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Denver Health Insurance Terms Glossary

Denver Health Insurance Terms

Ancillary Services

Services,other than those provided by a physician or hospital, which are related to a patient’s care, such as laboratory work, x-rays, and anesthesia.


Ambulatory Care

All types of health services that do not require an overnight hospital stay.


Appeal

Request made to a payer to reconsider a decision, such as a claim denial or denied prior authorization request.  Most appeals must be submitted in writing within a specified period.


Assignment of Benefits

When an insured person assigns benefits, they sign a document allowing the
hospital or doctor to collect health insurance benefits directly from the health insurance company. Otherwise, the insured person pays for the treatment and is later reimbursed by the health insurance company.


Catastrophic Ilness

A very serious and costly health problem that could be life threatening
or cause life-long disability.  The cost of medical services alone for this type of serious condition could cause financial hardship.


Centers of Excellence

Hospitals that specialize in treating particular illnesses or performing
particular treatments, such as cancer or organ transplants.


Certificate of Coverage

A document given to an insured that describes the benefits, limitations
and exclusions of coverage provided by an insurance company.


Certificate of Creditable Coverage

The Certificate of Creditable Coverage (COCC) is provided to an insured person by his insurance company when his coverage has been canceled. This form supplies the beginning and ending date of coverage under the health plan and is used by the insured person when he applies for new health insurance to document his prior health coverage.


Co-insurance

Cost-sharing arrangement between an insured person and the health insurance company in which the insured person is required to pay a percentage of the cost for the health care services received.  Coinsurance typically applies after satisfaction of a deductible.  For example, 80% coinsurance may apply after a $500 deductible has been satisfied.


Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees to offer
continued health coverage for employees and their dependents for 18 months after the employee leaves the job.  Longer durations of continuation are available under certain circumstances.  If a former employee opts to continue coverage under COBRA, the former employee must pay the entire premium, plus a 2% administration charge.


Concurrent Review

Concurrent review involves monitoring the medical treatment and progress toward
recovery, once a patient is admitted to a hospital, to assure timely delivery of services and to confirm the necessity of continued inpatient care.  This monitoring is under the direction of medical professionals.  Concurrent review is a component of “Utilization Review”


Consumer-Driven Health Plan

A High-Deductible Health Plan (HDHP) that is combined with a personal
savings fund or reimbursement arrangement to pay for health care expenses. Participants are responsible for how their health care dollars are spent, resulting in more prudent management of their costs and expenditures.


Contract Year

The period of time from the effective date of the contract to the expiration date of the contract.  A contract year is typically 12 months long, but not necessarily from January 1 through December 31.


Coordination of Benefits (COB)

A provision in the contract that applies when a person is covered under more than one health insurance plan.  It requires that payment of benefits be coordinated by all plans to eliminate over-insurance or duplication of benefits.


Co-payment

A Co-payment is a predetermined fee that an individual pays for health care services.  For example, a PPO may require a $20 “co-payment” for normal services delivered during a physician office visit. In most cases, the deductible is waived when a co-payment is specified; therefore the co-payment will not apply to the deductible or out-of-pocket limit. Cost Sharing:

This occurs when the users of a health care plan share in the cost of medical care. Deductibles, coinsurance, and co-payments are examples of cost sharing.Covered Benefit:
A health service or item that is included in a health plan, and that is partially or fully paid by the health plan.Covered Charges/Expenses:
Most insurance plans, whether they are PPOs or HMOs, do not pay for all services. Covered services are those medical procedures for which the insurer agrees to pay, and are listed in the policy.


Creditable Coverage

Any previous health insurance coverage that can be used to shorten the pre-existing condition waiting period. See “HIPAA.


Current Procedural Terminology (CPT)

A system of terminology and coding developed by the American Medical Association (AMA) that is used for describing, coding, and reporting medical services and procedures.


Custodial Care

Personal care, such as bathing, cooking, and shopping.


Deductible

The Deductible is a cost-sharing arrangement between an insured person and
the health insurance company in which the insured person will be required to pay a fixed dollar amount of covered expenses each year before the health insurance company will reimburse for covered health care expenses.Generally, an insured person is responsible for a deductible each calendar year.


Deductible Carry-Over Credit

Charges applied to the deductible for services during the last 3 months of a calendar year which may be used to satisfy the following year’s deductible


Designated Facility

A facility which has an agreement with a health insurance plan to render
approved services. (Organ transplants are the most common example.) The facility may be outside a covered person’s geographic area.


Effective Date

The date health insurance coverage begins.


Eligible Dependent

A dependent of a covered person (spouse, child, or other dependent) who
meets all requirements specified in the contract to qualify for coverage and for whom premium payment is made.


Exclusions and Limitations

Medical services that are either not covered or limited in benefit by a health insurance policy.


Exclusion Period

A period of time when an insurance company can delay coverage of a pre-existing condition. Sometimes this is called a pre-existing condition waiting period.


Explanation of Benefits (EOB)

Statement sent by health plans to persons who have experienced a claim under the health plan. The explanation of benefits (EOB) details the charges for the services received, the amount the health insurance company will pay for those services, and the amount the insured person will be
responsible for paying.


