Glossary of Health Terms

ACCUMULATION PERIOD - The timeframe within a health insurance policy period in which the deductible and out-of-pocket amounts are calculated.

ACA - The abbreviation for Affordable Care Act

ADMITTING PHYSICIAN - The physician who is responsible for admitting a patient to a hospital or other inpatient health facility.

AFFORDABLE CARE ACT (ACA) - this act, signed into law by President Obama provides Americans with better health security by putting in place comprehensive health insurance reforms. Some of the reforms implemented including establishing Health Insurance Exchanges, or Marketplaces, where individuals, families and small businesses may purchase guaranteed issue qualified health insurance plans. These plans satisfy ACA’s individual mandate requiring those who don’t have health insurance to buy a health insurance policy.

AFTER CARE - Care or follow up treatment for a patient who has recently undergone surgery or other medical treatment or illness that required hospitalization. Physical and Occupational Therapists are often part of an after care protocol.

ALLOWABLE CHARGE - Also known as “Allowed Amount”, “Usual, Customary and Reasonable” (UCR), or “Maximum Allowable” - A discounted fee considered by a health insurance company to be a reasonable charge for medical services or supplies. This is a key reason why health insurance companies create incentives to use in-network providers and why consumers may pay more if they don’t. 

ALLOWED MAXIMUM BENEFIT - The maximum amount that a health insurer will pay per year. This may also be called an “eligible expense,”
“negotiated rate” or “payment allowance.”

AMBULATORY CARE - Any type of health service not requiring an overnight hospital stay.

ANCILLARY SERVICES - Medical services other than the services provided by a physician or hospital that are related to a patient’s care such as x-rays, anesthesia or lab work.

APPEAL - A request made to an insurance payer to reconsider a decision. Most often appeals are claim denials or claims that have been denied prior authorization requests. Most appeals must be submitted in writing within a specific time period.

ASSIGNMENT OF BENEFITS - When an insured individual signs a document that assigns benefits allowing a hospital or a physician to collect health insurance benefits directly from the health insurance company.

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BENEFIT - The amount that a health plan agrees to cover.

BENEFIT CAP - The total dollar amount that a payer will reimburse for covered health care services during a specified period.

BENEFIT LEVEL - The maximum amount that a health plan agrees to pay for a covered benefit.

BENEFIT YEAR- A 12-month period for which health insurance benefits are calculated.  This does not always coincide with the calendar year.

BENEFICIARY - The person(s) who are eligible for benefits under a health insurance policy.

BOARD CERTIFIED - A physician who has passed examinations given by a medical specialty group and now has been certified as a specialist in this area of practice as a result.

BROKER - A licensed legal representative of the health insurance policy holder who negotiates with an insurance company on behalf of a consumer, but is paid a commission by the health insurance company.

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A fixed monthly dollar amount that a Health Maintenance Organization (HMO) pays to a group of health care providers who have contracted with the HMO. The amount of this fixed dollar amount depends upon the number of HMO enrollees who have chosen this group of health care providers for primary care services under the HMO plan. The fixed dollar amount does not vary with how much HMO enrollees use or don’t use for services offered by this group of HMO providers. Not all HMOs utilize capitation payments.

CARE PLAN - A written plan by a health care professional for a patient’s health care.

CASE MANAGEMENT - The process whereby an insured individual who has specific health care needs is identified and a plan which utilized health care resources is designed and implemented to achieve optimum patient outcome in the most cost-effective manner possible.

CASE MANAGER - A health care professional such as a doctor, nurse or social worker who arranges all services that will be needed to provide proper health care to a patient or group of patients.

CATASTROPHIC COVERAGE - A health insurance plan that generally has lower premiums than traditional health insurance but also have high deductibles. This plan covers costly health services such as hospitalization but generally does not cover most routine medical care.

CATASTROPHIC ILLNESS - A serious and potentially costly health problem that could be life threatening or cause life-long disability.

CERTIFICATE OF COVERAGE - A document that is given to an insured individual describing the benefits, limitations and the exclusions of coverage provided by a health insurance company.

CLAIM - A request made by a health plan member or health care provider for reimbursement for
covered medical services.

CLINICAL PRACTICE GUIDELINES - Reports that are written by health experts who have studied whether a particular treatment works and which patients are the most likely to benefit by it.

