Insurance Glossary

 

B

 

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E

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."

F

G

Generic Drug
A drug which is exactly the same as a brand name drug and which is allowed to be produced after the brand name drug's patent has expired. It is also called a "generic equivalent."
Grievance Procedure
A procedure which allows a member of a health plan or a provider of benefits to express complaints and seek remedies.
Group
Coverage of a number of individuals under one contract. The most common "group" is employees of the same employer.
Group Certificate
The document provided to each member of a group plan. It shows the benefits provided under the group contract issued to the employer or other insured.

H

Home Health Agency
A certified facility approved by a health plan to provide services under contract.
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 choreworkers.
Home Health Services
Health care services provided by a licensed home health agency in the patient's home which is a covered expense under Part A of Medicare.
Health Benefits Package
The coverages offered by a health plan to an individual or group.
Health Plan
This refers to any kind of plan that covers health care services such as HMOs, insured plans, preferred provider organizations, etc.
Health Insurance (HI)
Insurance against loss by sickness or bodily injury. The generic form for those forms of insurance that provide lump sum or periodic payments in the event of loss occasioned by bodily injury, sickness or disease, and medical expense. The term Health Insurance is now used to replace such terms as Accident Insurance, Sickness Insurance, Medical Expense Insurance, Accidental Death Insurance, and Dismemberment Insurance. The form is sometimes called Accident and Health, Accident and Sickness, Accident, or Disability Income Insurance.
Health Maintenance Organization (HMO)
An HMO is a prepaid medical service plan which provides services to plan members. Medical providers contract with the HMO to provide medical services to plan members. Members must use contracted providers. The emphasis is on preventive medicine, and it is an alternative to employee benefit plans. Employers of more than 25 persons are required to offer the alternative of HMO to employees, but not if the cost exceeds that of present employee benefit plans.
Health Services
The benefits covered under a health contract.
Hospice
An organization which is primarily designed to provide pain relief, symptom management and supportive services for the terminally ill and their families. Hospice care is covered under Part A of Medicare.
Hospital Benefits
Benefits payable for hospital room and board, plus miscellaneous charges resulting from hospitalization.

I

Identification Card
A card given to each person covered under the plan which identifies him or her as being eligible for benefits.
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, intentional injuries inflicted on the insured are covered (assuming no collusion).
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
A facility licensed by the state, which provides nursing care to persons who do not require the degree of care which a hospital or skilled nursing facility provides.

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L

Legend Drug
A drug which has on its label "caution: federal law prohibits dispensing without a prescription."
Length of Stay (LOS)
The total number of days a participant stays in a facility such as a hospital.

M

Major Medical Insurance
A type of Health Insurance that provides benefits up to a high limit for most types of medical expenses incurred, subject to a large deductible. Such contracts may contain limits on specific types of charges, like room and board, and a percentage participation clause sometimes called a coinsurance clause. These policies usually pay covered expenses whether an individual is in or out of the hospital.
Mandated Benefits
Benefits required by state or federal law.
Maximum Out-of-Pocket Costs
The most a member will pay considering copayments, coinsurance, deductibles, etc.
Medicaid
A medical benefits program administered by states and subsidized by the federal government. Under this plan, various medical expenses will be paid to those who qualify. It is technically referred to as Title XIX Benefits.
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.
Medicare
The United States federal government plan for paying certain hospital and medical expenses for persons qualifying under the plan, usually those over 65. The hospital benefits are Part A, and the medical expense portion is Part B. Part A is compulsory social insurance; Part B is voluntary government-subsidized, government-operated insurance.
Member
Anyone covered under a health plan (enrollee or eligible dependent).
Member Certificate
Another term for certificate of coverage.
Mental Health Services and Supplies
Items required for treatment of mental illness, including substance abuse and alcoholism.
Miscellaneous Expenses
Ancillary expenses, usually hospital charges other than daily room and board. Examples would be X-rays, drugs, and lab fees. The total amount of such charges that will be reimbursed is limited in most basic hospitalization policies.

N

National Drug Code (NDC)
A system for identifying drugs. National Health Insurance
Any system of socialized insurance benefits covering all or nearly all of the citizens of a country, established by its federal law, administered by its federal government, and supported or subsidized by taxation.
Nonduplication 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
A policy or provision of a policy which excludes accidents occurring on the job, when such employment is covered by workers compensation.
Nonparticipating Provider
(1) A provider who has not signed a contract with a health plan. (2) A medical or health care provider who is not certified to participate in the Medicare program.
Nonparticipating Provider Indemnity Benefits
Coverage where services provided by nonparticipating providers are reimbursed under an indemnity basis.
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.
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 Panel
See Open Access.
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
The maximum coinsurnace an individual will be required to pay, after which the insurer will pay 100% of covered expenses up to the policy limit.
Outpatient
A patient who is not a bed patient in the hospital in which he or she is receiving treatment.
Over-The-Counter Drugs (OTC)
A drug that can be purchased without a prescription.

