers, and general rules and regulations of an insurance policy. Each employee covered under a company plan receives a certificate of coverage describing their benefits.
Cesarean section (c-section): Delivery of a baby requiring incision through the lower abdomen and uterus. The first Caesar (Latin:, "to cut") was named because he was delivered thus. In those days, his mother probably died of bleeding or infection. Currently, one in four babies in the U.S. is delivered her by c-section. Efforts are being made to reduce the use of this procedure when it is unnecessary. Vaginal birth after a serious cesarean (VBAC) is now generally safe.
Chronic
Care: Continuing medical care for long-lasting diseases
such as diabetes or arthritis
Clinical: A term referring to
direct contact with, or information from, patients.
Closed Panel: Refers to a health care program that requires the insured to use certain providers from a list provided by the plan. The primary care provider is the gatekeeper and is responsible for all your health needs, referring you to specialists or a hospital when appropriate.
Coordination of Benefits (COB): A contractual provision to prevent an insured from receiving duplicate benefits and profiting from over-insurance.
COBRA: Consolidated Omnibus Budget Reconciliation Act of 1985. This federal law requires most employers to allow former employees to pay for continuation of their medical insurance for up to 18, 24, or 36 months after their employment ceases.
Co insurance: A percentage of the total bill (often 20 percent) that you must pay for a medical service. A typical arrangement is 80%/20% up to $5000, which is the stop-loss or co insurance limit. In this example, the insurance company pays 80% of the first $5000 (above any deductible) and you pay 20%, then above $5000 the insurance company pays 100% of covered expenses during the remainder of the calendar year up to the limits of the policy.
Commission: Part of an insurance premium paid by an insurance company to an agent in return for selling and servicing the business for the insurance company. Commissions are three to ten percent of the premium.
Community Rating: A rating method that determines a single average premium based on the characteristics and claims experience of an entire membership such as an HMO.
Conversion Privilege: A contractual right given to an insured person so that he/she can convert to an individual policy if their group coverage terminates without requiring any medical exams.
Co payment: The "co-pay" refers either to the fixed dollar amount the recipient pays for health service received at the time of service, i.e., $10 or $15 per office visit, or to the co insurance payment, which is that fraction of medical bills paid by the patient when the balance is paid by the insurer, i.e., 20% in an 80/20 plan.
Covered Expenses: Expenses which are reimbursed by the insurance company.
Credentialing: The review process for health care providers that monitors licenses, certifications, malpractice losses, and medical practice histories.
- D - Back to Top
Deductible: The amount of money an insured person pays for services before the insurer starts paying. There are the calendar year deductibles (better for young couples who have or are likely to have young children, and families with known medical conditions) and the per accident/per sickness deductible (better for singles, and couples with children over 8). Higher deductibles mean lower premiums. Agreeing to a deductible of even $100/year/person saves considerably on your premiums. Sometimes the maximum annual out-of-pocket is smaller than the deductible. This is because the max. out-of-pocket kicks in after the deductible ends, so a calendar year deductible of $5000 and a max. out-of-pocket of $1500 really means that the maximum you would have to pay in a year is $6500.
Disability income insurance: This insurance provides replacement income if you are unable to work because of illness or accident.
Discharge planning: The planning process before a patient leaves a hospital or nursing facility to assure the patient's needs are met before leaving.
- E - Back to Top
Efficacy: The ability of a drug or treatment to cure the ailment.
Emergency: An injury or acute medical condition likely to cause death, disability, or serious illness if not dealt with quickly.
EOB: Explanation of Benefits. A document sent to the insured which explains how reimbursement was made, why a claim was not paid, or if additional information is needed. It also explains the appeals procedures if you have a dispute.
EPO. Exclusive Provider Organization. A plan which requires the insured to use only the listed providers or to forfeit benefits.
ERISA: Employee Retirement Income Security Act of 1974. A federal law which sets minimum standards for funding, vesting, and termination of employer-sponsored pension plans. ERISA also protects beneficiaries in welfare plans.
Evidence of coverage: The certificate of coverage is your evidence of coverage for hospitals, doctors, etc...
