Health Insurance Terms

Usual customary resonable charges (UCR)

Conventional idemnity plans operate based on usual, customary and reasonable (UCR) charges. Charge is the providers usual fee for a service that does not exceed the customary fee in that geographic area, and is reasonable based on the circumstances.

Deductible

A fixed dollar amount during the benefit period-usually a year-that an insured person pays before the insurer starts to make payments for covered medical services. Plans may have both per individual and family deductibles.

Copayment

A form of medical cost sharing in a health insurance plan that requires an insured person to pay a fixed dollar amount when a medical service is recieved. The insurer is responsible for the rest of the reimbursement.

Health maintenance organization (HMO)

A health care system that assumes both the finacnical risk associated with providing comprehensive medical services and the responsiblity for health care delivery in a particular geographic area to HMO members.

Exclusive provider organization (EPO)

A more restricitve type of preferred provider organization plan under which employees must use proviers from the specified network of physicians and hospitals to receive coverage

Primary care physician (PCP)

A physician who serves as a group member's primary contact within the health plan. In a manged care plan, the primary care physician provides basic medical services, coordinates and, if required by the plan, authorizes referrals to specialists and hospitals.

Staff Model HMO

A type of closed-panel HMO (Where patients can recieve services only through a limited number of providers) in which physicians are employees of the HMO.

Individual Practice Association (IPA) HMO

A type of health care provider organizationcomposed of a group of independent practicing physcians who maintain their own offices and band together for the purpose of contracting their services to HMOs.

Flexible spending accounts or arrangements (FSA)

Accounts offered and administerred by employers that provide a way for employees to set aside, out of their paycheck, pretax dollars to pay for the employee's share of insurance premiums or medical expenses not covered by the employer's health plan.

Premium

Agreed upon fees paid for coverage of medical benefits for a defined benefit period. Can be paid by employers, unions, employees, or shared by both the insured individual and the plan sponsor.

Physician Hospital Organization (PHO)

Alliances between physicians and hospitals to help providers attain market share, improve bargaining power and reduce adminisstrative costs.

Network Model HMO

An HMO model that contracts with multiple physician groups to provide services to HMO members; may involve large single and multispecialty groups.

Group model HMO

An HMO that contracts with a single multi-specialty medical group to provide care to the HMO's membership. May work with an HMO or non-HMO patient.

Conventional indemnity plan

An idenmnitty that allows the participant the choice of any provider without effect on reimbursement. These plans reimburse the patient and/or provider as expenses are incurred.

Third Party Administrator (TPA)

An individual or firm hired by an employer to handle claims processing, pay providers, and mange other functions related to the operation of health insurance. The TPA is not the policyholder or the insurer.

Self insured plan

Plan offered by employers who directly assume the major cost of health insurance for their employees.

Indemnity plan

a type of medical plan that reimburses the patient and/or provider as expenses are incurred.

Managed care plans

provide comprehensive health services to their members, and offer financial incentives for patients to use the providers who belong to the plan.

Any providers

Enrollees may go to providers of their choice with no cost incenives to use a particular subset of providers.

Preferred provider organization (PPO)

an indemnity plan where coverage is provided to participants through a network of selected health care providers (hospitals and physicians)

Point of service (POS)

A POS plan is an "HMO/PPO" hybrid: sometimes referred to as an "open-ended" HMO when offered by an HMO. Resembal HMO for in network services. Services recieved outside of the network are usually reimbursed in a manner simialr to conventional indemnity plans.

Exclusive Providers

Enrollees must go to providers associated with the plan for all non-emergency care in order for the costs to be covered.

Premium Equivalent

For self-insured plans, the cost per covered employee, or the amount the firm would expect to reflect the cost of claims paid, administrative costs, and stop-loss premiums.

Coinsurance

Form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid.

Medical savings accouonts (MSA)

Savings accounts designated for out of pocket medical expenses. Employers and individuals are allowed to contribute to a savings account on a pre-tax basis and carry over the unused funds at the end of the year.

Maximum plan dollar limit

The maximum amount payable by the insurer for covered expenses for the insured and each convered dependent while covered under the health plan.

Maximum out of pocket expense

The maximum dollar amount a group member is required to pay out of pocket during a year.