Health Care Definitions

ACCESS: The ability to obtain medical care in a timely manner. The ease of access is determined by components such as the availability of medical services and their acceptability to the individual, the locale of health care facilities, transportation, hours of operation and cost of care. 

ACUTE: Sudden onset of symptoms that are of short duration. 

AMBULATORY CARE: An institutional health setting in which organized health services are performed on an outpatient basis, such as a surgery center, clinic or other outpatient facility. Ambulatory care settings also may be mobile units or service, such as mobile mammography. 

APPEAL: The formal review process, initiated by a managed care member, when a service is denied or disapproved.  

BENEFITS: List of health and related services guaranteed to be covered in a health plan if the services are medically necessary.

BENEFIT MAXIMUM:  The maximum amount an insurer will pay for a specific benefit.  (See limited benefit plans.)

CAPITATION: Rate paid to a health plan or provider for services based on a fixed monthly or yearly amount per person, no matter how few or many services a consumer uses.  

CARVE OUT: An arrangement whereby the health plan or an employer eliminates coverage for a specific category of services (e.g. vision care, mental health and prescription drugs) and contracts with a separate set of providers for those services according to a predetermined fee schedule.   

CASE WORKER: A health professional (e.g. nurse, doctor, social worker) affiliated with a health plan who is responsible for coordinating the medical care of an individual enrolled in a managed care plan. 

CERTIFICATE (or EVIDENCE) OF COVERAGE: The description and explanation of benefits covered by your health plan.  The certificate of coverage is a contract between you and your insurer.

CLAIM: Information submitted by a provider or covered member to establish that medical services were provided, from which processing for payment to the provider is made. The term generally refers to the liability for health care services received by covered members. 

CMS (Center for Medicare and Medicaid Services): The Federal Medicare agency responsible for administering Medicare and Medicaid.   It used to be known as "HCFA."

COBRA (Consolidated Omnibus Budget Reconciliation Act): A federal law that, among other things, requires employers of a certain size to offer continued health insurance coverage, for a definitive amount of time, to certain employees and their beneficiaries who have had their group health insurance coverage terminated.

COB (Coordination of Benefits): A provision in a contract that applies when a person is covered under more than one insurance plan. It requires that payment of benefits be coordinated by all plans to eliminate over-insurance or duplication of benefits.

CO-INSURANCE: the portion of covered health care cost for which the covered person has a financial responsibility; usually according to a fixed percentage. Often co-insurance applies after first meeting a deductible requirement.

COMPLAINTS: Complaints by members may be generally defined as problems that members bring to the attention of the managed care plan. Complaints that are not resolved to the satisfaction of the member may evolve into formal grievances.

CO-PAYMENT: A cost-sharing arrangement in which a plan member pays a specific charge for a specified service, such as $20 for an office visit. The member is usually responsible for payment at the time the health care is rendered.

CREDENTIALING: A process of review to include and/or maintain a provider as a participating provider in a given managed care plan.

DATE OF SERVICE: The date on which health care services were provided. 

DEDUCTIBLE: The amount of eligible expense a person must pay each year from his/her own pocket before the health plan will make payment for eligible benefits. Usually occurs in the out of network portion of point of service plans. 

DRUG FORMULARY: A listing of prescription medications which are approved for use and/or coverage by the plan and which will be dispensed through participating pharmacies to a covered member. The list is subject to periodic review and modification by the managed care plan. 

DURABLE MEDICAL EQUIPMENT (DME): Equipment which can stand repeated use, is primarily and customarily used to service a medical purpose, and is appropriate for use at home. Examples include hospital beds, wheelchairs and oxygen equipment. 

EXPERIMENTAL, INVESTIGATIONAL or UNPROVEN PROCEDURES: (Your plan may have a different definition -- check your plan)  Medical, surgical or other health care services, supplies, treatments procedures or devices that are determined by the health plan (at the time it makes a determination regarding coverage in a particular case) to be either:

(1)   not generally accepted by informed health care professionals in the U.S. as effective in treating the condition, illness or diagnosis for which their use is proposed, or

(2)   not proven by scientific evidence to be effective in treating the condition, illness or diagnosis for which their use is proposed.

EXPLANATION OF MEDICAL BENEFITS (EOB): the statement sent to members by their health plan listing services provided, amount billed and payment made.  Providers also receive EOBs.

FEE FOR SERVICE: A provider payment method in which an insurer pays a provider a fee for each service performed. 

GENERIC DRUG: A chemically equivalent copy designed from a brand name drug that has an expired patent. A generic is typically less expensive and sold under a common or “generic” name for that drug, not the brand name.  

GRIEVANCES: Formal complaints unresolved by the plan; managed care plans are required to have a formal internal grievance procedure according to a time sensitive established review system. State law requires managed care plans to resolve internal grievances within 60 days from the date grievance is commenced.

HIPAA (Health Insurance Portability and Accountability Act):  Federal law designed to allow people to change jobs without fear of losing insurance because of a pre-existing condition.  HIPAA also requires additional protections for the privacy of health information.

INDEMNITY: an insurance program in which the insured person is reimbursed for covered expenses. Involves the application of deductibles and co-insurance requirements. With an indemnity (fee-for-service) plan the member can go to any doctor (or hospital) and the bill is then submitted by the member or the doctor to the insurance company.

IN-NETWORK PROVIDER: A provider who has contracted with a managed care plan and agrees to deliver medical services to enrollees for an agreed upon fee.