Excess major medical: Coverage for catastrophic expense. Some 85% of employees state this is what they need most. Has high deductible, say $5,000, and typically a maximum lifetime limit of more than $1,000,000.
Exclusions: Health conditions that an insurance policy doesn't pay for.
Extended Benefits: Benefits which continue after the termination of other coverage. (For example, payment for hospitalization which continues after coverage would normally cease.)
- F - Back to Top
Family practitioner: Doctors who specialize in dealing with general medicine issues, particularly family care.
FDA: US Food and Drug Administration: part of the Department of Health and Human Services that oversees drug testing and approval, as well as food standards.
Federally Qualified: HMOs are qualified by the Health Care Financing Administration (HCFA) if they met certain standards.
Fee for Service Reimbursement: Doctors, clinics, or hospitals are paid for each visit or procedure. By contrast, managed care insurers establish fixed payments to doctors independent of services performed. Fee-for-service plans are also called indemnity plans.
First dollar coverage: A hospital or surgical policy with no deductible amount.
Fixed Costs: Premium payments and administrative costs, independent of claims paid.
- G - Back to Top
Gatekeeper: The person (usually your primary care physician) who, in a managed care environment, directs a patient's health care services. Typically, this person must approve all health care services and referrals to specialists.
Generic: Drugs that are not of name brand. They are less expensive but chemically identical and approved by the FDA. (U.S. Food and Drug Administration)
Guaranteed Renewable: The insured's right to continue a policy by paying the premiums. The insurance company cannot change the coverage or refuse to renew for any reason other than non-payment of premiums.
Grace Period: Most policies have a 31-day grace period during which your policy stays in force even if your payment is late. Grace periods don't apply if you give advanced, written notice of termination.
Group Model HMO: An HMO made up of physicians who are employed by a medical group such as a large clinic or university.
- H - Back to Top
Health Care Financing Administration (HCFA): A federal agency which approves HMOs.
Health Maintenance Organization (HMO):. An organization that provides a wide range of health services for a fixed, pre-paid premium. The HMO may provide all services or may contract with other sources for some services. An HMO may be a Group Model, Individual Practice Association (IPA), Staff Model, or Network.
Health Maintenance Organization Act of 1973: The federal law which mandates employers of 25 or more to offer HMO coverage as a health insurance option, unless the company is self-insured.
Health Plan Employer Data and Information Set (HEDIS): A set of standardized performance measures developed by the National Committee for Quality Assurance (NCQA). "Report cards" show how health plans perform in specific areas, such as providing members with certain preventive health tests or treatments.
Hippocratic Oath: Attributed to Hippocrates, a Greek physician who died in 377 BC and is often referred to as the Father of Medicine. Medical students, upon graduation, are asked to subscribe to the spirit of the Hippocratic Oath. The new physician swears that he or she will do no harm and keep patient information secret.
- I - Back to Top
IBNR: Incurred But Not Reported claims are those which have been incurred by the insured but have not been submitted to the insurance company for reimbursement (also called lagged claims).Incontestability: Provision in a policy which provides that an insurance company cannot contest the validity of a claim after the policy has been in force for a certain period, usually two or three years.
Independent Provider Association (IPA): HMO's may contract with an IPA, a group of physicians. Payment is usually on a capitated or discounted fee-for-service basis. IPAs may also serve non-HMO patients who typically pay non-discounted fees for service.
Indicator Measurement System (IMS): The outcomes evaluation approach used increasingly by the JCAHO and others to give HMOs and hospitals a report card. Deals with issues such as: What are the actual results in a given institution or area of treatment for a specific disease? Are prostates over-operated? Are too many hysterectomies being done? Are hospital stays, complications, and expenses in line with other centers?
Informed consent: A person's agreement to undergo a treatment while understanding the treatment, including the risks..
Insurability: The health status of an applicant which makes him/her acceptable for coverage by an insurance company
Intern: The doctor being trained in a hospital for a year after completion of medical school. The new shift of interns begins every year in late June or July, hence the old saying, "don't go to a hospital in summer."