CO-INSURANCE - A percentage of the charge for medical care that you pay to share the cost of covered services after your deductible has been paid. The coinsurance rate is usually a percentage. For example, if the insurance company pays 80% of the claim, you pay 20%.

CONCURRENT REVIEW - Involves monitoring the medical treatment and progress toward recovery once a patient is admitted to a hospital. This is to assure timely delivery of services and to confirm the necessity of continued inpatient care. This monitoring is under the direction of medical professionals. Concurrent review is a component of “Utilization Review.”

CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT (COBRA) - Commonly known as COBRA, the Consolidated Omnibus Reconciliation Act of 1985 requires group health plans with 20 or more employees to offer continued health coverage for employees and their dependents for 18 months after the employee leaves a job. If a former employee opts to continue coverage under COBRA, the former employee must pay the entire premium.

CONSUMER DRIVEN HEALTH CARE (CDHC) - Health plans where employees have personal health accounts such as a health savings account, medical savings account of flexible spending account from which medical expenses are paid from.

CONTRACT YEAR - The period of time from the effective date of the health plan contract to the expiration date of the contract. A health plan contract typically runs for 12 months, but not necessarily from January 1 through December 31.

COORDINATION OF BENEFITS (COB) - a system used in group health plans to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100% of the claim.

COORDINATED CARE - Links the treatment or services necessary to obtain an optimum level of medical care that is required by a patient and is provided by the appropriate providers. It is also another term for “managed care” used by federal government officials.

CO-PAYMENT - Alsoknown as Co-pay or Cost sharing is a flat amount paid by the patient for a covered service.

COVERED CHARGES OR EXPENSES - Most insurance plans, whether they are HMOs or PPOs, do not pay for all health care services. For example, some may not pay for mental health care; others may not pay for prescription drugs. Covered services are those medical procedures for which the health insurer has agreed to pay. You can find a list of covered charges or expensed in the health plan policy.

COVERED PERSON - An individual who meets eligibility requirements and for whom premium payments are paid for specified benefits of the contractual agreement.

CREDENTIALING - Credentialing is the process used by health insurance companies to examine and verify the medical qualification of health care providers who wish to participate in the PPO or HMO network. PREFERRED Therapy Providers, Inc. credentials all physical, occupational and speech therapists who join PREFERRED’s network.

CREDITABLE COVERAGE - Any previous health insurance coverage that can be used to shorten the pre-existing condition waiting period.

CRITICAL ACCESS HOSPITAL - A small medical facility that provides limited outpatient and inpatient hospital services to individuals residing in rural areas.

CURRENT PROCEDURAL TERMINOLOGY (CPT) - A system of terminology and coding developed by the American Medical Association (AMA) that is used for describing coding, and reporting medical services and procedures.

CUSTODIAL CARE - Personal care such as cooking, shopping and bathing.

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DEDUCTIBLE - The cost-sharing arrangement between an insured person and the health insurance company in which the insured person will be required to pay a fixed dollar amount of covered expenses each year before the health insurance company will reimburse for covered health care expenses.

DEDUCTIBLE CARRY OVER CREDIT - Charges applied to the deductible for services during the last three months of a calendar year which may be used to satisfy the following year’s deductible.

DEFENSIVE MEDICINE - The use of unnecessary treatments, procedures or other medical services by doctors to minimize the threat of a malpractice lawsuit.

DENIAL OF CLAIM - The refusal by a health insurer to reimburse for health care services that have been rendered.

DEPENDENT - Any covered person (spouse or child) that is covered by the primary insured member’s health plan.

DESIGNATED FACILITY - A facility which has an agreement with a health insurance plan to render approved services (such as organ transplants). The facility may be outside a covered person’s geographic area.

DISCHARGE PLANNING - The evaluation of appropriate settings for care by medical personnel of a health plan working with a patient’s attending physician and hospital staff. This can include arranging for a patient discharge including planning for subsequent care at home or in a skilled nursing facility. The goal of discharge planning is to assess when a patient is ready to leave the hospital and to provide a more comfortable and cost-effective setting for continued treatment.

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EFFECTIVE DATE - The date that a policy holder’s health coverage begins.

ELIGIBILITY - The process health insurance companies use to determine whether a patient qualifies for benefits based on factors such as enrollment date, pre-existing conditions, valid referrals, etc.

