Texas Health Insurance Glossary

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Glossary of Texas Health Insurance Terms

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-A- 

Access
The availability of medical care to a patient. This can be determined by location, transportation, type of medical services in the area, etc.

Accidental Death Insurance
A form that provides payment if the death of the insured results from an accident. It is often combined with Dismemberment Insurance in a form called Accidental Death and Dismemberment. See also Accidental Death and Dismemberment.

Accrete
A Medicare term which means the process of adding new members to a health plan.

Accumulation Period
A specified period of time (such as ninety days) during which the insured person must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy

Actively-at-work
Most group health insurance policies state that if an employee is not actively at work on the day the policy goes into effect, the coverage will not begin until the employee does return to work.

Actual Charge
The actual amount charged by a physician for medical services rendered.

Acute Care
Skilled, medically necessary care provided by medical and nursing personnel in order to restore a person to good health.

Additional Drug Benefit List
Prescription drugs listed as commonly prescribed by physicians for patients' long-term use. Subject to review and change by the health plan involved. Also called drug maintenance list.

Adjusted Average Per Capita Cost (AAPCC)
The estimated average cost of Medicare benefits established on a per county basis _ factors include age, sex, Medicaid, institutional status, disability, and end stage renal disease status. Used to determine payments to cost contractors for Medicare benefits.

Adjusted Community Rating (ACR)
Community rating adjusted by factors specific to a particular group. Also known as factored rating.

Administrative Service Only (ASO) Plan
An arrangement under which an insurance carrier or an independent organization will, for a fee, handle the administration of claims, benefits, and other administrative functions for a self-insured group.

Admissions/1,000
The number of hospital admissions for each 1,000 members of the health plan.

Admits
The number of admissions to a hospital (including outpatient and inpatient facilities).

Adverse Selection
The tendency of persons with poorer than average health expectations to apply for, or continue, insurance to a greater extent than persons with average or better health expectations.

Age Limits
Stipulated minimum and maximum ages below and above which the insurance company will not accept applications or may not renew policies.

Age/Sex Factor
Compares the age and sex risk of medical costs of one group relative to another. An age/sex factor above 1.00 indicates higher than average risk of medical costs due to that factor. Conversely, a factor below 1.00 indicates a lower than average risk. This measurement is used in underwriting.

Age/Sex Rates
Separate rates are established for each grouping of age and sex categories. Preferred over single and family rating because the rates and premiums automatically reflect changes in the age and sex content of the group. Also sometimes called table rates.

Aggregate Indemnity
The maximum ages below and above which the insurance company will not accept applications or may not renew policies.

Allocated Benefits
Benefits for which the maximum amount payable for specific services is itemized in the contract.

Allowable Charge
The lesser of the actual charge, the customary charge and the prevailing charge. It is the amount on which Medicare will base its Part B payment.

Allowable Costs
Charges which qualify as covered expenses.

Alternative Delivery Systems
Systems which cover health care costs, other than on the usual fee-for-service basis. Could include HMOs, IPAs, PPOs, etc.

Alzheimer's Disease
A progressive, irreversible disease characterized by degeneration of the brain cells and severe loss of memory causing the individual to become dysfunctional and dependent upon others for basic living needs.

Ambulatory Benefits
Benefits available to you for health care services received while not confined to a hospital bed as an inpatient; for example, outpatient care, emergency room care, home health care, and preadmission testing.

Ambulatory Care
Medical services that are provided on an outpatient (non-hospitalized) basis. Services may include diagnosis, treatment and rehabilitation.

Ambulatory Surgery
A large, through limited, range of procedures using operative and anesthesia techniques that allow the patient to recuperate at home, rather than in the hospital, immediately following the operation.

Ambulatory Surgical Center
A medical facility for outpatient surgical procedures.

Ancillary Benefits
Benefits for miscellaneous hospital charges.

Application
A signed statement of facts requested by the company on the basis of which the company decides weather or not to issue a policy. This then becomes part of the health insurance contract when the policy is issued.

Approval
Acceptance of an offer from an applicant or policyholder in the form of a contract for new insurance, reinstatement of a terminated policy, request for a policy loan, etc., by an officer of he company.

Approved Charge
The amount that Medicare has determined is appropriate for payment to a physician for a service, based on his colleagues' histories of charge.

Approved Health Care Facility or Program
A facility or program which has been approved by a health care plan as described in the contract.

APTD(Aid to the Permanently and Totally Disabled)
A program of financial assistance and social services designed for the permanently and totally disabled who meet Medicare eligibility guidelines.

Assignment
A process in which a Medicare beneficiary agrees to have Medicare's share if the cost of a service paid directly to a doctor or other provider, and the provider agrees to accept the Medicare-approved charge as payment in full. Medicare pays 80 percent of the cost, the beneficiary 20 percent.

Assignment of Benefits
A method where the person receiving the medical benefits assigns the payment of those benefits to a physician or hospital.

Association Group
A Group formed from members of a trade or a professional association for group insurance under one master health insurance contract.

-B-

Basic Hospital Expense Insurance
Hospital coverage providing benefits for room and board and miscellaneous hospital expenses for a specified number of days during hospital confinement.

Beneficiary
The person designated or provided for by the policy terms to receive the proceeds upon the death of the insured.

Benefits
The amount payable by the insurance company to a claimant, assignee (party to whom the payment is assigned-- for example, a service provider), or beneficiary under each coverage.

Benefit Levels
The maximum amount a person is entitled to receive for a particular service or services as spelled out in the contract with a health plan or insurer.

Benefit Package
A description of what services the insurer or health plan offers to those covered under the terms of a health insurance contract.

Benefit Period
Defines the period during which a Medicare beneficiary is eligible for Part A benefits. A benefit period is 90 days which begins the day the patient is admitted to a hospital and ends when the individual has not been hospitalized for a period of 60 consecutive days.

Billed Claims
The amounts submitted by a health care provider for services provided to a covered individual.

Binding Receipt
A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt

Bioequivalence
Since the mid-1970s, the Food and Drug Administration has required that generic drugs have the same therapeutic effects as the brand-name drugs when administered to people under the conditions spelled out in the labeling. When this is the case, the drug products are said to be bioequivalent.

Birthday Rule
One method of determining which parent's medical coverage will be primary for dependent children: the parent whose birthday falls earliest in the year will be considered as having the primary plan.

Blanket Contract
A contract of health insurance affording benefits, such as accidental death and dismemberment, for all of a class of persons not individually identified. It is used for such groups as athletic teams, campers, travel policy for employees, etc.

Blanket Insurance
A contract of Health Insurance that covers all of a class of persons not individually identified in the contract.

Blanket Medical Expense
A provision that entitles the insured person to collect up to a maximum established in the policy for all hospital and medical expenses incurred, without any limitations on individual types of medical expenses.

Blue Cross
An independent, nonprofit membership corporation providing protection on a service basis against the cost of hospital care in a limited geographical area.

Blue Plan
A generic designation for those companies, usually writing a service rather than a reimbursement contract, who are authorized to use the designation Blue Cross or Blue Shield and the insignia of either.

Blue Shield
An independent, nonprofit membership corporation providing protection on a service basis against the cost of surgical and medical care in a limited geographical area.

Board Certified
A physician or other professional who has passed an examination which certifies him or her as a specialist in a particular medical area.

Board Eligible
A professional person or physician who is eligible to take a specialty examination.

Brochure (also called Certificate of Coverage)
This booklet showing the complete details of a plan's benefits, limitations (or limited benefits), exclusions and definitions. the brochure is a plan's contractual statement of benefits.

Broker
A sales and service representative who handles insurance for clients, generally selling insurance of various kinds and for several companies.

Business Overhead Expense
A disability income policy which indemnifies the business for certain overhead expenses incurred when the business owner is totally disabled.

-C- 

Cancellation
The termination of a policy before it would normally expire.

Carriers
Private organizations, usually companies, that have contract with the Health Care Financing Administration to process claims under Part B (doctor insurance) of Medicare.

Carrier Replacement
This refers to a situation where one carrier replaces one or more carriers.

Carry Over Provision
In major medical policies, allowing an insured who has submitted no claims during the year to apply any medical expenses incurred in the last three months of the year toward the new calendar year's deductible.

Case Law
The body of court decisions that establish binding interpretations of the law passed by legislative bodies.

Case Management
The monitoring of a patient and the planning and coordination of his or her receipt of services to assure that the types of providers used and the types of services received are appropriate and cost effective.