Internist: A physician trained to treat internal organs and systems. He has had residency training beyond internship. May be certified in general internal medicine or, with additional training, in a sub-specialty such as cardiology, gastroenterology (GI), or geriatric medicine. To be a primary care physician, she must treat the general range of medical issues as well as his speciality.
Invasive Procedure: Any medical procedure involving penetration into the body, such as pacemaker implantation, sigmoidoscopy (drawing a sample of blood), or a test requiring an I.V. injection (intra venous).
- J - Back to Top
Joint Commission on Accreditation of Healthcare Organizations (JCAHO): Approves hospitals and other health care organizations. There are levels of deficiency ratings: about one percent are denied accreditation. Call them at (708) 916-5600 to assess an organization's status .- L - Back to Top
Lagged Claims: Reimbursement claims for provided service that have not yet been filed for.Lapse: Termination of insurance coverage for failure to pay premiums.
Lifetime maximum: The total amount that an insurance policy will pay for medical care during the lifetime of the beneficiary.
Living will: A legal contract in which a person sets forth their wishes concerning medical treatment in the event they are incapacitated.(unable to make reasoned decisions regarding treatment.)
Long-Term Care: The services required over a lengthy period of time due to an insured's chronic illness or disability. It may include nursing care and/or custodial care, adult day care or full time nursing home care.
Long-Term Health Care Insurance: Some policies cover only home care, some cover nursing home stays, and some both. All have options and can be extremely expensive. You may decide to have nursing home and at home coverage.
- M - Back to Top
Major medical: Called comprehensive insurance. Pays the sizable bills associated with serious accidents and illness. Formerly, these policies were separate and had a high deductible. Now they are usually bundled with basic plans.
Managed care: Managed care is provided though HMO, PPO, EPO, and POS plans. Costs are controlled by limiting the use of medical services and the payment for them.
Mandate: A procedure policy or coverage that a plan must offer as specified by state or federal law.
Maternity Benefits: Most policies cover pregnancy as an illness. Good pregnancy benefits are expensive so if you don't plan on having more children, look for a policy without these benefits. For prospective mothers, consider plans that provide coverages for the newborn at birth and for complicated deliveries which might require extra in-hospital days. Also check coverage of well-baby nursery costs.
Maximum out-of-pocket cost: The maximum amount of money a member will have to pay from his or her own funds for deductibles, co-payments, or other expenses.
Maximum Benefit: The maximum amount that an insurance company will pay for covered injuries or sickness. There are various types:
- Maximum lifetime benefits. $2 million coverage doesn't cost that much more than $500,000, so you might want sign up for the larger amount.
- Per accident/per sickness limits. Lowers premium significantly, but you pay the deductible and coinsurance for each event so consider carefully. How much risk can you sleep with?
- No limits. May cost 5% to 10% more than a $5 million maximum lifetime benefit plan. Payments continue until you either get well or are deceased.
Medicaid: A medical benefits plan for low income persons and paid by federal and state government, but administered by the state. In California, called MediCal.
MSA's ( Medical Savings Accounts ) . under section 220 of The 1996 Health Insurance Portability Act permits eligible individuals to establish medical savings accounts ( MSAs ) under a pilot project beginning Jan.1, 1997. An MSA is a tax exempt trust established for the purpose of paying medical expenses in conjunction with a high-deductible health plan. High deductible is defined as, (1) an annual deductible of at least $1,500 and not more than $2,250.00, for individual ( self-only ) coverage; or (2) has an annual deductible of at least $3,000 and not more than $4,500, for family coverage. The annual out-of-pocket expenses cannot exceed $3,000 for individuals and $5,500 for families.
Medicare: A federal program of medical care benefits designed for those permanently disabled or over age 65. The patient has a coinsurance payment of 20%.
Medicare assignment: An agreement between a health care provider and Medicare that the doctor will accept the amount Medicare approves as full payment for Medicare-covered services.