ELIGIBLE DEPENDENT - A dependent of a covered person (spouse, child or other dependent) who meets all of the requirements outlined in the health insurance contract to qualify for coverage and for who a premium payment is made.

ELIGIBLE EXPENSES - The lower of the reasonable and customary charges or the agreed upon health services fee for health services and supplies that are covered under a health plan.

EMPLOYEE ASSISTANCE PROGRAMS (EAPs) - Mental health counseling services that are sometimes offered by insurance companies of employers.

ENROLLEE - The person who is the primary insured. Under an individual or family policy, this person is the applicant. Under an employer-sponsored group health policy, this person is the employee.

EPISODE OF CARE - Health care services that are provided during a certain period of time, generally during a hospital stay.

ESSENTIAL HEALTH BENEFITS - Categories of health services that the Affordable Care Act requires certain health insurance plans to cover beginning in 2014. They include outpatient surgery, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services (including behavioral treatment and prescription drugs), rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, chronic disease management, and pediatric services that include oral and vision care. Each state will have significant latitude in establishing these benefits.

EXCHANGE - Also known as a Health Insurance Exchange or Health Insurance Marketplace. An Exchange is a shopping area for health insurance.

EXCLUDED FROM OUT-OF-POCKET EXPENSE CAP - Some health insurance plans exclude deductibles, co-pays and co-insurance from the out-of-pocket maximum.

EXCLUSION OR LIMITATION - Any specific situation, condition or treatment that a health insurance plan does not cover.

EXCLUSION PERIOD - A period of time when a health insurance company can delay coverage of a
pre-existing condition. This is also often called a pre-existing condition waiting period.

EXCLUSIONS - Items or services that are not covered by a health plan.

EXPLANATION OF BENEFITS (EOB) - The health insurance company’s written explanation of how a medical claim was paid. It contains detailed information about what the health insurance plan paid and what portion of the cost the insured is responsible for.

EVIDENCE OF INSURABILITY - Proof of physical condition that may be provided through physician records or by the results of an examination.

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FEE FOR SERVICE - Health care where the provider is paid for each service rendered instead of a pre-negotiated amount.

FEE SCHEDULE - A complete listing of the fees used by health insurance plans to pay health care providers.

FIRST DOLLAR COVERAGE - Refers to not having to meet a calendar year deductible prior to receiving reimbursement or payment for a medical service.

FLEXIBLE BENEFIT PLAN - A benefits package that allows an employee to choose from a rage of health benefit choices.

FLEXIBLE SPENDING ACCOUNT (FSA) - An employee benefits cash account that allows employees to use pre-tax dollars to pay for qualified medical expenses during the year and are generally funded through voluntary salary reduction agreements with an employer.

FORMULARY - A list of medications, either prescription or generic and their proper dosages that the health insurance plan will pay for.

FREE-LOOK PERIOD - Usually a 10-day period during which a newly insured individual can cancel a policy and receive a full refund of paid premium.

FULL TIME STUDENT - An eligible dependent child student typically age 19 or older under a health plan who meets the health plan’s criteria of “full time.” Such criteria will typically include minimum credit hour requirements such as 12 credit hours per semester and a maximum age limit.

Go To Top GAG RULE LAWS - Special laws to make certain that health plans let doctors tell their patients complete health care information including information about treatments that may not be covered by the health plan.

GATEKEEPER - In a managed care environment, the gatekeeper refers to the provider who is designated as one who directs an individual patient’s care and who is responsible for authorizing all specialist referrals. In most health maintenance organizations (HMOs), the secondary care is not covered by insurance if the primary care physician does not approve it.

GENERAL AGENT - A “middle man” agent who facilitates business between “retail” agents and the health insurance company.

GRIEVANCE - A request that is made to a health plan to reconsider coverage of a health care service that the health plan has not interpreted to be a covered benefit.

GROUP HEALTH INSURANCE OR GROUP HEALTH PLAN - A health care coverage plan that is offered by an employer or other organization that covers the individuals in that group as well as their dependents under a single policy.

GUARANTEED ISSUE - Under guaranteed issue, a health insurance company or an HMO must issue coverage to an applicant regardless of prior medical history.

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Name given to CPT codes (Level I), alphanumeric codes (Level II), and local codes (Level III) used by payers and providers for billing purposes. Within the industry, most refer to Level II national codes as HCPCS codes.

