A process under which Medicare pays its share of the allowed charge directly
to the physician or supplier. Medicare will do this only if the physician
accepts Medicare's allowed charge as payment in full.
Someone who is eligible for or receiving benefits under an insurance policy or plan.
The amount beneficiaries must pay for covered services. These include co-payments,
coinsurance, deductibles and balance billing amounts.
Certificate of Coverage (COC)
A description of the benefits included in a carrier's plan. The certificate
of coverage is required by state laws and represents the coverage provided
under the contract issued to the employer.
Free or reduced-fee care provided due to financial situation of patients.
Children's Health Insurance Program (CHIP)
A federal program jointly funded by states and the federal government,
which provides medical insurance coverage for children not covered by
state Medicaid-funded programs.
A type of cost sharing where the beneficiary and insurance provider share
payment of the approved charge for covered services in a specified ratio
after payment of the deductible by the insured. For example, for Medicare
physicians' services, the beneficiary pays co-insurance of 20 percent
of allowed charges.
(1) A fixed dollar amount paid for a covered service by a beneficiary (See
Co-insurance and Deductible). (2) Amount that a member of a health plan
has to pay for specific health services, such as visits to a physician.
(See "Beneficiary Liability" and Co-insurance" above.)
How physician's services are identified and defined.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal law that requires employers to offer continued health insurance
coverage to certain employees and their beneficiaries whose group health
insurance coverage has been terminated. Applies to employers with 20 or
more eligible employees. Typically, COBRA makes continued coverage available
for up to 18 or 36 months. COBRA enrollees may be required to pay 100
percent of the premium, plus an additional 2 percent.
Integrating benefits payable under more than one health insurance (for
example, Medicare and retiree health benefits). Coordinated coverage is
typically arranged so the insured benefits from all sources not exceeding
100 percent of allowable medical expenses. Coordinated coverage may require
beneficiaries to pay some deductible or co-insurance.
Coordination of Benefits (COB)
A provision that applies when a person is covered under more than one group
medical program. (See "Coordinated Coverage" above.)
Date of Service
The date(s) healthcare services were provided to the beneficiary.
(1) The amount the patient pays for medical care before insurance covers
the balance. (2) A type of cost sharing where the beneficiary pays a specified
amount of approved charges for covered medical services before the insurer
will pay for all or part of the remaining covered services. (3) Total
amount a member of a health plan has to pay for services before that person's
plan begins to cover the costs of care. (See "Beneficiary Liability" above.)
Diagnosis-Related Groups (DCI)
(1) A system of classifying patients on the basis of diagnosis for purposes
of payment to hospitals. The DRG system classifies payments into groups
based on the principal diagnosis, type of surgical procedure, presence
or absence of complications, and other relevant indicators.
Duplicate Coverage Inquiry (DCI)
A request to an insurance company or group medical plan by another insurance
company or medical plan to find out whether other coverage exists (see
Durable Medical Equipment (DME)
Medical equipment which: can withstand repeated use; is not disposable;
is used to serve a medical purpose; is generally not useful to a person
in the absence of sickness or injury, and is appropriate for use in the
home. Examples include hospital beds, wheelchairs and oxygen equipment.
Employee Retirement Income Security Act of 1974 (ERISA)
This law mandates reporting, disclosure of grievance and appeals requirements
and financial standards for group life and health. Self-insured plans
are regulated by this law.
Person who is covered by health insurance.
Explanation of Benefits (EOB)
The coverage statement sent to covered persons listing services rendered,
amount billed and payment made. This normally would include any amounts
due from the patient, as described in "Beneficiary Liability," "Co-insurance,"
"Deductible" and "Co-payment" all listed above.)
Coverage that provides for the payment of benefits as a result of sickness
or injury. Includes insurance for losses from accident, medical expense,
disability, or accidental death and dismemberment.
Health Insurance Portability and Accountability Act (HIPAA)
A federal law intended to improve the availability and continuity of health
insurance coverage that, among other things: places limits on exclusions
for pre-existing medical conditions; permits certain individuals to enroll
for available group healthcare coverage when they lose other health coverage
or have a new dependent; prohibits discrimination in group enrollment
based on health status; guarantees the availability of health coverage
to small employers and the renewability of health insurance coverage in
the small and large group markets; requires availability of non-group
coverage for certain individuals whose group coverage is terminated.
Health Maintenance Organization (HMO)
An entity that provides, offers or arranges for coverage of designated
health services needed by plan members for a fixed, prepaid premium.
An individual or institution that provides medical services (e.g. a physician,
hospital or laboratory). This term should not be confused with an insurance
company that "provides" insurance.
Home Health Agency (HHA)
A facility or program licensed, certified or otherwise authorized according
to state and federal laws to provide healthcare services in the home.
Hospital Inpatient Prospective Payment System (PPS)
Medicare's method of paying acute care hospitals for inpatient care. Prospective
per-case payment rates are set at a level intended to cover operating
costs for treating a typical inpatient in a given DRG.
International Classification of Diseases, 9th Edition (Clinical Modification)
A listing of diagnosis and identifying codes used by physicians and hospitals
for reporting diagnoses and procedures of health plan enrollees
(1) A state/federal benefit program for the poor who are aged, blind, disabled
or members of families with dependent children. Each state sets its own
eligibility standards. Only 40 percent of individuals with income below
the poverty level currently are covered.
