Glossary of Health Care Insurance Terms
Accident Insurance. Provides first-dollar coverage (no deductible or copayments) 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. 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. Hospitals that specialize in treating particular illnesses, or performing particular treatments, such as cancer or organ transplants.
Co-insurance. 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. The review of continued-stay hospital cases and discharge-planning efforts to ensure proper and efficient placement of the hospital patient.
Co-payment. See co-insurance.
Deductible. The amount of covered expenses that must be incurred and paid by the insured before benefits become payable by the insurer.
Employee Assistance Program (EAP). A generic term for the variety of counseling services made available to employees (and frequently their families) through employer-sponsored programs.
Fee-for-Service. 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.
Health Maintenance Organization (HMO). An organization that provides for a wide range of comprehensive health care services for a specified group at a fixed periodic prepayment.
Indemnity. A benefit paid by an insurance policy for an insured loss.
Limited Policy. A policy that covers only specified accidents or sicknesses.
Major Medical Expense Insurance. A form of health insurance that provides benefits for most medical expenses up to a high maximum benefit. Such contracts may contain internal limits and are usually subject to deductibles and co-insurance.
Maximum Out-of-Pocket. The amount of money an insured will pay in a benefit period in addition to regular premium payments. Noncovered expenses are the employee's responsibility in addition to out-of-pocket amounts.
National Association of Insurance Commissioners (NAIC). A national organization of state officials charged with regulating insurance. Formed to provide national uniformity in insurance regulations.
Pre-admission Certification. Determines whether a hospital should admit a patient and whether services can be provided on an outpatient basis; its goal is to eliminate unnecessary nonemergency procedures.
Pre-admission Testing. Tests taken prior to hospital admission.
Pre-existing Condition. Any physical and/or mental condition(s) of an insured that exist prior to the effective date of coverage.
Preferred Provider Organization (PPO). 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.
Premium. A periodic payment made by a policyholder (employer, individual) for the cost of insurance.
Reasonable and/or Customary Charges. Amounts charged by health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.
Retrospective Review. 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. A process that requires patients to obtain a second doctor's opinion before certain elective surgeries in an effort to eliminate unnecessary surgical procedures.
Special Benefit Networks. Provider networks for particular services, such as mental health, substance abuse, or prescription drugs.
State Insurance Department. 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. Benefits for a variety of medical conditions that a given state requires of insurance policies sold in that state.
Third-Party Administrator (TPA). An outside person or firm, not a party to a contract, that maintains all records regarding the persons covered under the insurance plan.
Underwriting. The process by which an insurer determines whether or not and on what basis it will accept an application for insurance.
Utilization Review (UR). 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.
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