HEALTH CARE PROVIDER - A doctor, nurse, laboratory, therapist or any other provider who delivers medical or health-related care.

HEALTHCARE MARKETPLACE - A health insurance marketplace, otherwise known as a health insurance exchange, is a shopping area for health insurance.  Although private health insurance exchanges do exist, the phrase most commonly refers to public health insurance exchanged developed within each state as part of health care reform.

HEALTH EMPLOYER DATA AND INFORMATION SET (HEDIS) - A set of standard performance measures that provides information about the quality of a health plan.

HEALTH INSURANCE PORTABILITY & ACCOUNTABILITY ACT (HIPAA) - A law that was passed in 1996 and is also called the “Kassebaum-Kennedy” law.  This law expanded health care coverage for persons who have become unemployed through job loss, or are moving from one job to another. HIPAA protects individuals who have pre-existing medical conditions and/or problems, based on past or current health, in obtaining health insurance coverage.

HEALTH MAINTENANCE ORGANIZATION (HMO) - A health care financing and delivery system providing comprehensive health care services for enrollees from participating providers within a particular geographic area. HMOs require the use of specific, in-net work plan providers. In an HMO, one must choose a primary care physician who coordinates all care and makes referrals to any specialists that may be required and an enrollee must use the doctors, hospitals and clinics that participate in the plan’s network.

A tax-advantaged employee health spending account funded and owned by the employer. Funds that are remaining in the account at year-end revert to the employer.

HEALTH SAVINGS ACCOUNT (HSA) - A personal savings account allowing participants to pay for medical expenses with pre-tax dollars. Operating similarly to IRAs, HSAs are tax-advantaged savings accounts for health care services. HSAs are designed to complement a special type of health insurance called an HSA-qualified high-deductible health plan (HDHP).

HIGH DEDUCTIBLE HEALTH PLAN (HDHP) - An individual must be enrolled in a qualified High-Deductible Health Plan (HDHP) before they can establish a Health Savings Account (HSA).

HOME HEATLH CARE - Services provided at home to aged, disabled, convalescent or sick individuals who do not require institutional care. The most common types of home care are visiting nurse services and speech, physical, occupational and rehabilitation therapy. These services are provided by home health agencies, hospitals and other community organizations.

HOSPICE CARE - Care for terminally ill patients and their families in the home or in a non-hospital setting. Hospice emphasizes alleviating pain and discomfort rather and a medical cure.

HOSPITAL CARE - Reimbursement for both inpatient and outpatient medical care expenses incurred in a hospital including such charges as hospital room and board, necessary supplies and services (sometimes referred to as Hospital Extras, Other Hospital Extras, Miscellaneous Charges or Ancillary Charges). Outpatient benefits can include surgical procedures, rehabilitation or physical therapy.

HOSPITAL-SURGICAL COVERAGE - A form of health insurance offering coverage of certain costs related to hospitalization and surgical procedures.

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IN-NETWORK PROVIDER - A health care provider, hospital or pharmacy that is a part of a health plan’s network of preferred providers. Health insurance enrollees generally will pay less for services received from in-network providers because they have already negotiated a discount for their services in exchange for the health insurance company referring more patients to them.

INDIVIDUALIZED HEALTH INSURANCE - Health insurance plans that are purchased by individuals to cover themselves and their families. This differs from Group Plans which are offered by employers to cover all of their employees if they select to participate.

IMPAIRED RISK - The definition for a health insurance applicant who has a pre-existing poor health condition or is in substandard physical condition, or is engaged in dangerous activities or has a hazard occupation.

INCURRAL DATE - This is the date on which health care services are provided to a covered person. The incurral date and not the date on which the insurance company pays a health care claim is the critical date in determining health insurance benefits.

INDEMNITY HEALTH PLAN - Also known as “Fee-for-Service,” these are the types of plans that primarily existed before HMOs and PPOs. An indemnity plan is when an individual pays a pre-determined percentage of the cost of health care services, and the health plan pays the other percentage.

INDEPENDENT PRACTICE ASSOCIATION (IPA) - A type of HMO in which care is provided by independent physicians who contract with the HMO.

INPATIENT CARE - Health care that is provided with an overnight stay in a hospital.

INSURED - A person who has obtained health insurance coverage under a health insurance plan.