Case Manager
A person, usually an experienced professional, who coordinates the services necessary under the case management approach.

Catastrophic Limit
A benefit feature to limit the amount you would have to pay in a calendar year if you or your family incurred large and unusual medical bills. Te catastrophic limit is the maximum amount of covered expenses you would have to pay out of your pocket during the year for yourself and your family. There are separate catastrophic limits for medical surgical expenses and in-patient care for mental conditions. The limits apply to your co-insurance payments. Depending on the plan, these limits may also included any co-payments and the calendar year inpatient and mental health deductible you pay.

Catastrophe Policy
This is an older name for Major Medical. See Major Medical.

Certificate of Authority (COA)
Issued by the state, it licenses the operation of an HMO (Health Maintenance Organization).

Certificate of Insurance
A Statement of coverage issued to an individual insured under a group insurance contract, outing the insurance benefits and principle provisions applicable with the policy.

Chemical Dependency Services
The services required in the treatment and diagnosis of chemical dependency, alcoholism, and drug dependency.

Chemical Equivalents
Drugs which contain identical amounts of the same ingredients.

Claim
A notification by you, your doctor or your hospital to your insurance company stating that you have received a medical service and are requesting payments in accordance with the policy.
 

Closed Access
A situation where covered insured's must select one primary care physician. That physician is the only one allowed to refer the patient to other health care providers within the plan.

COBRA Group Health Plan
Any plan maintained by an employer to provide medical services to employees, past employees, and their families, weather or not insured. "Maintained by employer" means "any plan of, or contributed to by and employer." While plans that are merely aimed at promoting health, such as fitness programs, are not included, service such as health clinics or drug or alcohol treatment programs are covered.

Cognitive Impairment
A deficiency in the ability to think, perceive, treason or remember resulting in loss of the ability to take care of one's daily living needs.

Coinsurance
The fixed percentage of covered charges you must pay after any deductible has been subtracted. If a plan pays 80 percent of covered charges you would be responsible for the deductible and the 20 percent balance.

Coinsurance Clause
A provision stating that the insured and the insurer will share all losses covered by the policy in a proportion agreed upon in advance, i.e., 80-20 would mean that the insurer would pay 80% and the insured would pay 20% of all losses.

Community Rating
Under this rating system, the charge for insurance to all insured depends on the medical and hospital costs in the community or area to be covered. Individual characteristics of the insured are not considered at all.

Competitive Medical Plan
 An arrangement for prepaid care that is not as restricted as a health maintenance organization (HMO) in benefits offered, premium calculation, and the like.

Composite Rate
One rate for all members of the group regardless of their status as single or members of a family.

Comprehensive Major Medical Insurance
A policy designed to give the protection offered by both a base plan and a major medical health insurance policy. It is characterized by a deductible amount, a coinsurance feature and high maximum benefits.

Concurrent Review
A case management technique which allows insurers to monitor an insured's hospital stay and to know in advance if there are any changes in the expected period of confinement and the planned release date.

Conditional Binding Receipt
This is the more exact terminology for what is often called a binding receipt. It provides that if a premium accompanies an application, the coverage will be in force from the date of application or medical examination, if any, whichever is later, provided the insurer would have issued the coverage on the basis of the facts revealed on the application, medical examination and other usual sources of underwriting information. A Life and Health Insurance policy without a conditional binding receipt is not effective until it is delivered to the insured and the premium is paid.

Conditionally Renewable Clause
A provision that permits a policyholder to renew a policy up to a certain age limit, such as 65, provided all conditions of the insurance contract have been met.

Confining
A form of disability or sickness that confines the insured indoors, usually at home or in a hospital. Many policies state that coverage is afforded only if the insured is confined.

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986
Legislation providing for a continuation of group health care benefits under the group plan for a period of time when benefits would otherwise terminate. Continuation rights apply to enrolled persons and their dependents. Coverage may be continued for up to 18 months if the insured person terminates employment or is no longer eligible. Coverage may be continued for up to 36 months in nearly all other cases, such as loss of dependent eligibility because of death of the enrolled person, divorce, or attainment of the limiting age.

Continuation
Allows terminated employees to continue their group health insurance coverage under certain conditions.

Contraindication
Any condition or disease that renders some particular line if treatment improper or undesirable

Contributory
A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan. At least 75 percent of the eligible employees must be insured.

Conversion Privilege
A privilege granted in an insurance policy to convert to a different plan of insurance without providing evidence of insurability. the privilege granted by a group policy is to convert to an individual policy upon termination of group coverage.

Coordination of Benefits (COB)
                                , To limit benefits for people covered by more than one health insurance policy to 100 percent of the expenses covered, and to designate the order in which the multiple carriers are to pay benefits.

Co-pay
This is an arrangement where the covered person pays a specified amount for various services and the health care provider pays the remainder. The covered person usually must pay his or her share when the service is rendered. Similar to coinsurance, except that coinsurance is usually a percentage of certain charges where the co-payment is a dollar amount.

Co-payment
A Fixed dollar amount you must pay for service or benefit provided by a plan. For example, some prepaid plans (HMOs) charge a co-payment of $50 or more per hospital admission or $5 or more for a doctor's visit

Co-pay Provision
Often used with major medical policies. The copay provision states what percentage of a claim the company will pay and what percentage the insured will pay. For example, an 80 percent copay provision would provide that the insurer pay 80 percent of claims and the insured pay 20 percent.

Corridor Deductible
A Major Medical deductible that provides for a deductible, or "corridor," after the full payment of basic hospital and medical expenses up to a stated amount. In the event of further expenses, payment is on the basis of participation or coinsurance, such as 80%-20% or 85%-15%, and the deductible is that portion paid by the insured.

Cosmetic Procedures
Procedures which improve the appearance, but are not medically necessary.

Covered Charges
The amount of one's medical care expenses that are covered by the plan. An Expense that is not a covered charge cannot be used to satisfy the plan's deductible. Often a plan includes as covered charges only amount specified in a scheduled allowance or based in a reasonable and customary profile. See your plan's brochure to find out how covered charges are determined. Covered charges do not include expenses for nonmedical items related to an illness or injury or for items specifically excluded by the plan.

Covered Employee
An individual who is or was provided coverage under a group health plan by virtue of the individual's employment or previous employment with an employer, OBRA-89--the Omnibus Budget Reconciliation Act of 1989, a law that is not the same as COBRA--expanded this category to include persons who provide services for one or more persons maintaining a group health plan. This might include agents, independent contractors, partners, directors and self employed individuals covered under the group plan. These people must now be considered covered employees under COBRA.

Covered Expenses
Health care expenses incurred by an insured or covered person that qualify for reimbursement under the terms of a policy contract.

Covered Person
A person who pays premiums into the contract for the benefits provided and who also meets eligibility requirements.

Custodial Care
Care that is primarily for meeting personal needs such as help in bathing, dressing, eating or taking medicine. It can be provided by someone without professional medical skills or training but must be according to doctor's orders.

Custodial Care Facility
A facility that provides round-the-clock room and board to aged or handicapped persons who require personal care, supervision or assistance in daily activities.

-D-

Date of Service
The date that the health service was provided.

Deductible
The amount of covered charges you must pay before the plan pays benefits; for example, calendar-year deductible and inpatient hospital deductible. Generally, no more than two or three family members must meet the calendar-year deductible, which can be met by any or all of those covered.

Deductible Carryover Credit
During the last three months of a calendar year, charges incurred for health services can be used to satisfy the deductible for the following calendar year. These credits may be applied whether or not the prior calendar year's deductible had been met.

Dental Care
Coverage may include routine diagnostic and preventive services and one or more of the following treatment services: restorative, crown and bridge, endocrontic, oral surgery, periodontal, prosthetic, and orthodontic. Some prepaid plans (HMOs) limit coverage to preventive services for childeren.

Dental Insurance
A group Health Insurance contract that provides payment for certain enumerated dental services.

Department of Health and Human Services
The federal department charged generally with the administration of national "welfare" programs. Formed from the old Department of Health, Education, and Welfare when the Department of Education was split off.

Dependent Coverage
Insurance coverage on the head of a family which is extended to his or her dependents, including only the lawful spouse and unmarried children who are not yet employed on a full-time basis. "Children" may be step, foster, and adopted, as well as natural. Certain age restrictions on children usually apply.

Designated Mental Health Provider
The organization hired by a health plan to provide mental health and substance abuse services.

