GLOSSARY

Accreditation: A quality review process by an outside agency that looks at how well an organization provides services to its members and works to continously improve those services. The National Committee for Quality Assurance (NCQA) conducts many of the reviews of HMOs. In order for hospitals and other health care facilities to be accredited they must go through a separate review process, often conducted by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). Accreditation can be distinguished from state licensure, as accreditation is a voluntary process. Further, the accrediting bodies lack the enforcement mechanisms needed to ensure that the plans provide the required quality of, and access to, care.

Ambulatory Review: Review of the appropriateness, necessity, efficacy or efficiency of health care services performed or provided in an outpatient setting. NCGS 58-50-61(a)(17)(a).

Annual Limits: The maximum amount of money that the insurer or HMO will pay for a member’s health care services in a given year. The insurer can have an annual limit for all health care services, or may have separate annual limits for specific services (for example, prescription drugs or durable medical equipment). Some insurers also have lifetime limits, which is the maximum amount of money the insurer or HMO will pay during the lifetime of a particular member.

Appeal: A request by a member to an HMO to review a noncertification decision—that is, a decision to deny or limit payment of recommended health care procedures, services, or treatments.

Authorization: Approval to obtain health services, see a specialist, obtain care outside of the network, or be hospitalized. A primary care provider (PCP) can often authorize the provision of health services and referrals to specialists. However, the HMO sometimes requires that the member seek prior authorization from the health plan for non-emergency hospital admissions or certain high-cost or high-technology procedures. Also known as prior authorization.

Capitation: A fixed payment that an HMO pays to a physician, group practice, hospital or network of providers. The payment is calculated to cover the expected costs of providing certain services to members over a period of time, usually a month. The provider gets the same payment each month (or other fixed time period), regardless of the amount or type of services actually rendered. capitation payment systems can cover just the cost of providing primary care (primary care capitation), may cover the costs of primary care and some specialty care (partial capitation) or may also include the costs of primary, specialty, and hospitalization (full or global capitation).

Case Management: A coordinated set of activities to manage the health care services provided to patients with serious, complicated or prolonged health conditions. NCGS 58-50-61(a)(17)(b).

Certification: A determination by an insurer or its designated utilization review Organization that an admission, continued stay in a hospital, or other health care services has been reviewed and satisfies the health plan’s requirements for coverage. NCGS 58-50-61(a)(17)(c).

Clinical Guidelines: The criteria used that outlines the process and standard of care to be given for a specific health condition, disease or illness. Clinical guidelines are usually developed by practicing health care providers, and are an attempt to identify the best way to prevent, detect or treat a particular medical condition. Managed care organizations and other health care institutions use clinical guidelines as a way to ensure that practitioners are providing appropriate care, and to standardize care across providers. Also referred to as clinical practice guidelines, clinical protocols, treatment protocols, or medical protocols.

Clinical Review Criteria: The criteria used that outlines the process and standard of care to be given for a specific health condition, disease or illness. May include clinical protocols or practice guidelines used by an insurer to determine the services or treatments that are appropriate and medically necessary for a person with a specific health condition, disease or illness. NCGS 58-50-61(a)(2).

Coinsurance: The percentage of a provider’s fee that the patient is expected to pay. For example, many traditional insurance companies pay 80% of a physician’s usual, customary and reasonable (UCR) fees. The patient is expected to pay the 20% difference between the physician’s UCR fees and what the insurance company pays. The 20% which the patient pays is called the coinsurance.

Concurrent Review: Review conducted during the course of a patient’s hospital stay or course of treatment, to determine whether the hospital stay or treatment is still necessary. NCGS 58-50-61(a)(17)(d).

Copayment (Copay): A fixed payment that must be paid out-of-pocket by a patient upon receiving health care services. In some HMOs, for instance, you pay a $10 copayment for a physician visit, or a $5 copayment for a prescription.

Deductible: The amount an insured person must pay out-of-pocket each year before the insurance plan begins to cover health care costs. A policy with an individual deductible of $250 and a family deductible of $750 means that each individual person in the family must pay $250 of medical expenses before the policy begins paying benefits for that individual. Once the out-of-pocket expenses of the family reaches $750, then the insurance company will pay benefits for each family member.

Discharge Planning: The process used to determine how a patient’s ongoing health care needs will be coordinated and managed after being discharged from a hospital or other health care facility. NCGS 58-50-61(a)(17)(e).