MediGap: MediGap policies are private insurance policies designed to supplement Medicare, which pays only 80% of medical bills without a lot of extras. They range from Type A (bare bones, costs $300 - $400/yr) to Type J (up to $2000/yr). Not all are available in every state. A tip: Insurers can't check on your health status for six months after you get on Medicare, so be sure to get this MediGap coverage within that time limit.
- N - Back to Top
National Association of Health Underwriters (NAHU): A professional organization founded in 1929, of more than 12,000 men and women in the health insurance industry serving more than 119 million consumers. NAHU promotes excellence in the insurance industry through legislative advocacy, education, and leadership.
National Association of Insurance Commissioners (NAIC): An organization that assists state insurance departments and helps draft model laws.
National Committee for Quality Assurance (NCQA): An independent, nonprofit organization that assesses and reports on health plan quality. Through accreditation reviews and standardized measures of health plan performance, NCQA holds health plans accountable for the quality of care and service they deliver. These reports are summarized on the HEDIS page of this web site.
Network: Contracted providers of health care (physicians, hospitals, testing centers, rehabilitation centers, etc.) that have negotiated discount fees for their services in return for a higher number of patients. Can apply to HMO, PPO, POS, or EPO organizations.
Network Model HMO: An HMO made up of several groups of doctors in different locations.
- O - Back to Top
OB/GYN: Obstetrics and Gynecology is a medical specialty that deals with female reproductive health issues.Ombudsman: An advocate for consumers who is responsible for investigating and resolving consumer complaints.
Open Panel: A right included in an HMO for a covered person to obtain non-emergency covered services from a specialist without a referral from the primary care physician or gatekeeper.
Outcomes Measurement: A program which tracks physician treatment patterns to evaluate
efficacy.
Out-of-Pocket Expense: Your actual cost for medical care, not counting the insurance
premiums. Includes all coinsurance payments, but does not
include the deductible.
- P - Back to Top
Paid Claims: The total claims paid for you by the plan or insurance company.
Palliation: Alleviating discomfort rather than treating the disease. Usually applies to terminal cancer patients who need pain medication, fluids, sedation, and nursing care but no longer any surgery, radiation or chemotherapy.
Participating providers: Providers who are under contract with a health plan to provide services to plan members.
Point-of-service plan (POS): A health plan that allows the policyholder to receive a service from either a participating or a non-participating provider, with lower benefit levels provided when using non-participating providers.
Pool(ing): Used by insurance companies to combine all premiums, claims, and expenses in order to spread the risk of insurance coverage. This process ensures that small employers will not be singled out and assessed with a large rate increase due to the catastrophic claims history of their employees.
Preexisting condition: A health condition that a person has prior to joining a plan. An insurance policy may specifically exclude it from coverage or it may prevent the person from qualifying for insurance. Some policies allow resumption of coverage after a certain period of time without any treatment.
Portability: Provides access to continuous health coverage so the insured does not lose insurance coverage due to any change in health or personal status such as employment, marriage, or divorce.
Power of attorney: A document authorizing someone else to make decisions.
Pre-admission review: A review undertaken by a health plan before a patient is admitted to a hospital.
Preferred provider organization (PPO): A managed care organization in which medical providers contract with an insurer to provide services at pre-negotiated fees. Patients may use providers outside this network by paying a larger copayment.
Premium: The regular charge, usually monthly, that a policyholder or his or her employer pays to an insurer for health coverage, regardless of the policyholder's use of service.
Premium Tax: A state tax on insurance premiums.
Prepaid Group Practice: A type of HMO in which participating doctors give specific health care in exchange for an advanced fixed payment.
Primary Care: Routine office medical care. Usually provided by family practitioner, internist, pediatrician, or OB/GYN.
Provider: A person or an institution that delivers a medical service.
- Q - Back to Top
Quality assurance: A process to examine and optimize the quality of the services a hospital or other provider offers.- R - Back to Top
Reasonable and Customary: Standard doctors' fees for specific services that are determined by an insurance company. Reimbursement fractions are pegged to these mandated fees for the network physicians. Out-of-network physicians may charge more but are reimbursed only for the agreed-upon fraction of the mandated fee, so you must pick up the difference.
Referral: When one health care provider suggests you visit another for the purpose of further evaluation and/or treatment.