Detoxification
The process an individual goes through when withdrawing from alcohol. Usually is done under guidance of medical personnel.

Diagnosis
The process of identifying a disease.

Diagnosis-Related Groups (DRG)
System that reimburses health-care providers fixed amount for all care given in connection with standard diagnostic categories.

Disability
A limitation of physical or mental functional capacity resulting from sickness or injury. It may be partial or total.

Disability Income Insurance
A form of health insurance that provides periodic payments to replace income when as insured person is unable to work as a result of illness, injury or disease.

Disability Insurance
Insurance that pays an individual; a potion of his or her salary when the individual is sick or injured and is unable to work.

Disease-Specific Insurance
Insurance that provides benefits should one develop a specific illness, such as cancer, heart disease, poliomyelitis, encephalitis or spinal meningitis.

Doctor of Chiropractic
A holder of the degree of doctor of chiropractic (D.C.), a school of medicine that places almost exclusive reliance on manipulation for alignment of the skeleton, plus exercise and nutrition. Chiropractors are eligible to participate in the Medicare programs.

Dread (or Specified) Disease Policy
Coverage, usually with a high maximum limit, for all types of medical expenses arising out of diseases named in the contract. Common diseases covered are poliomyelitis, diphtheria, multiple sclerosis, spinal meningitis, and tetanus. Cancer is sometimes covered or may be added with some companies by a rider.

Drug-Drug Interactions
Drugs that can affect the activity of each other when more than one drug is taken at a time. The activity of one may be decreased or increased when a second drug is taken, or the combination of two drugs may cause an entirely different effect than is intended.

Drug Formulary
A schedule of prescription drugs approved for use which will be covered by the plan and dispensed through participating pharmacies.

Dual Choice
The federal requirement that employers having 25 or more employees who are within the service area of a federally qualified HMO, who are paying at least minimum wage and offer a health plan to their employees, must offer HMO coverage as well as an indemnity plan.

Duplication of Benefits
Overlapping or identical coverage of the same insured under two or more health plans, usually the result of contracts of different insurance companies, service organizations, or prepayment plans; also known as multiple coverage.

Duplicate Coverage Inquiry (DCI)
A request to determine whether or not other coverage exists. Used to apply the coordination of benefits provisions where two or more insurance companies are involved.

Duplication of Benefits
A situation where identical or overlapping coverage exists between two or more insurance companies or service organizations.

-E-

Earnings Record
The record of amounts earned by each individual for whom Social Security taxes were paid; maintained by the Social Security Administration.

Effective Date
The date on which the insurance under a policy begins.

Eligibility Date
The date that a person is eligible for benefits.

Eligibility Period
A specified length of time, frequently 90 days up to one year following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.

Eligibility Requirements
Requirements imposed for eligibility for coverage, usually in a group insurance or pension plan.

Eligible Dependent
A dependent of an insured person who is eligible for coverage according to the requirements set forth in the contract.

Eligible Employees
Those members of a group who have met the eligibility requirements under a group life or health insurance plan.

Eligible Expenses
Expenses as defined in the health plan as being eligible for coverage. This could involve specified health services fees or "customary and reasonable charges." (H)

Eligible Person
Similar to eligible employee except it could be a contract covering people who are not employees of a specified employer. An example might be members of an association, union, etc.

Elimination Period
A period of time between the period of disability and the start of disability income insurance benefits, during which no benefits are payable.

Emergency
An injury or disease which happens suddenly and requires treatment within 24 hours.

Emergency Accident Benefit
A group medical benefit which reimburses the insured for expenses incurred for emergency treatment of accidents.

Employee Benefit Program
Benefits offered an employee at his place of work by his employer, covering such contingencies as medical expenses, disability, retirement, and death, usually paid for wholly or in part by the employer. These benefits are usually insured.

Employee Certificate of Insurance
The employee's evidence of participation in a group insurance plan, consisting of a brief summary of plan benefits. The employee is provided with a certificate of insurance rather than the actual insurance policy.

Employee Contribution
The employee's share of the premium costs.

Employer Contribution
The portion of the cost of a health insurance plan which is borne by the employer.

Employer Mandate
A requirement that employers provide or arrange health insurance coverage for employees. Typically, such proposals require coverage of worker' families, too.

Encounter
Each time a person meets with a health care provider to receive services, is a separate "encounter." (H)

Enrollee
An eligible individual who is enrolled in a health plan _ does not include an eligible dependent.

Enrolling Unit
The organization (such as an employer) that contracts for participation in a health insurance plan.

Enrollment Period
The amount of time an employee has to sign up for a contributory health plan.

Enrollment (Service) Area
The geographic area within which a prepaid plan (HMO) enrolls members. The plan brochure identifies the enrollment area.

Entire Contract Clause
A provision in an insurance contract stating that the entire agreement between the insured and the insurer is contained in the contract, including the application if it is attached, declarations, insuring agreements, exclusions, conditions and endorsements.

Evidence of Insurability
Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance.

Examination
The medical examination of an applicant for Life or Health insurance.

Examiner
A physician appointed by the medical director of a Life or Health insurer to examine applicants.

Exclusions
Charges, service or supplies that are not covered. A plan does not provide or pay for excluded items, nor do charges for them apply toward deductible and catastrophic limits.

Exclusive Provider Organization (EPO)
People who belong to an EPO must receive their care from affiliated providers; services rendered by unaffiliated providers are not reimbursed.

Experience
Record of losses, whether or not insured. This record is used in predicting future losses and in developing premium rates based on expectation of insured losses.

Experience Rating
The process of determining the premium rate for a group risk, wholly or partially on the basis of that group's experience.

Experimental or Unproven Procedures
Any health care services, supplies, procedures, therapies, or devices that the health plan determines regarding coverage for a particular case to be either (1) not proven by scientific evidence to be effective, or (2) not accepted by health care professionals as being effective.

Explanation of Benefits (EOB)
A summary of how an insurance company paid a claim to a provider or the insured person. The EOB shows how much the provider billed, how much the provider was reimbursed, and what potions of the claim is the responsibility of the insured. the EOB also tells the insured how to file an appeal in the event payment for service is disallowed.

Explanation of Medicare Benefits (EOMB)
A form sent to a Medicare beneficiary after a claim is paid, indicating the date and type of service received, name of the provider, Medicare-approved amount, payment to the provider, and the amount owed by the Medicare beneficiary. The EOMB also tells the Medicare beneficiary how to file an appeal in the event payment for a service is disallowed.

Extended Care Facility
An institution that (in place of hospitalization) furnishes room and board, and medically prescribed skilled nursing care 24 hours a day by an organized medical staff. It is not, other than incidentally, a place for rest or domiciliary care, nor is it a facility to the aged, drug addict, or alcoholics.

Extended Coverage
A provision in certain Health policies, usually Group, to allow the insured to receive benefits for specified losses sustained after the termination of coverage, such a maternity expense benefits incurred for a pregnancy in progress at the time of the termination.

Extension of Benefits
A condition in the insurance policy which allows coverage to continue beyond the expiration date of the policy in the case of employees who are not actively at work or dependents who are hospitalized on that date. The extended coverage applies only where the employee or dependent is disabled as of that date and continues only until the employee returns to work or the dependent leaves the hospital.

-F- 

Family Dependent
A person entitled to coverage because he or she is: 1. The enrollee's spouse, or 2. A single dependent child of either the enrollee or the enrollee's spouse (including stepchildren or legally adopted children), and 3. A resident of the enrollee's home.

Family Expense (or simply "Family") Policy
A Policy that insures both the policyholder and his or her immediate dependents (usually spouse and children).

FDA
the Food and Drug Administration is the federal agency responsible for approving all prescription and nonprescription medicines on the basis of safety, effectiveness and proper labeling.

Fee-for-Service Reimbursement
A health care system where physicians and other providers receive payment based on their billed charge for each service provided.

Fee Maximum
The maximum amount available to a provider for specific health care services under a contract.

Fee Schedule
A list of maximum fees for providers who are on a fee-for-service basis.

First-Dollar Coverage
A policy with no deductible that covers the first dollar of your expenses.

Flat Maternity Benefit
A stipulated benefit in a Hospital Reimbursement policy that is paid for maternity confinement, regardless of the actual cost of the confinement.

Flexible Benefit Plan
A type of program where employees can tailor their benefits to meet their own specific needs.