Efficacy: Under ideal conditions, how well a treatment, therapy or procedure produces a desired health outcome (cure, alleviation of pain, return of functional abilities).

Effectiveness: Under real life conditions, how well a treatment, therapy or procedure produces a desired health outcome (cure, alleviation of pain, return of functional abilities).

Employee Retirement Income Security Act (ERISA): A Federal law that prevents states from enacting laws or regulations that have an impact on employer welfare plans, including employer sponsored health benefits. States can regulate insurance carriers or HMOs. If an employer purchases a regulated health plan, then the members are covered by the state consumer protection laws. However, employers that pay directly for all of health services (self-funded or self-insured plans) are not subject to the same state laws.

Emergency Medical Condition: North Carolina state law uses a prudent layperson definition of emergency medical condition. That is, state law considers certain acute symptoms to be emergency medical conditions if a prudent layperson, possessing an average knowledge of health and medicine, thinks that in the absence of immediate medical attention, the medical condition is likely to place him or her (or in the case of a pregnant woman, her unborn child) in serious jeopardy, or cause serious impairment to bodily functions or bodily organs. NCGS 58-50-61(a)(4).

Emergency Services: Health care items and services needed to screen for or treat an emergency medical condition until the condition is stabilized, including pre-hospital care and ancillary services routinely available in the emergency department. NCGS 58-50-61(a)(5).

Evidence of Coverage (EOC): The document given to HMO members that describes the covered benefits and exclusions, utilization review requirements, cost sharing, and other coverage provisions. The Evidence of Coverage is similar to a policy contract that other insurers issue.

Experimental: A new treatment developed from research that is different from the commonly provided standard of care for a given disease, illness or condition. Experimental or investigational drugs, treatments or procedures are typically not approved for use by the FDA, and may be the subject of clinical trials to test toxicity, efficacy or effectiveness.

Fee-for-Service (FFS): Payments to providers based on the specific services rendered. fee-for-service systems are typically distinguished from capitation payments, which involve a fixed periodic payment per individual regardless of what services are provided. Under a fee-for-service system, the provider is paid each time he or she provides a different service.

Formulary: List of drugs and other pharmaceuticals that the health plan will cover. A formulary may limit the type and number of medications available for a physician to select from when treating any given disease, illness or condition.

Gatekeeper: In managed care systems, a primary care provider (PCP) who is responsible for authorizing treatment by specialists or non-emergency hospitalizations. If you are in a managed care system that uses gatekeepers you must see your gatekeeper before visiting a specialist (for example, a cardiologist).

Grievance: A written complaint submitted by a member which challenges any of the following: the health plan’s decisions, policies or actions related to availability, delivery or quality of health care services; claims payment or handling; reimbursement for services; the contractual relationship between the member and the insurer; or the outcome of an appeal of a noncertification decision. NCGS 58-50-61(a)(6).

Health Insurance Portability and Accountability Act (HIPAA): Passed by Congress in 1996, it established minimum standards for access, portability and renewability of coverage for all health plans, including self-funded or ERISA plans.Most of the protections apply to large and small group purchasers and certain individuals leaving or changing group coverage. Provisions of the bill include guaranteed issue, guaranteed renewability, limits on preexisting condition waiting periods, nondiscrimination based on health status, portability and special enrollment periods.29 USC §§ 1001-1461.

Independent Practice Association (IPA) Physician Network: A legal entity comprised of independent physicians that contracts with HMOs for the physicians in the association. Physicians in the IPA retain their independence, ability to contract individually with other organizations and work out of their own offices. By forming an IPA, these independent physicians gain leverage for negotiating contracts and attain administrative economies of scale, thus reducing costs. Also referred to as Independent Physician Associations or Independent Provider Associations.

Lifetime Limits: The maximum amount of money that the insurer or HMO will pay for care over the member’s lifetime. The insurer can have a lifetime limit for all health care services, or may have separate lifetime limits for specific services. Some insurers also have annual limits, which is the maximum amount of money the insurer or HMO will pay for the member during a particular year.

Medicaid: A governmental health insurance program that provides assistance with medical costs for certain low- and moderate-income individuals and families. The federal government sets the broad guidelines for the program. A state is then given considerable latitude to establish eligibility criteria and to determine what services will be covered for the state’s Medicaid population.