LIFETIME MAXIMUM:  The maxium amount of coverage that an insurer will pay in claims over one's lifetime under that policy.  Many insurers do not have lifetime maximums on their policies.

LIMITED BENEFIT PLAN:  A type of insurance plan that covers only a certain number of benefits or limits the amonut of coverage it will pay on benefits.  Under state law, insurers are required to disclose the limitations on the benefits in these plans in large typeface.

MANAGED CARE PLANS (MCOs):  Health care systems that are responsible for both the financing and the delivery of a broad range of comprehensive health services to an enrolled population. They provide health care services through certain doctors, hospitals and other health care providers to give a range of services to plan members. The acronym “HMO” (“health maintenance organization”) is often interchangeable with “MCO”.  

MEDICAID: Federal program (Title XIX of the Social Security Act) that pays for health services for certain categories of people who are poor, elderly, blind, disabled, or who are enrolled in certain programs, including Medicaid waivers.  Joint Federal/State funds are used to support the Medicaid program. Children  and parents in CT with low family income may quality for HUSKY (Healthcare for UninSured Kids and Youth). The HUSKY Plan is a comprehensive health insurance program to help CT families obtain and afford coverage for their children.

MEDICAL NECESSITY: Legal term used to determine what services will be provided and paid for. Describes services that are consistent with a diagnosis, meet standards of good medical practice, and are not primarily for the convenience of patient or provider. This definition and how it is used may vary from plan to plan.  Connecticut law defines medical necessity for many insurance plans.  Check your insurance contract for the definition in your plan.

MEDICARE: The federal health insurance program for older Americans (65 and older) and disabled folks with a work history.  

MEMBER: State law defines a “consumer” as a resident of the state who receives services from an MCO. The managed care industry defines each consumer with insurance coverage under a health plan as a “member”. Other terms used include enrollees and covered lives. 

NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA): An organization that provides information to allow purchasers and consumers of managed health care to compare plans.

NETWORK: A list of participating providers that participate with a managed care plan. 

OPEN ACCESS: A term describing a member’s ability to self-refer for specialty care. Open access arrangements allow a member to see a participating specialty provider without a referral from another doctor.   

OPEN ENROLLMENT: The period during which consumers may choose to enroll in a health plan or change health plan coverage. 

OUT OF POCKET MAXIMUM:  The amount, once exceeded, at which an insurer will pay 100% of the costs of claims.

POINT OF SERVICE PLAN: Managed care members covered under this type of health benefit plan may decide whether to use managed care benefits or indemnity style benefits for each instance of care. Therefore, the member is allowed to make a coverage choice at the “point of service” (or POS) when medical care is needed. The indemnity coverage available typically incorporates higher deductibles and coinsurance.

PRE-EXISTING CONDITION: any medical condition that has been diagnosed or treated within a specified period immediately preceding the enrollee’s effective date of coverage under the group contract. 

PREFERRED PROVIDER ORGANIZATION (PPO): A health plan that encourages savings by establishing a network of preferred providers – health professionals who agree to provide medical services to plan members for discounted rates. Plan members may go out of network to seek medical services from non-affiliated medical professionals. Members are charged higher co-payments for this option. 

PRIMARY CARE PHYSICIAN (PCP): A doctor who provides, arranges, authorizes, coordinates and monitors the care of managed care members. Upon joining a managed care plan a member chooses such a doctor from an extensive list of network physicians. 

PRE-AUTHORIZATION (or PRE-CERTIFICATION): the process of obtaining coverage approval for a service or medication from the managed care plan. Managed care plans require such approval for certain services, such as surgery, and for services at a non-participating provider or facility, non-covered medication, continued care for specific services, or exception to a benefit plan.  

REFERRAL: the process by which a managed care patient’s primary care doctor refers a consumer for treatment from a medical specialist or facility. 

SELF-INSURED PLANS: are offered to approximately 50% of the employees in CT by their employers. In a self-insured (or self-funded) plan, the costs of medical care are borne by the employer. The employer decides the level of benefits offered and is the decision-maker while the implementation may be by a third party (or managed care plan) who has been contracted with by the employer for administration of the plan.   

SERVICE AREA: the geographic area within which a managed care plan provides health care for its members. 

SKILLED NURSING FACILITY (SNF): An institution providing skilled nursing and related services to residents; a nursing home. 

SERVICE LIMITS: Certain number of times you may use a health service and a certain time period when you may use a service. 

SPEND-DOWN: The process of using up all income and assets on medical care in order to quality for Medicaid. 

SUMMARY PLAN DESCRIPTION: a description of the entire benefit package available to an employee covered by a self-insured plan.   The SPD is interchangeable with the Certificate of Coverage and is your insurance contract.

SUPPLEMENTAL SECURITY INCOME (SSI): Monthly cash assistance for people, including children, who have low incomes and who meet certain age or disability guidelines.  

URGENT CARE: Occurs when a patient has an illness that is not life-threatening but requires immediate attention. 

UTILIZATION REVIEW: The assessment process that determines the medical necessity and appropriate level of care provided to members. An assessment may take place either before the services can be provided or while they are being provided in order to decide whether to pay for those services. Denied services can be appealed.

YEARLY MAXIMUM:  (Most plans do not have yearly maximums.) The maximum in yearly benefits that your plan will pay.  Anything above that amount is the consumer's responsbility.