Food and Drug Interactions
Foods can interact with drugs in a variety of ways--by either slowing down or speeding up the time the medication takes to travel to the part of the body where it's needed or by preventing a drug from being absorbed properly.

Franchise Insurance
A Form of insurance in which individual policies are issued to the employees of a common employer or to the members of an association under an arrangement by which the employer or association agrees to collect the premiums and remit them to the insurer.

Free Look
A period of time---usually 10 to 30 days---during which you may return the policy and receive a full refund of any premium paid.

Freedom of Choice Options
Arrangements under which members of a health maintenance organization or other prepaid plan can use physicians who are outside the panel of participating doctors, if they wish to do so. Additional payment is usually involved. This applies to Medicare beneficiaries enrolled in health maintenance organizations or competitive medical plans.

Free-Standing Emergency Medical Service Center
A facility whose primary purpose is the provision of care for emergency medical conditions. Also called emergi-center or urgi-center.

Free-Standing Outpatient Surgical Center
A facility which only provides outpatient surgical services. Also called surgi-center.  

-G- 

General Agent (GA)
An individual appointed by a Life or Health insurer to administer its business in a given territory. He is responsible for building his own agency and service force and is compensated on a commission basis, although he possibly has some additional expense allowances.

General Enrollment Period
The time from January 1 to March 31 of each year when anyone eligible for Part B of Medicare can enroll in it.

Generic Drugs
Every drug has a generic name, usually a condensed version of the original chemical name, which is suggested and filed for by the pharmaceutical company that invented the drug. The manufacturer also registers the drug under the company's own promotional name, and that name is the brand name.

Grace period
A specified period---31days---after a premium payment is due in which the policyholder may make such payment, and during which the protection of the policy continues.

Group
Coverage of a number of individuals under one contract. The most common "group" is employees of the same employer.

Group Contract
A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Health Insurance
Insurance, usually issued through employers and unions, that covers a group of persons.

Group Model HMO
A health plan where a group of physicians is reimbursed for services they provide at a negotiated rate. The HMO also contracts with hospitals for the care of the patients of the physicians who belong to the group.

Guaranteed Renewable Contact
A contract that the insured person or entity has the right to continue in force by the timely payment of premiums for a substantial period of time, during which the insurer has no right to unilaterally make any change in any provision of the contract while it is in force, other than a change in the premium rate for classes of policyholders.

 -H- 

HIQA. Health Insurance Quality Award
An award granted annually by the International Association of Health Underwriters or the National Association of Life Underwriters for high persistency of Health Insurance policies written by agents. See also Persistency.

Home Health Care
Care received at home as part-time skilled nursing care, speech therapy, physical or occupational therapy, part-time services of home health aides or help from homemakers or chore workers.

Health Benefits Package
The coverage's offered by a health plan to an individual or group.

Health Care Financing Administration (HCFA)
Part of the Department of Health and Human Services, responsible for administration of the Medicare and Medicaid programs. The HCFA establishes standards for medical providers which must be complied with if the provider is to meet certification requirements.

Health History
A form used by underwriters to assist in evaluating groups or individuals to determine whether they are acceptable risks.

Health Insurance
Protection that provides payment of benefits for covered sickness or injury. Included under the heading at various types of insurance such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance.

Health Insurance Purchasing Cooperative (HIPC)
An entity that buys insurance coverage and medical care fro a large number of people, including employees of small business.

Health Plan
This refers to any kind of plan that covers health care services such as HMOs, insured plans, preferred provider organizations, etc.

Health Maintenance Organization (HMO)
An organization that provides a wide range of health-care services for a specified group at a fixed periodic payment. The HMO can be sponsored by the government, medical schools, hospital, employers, labor unions, consumer group, insurance companies and hospital-medical plans.

Health Services
The benefits covered under a health contract.

Home Health Care
Medically supervised care and treatment in the home of a patient whose physician certifies that, without such care, confinement is a hospital or extended care facility would be required. Typically care and treatment are provided in accordance with an approved home health care plan and must begin within a specified period of time after discharge from a hospital.

Home Nursing Care
skilled care in the home provided by a registered nurse (R.N.), licensed practical nurse (L.P.N.), or licensed vocational nurse (L.V.N.). The care generally must be ordered by a physician, is usually limited to a specified number of hours per day and visits per year, and does not include homemaking services of any kind.

Hospice Care
A coordinated program at home and/or on an inpatient basis, easing the pain and discomfort, and providing supportive care, for a terminally ill patient and the patient's family, provided by a medically supervised, specialized team under the direction of a licensed or certified hospice care facility or agency.

Hospital Affiliation
A contract whereby one or more hospitals agrees to provide benefits to members of a specific health plan.

Hospital Alliances
A group of hospitals that work together to share common services and thereby reduce health costs. By grouping together, they are better able to compete with other alliances or chains.

Hospital Benefits
Benefits payable for hospital room and board, plus miscellaneous charges resulting from hospitalization.

Hospital Expense Insurance
Health insurance protection against the cost of hospital care resulting from the illness or injury of the insured person.

Hospital Indemnity
A form of health insurance that provides a stipulated daily weekly or monthly indemnity during hospital confinement. the indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.

Hospital Insurance (HI)
Also identified as Part A of Medicare. HI provides inpatient hospital care, skilled nursing care home health and hospice care subject to a benefit period deductible and co-payments for certain services.

Hospital Medical Insurance
A term used to indicate protection that provides benefits for the cost of any or all of the numerous health care services normally covered under various health care plans.

Hospitalization Expense Policy
A policy which covers daily hospital room and board charges and also covers miscellaneous hospital expenses (such as X-ray, etc.). It also often covers emergency treatment charges and many times will also include a surgical benefit.

Hospitalization Insurance
A form of insurance that provides reimbursement within contractual limits for hospital and specific related expenses arising from hospitalization caused by injury or sickness.

House Confinement
A provision in some Health Insurance contracts which requires an insured to be confined to the house in order to be eligible for benefits. This provision is most commonly found in policies providing loss of income benefits.

-I- 

Identification Card
A card given to each person covered under the plan which identifies him or her as being eligible for benefits.

In-Area Services
Services which are provided within the "authorized" service area as designated in the plan.

Incontestable Clause
An optional clause that may be used in noncancellable or guaranteed renewable health insurance contracts providing that the insurer may not contest the validity of the contract after it has been in force for two (or sometimes three) years.

Incurred Claims
Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year, minus the corresponding reserves as of the beginning of the policy year. The difference between the beginning and end of the year's claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims.

Indemnity
Benefits paid in a predetermined amount in the event of a covered loss.

Indemnity Policy
Insurance that pays a specified amount of money each day or week that an individual is in the hospital and that pays a set amount for medical and surgical procedures.

Individual Contract
A contract made with an individual that covers that individual and perhaps also specified members of his family for benefits as described in the policy.

Individual Enrollment Period
the time, running from three months before one's sixty-fifth birthday to three months after, during which one can enroll in Part B of Medicare without a premium increase for delayed enrollment.

Individual Insurance
Policies that provide protection to the policy holder and/or his or her family. Sometimes called "personal insurance," as distinct from group and blanket insurance.

Individual Practice Association (IPA)
A Prepaid health-care plan that is offered to group of people by physicians in private practice.

Individual Practice Association (IPA) Health Maintenance Organization
A health maintenance organization that is staffed by physicians in private practice who continue to maintain their own offices and see both HMO and non HMO patients.

Inflation Factor
A premium loading to provide for future increases in medical costs and loss payments resulting from inflation.

Inflation Protection
Provisions in a health insurance policy that increase benefit levels to account for anticipated increases in the cost of covered services.

Initial Eligibility Period
The time period during which prospective members can apply for coverage without providing evidence of insurability.

Injury Independent of All Other Means
An injury resulting from an accident provided that the accident was not caused by an illness.

Inpatient
Someone who is admitted to the hospital for medical services.

Inpatient Services
The care provided while a bed patient in a covered facility.

Inside Limits
A provision that limits insurance payment for any type of service, regardless of the actual cost.

Insurable Risk
a) there must be a large number of homogeneous exposures subject to the same perils, b) the loss must be calculable and the cost insuring it must be economically feasible, c) the peril must be unlikely to affect all insured's simultaneously, and d) the loss produced by risk must be definite and have a potential to be financially serious.

Insurance
Protection by written contract against the financial hazards (in whole or in part) of the happening of specified fortuitous events.

Insurance Company
Any corporation primary engaged in the business if furnishing insurance protection to the public.