INTERNATIONAL CLASSIFICATION OF DISEASES, 10TH REVISION (ICD-10) - The coding system maintained by the National Center for Health Statistics and the Center for Medicare and Medicaid Services (CMS).

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LAPSE - Termination of insurance for non-payment of a premium.

LIFETIME MAXIMUM - A cap placed on the benefits paid for the duration of a health insurance policy.

LIMITED POLICY - A health plan policy that covers only specified accidents or sicknesses. An example would be a cancer policy.

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MAJOR MEDICAL - Health insurance coverage for expenses that are associated with hospital stays, surgeries and/or medical conditions that require a broad range of medical services and supplies.

MANAGED CARE - An organized method to manage cost, use and quality of the health care system. The major types of managed care plans are health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

MASTER POLICY - The group health insurance policy explaining coverage to all members of the group.

MEDICAID - The federal and state health insurance program established in 1965 for low-income individuals meeting the established eligibility criteria and who cannot afford Medicare or other commercial plans. Medicaid is funded by the federal and state governments and managed by the states.

MEDICARE - The federal health insurance program signed into law in 1965, providing health benefits to Americans who are aged 65 and older. Medicare has two parts: Part A, which covers hospital services, and Part B, which covers physician services.

MEDICARE SUPPLEMENT PLANS - Plans that are offered by private insurance companies to help fill the “gaps” in Medicare coverage. These plans are also known as “MediGap” plans.

MEDICAL NECESSITY - Medical information that justifies that the service rendered or item provided is reasonable and appropriate for diagnosis or treatment of a medical condition or illness.

MEDICAL SAVINGS ACCOUNT (MSA) - A tax-advantaged personal savings account used in conjunction with a high deductible health policy. Individuals can contribute funds to this account on a pre-tax basis to set aside money for qualified medical care and expenses, including annual deductibles and co-payments.

MEDICALLY NECESSARY - Many health insurance policies will pay only for treatment that is deemed “medically necessary” to restore a person’s health.

MEDIGAP - A supplemental health insurance policy that helps to cover the difference between approved medical charges and benefits paid by Medicare. Also known as Medicare Supplement plans.

MEMBER - A term that is used to describe a person who is enrolled in a health insurance plan.

MISREPRESENTATION - Lying of misleading an insurance company about the facts affecting a health insurance policy.

MORBIDITY - A mathematical representation of the occurrence of illnesses to a specific classification of people.

Go To Top NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) - A national organization of state officials charged with regulating insurance.

NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) - A national group responsible for devising and monitoring quality measurements and standards for health care entities.

NATIONAL DRUG CODE (NDC) - Numerical coding system for drug identification. NDC numbers are assigned by the Food and Drug Administration (FDA) and are typically used to bill payers for the drugs provided to health care beneficiaries.

NETWORK  PROVIDER - Also known as Participating Provider, it is the group of physicians, hospitals and other health care providers that insurance companies contract with to provide services at discounted rates. Health services rendered generally cost less when received from providers in the health plan’s network.

NON-CANCELLABLE POLICY - A policy that guarantees you can receive health insurance as long as you pay the premium. It is also known as a Guaranteed Renewable Policy.

NON-PARTICIPATING PROVIDER - Any health care provider or organization that does not have a contractual agreement with an insurance company to provide care to eligible patients for a contracted or discounted fee. Patients can receive services from non-participating providers if they have out-of-network benefits as part of their health insurance plan; or if they wish to pay cash for the service. In this instance the patient would miss out on in-network discounts.

NON-RENEWABLE - A health insurance policy that cannot be renewed or continued after its expiration date.

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OPEN ENROLLMENT - A period each year when a patient can enroll in health insurance or change from one plan to another.

OUT-OF-NETWORK- Health care services received outside the HMO or PPO network.

OUT-OF-NETWORK PROVIDER - A health care professional, hospital, or pharmacy that is not part of a health plan’s network of preferred providers. Services received from out-of-network providers are generally higher than with in-network providers.

OUT-OF-PLAN - This phrase usually refers to physicians, hospitals or other health care providers who are considered non-participants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered at a reduced benefit level.

OUT-OF-POCKET - Money that the patient pays toward the cost of their health care services.

OUT-OF-POCKET COSTS - Insured health care costs for which one is responsible, because of the application of deductibles, coinsurance and co-payments.