First Dollar Coverage

First Dollar Coverage refers to not having to meet a calendar year deductible prior to receiving reimbursement or payment for a medical service. Co-pays and some preventive care are examples of First Dollar Coverage.Formulary:

A list of preferred drugs and their proper dosages.  Under most health plans, better benefits are provided for formulary drugs than are provided for non-formulary drugs.


Full-Time Student

Under a health plan, an eligible dependant child student (typically age 19 or
older) who meets the health plan’s criteria of “full-time.”  Such criteria typically include minimum credit hour requirements (such as 12 credit hours in a semester) and a maximum age (age 23 is typical).


Gatekeeper

A primary care physician in a managed care environment who is responsible for managing the patient’s overall care and who must authorize all specialist referrals.  In most health maintenance organizations (HMOs), the secondary care is not covered by insurance if the primary care physician does not approve it


Group Health Plan

A health plan that provides health coverage to employees and their families, and is supported by an employer or employee organization.


Guaranteed Issue

Under guaranteed issue, a health insurance company or HMO must issue coverage
to an applicant regardless of prior medical history.  In Illinois and Indiana, small employers (defined as 2 to 50 employees) cannot be refused coverage for their employees regardless of the medical history of one or more employees.


Health Care Provider

A doctor, hospital, laboratory, nurse, or anyone who delivers medical or health-related care.


Health Insurance Portability & Accountability Act (HIPAA)

A law passed in 1996, which is also called the “Kassebaum-Kennedy” law.  This law expanded health care coverage for persons who lose their job, or move from one job to another.  HIPAA protects persons with pre-existing medical conditions and/or problems, based on past or present health, getting health insurance coverage.


Health Maintenance Organization (HMO)

Prepaid health plans which cover doctors’ visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests, X-rays, and therapy.  In an HMO, one must choose a primary care physician who coordinates all care and makes referrals to any specialists that may be required.  In addition, one must use the doctors, hospitals and clinics that participate in your plan’s network.  No benefits are paid for non-emergency benefits provided outside the HMO network.


Health Savings Account (HSA)

Operating similarly to IRAs, HSAs are tax-advantaged savings accounts for health care services.  A person must enroll in a qualified High-Deductible Health Plan (HDHP) before they can establish an HSA.


High-Deductible Health Plan (HDHP)

A person must be enrolled in a qualified High-Deductible Health Plan (HDHP) before they can establish a Health Savings Account (HSA).  Not all high-deductible health plans qualify for purposes of establishing HSA eligibility.  A qualified HDHP benefit design must conform to various federally-mandated requirements, such as a minimum $1,100 deductible and a lack of first-dollar benefit provisions.


Home Health Care

Services given at home to aged, disabled, sick, or convalescent individuals not
needing institutional care.  The most common types of home care are visiting nurse services and speech, physical, occupational, and rehabilitation therapy.  These services are provided by home health agencies, hospitals, or other community organizations.


Hospice Care

Care for the terminally ill and their families, in the home or a non-hospital setting, that emphasizes alleviating pain rather than a medical cure.


Hospital-Surgical Coverage

A form of health insurance that offers coverage of certain costs related to hospitalization and surgical procedures.   A hospital-surgical plan does not cover other types of medical services, such as physician office visits and outpatient prescription drugs.


Indemnity Health Plan

Indemnity health insurance plans are also called “fee-for-service.”  These are the types of plans that primarily existed before the rise of HMOs and PPOs.   With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the health plan pays the other percentage.  For example, an individual might pay 20% for services and the insurance company pays 80%.  The fees for services are defined by the health care providers and vary from physician to physician and hospital to hospital.


Independent Practice Associations (IPA)

An IPA is a type of HMO in which care is provided by independent physicians who contract with the HMO.  This contrasts with the “staff model” HMO, in physicians are employees of the HMO.


Inpatient Care

Health care that you get when you stay overnight in a hospital.


Lifetime Maximum

A cap on the benefits paid for the duration of a health insurance
policy.  Many policies have a lifetime limit of $5 million, which means that the insurer agrees to cover up to $5 million in covered services over the life of the policy.  Once the $5 million maximum is reached, no additional benefits are payable.


Limited Policy

A policy that covers only specified accidents or sicknesses (e.g. a cancer policy).


Major Medical

Health insurance coverage for expenses associated with hospital confinements,
surgeries, and/or medical conditions that require a broad range of medical services and supplies.


Medicaid

Federal and state health insurance program for low-income individuals who meet
established eligibility criteria (programs vary from state to state).


Medical Necessity

Medical information justifying that the service rendered or item provided is
reasonable and appropriate for the diagnosis or treatment of a medical condition or illness.


Medicare

Federal health insurance program for the elderly (age 65 and older), certain
disabled individuals, and those with end-stage renal disease.  Medicare is administered by the Center for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA).


Medicare Supplement

A supplemental insurance policy to help cover the difference between
approved medical charges and the benefits paid by Medicare.  These plans are also known as “Medi-gap” plans.


