Glossary of Terms
Use this handy reference to understand terminology.
The formal evaluation of an organization or a program by an external body according to certain pre-determined standards. The process is often carried out by a private organization created for the purpose of assuring the public of the quality of an institution or program. For example, the National Committee for Quality Assurance, a nationally recognized independent organization, evaluates managed care plans using objective scientific measures.
Accreditation Association for Ambulatory Health Care
The Accreditation Association for Ambulatory Health Care, also known as the Accreditation Association or AAAHC, was formed in 1979 to assist ambulatory health care organizations in improving the quality of care provided to patients. The AAAHC is the leader in ambulatory health care accreditation.
Accreditation Commission for Health Care (ACHC)
The Accreditation Commission for Health Care, Inc. (ACHC) is one of the few standard-setting accrediting bodies for home care and alternate site organizations in the country. Their accrediting programs were developed by providers for providers to reflect criteria conducive to providing quality care. ACHC is a not-for-profit organization that has been a symbol of quality since 1986.
Administrative Services Only (ASO)
An arrangement whereby an employer hires an outside organization to perform specific administrative services, such as providing claim forms and processing claims, for a self-insured group health insurance plan. The employer retains financial responsibility for paying claims.
A person licensed by a state insurance department who solicits, negotiates, or effects insurance contracts on behalf of one or more insurers.
The maximum amount we will approve for payment for medical services or supplies. For participating providers, this amount will be based on the contract between us and a participating provider. For non-participating providers, this amount will be based on the usual or customary charges in your geographical area.
A formal document changing the provisions of an insurance policy.
American Board of Family Medicine (ABFM)
The American Board of Family Medicine (ABFM) is the second largest medical specialty board in the United States. Founded in 1969, it is a voluntary, not-for-profit, private organization whose purposes include: improving the quality of medical care available to the public, establishing and maintaining standards of excellence in the specialty of Family Medicine, improving the standards of medical education for training in Family Medicine, and determining by evaluation the fitness of specialists in Family Medicine who apply for and hold certificates.
American Board of Internal Medicine (ABIM)
The American Board of Internal Medicine (ABIM) has a maintenance-of-certification program, which sets standards and certifies physicians who practice internal medicine and its sub-specialties, such as cardiology, endocrinology and geriatrics.
American Board of Medical Specialties (ABMS)
Established in 1933, the American Board of Medical Specialties (ABMS), a not-for-profit organization comprising 24 medical specialty Member Boards, is the pre-eminent entity overseeing the certification of physician specialists in the United States. The primary function of ABMS is to assist its Member Boards in developing and implementing educational and professional standards to evaluate and certify physician specialists. By participating in these initiatives, ABMS also serves as a unique and highly influential voice in the health care industry, bringing focus and rigor to issues involving specialization and certification in medicine. ABMS is a designated primary equivalent source of credential information.
American Osteopathic Association (AOA)
The Bureau of Osteopathic Specialists of the American Osteopathic Association (AOA) is made up of eighteen different specialty boards who implement the below certification criteria: define the qualifications required of osteopathic physicians for certification in the specialty or field of practice that may be assigned to the Board, determine the qualifications of osteopathic physicians for certification in specialty or field of practice that may be assigned to it, conduct examinations in conformity with the Bylaws of this Board, issue certificates subject to the approval of the Bureau of Osteopathic Specialists of the AOA, to those osteopathic physicians who are found qualified, recommend revocation of certificates for cause, and use every means possible to maintain a high standard of practice within the osteopathic profession.
American Osteopathic Board of Orthopedic Surgery
The American Osteopathic Board of Orthopedic Surgery was established in 1979 and exists primarily for the purpose of assisting newly trained orthopedic surgeons in the certification process. The purpose of certification examination is to provide the public with a dependable mechanism to identify physicians who have met a standard to assure competent performance in the field of orthopedic surgery.
Additional charges or secondary services from a non-attending provider. Example: anesthesia, x-rays, labs.
The maximum amount a plan will pay for each member for covered expenses during a calendar year. The annual maximum will be specified in the schedule of benefits and includes all other applicable benefit maximums specifically stated in the schedule of benefits.
An appeal is a special kind of complaint you make if you disagree with any decision about your health care services. This complaint is made to your health plan. There is usually a special process you must use to make your complaint.
The lesser amount between the billed charge and the maximum payment for the covered service. Any required copayments and deductibles are subtracted from this amount before payment is made.
The amount payable by the insurance company, under the terms of the policy.