Insuring Clause
The clause that sets forth the type of loss being covered by the policy and the parties to the insurance contract.

Insurance In Force
The annual premium payable on current contracts of insurance.

Integration
A coordination of the disability income insurance benefits with other disability income benefits, such as Social Security, Through a specific formula to insure reasonable income replacement.

Intensive Care Unit
the unit in a hospital in which people whose life support requires constant monitoring, or who require close and constant observation, are cared for.

Intentional Injury
An injury resulting from an act, the doer of which had as his intent, inflicting injury. In an accident insurance contract, an intentionally self-inflicted injury is not covered (because it is not an accident). In general, assuming no collusion, intentional injuries inflicted on the insured are covered

Intermediaries
Private organizations, usually insurance companies, that have contract with the Health Care Financing Administration to process claims under Part A (hospital insurance) of Medicare.

Intermediate Care
A level of care associated with a skilled nursing facility which provides nursing care under the supervision of physicians or a registered nurse. The care provided is a step down from the degree of care described as skilled nursing care.

Intermediate Care Facility
An institution that provides less intensive care than a skilled nursing facility. Patients are generally more mobile, and rehabilitation therapies are stressed.

Invalidity
Sickness.

-K-

Key-Man or Key-Person Health Insurance
An individual or group insurance policy designed to protect a firm against the loss of income resulting from disability of a key employee.

-L-

Lapse
Termination of a policy upon the policyholder's failure to pay the premium within the time required.

Lapsed policy
An insurance policy that has been cancelled for nonpayment of premiums.

Legal Reserve
The minimum reserve that a company must keep to meet future claims and obligations as they are calculated under the state insurance code.

Legend Drug
A drug which has on its label "caution: federal law prohibits dispensing without a prescription." (H)

Length of Stay (LOS)
The total number of days a participant stays in a facility such as a hospital.

Level of Care
the type and intensity of treatment necessary to adequately and efficiently treat your illness or condition.

Level Premium
A premium that remains unchanged throughout the life of a policy.

Lifetime Disability Benefit
A benefit to help replace income lost by an insured person as long as he or she is totally disabled, even for a lifetime.

Limitations (or Limited Benefits)
Statements in a brochure showing services or supplies that are not fully covered, only partially paid by a plan or covered only if the service or supply provided meets certain specified criteria, e.g., preadmission testing within 72 hours of surgery

Limited Policy
A contract that covers only certain specified diseases or accidents.

Long Term Care (LTC)
the range of maintenance and health services to the chronically ill or physically or mentally disabled. Services may be provided on an inpatient---for example, rehabilitation facility, nursing home, mental hospital---outpatient, or at-home basis.

Long Term Disability Income Insurance
Insurance issued to an employer (group) non-individual to provide a reasonable replacement of a portion of an employee's earned income lost through serious and prolonged illness or injury during the normal work career.

Long Term Care Facility
Usually a state licensed facility which provides skilled nursing services, intermediate care and custodial care.

LPRT
See Leading Producers Round Table.

-M-

Major Hospitalization Policy
The same as Major Medical Insurance, except that it applies to expenses incurred only when the insured is hospitalized. See also Major Medical Insurance.

Major Medical Insurance
Health insurance to finance the expense of major illness and injury. characterized by large benefits maximum ranging up to $250,00 or more, or no limit. the insurance, above an initial deductible, reimburses the major part of all charges for hospital, doctor, private nurses, medical appliances, prescribed out-of-hospital treatment , drugs, and medicines. The insured person as coinsurer pays the remainder.

Managed Care
Health care system that integrate the financing and delivery of appropriate health care services to covered individuals by arrangement with selected providers to furnish a comprehensive set of health care providers, formal programs for ongoing quality assurance and utilization review and significant financial incentives for members to use providers and procedures associated with the plan.

Managed Competition
A health policy that combines free-market forces with government regulation. Large groups of consumers and businesses buy health care from organized networks of doctors and hospitals. which are supposed to compete by offering low prices and high quality.

Managed Health Care Plan
A plan which involves financing, managing, and delivery of health care services. Typically, it involves a group of providers who share the financial risk of the plan or who have an incentive to deliver cost effective, but quality, service.

Mandated Benefits
Benefits required by state or federal law.

Mandated Providers
Types of providers of medical care whose services must be included by state or federal law.

Manual Rate
the premium developed for a group insurance coverage company's standard rate tables normally referred to as its rate manual or underwriting manual.

Market Assistance Plan (MAP)
A plan promulgated by the Department of Insurance to assist buyers to obtain certain types of insurance when they are limited in availability.

Maximum Allowable Costs (MAC) List
A list of prescriptions where the reimbursement will be based on the cost of the generic product.

Maximum Out-of-Pocket Costs
The most a member will pay considering co-payments, coinsurance, deductibles, etc.

Maternity Care
Prenatal and postnatal care and delivery by covered hospital, physician, or other covered practitioner, including, in many cases, nurse midwives. the plan brochure will specify coverage for nurse midwives. Plans generally pay for maternity care the same as for other covered inpatient and outpatient services.

Medical Examination
The examination of an applicant for insurance or a claimant by a physician who acts in the capacity of the insurer's agent.***

Medical Examiner
The physician who examines an applicant or claimant on behalf of the insurer and as an agent of the insurer.***

Medical Supplies
Any items which are essential in carrying out the treatment of a patient's illness or injury.

Medically Necessary
A service or treatment which is absolutely necessary in treating a patient and which could adversely affect the patient's condition if it were omitted.

Medicaid
State programs of public assistance to persons regardless of age whose income and resources are insufficient to pay for health care. Title XIX of the federal Social Security Act provides matching funds for financing state Medicaid programs effective January 1,1966

Medicare
the hospital insurance system and the supplementary medical insurance for the aged and certain people with disabilities, created by the 1965 amendments to the Social Security Act and operated under the provisions of the Act.

Medicare-Approved Amount
A dollar figure approved by Medicare that will be either the usual and customary charge, the prevailing charge or the actual charge (whichever is lowest) and is the amount Medicare pays the doctor.

Medicare Assignment
An agreement by a physician or medical provider to accept the Medicare-approved amount as payment in full for services rendered to a Medicare beneficiary.
 

Medicare Beneficiary
Anyone entitled to Medicare benefits based on the designation by the Social Security Administration.

Medicare Discharge Rights
Also called "An Important Message From Medicare." This notice advises Medicare beneficiaries what to do in the event they are given a notice of non-coverage by a provider. It spells out the appeals process available to a Medicate beneficiary when he/she does not agree with the determination made by the provider.

Medigap (also called Medicare Supplemental Insurance)
A term sometimes applied to private insurance plans that supplement Medicare insurance benefits.

Medical Necessity Determination
A formal judgment, usually made for purposes of insurance payment, that a treatment was or was not medically necessary. Medicare will pay only for services deemed medically necessary.

Medical-Surgical Insurance
Insurance that covers some of the fees of physicians and surgeons for care provided in the hospital, office or home and covers part of the cost of laboratory test preformed outside the hospital.

Medicare Supplement Insurance
Insurance coverage sold on an individual or group basis which helps to fill the gaps in the protection provided by the Medicare program. Medicare supplements cannot duplicate any benefits provided by Medicare, but may pay part or all of Medicare's deductibles and co-payments, and may cover some services and expenses not covered by Medicare.

Member
Anyone covered under a health plan (enrollee or eligible dependent).

Mental Conditions/Substance Abuse
Conditions and diseases listed in the most recent edition of the International Classification of Diseases (ICD) as psychoses, neurotic disorders and personality disorders: also other non-psychotic mental disorder listed in the ICD, as determined by the plan. (Refer to the plan brochure for an explanation of covered services, exclusions and limitations.)

Mental Health Services and Supplies
Items required for treatment of mental illness, including substance abuse and alcoholism.

Minimum Group
The least number of employees permitted under a state law to effect a group for insurance purposes. The purpose is to maintain some sort of proper division between individual policy insurance and the group forms.

Minimum Premium Plan (MPP)
An arrangement under which an insurance carrier will, for a fee, handle the administration of claims and insure against large claims for a self-insured group.

Miscellaneous Expenses
Expenses in connection with hospital insurance and hospital charges other than room and board, such as X-rays, drugs, laboratory fees and other ancillary charges. (Sometimes referred to as "ancillary charges.")

Morbidity
the incidence and severity of sickness and accidents in a well-defined class or classes of persons.