OUT-OF-POCKET LIMIT - The maximum amount paid for covered services in a year.

OUT-OF-POCKET MAXIMUM - The most money a patient will pay for a year of health insurance coverage. This includes deductibles, copayments and coinsurance, but is in addition to regular premiums. Beyond this amount, the health insurance company will pay all expenses for the remainder of the year.  This is also known as Stop-Loss Limit or Catastrophic Expense Limit.

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PARTICIPATING PROVIDER - A health care professional or organization that has a contractual agreement with a health insurance company to provide care to eligible patients under certain defined conditions and often at discounted and/or contracted fees. Also known as In-Network Provider.

PAYER - The party who actually makes payment for services under the health insurance coverage policy. In the majority of cases, the Payer is the same as the insurer. But as in the case of very large self-insured employers, the payer is a separate entity under contract to handle the administration of the health insurance policy. Other terms for this are Carrier or Payor.

PERMANENT INSURANCE - Coverage that can be continued relatively indefinitely (such as to age 65 for most permanent health insurance policies) as long as the policyholder makes scheduled premium payments and refrains from actions that would invalidate the policy (such as misrepresentation on the application).

PLAN SELECTIVITY - Health insurers do not have to cover everyone who applies. Some plans turn down the majority of applicants based on medical history and results from physical exams.    

POLICY - The health insurance agreement or contract.

POLICY YEAR - The twelve month period beginning with the effective date or renewal date of the policy.

POLICY HOLDER - The insured person named on the insurance policy.

PORTABILITY - The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.

PRE-ADMISSION REVIEW - A review of an individual’s health care status of condition prior to being admitted to a hospital or inpatient health care facility. Pre-admission reviews are often conducted by case managers or insurance company representatives in cooperation with the individual, the primary care physician or health care provider and hospitals.

PRE-ADMISSION TESTING - Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.

PRE-AUTHORIZATION - Under a pre-authorization provision of a health insurance policy, the insured must contact the health insurance company prior to a hospitalization or surgery and receive authorization for the service. Also known as Prior Authorization.

PRE-CERTIFICATION - This is a requirement that an insured person calls their health insurance company and advises them a doctor has stated certain medical treatment is required. This is done before receiving treatment from the doctor or hospital. A health insurance policy will normally list the medical conditions that require pre-certification before receiving treatment. When pre-certification is not received, benefits will be reduced or possibly not covered.

PRE-EXISTING CONDITION - A health problem that existed before the date a health insurance becomes effective. In most cases, a pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage.

PREFERRED PROVIDER ORGANIZATION (PPO) - A network of health care providers with which a health insurer has negotiated contracts for its insured population to receive health services at discounted costs. The insured can see both participating and non-participating providers.

PREGNANCY CARE - Federal maternity legislation, enacted in 1978, requires that employers engage in interstate commerce having 15 or more employees provide the same benefits for pregnancy, childbirth and related medical conditions as for any other sickness or injury.

PREMIUM - The cost of a health insurance plan.

PREVENTIVE CARE - Health services that can prevent illness or detect illness at an early stage such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, mammograms and other early detection testing. The purpose of offering health coverage for preventative care is to diagnose a health problem early when it is less costly to treat, rather than late in the stage of the health problem when it can be much more expensive.

PRIMARY CARE PHYSICIAN (PCP) - The primary care physician is usually an insured person’s first contact for health care. This is often a family physician, internist or pediatrician. A primary care provider monitors patient health, treats most patient health problems, and refers patients if necessary, to specialists.

PRIMARY CARE VISITS - Primary care physicians and health care practitioners who perform routine medical exams and other uncomplicated medical services including internists, OB/GYNs and pediatricians.

PROVIDER - Any health care professional such as doctor or nurse, or an institution such as a hospital, clinic or laboratory that provides medical care.

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QUALIFYING EVENT - An occurrence such as death, termination of employment, divorce, etc. that changes an employee’s eligibility status under a group health plan. The term is most frequently used in reference to COBRA eligibility.

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REASONABLE AND CUSTOMARY (R & C) CHARGE - A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community. Also known as “Usual and Customary (U & C) Charge.”

REFERRAL - An approval from a patient’s primary care physician to see a specialist or to receive certain services. In many HMO plans, the insured person must receive a referral before they can receive care from anyone except the primary care provider.

