Certificate Period: The term used to describe the period of time for which you have purchased coverage. Under this definition also, this is the period in which the insurance company is responsible to act on your behalf based on the terms of the policy.
Co-insurance: The cost sharing between you and the insurance company. Normally a policy will require that you cost share with them on the first $5,000 of medical claims.
Example: 80%/20% co-insurance: The insurance company would pay 80% of the first $5,000 of medical claims and you would pay 20%, after which the insurance company begin to pay the remainder per the terms of the policy. UCR applies.
Co-insurance can vary with different policies, so be sure you understand the terms of the plan in which you are interested. NOTE: Many physicians’ charges are higher than the “reasonable and customary” fee and the patient is responsible for 100 percent of the excess amount. This is known as “balance billing.”
Co-payment: The amount a plan member has to pay–usually $5 to $15– every time he or she visits an affiliated physician or receives services.
Credentialing: A managed-care plan’s review of a physician’s background and current professional standing, which is done before an HMO contracts with a doctor. The review usually requires evidence of graduation from an accredited medical school, a current state medical license, hospital privileges in good standing, and a professional liability claims history, including chemical dependency, felony convictions and disciplinary actions.
Deductible: The amount a person must pay before the insurance company begins to pay its portion of claims.
Group Model: An HMO that contracts with a group practice of physicians to provide services to enrollees. These contracts can be either exclusive (the group can only treat plan members), or non-exclusive (the practices are free to contract with other plans and see fee-for-service patients).
Health Maintenance Organization (HMO): An HMO provides members, through a network of selected physicians and hospitals, a defined set of comprehensive benefits in exchange for a prepaid premium. There are generally no deductibles, small co-payments, and no claims to file. The HMO provides no reimbursement (or a reduced amount) for non-emergency care with a physician or hospital outside of the network. There are several types of HMOs: Group Model, Staff Model, Independent Practice Association (IPA), and Point of Service Plan (POS).
Independent Practice Association (IPA): An “HMO without walls,” in which patients choose doctors from a select list and are treated at the physicians’ private offices. IPA physicians are free to contract with more than one HMO at a time and they can treat fee-for-service patients.
Indemnity, or Fee-for-Service, Plans: Patients receive a bill from their doctor or hospital for each service rendered. They submit the bill to their insurance company and the company pays it. These plans provide the maximum choice of physicians and hospitals but are the most expensive kinds of plans.
Managed Care: A general term for organizing doctors and hospitals into health care delivery networks with the intent of lowering costs and “managing” the medical care provided.
Network: A selected group of physicians, hospitals, laboratories and other health care providers who participate in a managed-care plan’s health delivery program and agree to follow the plan’s procedures.
Out-of-Pocket Maximum: A limit on all of the insured’s out-of-pocket expenses (including deductibles and co-payments) for treatment of illness or injury. At this point, the insurance company will begin covering 100 percent of the charges. For members who use non-network providers, the out-of-pocket maximum could be as high as $10,000.
Point of Service Plan (POS): The latest development in managed care, this type of HMO allows the patient to see either an in-network or out-of-network provider. But patients who go outside the network are reimbursed less (perhaps only 50 to 80 percent of the doctor’s fee), and they must submit a claim and pay a deductible plus co-payment charges.
Pre-Certification: UCR rates refer to medical research which has determined the fair and reasonable charges for various medical procedures and treatments as well as fee for service charges based on the region of the country in which those services are provided.
Preferred Provider Organization (PPO): A managed-care plan that doctors and hospitals agree to provide discounted rates to. PPOs usually exercise looser management over medical care. For example, they usually don’t use primary-care physicians to coordinate patient care. Patients are reimbursed 80 percent to 100 percent for treatment within the PPO versus 50 percent to 70 percent outside of it.
Premium: The cost of the health plan coverage. It does not include any deductibles or co-payments the plan may require.
Pre-Existing Conditions: (Not covered under the policy guidelines.) Pre-existing condition is defined as an injury or illness which was contracted or which first manifested itself; or for which manifestations of symptoms would have caused a prudent person to seek medical advice or treatment; or for which a licensed physician was consulted.
Schedule of Benefits and Exclusions: A policy always lists the benefits which are covered under the policy guidelines as well as services which are not provided under the policy.
Staff Model: A type of HMO that hires its own doctors. These physicians usually practice under one roof and are salaried by the plan. Kaiser is one example of a staff model.
Usual, Customary, and Reasonable (UCR): UCR rates refer to medical research which has determined the fair and reasonable charges for various medical procedures and treatments as well as fee for service charges based on the region of the country in which those services are provided.