Health Insurance Policy
- A contract between you and your insurer that provides that your insurer will be required to pay for specific medical services (these will be defined in the policy) as long as your premium is paid. Having a health insurance policy does not mean that your insurer will pay for every medical service that you receive. It is important for you to know the services that are included for coverage in your health insurance policy and any requirements that you need to meet in order to have the insurer pay for the services. You will be responsible for paying for any services that you receive that are not covered by your policy unless your insurer/administrator states that you are not responsible.
Health Insurance Portability and Accountability Act (HIPAA)
- A federal law that protects the privacy of individuals’ health information, regulates health insurance portability and non-discrimination, and provides health insurance simplification. The HIPAA provisions have been broadly expanded by the Patient Protection and Affordable Care Act.
Health Maintenance Organization (HMO)
- An HMO is a health plan that typically has a closed network of physicians and other healthcare providers, and hospitals. With a traditional HMO plan, a member receives services from the HMO's providers for a predetermined co-payment. A member pays only co-payments for services and need not file claim forms unless he or she receives medical services outside the network. Non-emergency services received outside the network without prior plan approval are not covered by the plan.
Health Savings Account (HSA)
- An HSA is a tax-advantaged savings account that a member can open to pay for qualified medical expenses. Contributions to an HSA can be made by both a member and his or her employer, but the money belongs to the member. The money invested in an HSA is tax-deductible, and any earnings are tax-deferred. The member can withdraw funds tax-free and without penalty from the account if the funds are used to pay for qualified medical expenses. The HSA is portable and goes with the member if the member changes jobs. Tax references are applicable per federal tax regulations. State tax regulations may vary. (See the page about HSAs at the U.S. Department of the Treasury Web site
.) (See the Internal Revenue Service's list of qualified medical and dental expenses
Level I codes are 5-character Current Procedural Terminology (CPT) Codes that are developed and maintained by the American Medical Association. CPT codes refer to professional services such as reading an MRI, giving a shot, seeing a patient for an office visit or performing surgery. There are 3 categories of Level I codes. Category I codes have 5 digits. Category II codes are used for performance measurement and have 4 digits followed by the letter F. Category III codes are used for emerging technologies, and have 4 digits followed by the letter T.
Level II HCPCS codes include one letter followed by 4 digits (e.g., A9999). Most Level II codes refer to services or items such as durable medical equipment (e.g., wheelchairs, crutches), ambulance services, vision and hearing supplies, injectable and chemotherapy drugs and prosthetic devices. Level II HCPCS codes are maintained by the Centers for Medicare and Medicaid Services (CMS), a division of the US Department of Health and Human Services. You may see a HCPCS code on your Explanation of Benefits form (EOB). You can also ask your healthcare provider for the relevant HCPCS code(s) for a procedure or service you will undergo, or have already received.
- A physician, dentist, nurse, physician assistant, or any other individual who is licensed or certified as required in his or her state and is performing services within the scope of that license or certification.
- A website maintained by the Office of Consumer Information and Insurance Oversight of the Department of Health and Human Services that provides information to consumers on available insurance options, data on care quality, and resources for disease prevention.
- See Department of Health and Human Services.
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- See Health Insurance Portability and Accountability Act.
Incontinences/Ostomy Supplies-Incontinence and ostomy supplies are medical devices that are used for collecting urine and waste materials.
- Pertains to treatment from doctors, clinics, health centers, hospitals, medical practices and other providers with whom your plan has an agreement to provide care for its members. Usually, you will pay less out of your own pocket when you receive treatment from in-network providers.
Institutional Review Board (IRB)
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- A group of people appointed by an institution (such as a hospital or university) to review and monitor research projects involving human subjects, with the purpose of protecting the rights and welfare of the people who are participating as subjects in the research. An IRB seeks to ensure that subjects are not placed at undue risk, and that they give uncoerced, informed consent to their participation. To this end, an IRB has the authority to approve, disapprove, and require modifications to research projects involving human subjects. Once a project is approved, the IRB must monitor the progress of the ongoing research, prospectively approve modifications, and suspend the project if necessary to protect subjects.
Maximum Allowable Amount
- The maximum dollar amount that an insurer will consider reimbursing for a covered service or procedure. This dollar amount may not be the amount ultimately paid to the member or provider as it may be reduced by any co-insurance, deductible or amount beyond the annual maximum. Some plans may refer to the "allowable amount" as the "maximum allowable amount"; these terms have a similar meaning.
