Sometimes
discussing your health care benefits with your doctor’s
office or human resources department can be difficult to
follow. Here’s a list of commonly used terms and their
definitions to help you brush up on insurance system
lingo.
Case Management – Determining a course of care,
based on the needs of the patient, to make sure the most
appropriate treatment happens in the best setting.
Centers of Excellence – Hospitals that specialize
in treating specific diseases or conditions, or that
perform a particular type of care, such as cancer
treatment or organ transplants.
Co-payment or co-insurance – The portion of a
medical bill that the patient pays. Many health care
plans pay for part of a doctor visit or prescription
drug, and require the patient to pay a
co-payment.
Deductible –The amount of health care costs that
the patient must pay before the insurance company pays
covered expenses. For example, you have a $250
deductible, after which your insurance company pays 80
percent of covered expenses. An emergency room visit
costs $600. You will pay your $250 deductible, plus 20
percent of the additional cost, or $320. Your insurance
picks up coverage after the $250 deductible, so
therefore pays 80 percent of additional $350, or
$280.
Explanation of Benefits (EOB) – A statement from
the insurance company showing the patient what charges
have been filed on behalf of a medical provider, how
much the insurance company paid, how much of costs for
which the insured is responsible, and any reason the
insurance company did not cover particular services
performed by the provider.
Fee-for-Service – When a physician or other
practitioner bills a patient for each visit or service
at full price, rather than through a negotiated rate
through an insurance provider.
Health Maintenance Organization (HMO) – An
organization of health care providers that provides
services for a specified group at a fixed cost.
Major Medical Insurance – A health insurance
policy that pays for covered medical expenses up to a
high maximum dollar amount, such as $1 million over the
patient’s lifetime. Most major-medical plans also have
deductibles or co-payments.
Maximum Out-of-Pocket Expenses – The amount of
deductibles and co-payments a patient will be
responsible for during a fixed period of time, usually a
year. After the insured reaches the maximum
out-of-pocket amount, the insurance company pays covered
expenses at 100 percent of reasonable and customary
expenses.
Medical Savings Account (MSA) – A high-deductible
health insurance plan that allows insured employees to
have a pre-determined amount deducted from their pay
before taxes.
Pre-admission Certification – Review by the
insurance company before surgery to determine if the
procedure is necessary and if it could be done on an
outpatient basis. Most insurance companies will not
cover surgical procedures without a pre-admission
certification.
Pre-existing Condition. Any medical conditions
that have been diagnosed before the insured was covered
by his current insurance policy
Preferred Provider Organization (PPO) – A sponsor
that negotiates price discounts with medical providers
in exchange for more patients. The sponsor may be an
insurance company, employer or third-party
administrator.
Premium – The payment made by an employer or
individual for the cost of insurance.
Reasonable or Customary Charges – Amounts health
care providers charge that are consistent with charges
from similar providers for identical or similar services
in a particular part of the country.
Special Benefit Networks – A group of health care
providers that offer specific services, such as mental
health, substance abuse or prescription drugs.
Third-Party Administrator (TPA) – A consultant to
the insured employer that maintains all records about
employees covered under the health care plan.
Underwriting – How an insurer determines who it
will accept for insurance coverage. Underwriters
generally review the medical histories of people
applying for individual polices or group plans.