Multi-Disciplinary
Treatment which involves care provided by a wide range of specialists.

Multiple Employer Trust (MET)
A legal trust established by a plan sponsor that brings together a number of small, unrelated employers for the purpose of providing group medical coverage on an insured or self-funded basis.

Multiple Employer Welfare Arrangements
Employer funds and trusts providing health care benefits to individuals.

Multiple Option Plan
Under this plan, employees can optionally choose from an HMO to a PPO to a major medical plan.

-N-

1. National Association of Insurance Commissioners (NAIC)
   The association of insurance commissioners of various states formed to promote national uniformity in the regulation of insurance.

2.  

   National Drug Code (NDC)
   A system for identifying drugs.

   Non-Cancelable
   A contract of Health Insurance that the insured has a right to continue in force by payment of premiums, as set forth in the contract, for a substantial period of time, also as set forth in the contract. During that period of time, the insurer has no right to make any change in any provision of the contract. The NAIC recommends that the term "Non-cancelable" not be permitted to be used to designate any form that is not renewable to at least age 50 or for at least five years if issued after age 44. Note that this is in contrast to Guaranteed Renewable, on which the premium may be increased by classes. The premium for Non-cancelable policies must remain as stated in the policy at the time of issue. Contrast with Guaranteed Renewable.

   Non-Cancelable Guaranteed Renewable Policy
   An Individual policy that he insured person has the right to continue in force until a specified age, such as to age 65, by the timely payment of premiums. During this period, the insurer has no right to make any unilateral changes in ay provision of the policy while it is in force.

   Non-Contributory
   A term applied to employees benefit plans under which the employer bears the full cost of the benefits for the employees. All eligible employees must be insured.

   Non-disabling Injury
   An injury that may require medical care, but that dose not result in loss of working time or income.

   Non-Duplication of Benefits
   A provision in some Health Insurance policies specifying that benefits will not be paid for amounts reimbursed by others. In Group Insurance, this is usually called coordination of benefits (COB).

   Non-Occupational Policy
   Contract that insures a person against off-the-job accident or sickness. It does not cover disability resulting from injury or sickness covered by workers' compensation. Group accident and sickness policies are frequently non-occupational.

   Non-Prescription medicine
   Any medicine that can be bought without a doctor's prescription. Distribution of non-prescription medicines is unrestricted, and may be sold, for example, in grocery stores as well as pharmacies.

   Nonprofit Insurers
   Persons organized under special state laws to provide hospital, medical, or dental insurance on a nonprofit basis. The laws exempt them from certain types of taxes.

   Notice of Non-coverage
   An official notice to a Medicare beneficiary that the provider has reason to believe that Medicare will no longer pay for the services provided. This is not an official determination by Medicare, but permits the beneficiary to request an official determination by Medicare, but permits the beneficiary to request an official determination by the peer review organization. The provider is responsible for filing the request for review with the peer review organization.

   Nurse Fees
   A provision in a medical expense reimbursement policy calling for reimbursement for the fees of nurses other than those employed by the hospital.

   Nursing Home
   A licensed facility which provides general nursing care to those who are chronically ill or unable to take care of necessary daily living needs. May also be referred to as a Long Term Care facility.

    

   -O-

    

   Occupational Disease
   Impairment of health caused by continued exposure to conditions inherent in a person's occupation or a disease caused by an employment or resulting from the nature of an employment.

   Occupational Hazards
   Occupations that expose the insured to greater-than-normal physical dangers by the very nature of the work in which the insured is engaged, and the varying period of absence from the occupation, due to the disability, that can be expected.

   Office Visit
   Services provided in the physician's office.

   Open Access
   Allows a participant to see another participating provider of services without a referral. Also called open panel.

   Open Enrollment Period
   A period during which members can elect to come under an alternate plan, usually without providing evidence of insurability.

   Optionally Renewable Contract
   A contract of Health Insurance in which the insurer reserves the right to terminate the coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates.

   Outcomes Measurement
   A method of keeping track of a patient's treatment and the responses to that treatment.

   Out-of-Area Care
   Care that is given to a member of a health maintenance organization when the member is outside the service area of the HMO. This is an issue largely because federal laws for HMO certification require the definition of a service area. Depending in the HMO, arranging for out-of-area care can be a problem.

   Out-of-Pocket Costs
   The amounts the covered person must pay out of his or her own pocket. This includes such things as coinsurance, deductibles, etc.

   Out-of-Pocket Limit
   an amount no more than which an insured individual is required to pay, after which his insurance policy pays all costs for the services it covers, regardless of other provisions. Also called a "stop-loss" limit.

   Outpatient
   Someone who receives services in a hospital but who is not admitted to the hospital.

   Outpatient Services
   The care provided to you in the outpatient department of a hospital, in a clinic or other medical facility or in a doctor's office.

   Outpatient Treatment
   Treatment at a hospital, or in a setting outside a hospital, that does not require admission or temporary residence in the hospital.

   Overage Insurance
   Health Insurance issued at ages above the usual limit, which is generally 65.

   Overhead Expense Insurance
   Insurance which covers such things as rent, utilities, and employee salaries when a business owner becomes disabled. The insurance benefit is generally not a fixed amount, but pays the amount of expenses actually incurred.

   Over-The-Counter Drugs (OTC)
   The same as non-prescription medicine.

    

   -P-

    

   Paid Claims.
   Amounts paid to providers based on the health plan.

   Partial Disability
   The result of an illness or injury that prevents an insured from performing one or more of the functions of his or her regular job.

   Partial Hospitalization Services
   Additional services provided to mental health or substance abuse patients which provides outpatient treatment as an alternative or follow-up to inpatient treatment.

   Participant
   An employee or former employee who is eligible to receive benefits from an employee benefit plan or whose beneficiaries may be eligible to receive benefits from the plan. (LI,H,PE)***

   Participating Provider
   A health care provider approved by Medicare to participate in the program and receive benefit payments directly from carriers or fiscal intermediaries.

   Patient Self-Determination Act
   A provision of the Medicare law that requires hospital to advise all Medicare patients of their right to make patient care decisions. In order to make health care decisions--including the fight to accept or refuse treatment and the right to execute advance directives--all adult individuals must be provided with written information about their rights under state law.

   Period of Non-Coverage
   Provisions that specify periods when the insurance contract is not in force.

   Permanently and Totally Disabled
   A term under the Social Security Act, applying to those persons who meet the definition of disability in the act , and qualify for Social Security payments and Medicare on that basis.

   Permanent Partial Disability
   A condition where the injured party's earning capacity is impaired for life, but he is able to work at reduced efficiency. (WC,H)***

   Permanent Total Disability
   A condition where the injured party is not able to work at any gainful employment for the remaining lifetime. (WC,H)

   Physical Therapist
   A trained medical person who provides rehabilitative services and therapy to help restore bodily functions such as walking, speech, the use of limbs, etc.

   Physician's Expense Insurance
   Coverage that provides benefits toward the cost of such services as doctor's fees for non-surgical care in the hospital, at home, or in a physician's office, and X-rays or laboratory tests performed outside the hospital (also called "regular medical expense insurance").

   Place of Service
   This designates where the actual health services are being performed, whether it be home, hospital, office, clinic, etc.

   Point-of-Service Plans.
   Often known as open-ended HMOs and PPOs, these plans permit insureds to choose providers outside the plan, yet are designed to encourage the use of network providers.

   Policy
   The legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the "policy contract" or the "contract".

   Policy Term
   The period for which an insurance policy provides coverage.

   Policy Limit
   The maximum benefits and insurance company will pay under a particular policy.

   Practical Nurse
   A licensed individual who provides custodial type care such as help in walking, bathing, feeding, etc. Practical nurses do not administer medication or perform other medically related services.

   Pre-Admission Authorization
   A cost containment feature of many group medical policies whereby the insured must contact the insurer prior to a hospitalization and receive authorization for the admission.

   Pre-Admissions Certification
   A procedure whereby (1) you or your doctor is required to contact your plan before your admission to a hospital, and (2) your plan determines the appropriateness of the admission and the length of stay by using established medical criteria.

   Pre-existing Condition
   A Physical and/or mental condition of an insured that first manifested itself to the issuance of his or her policy or that existed prior to issuance and for which treatment was received.

   Preferred Provider Organization (PPO)
   An agreement between a plan and a health care institution or other provider (the PPO) to provide service to you at a reduced cost.