Medicare: The national health insurance program provided primarily to older adults (65 or older) and some disabled people who are eligible for Social Security benefits. Medicare has three parts: Part A, which is hospital insurance, Part B, which covers the costs of physicians and other providers, and Part C (Medicare Plus Choice), which expands the availability of managed care arrangements for Medicare recipients.

Non-certification: A decision by an insurer or its designated utilization review organization to deny, reduce or terminate a requested service, treatment or procedure. The denial must be based on a review and a decision that the requested service, treatment or procedure does not meet the insurer’s requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness. NCGS 58-50-61(a)(13).

Open-Access Plan: An HMO that allows members to see any provider within the network without a referral from a primary care provider (PCP). Open-access plans are distinguished from gatekeeper plans, which usually require a PCP to authorize all visits to specialists

Out-of-Network: Care delivered by health care providers who are not a part of the managed care organization’s network. Some plans allow members to seek care out of the network, but at a higher out-of pocket cost and/or deductible to the member (POS and plans). HMOs generally do not cover any costs for care obtained out of network, unless contracting health care providers are unavailable to meet the health needs of the insured without unreasonable delay.

Pre-Certification or Pre-Admission Screening: Authorization that must be obtained from the health plan before inpatient care is provided in order for the plan to pay for the hospitalization. Pre-admission screening reviews the appropriateness of the requested care, while pre-certification may specify the allowable length of stay in addition to what services/procedures will be covered.

Primary Care Providers (PCP): Generally, most plans allow family physicians, pediatricians or general internists to serve as primary care providers. Sometimes, obstetricians or gynecologists (OB-GYNs), nurse practitioners (NPs), certified nurse midwives (CNMs) or physician assistants (PAs) can be PCPs. Primary care is distinguished from specialty care, which is often concerned with a particular health condition. Examples of specialists include oncologists, who deals with cancer, or cardiologists, who specialize in hearts.

Prior Authorization: The health plan’s approval that a requested hospital admission, treatment or procedure is a covered service and is medically necessary and appropriate. Also known as pre-authorization, prior approval, pre-authorization.

Prospective Review: Review conducted before an admission or a course of treatment. prospective review includes pre-authorization and pre-certification requirements that may be needed before a patient can be admitted to a hospital or obtain certain health care. NCGS 58-50-61(a)(17)(f).

Referral: Physician recommendation to a patient to see another physician for further evaluation or treatment. In HMOs that use gatekeepers, services provided by specialists or other practitioners usually require a referral by the patient’s PCP in order for the health plan to cover the cost of the care.

Retrospective Review: Review of services and supplies already provided to a patient to determine whether they were medically necessary or appropriate. NCGS 58-50-61(a)(17)(g).

Rider: A health insurance or HMO policy that supplements regular coverage. For example, some insurers exclude prescription drugs or mental health coverage. These services are not included in the comprehensive policy but may be purchased separately through a rider.

Second Opinion: An examination by a second physician or health provider before obtaining treatment. Second opinions allow patients to compare the recommendation of the second provider with the recommendation of the first provider. Second opinions are more common if the patient has complex medical conditions, the diagnosis is not clear, multiple treatment options exist, or a treatment or therapy is expensive.

Self-Insured or Self-Funded Plans: Health plans in which the employer is actually the insurer and is responsible for paying the medical bills of those insured through the plan. Even though the employer may contract with an HMO, insurer or other third-party administrator to administer the coverage and pay the claims, the employer retains responsibility for paying all the medical claims. These plans are governed by federal ERISA laws rather than state insurance regulations, and are sometimes called ERISA plans.

Stabilize: Provision of medical care that is appropriate to prevent the person’s health condition from deteriorating. NCGS 58-50-61(a)(16).

Standing referral: A referral from a primary care provider (PCP) to a specialist for a specified period of time (often to cover a course of illness). Health plans must have a process to allow members with chronic, degenerative, disabling or life-threatening illnesses or conditions to obtain extended or “standing” referrals to in-network specialists. The standing referrals can not exceed 12 months, and must be part of a treatment plan coordinated with the primary care physician, specialist and health plan.

Third-Party Administrator: Company hired to handle only the non-clinical aspects of a health plan’s business, such as billing, collecting premiums and paying physicians.

Utilization Review (UR): A system designed to monitor the use of, or evaluate the medical appropriateness, efficacy or efficiency of health care services, procedures, providers or facilities. utilization review may include ambulatory review, case management, certification, concurrent review, discharge planning, prospective review, retrospective review or second opinions. NCGS 58-50-61(a)(17).

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