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- The federal health insurance program for individuals ages 65 and older, as well as persons with end-stage renal disease and certain persons with disabilities. Medicare covers beneficiaries for hospital, post-hospital extended care, and home healthcare, as well as a range of medical care services and benefits. Medicare enrollment is compulsory for all individuals covered by the Social Security Act. At their option, Medicare beneficiaries can buy “Part D” outpatient prescription drug coverage. Beneficiaries can elect to enroll either in “traditional” Medicare (which allows patients to receive care from any participating physician, hospital or healthcare supplier) or through Medicare Advantage Plans, most of which restrict patients to specific network providers while typically offering additional benefits and coverage. The Patient Protection and Affordable Care Act expands Medicare coverage for preventative services and additional levels of prescription drug coverage while also introducing reforms to improve healthcare quality and efficiency.
- Costs for medical treatment that your insurer does not cover. In some cases the service is a covered service, but the insurer’s reimbursement does not cover the entire charge amount. In these cases, you will be responsible for any charge not covered by your plan. In some cases the service itself is not covered by your plan and you will be responsible for the full charge. You may wish to call your insurer or consult your health insurance policy to determine whether certain services are included in your plan before you receive those services from your doctor.
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- Medical services that are not included in your plan. If you receive non-covered services, your health plan will not reimburse for those services and your provider will bill you, and you will be responsible for the full cost. You will need to consult with your health insurer, but generally payments you make for these services do not count toward your deductible. Make sure you know what services are covered before you visit your doctor.
Orthotic Devices - Orthotics are medical devices that are used for treatment of the neuromuscular and skeletal system.
- Pertains to treatment from doctors, clinics, health centers, hospitals, medical practices and other providers that do not have an agreement with your health insurer to provide care to its members. You typically will pay more out of your own pocket when you receive treatment from out-of-network providers.
- Benefit plan coverage for services provided by doctors and other healthcare professionals who are not under a contract with your health plan.
- Portion of the cost of healthcare services that the plan member must pay. This cost includes the difference between the amount charged by an out-of-network provider and what a health plan reimburses for such services.
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- The limit on the total amount a health insurance company requires a member to pay in deductible and co-insurance in a year. After reaching an out-of-pocket maximum, a member no longer pays co-insurance because the plan will begin to pay 100% of medical expenses. This only applies to covered services. Members are still responsible for services that are not covered by the plan even if they have reached the out-of-pocked maximum for covered expenses. Members also continue to pay their monthly premiums to maintain their health insurance policies.
- A physician, dentist or other healthcare professional, hospital or healthcare facility that contracts with your health insurer to provide services to its members at a specific fee amount.
- A statistical measure used to describe how a particular quantity (such as the cost of a specific healthcare procedure) varies across a range of sources (such as all the doctors in your area.) For example, 50% of all fees billed by providers are at or below the level indicated by the 50th percentile; 80% of all fees billed by providers are at or below the level indicated by the 80th percentile. Percentiles are important because they are used by many insurers in determining the highest level of a billed charge that they will consider for reimbursement.
- An individual who has received a “Doctor of Medicine” (MD) or Doctor of Osteopathic Medicine (DO) degree and is licensed to practice medicine in their state.
Point of Service (POS) Plan
- A health plan that allows you to choose at the time medical services are to be received whether you will go to a provider within your plan’s network or seek care outside the network.
- A health condition that exists for a set time prior to enrollment into a health plan, regardless of whether the condition has been formally diagnosed. The Patient Protection and Affordable Care Act prohibits insurers and employer-sponsored health plans from denying or limiting coverage to individuals with pre-existing health conditions.
- A process that your health plan or insurer goes through to make a decision that particular healthcare services, treatment plans, prescription drugs or durable medical equipment prescribed by your doctor are covered and medically necessary. Your plan may require preauthorization for certain services, such as hospitalization, before you receive them. Preauthorization requirements are generally waived if you need emergency care.
Preferred Provider Organization (PPO)
- A health plan that is designed to encourage you to receive your healthcare through a network of selected healthcare providers (such as hospitals and physicians). If your plan is a PPO, your medical expenses will be lower if you use a provider or facility that is part of your plan’s network. You are entitled to receive reimbursement for care from providers and facilities that are outside the network, but you may pay a larger portion of the charges for such "out-of-network" care.