   Premium
   The fee you must pay (monthly, bi-weekly, quarterly) on a regular basis for your enrollment in a plan.

   Prepaid Group Practice Plan
   A Plan under which specified health services are rendered by participating physicians to an enrolled group of persons, with a fixed period payment in advance made by or on behalf of each person or family. If a health insurance carrier is involved, a contact exists to pay in advance for the full range of health services to which the insured is entitled under the terms of the health insurance contract. such a plan is one form of the HMO.

   Prescription Drugs
   Outpatient drugs and medicines which, by law, cannot be obtained without a doctor's prescription.

   Presumptive Disability
   A disability involving loss of sight, hearing, speech, or any two limbs, which is presumed to be a permanent and total disability. In such cases, the insurer does not require the insured to submit to periodic medical examinations to prove continuing disability.

   Preventive Care
   This type of care is best exemplified by routine physical examinations and immunizations. The emphasis is on preventing illnesses before they occur.

   Primary Care
   Basic health care provided by doctors who are in the practice of family care, pediatrics, and internal medicine.

   Primary Care Network (PCN)
   This is a group of primary care physicians who provide care to those members of a particular health plan.

   Primary Care Physician
   Some health insurance plans require members to select and seek treatment from a primary physician who either renders treatment or refers the member to an appropriate specialist within the approved health care network.

   Primary Coverage
   This is the coverage which pays expenses first, without consideration whether or not there is any other coverage. See also Coordination of Benefits.

   Primary Diagnosis
   The chief medical reason for an encounter with a health care provider or admission to a hospital; used by Medicare to determine payment for the services received.

   Principal Sum
   the amount payable in one sum in the event of accidental death and in some cases, accidental dismemberment.

   Prior Authorization
   A cost containment measure which provides full payment of health benefits only when the hospitalization or medical treatment has been approved in advance.

   Probationary Period
   A period of time between the effective date of a Health Insurance policy, and the date coverage begins for all or certain physical conditions.

   Professional Review Organization (PRO)
   An organization in which practicing physicians assume responsibility for reviewing the propriety and quality of health care services provided under Medicare and Medicaid.

   Prorating of Benefits
   The adjustment of Health Insurance policy benefits by reason of the existence of other insurance covering the same contingency.

   Prospective Payment
   Payment made before a service is rendered, and accepted as payment in full by the provider; the opposite of fee-for-service payment. Medicare DRGs are an example of prospective payment system.

   Protocol
   A written plan for caring fir a particular condition, intended as a guideline to physicians, and usually adopted by a medical institution such as a clinic, hospital, or health maintenance organization. May be used to help determine medical necessity of service provided to Medicare beneficiaries.

   Provider
   Any individual or group of individuals that provide a health care service such as physicians, hospitals, etc.

    

   -Q-

    

   Qualifying Event
   Refers to any of the following which. but for the COBRA continuation provision, would result in the loss of coverage by a plan beneficiary:

   1.  The death of the covered employee.

   2.  The termination (other than by reason of the employee's gross misconduct) or reductions of hours, of the covered employee's employment. A termination may be voluntary (that is, the employee chooses to leave the employer). Moreover, a strike or walkout is treated as termination or reductions in hours and therefore may also be the origin of this type of qualifying event.

   3.  The divorce or legal separation of the covered employee from the employee's spouse.

   4.  The covered employee becoming entitled to benefits under Title XVlll (Medicare) of the Social Security Act.

   5.  A dependent child ceasing to be a dependent child under the generally applicable requirement of the plan.

   Qualified Beneficiary
   With respect to a covered employee under a group health plan, any other individual who, on the day before the qualifying event for that employee, is a beneficiary under the plan: (a) as the spouse of the covered employee, or (b) as the dependent child of the employee.

   Qualified Impairment Insurance
   a form of substandard or special class insurance that restricts benefits for the insured person's particular condition.

   Quality Assurance
   Activities involving a review of quality of services and the taking of any corrective actions to remove any deficiencies.

   Quarantine Benefit
   A benefit paid for loss of time resulting from the quarantining of an insured by health authorities.

   Quarter of Coverage
   One-Fourth of a calendar year during which a person earns enough, in employment covered by Social Security, to have the quarter counted toward the number needed (usually 40) to ensure entitlement to Social Security and Medicare.
    

   -R-

    

   Reasonable and Customary Charges
   One of two benefit maximums that plans use as the amount of medical or dental care expenses they will cover for a particular service. (The other is the "scheduled allowance." defined below). A reasonable and customary charge is the amount a provider normally charges for the same geographic area. Health insurance industry-accepted methods are used by the plans to establish and periodically update reasonable and customary charges. The actual amount a provider charges for a particular service may be more than the reasonable and customary charge set by the plan for that service. An individual must pay any amount charged above the reasonable and customary charge, unless the provider accepts a lesser amount because of plan-provider agreements or Medicare-imposed limitations.

   Recidivism
   This term refers to how often a patient returns to an inpatient hospital status for the same reason.

   Recipient
   Anyone designated by Medicaid as being eligible to receive Medicaid benefits.

   Recurring Clause.
   A provision in some health-insurance policies that specifies a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement.

   Referral
   Occurs when a physician or other health plan provider receives permission to consult another physician or hospital.

   Referral Provider
   The person or provider to whom a participating provider has referred a member of the plan.

   Registered Nurse (RN)
   A licensed professional with a four-year nursing degree. Able to provide all levels of nursing care including the administration of medication.

   Rehabilitation
   Restoration of a disabled person to a meaningful occupation; a provision in some long-term disability policies that provides for continuation of benefits or other financial assistance while a disabled insured is retraining or attempting to resume productive employment.

   Rehabilitation Clause
   A clause in a Health Insurance policy, particularly a Disability Income policy, that is intended to assist the disabled policyholder in vocational rehabilitation.

   Reinstatement
   The resumption of coverage under a policy that has lapsed.

   Renewal
   Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.

   Residual Disability Benefits
    A provision in an insurance policy that provides benefits in proportion to a reduction of earnings as a result of disability, as opposed to the inability to work full-time.

   Residual Income
   A clause used with disability income policies that provides for benefits to be paid when the insured can do some but not all of his/her normal duties. For example, if the insured suffers a disability that causes him or her to lose a third of his or her earning power, the residual disability clause would provide one-third of the benefit that the policy would provide for total disability.

   Restoration of Benefits
   A provision in many Major Medical Plans which restores a person's lifetime maximum benefit amount in small increments after a claim has been paid. Usually, only a small amount ($1,000 to $3,000) may be restored annually.

   Retention
   The portion of the premium which is used by the insurance company for administrative costs.

   Return of Premium
   A rider or provision in a Health Insurance policy agreeing to pay a benefit equal to the sum of all the premiums paid, minus claims paid, if claims over a stated period of time do not exceed a fixed percentage of the premiums paid.3

   Rider
   A document that amends the policy or certificate. It may increase or decrease benefits, waive the condition of coverage, or in any other way amend the original contract.

   Risk
   Any chance of loss.

   -S-

    

   Scheduled Allowance
   One of two benefits maximums plans use as the amount of medical or dental care expenses that will be covered for particular service. (the other is the "reasonable and customary charge," defined above.) A scheduled allowance is the fixed dollar amount that has been assigned to a covered medical or dental service. The insured must pay any amount the provider charges above it. (Because a plan's schedule allowance for a particular service applies nationwide, and the amount a provider charges for that service may vary geographically, the scheduled allowance is likely to defray more of the provider's charge in some areas than in others.) See also Reasonable and Customary Charge.

   Schedule of Benefits
   A list of the maximum amount payable for certain conditions.

   Schedule (Surgical)
   A list of specified amounts payable for surgical procedures, dismemberments, ancillary expenses, and the like in hospital and medical reimbursement policies.

   Second Surgical Opinion
   A cost containment technique to help patients and insurance companies determine whether a recommended procedure is necessary, or whether an alternative method of treatment could accomplish the same result. Some health policies require a second surgical opinion before specified procedures will be covered, and many policies pay for the second opinion.

   Secondary Care
   Medical services provided by physicians who do not have first contact with patients. Examples would be specialists such as urologists, cardiologists, etc. See also Primary Care and Tertiary Care.

   Secondary Coverage
   Coverage which provides payment for charges not covered by the primary policy or plan. See also Coordination of Benefits.

   Secondary Diagnosis
   A condition that exists in addition to the one that is the chief reason for an encounter with a health care provider or admission to a hospital; plays and important role in helping to determine the payment under Medicare Parts A and B.

