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Glossary of Health Insurance Terms |
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Health insurance is an increasingly complicated and technical subject. Affinity Group Underwriters is committed to simplifying and de-mystifying medical insurance and the process of purchasing it. The following definitions are provided to help you better understand some of the most common terms and acronyms used in insurance generally and in health or medical insurance in particular. The source of the terms marked “(H)” is the Health Insurance Association of America's (HIAA) Consumer Information web page. Click here to visit HIAA's home page. There you can find tips on topics like selecting a health insurance policy, finding a doctor and what to look for in a PPO network. Terms marked “(T)” are from The Trustmark Insurance Company.
Ambulatory Care (H).
Reimbursement for medical, surgical, or diagnostic services provided in a non-hospital setting that
does not require an overnight stay. Also known as outpatient care. Approved Transplant
Services (T). Services and supplies which are related to a transplant procedure, approved in
writing by Trustmark, which include, but are not limited to pre-transplant evaluation for the medical
necessity of the transplant, hospital charges, physician charges, and tissue typing and ancillary
services. Accident Insurance (H).
Provides first-dollar coverage (no deductible or co-payments) when an injury is due to an accident.
Another type of accident plan pays a fixed dollar amount, $5,000 or $10,000 for example, if a serious
accidental injury occurs. Case Management (H).
Process of directing an ongoing course of treatment to assure that it occurs in the most appropriate
setting and that the best form of service is selected. Often produces alternatives to institutional
care that result in better patient outcomes as well as lower costs. Centers of Excellence
(H). Hospitals that specialize in treating particular illnesses, or performing particular
treatments, such as cancer or organ transplants. Co-insurance (H). Arrangement
by which the insurer and the insured share, in a specified ratio, payment for losses covered by the
policy after the deductible is met. Sometimes referred to as co-payment. Concurrent Review (H).
The review of continued-stay hospital cases and discharge-planning efforts to ensure proper and
efficient placement of the hospital patient. Co-payment (H). See
co-insurance. Deductible (H). The amount of
covered expenses that must be incurred and paid by the insured before benefits become payable by the
insurer. Dental Care (H). Reimbursement
for dental services and supplies, including preventive care. Benefits may be provided through a plan
integrated with other medical insurance coverage, or a plan may be written separately from other
coverage (non-integrated). Designated Facility (T).
A facility which has an agreement with Trustmark to render approved transplant services. The facility
may be outside a covered person’s geographic area. Diagnostic
X-Ray and Laboratory Examinations (H). Reimbursement for outpatient diagnostic and laboratory
examinations. Fee-for-Service (H). A
method of charging whereby a physician or other practitioner bills for each visit or service. Premium
costs for fee-for-service agreements can increase if physicians or other providers increase their fees,
increase the number of visits, or substitute more costly services for less expensive ones (note: this
was the traditional form of health insurance in the United States before managed care). Health
Maintenance Organization (HMO) (H). An organization that provides for a wide range of
comprehensive health care services for a specified group at a fixed periodic prepayment. Home Health Care (H).
Services given at home to aged, disabled, sick, or convalescent individuals not needing 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, or other community organizations. Hospice Care (H). Care for
the terminally ill and their families, in the home or a non-hospital setting, that emphasizes
alleviating pain rather than a medical cure. Hospital Care (H). Reimbursement for both inpatient and outpatient medical care expenses incurred in a hospital.
Top Injury (T). Accidental bodily injury independent of disease, bodily
infirmity or other cause. Limited Policy (H). A policy that covers only specified
accidents or sicknesses (e.g. a cancer policy). Major Medical Expense Insurance (H). A form of
health insurance that provides benefits for most medical expenses up to a high maximum benefit (usually
$1 million or more). Such contracts may contain internal limits and are usually subject to deductibles
and co-insurance. Managed Care Organization (MCO). An aggregate
term used to refer generically to any and all variants of managed care. Maximum Out-of-Pocket (H). The amount of money an insured
will pay in a benefit period in addition to regular premium payments. Non-covered expenses are the
insured's responsibility in addition to out-of-pocket amounts. Medically Necessary (T). A service, drug or supply that is
necessary and appropriate for the diagnosis or treatment of a sickness or injury in accordance with
generally accepted standards of medical practice in the United States at the time it is provided. When
specifically applied to a (hospital) confinement, the diagnosis or treatment of symptoms or a condition
which cannot safely be provided on an outpatient basis. National Association of Insurance Commissioners (NAIC) (H).
