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If care is determined in the doctor's office or surgical center without an overnight stay, it is considered ambulatory care.
As it applies to managed care, authorization is the approval of care, such as hospitalization. Pre-authorization may be required before admission takes place or care is given by non-HMO providers.
The practice of a provider billing a patient for all charges not paid for by the insurance plan, even if those charges are above the plan's UCR or are considered medically unnecessary. Managed care plans and service plans generally prohibit providers from balance billing except for allowed co-payments, coinsurance, and deductibles. Such prohibition against balance billing may even extend to the plan's failure to pay at all (e.g., because of bankruptcy).
Certification is the official authorization for use of services.
The method by which an enrollee's health-care service claims are reviewed before reimbursement is made. The purpose of this monitoring system is to validate the medical appropriateness of the provided services and to be sure the cost of service is not excessive.
An agreement to prevent double payment for services when a subscriber has coverage from two or more sources. For example, a husband may be covered by Blue Cross and Blue Shield through work, and his wife may be covered by an HMO through her place of employment. The agreement determines which organization has primary responsibility for payment and which organization has secondary responsibility.
A provision in a member's coverage that limits the amount of coverage by the plan to a certain percentage, commonly 80%. Any additional costs are paid by the member. This is characteristic of indemnity insurance plans and PPO plans. The coinsurance usually is about 20% of the cost of medical services after the deductible is paid.
That portion of a claim or medical expense that a member must pay out of pocket. Usually a fixed amount, such as $5 in many HMOs.
A set of five-digit codes that apply to medical services delivered. Frequently used for billing by professionals.
The portion of a subscriber's (or member's) health-care expenses that must be paid by the subscriber before any insurance coverage applies, commonly $100 to $300. Common in insurance plans and PPOS, uncommon in HMOs. May apply only to the out-of-network portion of a point-of-service plan.
A statistical system of classifying any inpatient stay into groups for purposes of payment. This is the form of reimbursement that HCFA uses to pay hospitals for Medicare recipients. Also used by a few states for all payers and by some private health plans for contracting purposes. A standard flat rate per procedure is derived from this scale, which is paid by Medicare for their beneficiaries.
A statement mailed to a covered insured person explaining how and why a claim was or was not paid: the Medicare version is called an EOMB (also see ERISA).
A listing of the maximum fee that a health plan will pay for a certain service based on CPT billing codes. (Also referred to as Fee Maximums or as a Fee Allowance Schedule.)
A claims form used by professionals to bill for services. Required by Medicare and generally used by private insurance companies and managed care plans.
Originally, an HMO was defined as an organization that provided health care to members in return for a preset amount of money. Today the term encompass two possibilities: a health plan that places at least some of the providers at risk for medical expenses, and a health plan that utilizes primary care physicians as gatekeepers (although there are some HMOs that do not).
The classification of disease by diagnosis codified into 6-digit numbers. The ICD-10 will use alphanumeric codes and is scheduled for publication in 1993.
A general term which refers to a system of health-care delivery that tries to manage the costs of health care, the quality of that health care, and access to that care. Common elements include a restricted group of contracted providers, some limitations on benefits to subscribers who use non-contracted providers (unless authorized to do so), and some type of authorization system. Managed care is actually a spectrum of systems, ranging from so-called managed indemnity, through PPOs, Point of Service, open panel HMOs and closed panel HMOs.
A program financed jointly by the federal government and the states, that provides health coverage for mostly low income women and children as well as nursing home care for low-income elderly. Levels of funding and benefits and the portion of low-income people covered vary widely from state to state.
The federal program providing health insurance for people aged 65 and older and for disabled people of all ages. Medicare part A covers hospitalization and is a compulsory benefit. Medicare part B covers outpatient services and is a voluntary service.
Insurance provided by carriers to supplement the monies reimbursed by Medicare for medical services. Since Medicare pays physicians for services according to their own fee schedule, regardless what the physician charges, the individual may be required to pay the physician the difference between Medicare's reimbursable charge and the physician's fee. Medigap is meant to fill this gap in reimbursement, so that the Medicare beneficiary is not at risk for the difference.
Sometimes referred to as a "gatekeeper," the primary-care physician is usually the first doctor a patient sees for an illness. This physician treats the patient directly, refers the patient to a specialist (secondary care), or admits the patient to a hospital. The primary-care physician can be a family physician, internist, pediatrician and occasionally obstetrician/gynecologist.
Reimbursement of an institution, usually a hospital, based on a set rate per day rather than on charges. Per Diem reimbursement can vary by service (e.g.. medical/surgical, obstetrics, mental health, and intensive care) or can be a set rate, regardless of intensity of services.
The practice of reviewing claims for hospital admission before the patient actually enters the hospital. This cost-control mechanism is intended to eliminate unnecessary hospital expenses by denying medically unnecessary admissions.
A plan in which members do not have to choose the coverage for services until they need them. The most common use of the term applies to a plan that enrolls each member in both an HMO (or HMO-like) system and an indemnity plan. Occasionally referred to as an "HMO swing-out plan" or "out-of-plan benefits rider" to an HMO, or a "primary care PPO." These plans provide different benefits (e.g.. 100% coverage rather than 70%) depending on whether the member chooses to use the plan or go outside the plan of services. Dual choice refers to an HMO-like plan with an indemnity plan, and triple choice refers to the addition of a PPO to the dual choice. An archaic but still valid definition applies to a simple PPO, where members receive coverage at a greater level if they use preferred providers (albeit without a gatekeeper system) than if they choose not to do so.
A plan that contracts with independent providers at a discount for services. The physicians in a PPO are paid on a fee-for-service schedule that is discounted, usually about 10% to 20% below normal fees. The panel of providers is limited and usually has some type of utilization review system associated with it. PPOs are often formed as a competitive reaction to HMOs by physicians who contract out with insurance companies, employers, or third-party administrators. A patient can use a physician outside of the PPO providers, but he or she will have to bear a bigger portion of the fee.
Also known as pre-admission certification, pre-admission review and pre-cert. They also describe the process of obtaining authorization from the health plan for routine hospital admissions (inpatient or outpatient). Often involves appropriateness review against criteria and assignment of length of stay. Failure to obtain pre-certification often results in a financial penalty to either the provider or the subscriber.
Any supplier of services, i.e.. physician, pharmacist, case management firm, etc.
A health plan where the risk for medical cost is assumed by the company rather than an insurance company or managed care plan. Under ERISA, self-funded plans are exempt from state laws and regulations such as premium taxes and mandatory benefits. Self-funded plans often contract with insurance companies or third party administrators to administer the benefits (also see ASO).
Typically an institution for convalescence or a nursing home. The skilled nursing facility provides a high level of specialized care for long-term or acute illness. It is an alternative to extended hospital stays or difficult home care.
An organization outside the insuring organization that handles the administrative duties and sometimes utilization review. Third-party administrators are used by organizations that actually fund the health benefits but who delegate the administration of the plan to someone else.
A method of profiling prevailing fees in an area and reimbursing providers on the basis of that profile. One common method is to average all fees and choose the 80th or 90th percentile. Sometimes this term is used synonymously with a fee allowance schedule when that schedule is set relatively high.
A review by an HMO of the treatment patterns of particular providers to see how their usage of drugs, x-rays, lab tests and other services compares with their peers. Utilization Review affects the amount of income providers will receive from the HMO.
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