REIMBURSEMENT - The payment by the patient (first-party) or insurer (third-party), to the health care provider, for services rendered.

RENEWAL - A continuation of an insurance policy on revised terms, such as adjusted health insurance rates.

RIDER - An attachment, amendment or endorsement to an insurance policy.

RISK - For a health insurance company, risk is the chance of loss, the degree of probability of loss, or the amount of possible loss. For an individual, risk represents such probabilities as the likelihood of surgical complications, medication side effects, exposure to infections, or the chance of suffering a medical problem because of a lifestyle or other choice. For example, an individual increases his/her risk of cancer if he/she chooses to smoke cigarettes.

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SCHEDULE OF BENEFITS AND EXCLUSIONS - A health insurance listing of the benefits which are covered under the policy guidelines as well as services which are not provided under the policy.

SECOND SURGICAL OPINION - An opinion provided by a second physician, when one physician recommends surgery to an individual. Most health insurance policies will cover second surgical opinions.

SELF-INSURED - Also known as Self-Administered, a self-insured employers assumes risk for health care expenses in a plan that is self-administered or administered through a contract with a third-party organization. This form of coverage is regulated by the Employee Retirement Income Security Act of 1974. Hence, self-insured health plans fall under federal, rather than state, regulation.

SERVICE AREA - The area where a health plan accepts members. For HMOs it is also the area where services are provided. A health plan may terminate coverage for persons who move out of the plan’s service area.

SHORT-TERM MEDICAL INSURANCE - Temporary major medical coverage designed to fill “gaps” in traditional medical coverage. Short-term plans typically last no longer than one year and cannot be renewed.

SKILLED NURSING FACILITY - A licensed institution that provides regular medical care and treatment to sick and injured persons. Daily medical records are kept and patients are under the care of a licensed physician. Many physical therapists choose to work in a skilled nursing facility.

SPECIAL BENEFIT NETWORKS - Provider networks for particular services such as substance abuse or mental health.

SPECIALIST VISITS - Some conditions require the care of a physician with narrower but deeper skills than a primary care physician can offer. An example would be a cardiologist who specializes in the heart or a nephrologist who specializes in kidney health.

STAFF MODEL - A type of HMO in which care is provided by physicians who are employees of the HMO. This contrasts with the “Independent Practice Association (IPA)” HMO, in which independent physicians contract with an HMO to provide health services.

STANDARD INDUSTRIAL CLASSIFICATION (SIC) - The coding of businesses by their product or service. The classification is used in group insurance in determining rates for various industries.

STATE INSURANCE DEPARTMENT - An administrative agency that implements state insurance laws and supervises (within the scope of these laws) the activities of insurance companies operating within the state.

STATE-MANDATED BENEFITS - Benefits for a variety of medical conditions that a given state requires of health insurance policies sold in that state.

STOP-LOSS PROVISIONS - A limit in a health insurance policy that provides for 100% payment of expenses after total patient out-of-pocket expenses exceed a certain contractual dollar amount.

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THIRD-PARTY PAYER - Any payer of health care services other than the insured person. This can be an insurance company, HMO, PPO, or the federal government.

Go To Top UNDERWRITING - The process by which a health insurance company evaluates a prospective insurance applicant for risk assessment and appropriate premium.

URGENT CARE - Health care provided in situations of medical duress that have not reached the level of an emergency. Claim costs for urgent care services are typically less than for services delivered in emergency rooms.

USUAL AND CUSTOMARY (U & C) CHARGE - A term that refers to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average of commonly charged fee for the particular service within that specific community. “Reasonable and Customary (R & C) Charge” is a term that means the same thing.

UTILIZATION REVIEW - A mechanism by which the appropriateness, necessity and quality of health care services are monitored by both insurers and employers.

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WAITING PERIOD - The period of time that an employer requires a new employee to wait before becoming eligible for coverage under the company’s health plan. Also, the period of time beginning with a policy’s effective date during which a health plan may not pay benefits for certain pre-existing conditions.

WELL-BABY CARE - Preventative health services, including immunizations, for young children within an age range specified by the health plan.

WELLNESS OFFICE VISIT - A health care providers’ office visit which is not prompted by sickness or injury.

WORKERS’ COMPENSATION - Insurance that employers are required to have to cover employees who become sick or injured on the job.