P

Participating Provider
A health care provider approved by Medicare to participate in the program and receive benefit payments directly from carriers or fiscal intermediaries.
Peer Review
Review of health care provided by a medical staff with training equal to the staff which provided the treatment.
Peer Review Organization (PRO)
Groups of physicians who are paid by the federal government to conduct pre-admission, continued stay and services reviews provided to Medicare patients by Medicare approved hospitals.
Permanent and Total Disability
Total disability from which the insured does not recover. When used as a definition in a policy (usually a life insurance policy rider), "permanent" is presumed after a stated period of time, commonly six months.
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 Current Procedural Terminology (CPT)
This terminology includes medical services and procedures performed by physicians and other providers of health care. The health care industry uses it as a standard for describing services and procedures.
Place of Service
This designates where the actual health services are being performed, whether it be home, hospital, office, clinic, etc.
Point-of-Service Plan.
This plan allows a choice of whether to receive services from a participating or nonparticipating provider.
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-Admission Certification
Before being admitted as an inpatient in a hospital, certain criteria are used to determine whether the inpatient care is necessary.
Preexisting Condition
A physical condition that existed prior to the effective date of a policy. In many Health policies these are not covered until after a stated period of time has elapsed.
Preferred Provider Organization (PPO)
An organization of hospitals and physicans who provide, for a set fee, services to insurance company clients. These providers are listed as preferred and the insured may select from any number of hospitals and physicians without being limited as with an HMO. Coverage is 100%, with a minimal copayment for each office visit or hospital stay. Contrast with Health Maintenance Organization. (LI,H)***
Prescription Medication
A drug which can be dispensed only by prescription and which has been approved by the Food and Drug Administration.
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 physican 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.
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.
Professional Review Organization
An organization of physicians which reviews services to determine if they are medically necessary.
Proration of Benefits
The adjustment of Health Insurance policy benefits by reason of the existence of other insurance covering the same contingency.
Provider
Any individual or group of individuals that provide a health care service such as physicians, hospitals, etc.

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R

Reasonable and Customary Charges
The charge for medical services which refers to the amount approved by the Medicare Carrier for payment. Customary charges are those which are most often made by a provider for services rendered in that particular area.
Recidivism
This term refers to how often a patient returns to an inpatient hospital status for the same reason.
Recurring Clause
Health Insurance policy provision defining the duration of a period of time during which the recurrence of a condition will be considered a continuation of a prior period of disability or 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 adminstration of medication.
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.
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.

S

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.
Sickness
Includes physical illness, disease, pregnancy, but does not include mental illness.
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)
A facility designed to qualify for treatment to Medicare eligible people. Included is treatment for rehabilitation and other care such as 24-hour nursing coverage, physical, occupational, and speech therapies, etc.
Surgi-Center
A separate facility (from a hospital) that provides outpatient surgical services.

T

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 Administrator (TPA)
A firm which provides administrative services for employers and other associations having group insurance policies. The TPA in addition to being the liaison between the employer and the insurer is also involved with certifying eligibility, preparing reports required by the state and processing claims. TPA's are being used more and more with the increase in employer self-funded plans.
Title XIX Benefits
See Medicaid.
Total Disability
A degree of disability from injury or sickness that prevents the insured from performing the duties of any occupation from remuneration or profit. The definition in any given case depends on the wording in a covering policy.
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.

U

Uniform Billing Code of 1992 (UB-92)
This code is scheduled to be implemented on October 1, 1993. It's a federal directive which states how a hospital must provide their patients with bills, itemizing all services included and billed on each invoice.
Urgi-Center
An emergency medical service center which is separate from any other hospital or medical facility.
Usual, Customary, and Reasonable (UCR)
See Reasonable and Customary.
Utilization
This refers to how much a covered group uses a particular health plan or program.
Utilization and Review Committee
A committee composed of medical personnel whose purpose it is to monitor the health care services and supplies provided to Medicare patients.
Utilization Management
This procedure or process utilizes a review coordinator to evaluate the necessity and appropriateness of various health care services.
Utilization Review
A cost control mechanism by which the appropriateness, necessity, and quality of health care is monitored by both insurers and employers.

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.

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X

Y

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