Rebating: The practice (illegal in most states) of giving an insurance applicant anything of value as an inducement to purchase or renew an insurance policy.
Reinstatement: A policy which lapses because of unpaid premiums may be reinstated under certain tough conditions. It's a serious problem if you develop a medical problem in the interim.
Reinsurance: The transfer of part of the insurance risk by your insurance company to another insurer or group of insurers. Self-funded plans generally buy aggregate stop-loss coverage to cover losses in excess of preset limits.
Reserves: Money set aside by an insurance company to assure adequate funds to cover future claims. Both insurance companies and self-insured employers put aside "reserves" in order to cover emergencies.
Retention: The portion of the insurance premium which is allocated for expenses, administration, commissions, and profit.
Rider and Exclusion Rider: An amendment to an insurance contract adding, limiting, or excluding an existing coverage for certain conditions.
- S - Back to Top
Screening: A testing procedure to determine if a person has a certain medical condition.Self-Funding: An arrangement under which all or some of the risk associated with providing medical insurance is covered by an employer or other group and not covered by an insurance contract.
Service area: The geographic area a health plan serves.
Specialist: A physician that practices in one of the 25 specialties defined by the American Board of Medical Specialties (ABMS). Also, a term used to describe a doctor's area of practice (surgery, urology, pediatrics).
Staff Model HMO: An HMO that employs physicians to provide health care services to its members. Staff Models usually operate their own health center or facilities, as in Group Models where doctors are employed by a medical group such as a large clinic or university faculty.
Stop-Loss: The limit on your out of pocket payments. Above this limit, coinsurance no longer applies and the insurance covers all medical bills. The higher this stop-loss, the greater the amount you may pay. This translates into less risk for the insurance company and lower premiums for you. It is easy to compute your maximum out-of-pocket expenses for a year by adding your deductible, and your percentage of co-pay for the entire stop-loss amount. Example: You have a $250 deductible on a $5000 80/20 policy. You may pay up to $250 plus $1000 (20% of $5000) for a total of $1250. This is what you pay on total medical bills exceeding $5250, up to the maximum benefit limit.
Subspecialist: A physician, already board certified, who has obtained additional training and certification within his specialty. Example: An interventional cardiologist, who specializes in invasive procedures such as angioplasty.
- T - Back to Top
Tertiary Care: Care that is intensive, sophisticated, and expensive such as an organ transplant, burn care, or neonatal intensive care.
Third Party Administrator (TPA): An organization that provides specific administrative duties (including premium accounting, claims review and payment) for a self-funded plan.
Triple Option Plan: A plan which allows an insured the opportunity to choose to be covered by an indemnity plan, HMO, or PPO.
- U - Back to Top
Underwriting: The process by which an insurer grants insurance coverage to an applicant..
Utilization Management or Utilization Review:The process insurers use to assure that treatment and care recommended for a patient is necessary and appropriate.
- V - Back to Top
(empty)- W - Back to Top
Waiting Period: The time between an employee's date of hire and eligibility to receive coverage.
Waiver of Premium: A provision in an insurance contract which relieves the insured of paying premiums while disabled.
Worker's Compensation Coverage: Programs mandated by states which require employers to provide coverage to compensate employees for work-related injuries or disabilities.
- X - Back to Top
Xu: A coin equal to 1/100 of the Dong, in North Vietnam.
- Y - Back to Top
Yggdrasil: In Norse mythology, the great ash tree with roots and branches that hold together earth, heaven, and hell.
- Z - Back to Top
Zag, zap, zax, zed, zee, zek, zig, zin, and zoa are excellent Scrabble words. Zit was finally included in the 3rd ed. of the Official Scrabble Players' Dictionary (1966). You may be interested to know that zzz is not acceptable (a poor Scrabble word anyway) nor is oo, but these words are: aa, ab, ai, ba, bo, brr, brrr, jo, mi, mm, mo, mu, od, psst, sh, shh, tsk, uh, um, umm, un, ut, xi, xu, ya, yo, and yok. Or, you may not (be interested).