A federal health benefit program for people over 65 and disabled that covers
35 million Americans-or about 14 percent of the population-for an annual
cost of over $120 billion. Medicare pays for 25 percent of all hospital
care and 23 percent of all physician services.
A program created by the Balanced Budget Act of 1997. Beneficiaries will
have the choice during an open season each year to enroll in a Medicare
Choice plan or to remain in traditional Medicare. Medicare Choice plans
may include coordinated care plans (HMOs, PPOs or plans offered by provider-sponsored
organizations); private fee-for-service plans or plans with medical savings accounts.
Medicare Supplement Policy (Medsupp)
The insurer will pay a policyholder's Medicare co-insurance, deductible
and co-payments for Medicare Part A and B and may provide additional supplement
benefits according to the supplement policy selected. Also called Medigap
of Medicare wrap.
Privately purchased individual or group health insurance policies designed
to supplement Medicare coverage. Benefits may include payment of Medicare
deductibles, co-insurance and balance bills, as well as payment for services
not covered by Medicare.
Purchased by Medicare enrollees to cover co-payments, deductibles and healthcare
goods or services not paid for by Medicare. Also known as a Medicare supplements policy.
A privately purchased insurance policy that supplements Medicare coverage.
Non-Participating Provider (Non-par)
Also known as out-of-network provider. A healthcare provider who has not
contracted with the carrier of a health plan to be a participating provider
Out of Network (OON)
Coverage for treatment obtained from a non-participating provider. Typically,
it requires payment of a deductible and higher co-payments and co-insurance
than for treatment from a participating provider.
The portion of payments for covered health services required to be paid
by the patient, including co-payments, co-insurance and deductible. (See
"Beneficiary Liability," "Co-insurance," "Deductible" and "Co-payment" above.)
Over-the-Counter Drug (OTC)
A drug product that does not require a prescription under federal or state law.
Part A Medicare
Medical Hospital Insurance (HI) under part A of title XVIII of Social Security
Act, which covers patients for inpatient hospital, home health, hospice
and limited skilled nursing facility services. Beneficiaries are responsible
for deductibles and co-payments.
Part B Medicare
Medicare Supplement Medical Insurance (SMI) under Part B of Title XVII
of the Social Security Act, which covers Medicare beneficiaries for physician
services, medical supplies and other outpatient treatment. Beneficiaries
are responsible for monthly premiums, co-payments, deductibles and balance billing.
Point-of-Service Plan (POS)
A health benefit plan allowing the covered person to choose to receive
a service from a participating or non-participating provider, with different
benefit levels associated with the use of participating providers.
Pre-Admission Certification (PAC)
A review of the need for inpatient hospital care, done before the actual
Pre-Existing Condition (PEC)
Any medical condition that has been diagnosed or treated within a specified
period immediately preceding the covered person's effective date of coverage.
Pre-existing conditions may not be covered for some specified amount of
time as defined in the certificate of coverage (usually six to 12 months).
Individuals can be required to satisfy a pre-existing waiting period only
once, so long as they maintain continuous group health plan coverage with
one or more carriers.
Pre-Exisiting Condition Exclusion
A practice of some health insurers to deny coverage to individuals for
a certain period for health conditions that already exist when coverage
Preferred Provider Organization (PPO)
A program that establishes contracts with providers of medical care. Providers
under such contracts are referred to as a preferred provider. Usually,
the benefit contract provides significantly better benefits and lower
member costs for services received from preferred providers, thus encouraging
covered persons to use these providers.
(1) Amount paid periodically to purchase health insurance benefits. (2)
The amount paid or payable in advance, often in monthly installments,
for an insurance policy.
What determines a physician's payment for a service under the Medicare
Primary Care Network (PCN)
A group of primary care physicians who have joined together to share the
risk of providing care to their patients who are covered by a given health plan.
Primary Care Physician (PCP)
A physician, the majority of whose practice is devoted to internal medicine,
family/general practice and pediatrics. An obstetrician/gynecologist sometimes
is considered a primary care physician, depending on coverage.
Reasonable and Customary (R&C)
A term used to refer to the commonly charged or prevailing fees for health
services within a geographic area.
Any insurance that supplements Medicare coverage. The three main sources
for secondary insurance are employers, privately purchased Medigap plans
Skilled Nursing Facility (SNF)
A facility, either free-standing or part of a hospital, that accepts patients
seeking rehabilitation and medical care that is less intense than that
received in a hospital.
Usually described as a comprehensive inpatient program for those who have
experienced a serious illness, injury or disease, but who do not require
intensive hospital services. The range of services considered sub-acute
can include infusion therapy, respiratory care, cardiac services, wound
care, rehabilitation services, post-operative recovery programs for knee
and hip replacements, cancer, stroke and AIDS care.
Third Party Administrator (TPA)
An independent person or corporate entity (third party) that administers
group benefits, claims and administration for a self-insured company or group.
Usual, Customary and Reasonable (UCR)
A term used to refer to the commonly charged or prevailing fees for health
services within a geographic area.
Utilization Review (UR)
A formal assessment of the medical necessity, efficiency and/or appropriateness
of healthcare services and treatment plans on a prospective, concurrent
or retrospective basis.