   Self-Administration
   The procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

   Self-Inflicted Injury
   An injury to the body of the insured inflicted by himself.

   Self- Insurance (Self-Insured Plan)
   A program for providing group insurance with benefits financed entirely through the internal means of the policyholder, in place of purchasing coverage from commercial insurance carriers.

   Senior Citizen policies
   Contracts insuring persons 65 years of age or over. In most cases, these policies supplement the coverage afforded by the government under the Medicare.

   Service Area
   The geographic area where prepaid plan (HMO) providers and facilities are available to you. This area would be the same as, or within, the plan's enrollment area.

   Service Benefits
   Medical expense benefits provided by service associations whereby benefits are identified in terms of days of coverage instead of monetary values.

   Service Plans
   Plans of insurance where benefits are the actual services rendered rather than a monetary benefit. See Blue Cross and Blue Shield.

   Short-Term Disability Income Policy
   A disability income policy with benefits payable for "Short Term," usually less than two years, as opposed to a Long Term Disability Income policy.

   Short-Term Disability Income Insurance
   The provision to pay benefits to a covered disabled person as long as he or she remains disabled up to a specified period not exceeding two years.

   Short Term Residential
   Residents of sheltered or custodial care facilities do not require constant attention from nurses and aides but do need assistance with one or more daily activities, or no longer want to be bothered with keeping up a house. The social needs of residents are met in a safe, secure environment free of as many anxieties as possible.

   Sickness
   Includes physical illness, disease, pregnancy, but does not include mental illness.

   Side Effects
   Effects on the body apart from the principal action of the medicine. Side effects are usually undesirable, but some cause only minor inconveniences.

   Skilled Nursing Care
   Daily nursing and rehabilitative care that is performed only by or under the supervision of skilled professional or technical personnel. Skilled care includes administering medication, medical diagnosis and minor surgery.

   Skilled Nursing Facility (SNF)
   An institution that offers nursing services similar to those given in a hospital, to aid recuperation of those who are seriously ill. Distinguished from intermediate care and custodial care, which may meet some minor medical needs but are intended primarily to support elderly and disabled individuals in the task of daily living.

   Staff Model Health Maintenance Organization
   A health maintenance organization staffed by doctors who are its employees and are not individual or group practice.

   Standard Insurance
   Insurance written in the basis or regular morbidity underwriting assumptions used by an insurance company and issued at normal rates.

   Standard Provision
   Those contract provisions generally required by state statutes until replaced by the uniformed policy provision.

   Standard Risk
   A person who, according to a company's underwriting standards, is entitled to insurance protection without extra rating or special restrictions.

   State Disability Plan
   A plan for accident and sickness, or disability insurance required by state legislation of those employers doing business in that particular state.

   State Insurance Department
   A department of a state government whose duty is to regulate the business of insurance and give the public information on insurance.

   Stop-Loss Provisions
   A provisions that limits an individual's out-of-pocket expenses to a set amount, after which the insurance policy pays all expenses up to the plan's maximum benefits.

   Subrogation
   A plan's right to recover payments it has made because of an injury to you or a covered family member in cases where he or she or the family member also receives payments for the injury from a third party.

   Subscriber
   This term has two meanings _ first, it refers to a person or organization who pays the premiums, and second, the person whose employment makes him or her eligible for membership in the plan.

   Subscriber Contract
   An agreement which describes the individual's benefits under a health care policy.

   Substandard Insurance
   Insurance issued with an extra premium or special restrictions to those persons who do not qualify for insurance at standard rates or with standard provisions.

   Substandard Risk
   An individual who, because of a health history or physical limitations, does not measure up to the qualifications of a standard risk.

   Summary Plan Description
   This is a recap or summary of the benefits provided under the plan. It is used most often with employees covered by self-funded plans.

   Supplemental Medical Insurance (SMI)
   Part B of Medicare is a voluntary program which generally covers physician's services and various outpatient services. A premium is charged for electing Part B coverage.

   Supplemental Security Income (SSI)
   A program that provides small stipends to the elderly, blind, and disabled who for one reason or another are not eligible for other more generous welfare programs.

   Supplemental Services
   Additional services which can be purchased over and above the basic coverage of a health plan.

   Surgi-Center
   A separate facility (from a hospital) that provides outpatient surgical services.

   Surgical Expense Insurance
   Health Insurance policies that provide benefits toward the physician's or surgeon's operating fees. Benefits may consists of scheduled amounts for each surgical procedure.

   Surgical Schedule
   A list of cash allowances attached to the policy that are payable for various types of surgery, with a maximum amount based upon the severity of the operation.

   -T- 

   Tax Cap
   A limit on federal tax breaks for health insurance. The term can apply to employers, employees or both.

   Temporary Disability Benefits (TDB)
   Legislated benefits payable to employees for nonoccupational disabilities under TDB laws in certain states. See also Disability Benefits Law.

   Temporary Partial Disability
   A condition where an injured party's capacity is impaired for a time, but he is able to continue working at reduced efficiency and is expected to fully recover. (WC,H)***

   Temporary Total Disability
   A condition where an injured party is unable to work at all while he is recovering from injury, but he is expected to recover. (WC,H)***

   Ten Day Free Look
   A notice, placed prominently on the face page of the policy, advising the insured of his or her right to examine a health policy, and if dissatisfied return the policy within ten days for a full refund of premium and no further obligation.

   Tertiary Care
   Services provided by such providers as thoracic surgeons, intensive care units, neurosurgeons, etc.

   Terminally Ill
   A term which refers to the status of a person who will normally die within 6 months of a specific illness or sickness. Often refers to the terminally ill requirement for hospice care.

   Therapeutic Alternatives
   Alternate drug products which may be different in chemical content, but provide the same effect when administered to patients.

   Therapeutic Equivalence
   Different drugs which will control a symptom or illness exactly the same as other drugs used to control that illness.

   Third-party Administration
   Administration of a group insurance plan by some person or firm other then the insurer or the policyholder.

   Third-Party Payer
   An organization (such as an insurance company) that reimburses medical care providers (such as hospital and medical practitioners) for services provided to policyholders.

   Time Limit
   The period of time during which a notice of claim or proof of loss must be filed.

   Time Limit on Certain Defenses
   One of the uniform individual accident and sickness provisions required by state law to be included in every Individual Health Policy. It sets a limit on the number of years after a policy has been in force that an insurer can use as a defense against a claim the fact that a physical condition of the insured existed before the policy was issued, but was not declared at that time.

   Total Disability
   An illness or injury that prevents an insured person from continuously performing every duty pertaining to his or her occupation or engaging in any other type of work.

   Treatment Facility
   Any facility, either residential or nonresidential, which is authorized to provide treatment for mental illness or substance abuse.

   Triage
   A method of ranking sick or injured people according to the severity of their sickness or injury in order to ensure that medical and nursing staff facilities are used most efficiently.

   Triple Option
   A plan where employees have their choice, among different types of provides such as HMO, PPO, or basic indemnity plan. Usually, their choice depends on how much they want to pay for the coverage.  

   -U- 

   Unallocated Benefit
   A policy provision providing reimbursement up to a maximum amount for the cost of all extra miscellaneous hospital services, but not specifying how much will be paid for each type of service.

   Underwriter
   The term as generally used applies to either (a) a company that receives the premiums and accepts the responsibility for the fulfillment of the policy contract, or (b) the company employee who decides whether or not the company should assume a particular risk. The agent who sells the policy is called a "field underwriter."

   Underwriting
   The process by which an insurer determines whether or not and on what basis and application for insurance will be accepted.

   Urgi-Center
   An emergency medical service center which is separate from any other hospital or medical facility.

    

   -V-

   Vision Care Coverage
   A health care plan usually offered only on a group basis which covers routine eye examinations, and which may cover all or part of the cost of eyeglasses and lenses.

   -W-

    

   Waiting Period
   the length of time an insured must wait from his or her date of enrollment or application for coverage to the date his or her insurance is effective.

   Waiver
   An agreement attached to a policy that exempts from coverage certain disabilities or injuries that are normally covered by the policy.

   Waiver of Premium
   A Provision included in some policies that exempts the policyholder from paying the premium while an insured is totally disabled, during the life of the contract.

   Workers' Compensation
   Insurance against liability imposed on certain employers to pay benefits and furnish care to employees injured, and to pay benefits to dependents of employees killed, in the course of or arising out of their employment.