- The amount a consumer (or employer) pays to a health insurance company for health coverage. The health insurance company generally recalculates the premium each policy year. This amount is usually paid in monthly installments. When a consumer receives health insurance through an employer, the employer generally pays a portion of the cost of the premium and the consumer pays the rest, often through regular payroll deductions.
Primary Care Physician (PCP)
- A family doctor, internist or pediatrician who coordinates your care or your family’s care. Some types of plans, like a POS or HMO, require that you visit your PCP first for any care that you need. But even if you’re not required to use a PCP, it’s a good idea to develop a relationship with a primary care doctor who knows your medical history and can make sure you’re getting the care you need.
- A doctor or other healthcare professional, hospital or healthcare facility that is accredited, licensed or certified to practice in their state, and is providing services within the scope of that accreditation, license or certification.
- Doctors and other healthcare professionals who agree to provide medical care to members of a health plan, under the terms of a contract.
Prudent Layperson Standard
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- Under PPACA, a condition with acute symptoms of sufficient severity (including severe pain) that a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in—(i) placing the health of the individual (or an unborn child) in serious jeopardy, (ii) serious impairment of bodily functions, or (iii) serious dysfunction of any bodily organ or part.
Qualified Medical Expenses
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- Qualified medical expenses are defined under Section 213 of the Internal Revenue Code. (See the Internal Revenue Service's Publication 502 about medical and dental expenses.) Qualified medical expenses and other expenses permitted to be reimbursed from health savings accounts (HSAs) include, but are not limited to, the following:
ambulance and hospital services
prescription drugs and certain over-the-counter prescription medications
durable medical equipment
COBRA healthcare continuation coverage
qualified long-term care services and limited long-term care premiums
health insurance premiums for individuals receiving unemployment compensation
at age 65 and over, Medicare Part A and B, Medicare HMO, and a member's share of employer-sponsored health insurance premiums (but not Medicare Supplement premiums)
A medical expense is not a qualified expense if a member receives reimbursement for it under insurance coverage. If the member's expense is paid for or reimbursed by an HSA account, that expense cannot be included for purposes of determining itemized tax deductions.
- The amount that your insurer pays for a specific service. For instance, your insurer’s reimbursement rate for a primary care visit may be up to $80. If your provider charges $100, you would be responsible for the remaining $20 if your plan covers that service at 100% of the maximum fee.
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- If you work for a large employer or group of employers, your plan may be self-insured. Self- insured means that your employer pays medical claims from their bank account and establishes the plan design. The benefits may be administered from a third-party administrator (“TPA”) or a Health Plan. Self- insured plans are not under the control of the Department of Insurance and the employer bears the cost for all utilization.
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Telehealth - The use of various forms of electronic information and communication technologies to support the delivery of non-clinical health care services. These services can include provider training, administrative meetings, discussions regarding the assessment, diagnosis, and management of the patient, as well as consultation, treatment, education, care management and/or self-management of a patient at a distance. Modes of delivery include but are not limited to, phone conversations, remote training, real-time video conferencing, electronic consultations and remote patient monitoring. The use of technology eliminates geographic barriers in the delivery of healthcare services. The definition of Telehealth services varies by payer and accordingly, coverage and reimbursement is at the discretion of the individual payer.
Telemedicine - The use of various forms of telecommunication and electronic information technologies to provide clinical health care services at a distance. Telemedicine can improve access to medical services that may not be available for many reasons, including geographic or emergency care situations, care provided after regular office hours, and facilitates the transmission of medical, imaging and health informatics data from one site or individual to another. Telemedicine seeks to improve a patient’s health by permitting two-way, real time interactive communication between patients and medical staff with both convenience and privacy, and is viewed as a cost-effective alternative to the more traditional face-to-face way of providing medical care. The definition of Telemedicine services varies by payer and accordingly, coverage and reimbursement is at the discretion of the individual payer.
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Usual and Customary Rate (UCR)
- A term often used to describe a level of reimbursement that insurers use to calculate reimbursements for out-of-network care. If your plan covers some out-of-network care, your insurer may base the payment on a price that it determines to be “usual, customary and reasonable” in your area. It’s a good idea to find out this rate and then ask your provider how much he or she will charge for the service you need. To understand your plan’s UCR, contact your insurer. That way, you can make an informed decision and you won’t be surprised by a large bill.