Medically Necessary

Many insurance policies will pay only for treatment that is deemed
“medically necessary” to restore a person’s health.  For instance, many health insurance policies will not cover routine physical exams or plastic surgery for cosmetic purposes.


Medigap

A supplemental insurance policy to help cover the difference between approved medical charges and the benefits paid by Medicare.These plans are also known as “Medicare Supplement” plans.


Network

Groups of physicians, hospitals, and other health care providers working with the health plan to offer care at negotiated rates.


Network Provider

Physicians,hospitals, or other providers of medical services that have agreed to
participate in a network, to offer their services at negotiated rates, and to meet other negotiated contractual provisions.  Also called “participating provider.”


Noncancellable Policy

A policy that guarantees you can receive insurance as long as you pay the
premium.  Also called a “guaranteed renewable policy.


Out-Of-Network

Health care services received outside the HMO or PPO network, or expenses
incurred by services provided by out-of-network health professionals, that may not be covered, or may be covered at a reduced benefit level.


Out-of-Pocket Costs

Insured health care costs for which the insured is responsible because of the
application of deductibles, co-insurance, and co-payments.


Out-of-Pocket Maximum

Total dollar amount an insured person will be required to pay for covered medical services during a specified period, such as one year.  The out-of-pocket maximum may also be called the stop-loss limit or catastrophic expense limit. The out-of-pocket maximum is the total of the deductible plus the co-insurance out-of-pocket.


Participating Provider

A health care provider who has been contracted to render medical services
or supplies to insured persons at a pre-negotiated fee.  Providers include hospitals, physicians, and other medical facilities that are part of a PPO or HMO network.


Pre-Authorization

Under a pre-authorization provision of a health insurance policy, the insured
person must contact the health insurance company prior to a hospitalization or surgery and receive authorization for the service


Pre-Certification

This is a requirement that an insured person call the health insurance
company to advise them that a doctor has stated that certain medical treatment is required.  This must be done before treatment is received from the doctor or hospital.  A health insurance policy will normally list the medical conditions that require pre-certification.  When pre-certification is not obtained, benefits will be reduced or possibly not given.


Pre-existing Condition

A health problem that existed before the date your insurance became
effective.  Each health insurance company uses its own particular definition of pre-existing condition. However, the following statement is in line with most insurance company provisions:  “A
pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage.


Preferred Provider Organization (PPO)

A network of health care providers with which a health insurer has negotiated contracts for its insured population to receive health services at discounted costs.  Health care decisions generally remain with the patient as he or she selects providers and determines his or her own need for services.  Patients have financial incentives to select providers within the PPO network.


Preventive Care

An approach to health care that emphasizes preventive measures and health
screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, pap smears, mammograms, and other early detection testing.


(PCP)

Under a health maintenance organization (HMO) plan, the primary care physician is usually an insured person’s first contact for health care.  This is often a family physician, internist, or
pediatrician.  A primary care physician monitors patient health, treats most patient health problems, and refers patients, if necessary, to specialists.


Prior Authorization

Review of need for health care items or services before services are rendered
or products are provided.  This refers to a decision made by the health plan to cover or not cover the charges before the services are provided.


Provider

Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) that provides medical care.


Reasonable and Customary (R&C) Charge

A term used to refer to the commonly charged or prevailing fees for health services within a geographic area.  A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that
specific community.  “Reasonable and Customary (R&C) Charge” essentially means the same thing as “Usual and Customary (U&C) Charge.


Referral

An OK from the primary care physician for the patient to see a specialist or get certain services.  In many HMO plans, the insured person needs to get a referral before they get care from anyone except the primary care physician.  If the referral is not received, the HMO may not cover resulting expenses.


Schedule of Benefits and Exclusions

A listing of the benefits covered by the policy as well as services not provided under the policy.


State Continuation Of Coverage

If a group has fewer than 20 employees, State Continuation Of Coverage may be available as an alternative to COBRA Coverage. In Illinois, State Continuation Of Coverage is normally available for up to 9 months.


State-Mandated Benefits

Benefits for a variety of medical conditions that a given state requires of health insurance policies sold in that state.


Stop-loss Provisions

Provides for 100% payment of expenses after total patient out-of-pocket expenses exceed a certain contractual dollar amount.


Underwriting

The act of reviewing and evaluating prospective insured persons for risk assessment and appropriate premium.


Usual and Customary (U&C) Charge

A term used to refer to the commonly charged or prevailing fees for health services within a geographic area.  A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community.   “Usual and Customary (U&C)” essentially means the same thing as “Reasonable and Customary (R&C) Charge.


Utilization Review

A mechanism by which the appropriateness, necessity, and quality of
health care services are monitored by both insurers and employers.


Waiting Period

A period of time during which the health plan does not cover a person for
a particular health problem. Waiting period also refers to the number of days before a new employee may join a group health plan.


Well-Baby Care

Preventive health services, including immunizations, for young children within an age range specified by the health plan.


Wellness Office Visit

A physician office visit that is not prompted by sickness or injury.