A national organization of state officials charged with regulating insurance. Formed to promote
national uniformity in insurance regulations. Physician Visits (H). Reimbursement for physician's fees for
visits in cases of injury or sickness. Of the two types of plans most commonly offered, one covers
in-hospital visits only and the other covers in-hospital visits and doctor visits out of the hospital
setting. Point Of Service Plan (POS). A hybrid of managed
care and traditional indemnity under which the insured can choose, for each doctor visit,
hospitalization or other medical expense, whether to use a network or non-network provider. Pre-admission Certification (H). Determines whether
a hospital should admit a patient and whether services can be provided on an outpatient basis; its goal
is to eliminate unnecessary non-emergency procedures. Pre-admission Testing (H). Tests taken prior to hospital
admission. Pre-existing Condition (H). Any physical and/or mental
condition(s) of an insured that existed prior to the effective date of coverage. Pre-existing Condition (T). A pre-existing condition means a sickness or injury during the 12
months prior to the effective date (of coverage) for which medical care, treatment, diagnosis or advice
was received or recommended, or the existence of symptoms which would cause an ordinarily prudent
person to seek medical care, treatment, diagnosis or advice. A sickness fully disclosed on the
application will not be considered a pre-existing condition. Preferred Provider Organization (PPO) (H).
A mode of health care delivery through which a sponsoring group negotiates price discounts with
providers in exchange for more patients. The sponsor may be an insurer, employer, or third-party
administrator. Pregnancy Care (H). Federal maternity legislation, enacted in
1978, requires that employers engaged in interstate commerce who have 15 or more employees provide the
same benefits for pregnancy, childbirth, and related medical conditions as for any other sickness or
injury. This includes all employers who are, or become, subject to Title VII of the Civil Rights Act of
1964. Prescription Drug Plan (H). Some prescription drug
expense insurance plans are subject to the same deductibles and co-payments as are other covered
medical expenses. Other plans use a prescription drug card and cover these expenses with very little,
if any, cost to the insured. Reasonable and/or Customary Charges (H).
Amounts charged by health care providers that are consistent with charges from similar providers for
identical or similar services in a given locale. Rehabilitation Care (H). A program that provides physical
and mental restoration of disabled insured individuals to maximum independence and productivity. Retrospective Review (H). A follow-up analysis that
ensures medical care services were necessary and appropriate in order to detect and reduce the
incidence of fraud and unnecessary services. Second Surgical Opinion (H). A process that requires
patients to obtain a second doctor's opinion before certain elective surgeries in an effort to
eliminate unnecessary surgical procedures. Sickness (T). Illness, disease, complications of pregnancy and the
congenital defect, birth abnormality or prematurity of a covered newborn child which occur after the
effective date of coverage. Skilled Nursing Facility (H). 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. Special Benefit Networks (H). Provider networks for
particular services, such as mental health, substance abuse, or prescription drugs. State Insurance Department (H). An administrative
agency that implements state insurance laws and supervises (within the scope of these laws) the
activities of insurers operating within the state. State-Mandated Benefits (H). Benefits for a variety of
medical conditions that a given state requires of insurance policies sold in that state. Third-Party Administrator (TPA). A service firm, not
an insurance company, which maintains records regarding the persons covered on behalf of an insurer.
TPAs can perform any or all of the following functions: underwriting, policy issue, premium billing and
collecting, general customer service and claims payment. Underwriting (H). The process by which an insurer assesses the
health of an applicant and determines whether or not and on what basis it will issue an insurance
policy. Usual and Customary Charge (T). The lesser of: 1.
the actual charge 2. the fee most often charged by the provider for the same service or supply, or 3.
the fee most often charged in the same are by providers with similar training and experience for a
comparable service or supply. An area is defined as the metropolitan area, a county or a greater area
if needed to find a cross-section of providers of a comparable service or supply. Utilization Review (UR) (H). The process of assessing
the delivery of medical services to determine if the care provided is appropriate, medically necessary,
and of high quality. UR may include review of appropriateness of admissions, services ordered and
provided, length of stay, and discharge practices, both on a concurrent and retrospective basis. Wellness Office Visit (T). A visit to a physician’s
office which is not prompted by sickness or injury. |
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| If you have encountered a health insurance term or phrase that you don't understand, please call Emma Parrish at 1-877-673-9797 toll free or send an e-mail to EParrish@agu.net and we will do our best to provide an explanation. | |||||
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Copyright © 2001 Affinity Group Underwriters. All rights reserved. |