Any provision that restricts coverage under the subscriber's contract, regardless of medical necessity.
The practice of compiling multiple components of a service into a single fee.
Bureau of Quality Assurance, WI DHFS (BQA)
The Bureau of Quality Assurance (BQA) is responsible for assuring the safety, welfare, and health of persons using health and community care provider services in Wisconsin. The WI Department of Health & Family Services licenses, certifies, registers, and regulates 45 types of health and community care entities.
The Consumer Assessment of Healthcare Providers & Systems is a member satisfaction survey used to evaluate the experience a patient has with a health care organization. By measuring the patient-centeredness of care, CAHPS helps organizations assess and improve quality.
Termination of an insurance policy by an insurance company or a policyholder before its expiration date.
A process by which a member with a serious, complicated, or chronic health condition is identified by a managed care organization and a plan of treatment is established in order to achieve optimum health in a cost-effective manner.
Center for Medicare & Medicaid Services (CMS)
The federal agency that runs the Medicare and Medicaid programs.
Certificate of Coverage
The formal document provided to a member that describes the specific benefits covered by the policyholder's group health care policy with the insurance company. The certificate contains copayment and/or deductible requirements, specific coverage details, exclusions and limitations, and the responsibilities of both the member and the insurance company.
Certificate of Creditable Coverage
A document that proves an individual previously had health care coverage. It can be applied to reduce or eliminate any pre-existing exclusion period that might otherwise apply when someone changes jobs.
A request for payment of services that is received on an approved form and is related to care and treatment of an illness or injury.
A fixed percentage of covered medical expenses that a member must pay in addition to any deductible amount. The coinsurance amount will be specified in the Schedule of Benefits. A typical coinsurance arrangement is 80% by the insurer and 20% by the member.
Commission for Accreditation of Rehab Facilities
The Commission for Accreditation of Rehab Facilities has been a leading, independent, nonprofit accrediting body of human services since 1966. CARF developed standards that are focused on outcomes and the satisfaction of the people served.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
The federal law that requires companies with 20 or more employees to offer separating employees the option to continue their group health-care coverage at their own expense.
Consumer Assessment of Healthcare Providers and Systems (CAHPS)
A nationally administered survey overseen by the Agency for Healthcare Research and Quality. The CAHPS program is a public-private initiative to develop standardized surveys of patients’ experiences with ambulatory and facility-level care.
Continuity of Care
The continuation of care by a primary care practitioner or specialist after the provider’s relationship with the insurer ends.
Coordination of Benefits (COB) Clause
A provision in a group health insurance policy that applies when a person is covered under more than one group health plan. It requires the payment of benefits to be coordinated by all insurance companies who cover that person in order to eliminate overpayments or duplication of benefits.
A flat fee that a member must pay for certain covered medical expenses.
Medical or surgical procedures performed primarily to improve physical appearance or to change or restore bodily form without correcting or improving bodily function.
Council on Accreditation (COA)
The COA is an international, independent, not-for-profit, child- and family-service and behavioral healthcare accrediting organization. It was founded in 1977 by the Child Welfare League of America and Family Service America (now the Alliance for Children and Families). Originally known as an accrediting body for family and children's agencies, COA currently accredits 38 different service areas and more than 60 types of programs.
The process of licensing, accrediting, and certifying health care providers prior to allowing them to participate in our network.
Previous health coverage that reduces the time you have to wait before preexisting health conditions are covered by a policy. Creditable coverage does not include coverage where there is a significant break in coverage. A significant break in coverage is a period of more than 63 consecutive days during all of which a person did not have any creditable coverage. A waiting period is not counted in determining a significant break in coverage.
Care received after a member has achieved a maximum level of improvement or plateau in progress. This care helps meet personal needs, including activities of daily living, and can be provided by persons without professional licenses or extensive training.
The portion of covered medical expenses that a member must pay before the plan with make any benefit payments. The deductible amount is specified in the schedule of benefits.
Programs designed to help members manage chronic conditions through a partnership between members, physicians, and the health plan. Disease management programs focus on member education and self-management strategies in an effort to reduce costs and improve quality.
A select list of prescription drugs and disposable diabetic supplies that is reviewed and periodically updated by the health plan. Formulary designation may affect a member’s financial responsibility for a prescription drug or disposable diabetic supply.
Durable Medical Equipment (DME)
Medical equipment that is designed for repeated use, is intended to treat or stabilize a member’s illness or injury or to improve function, and is generally not useful to a person in the absence of an illness or injury. Examples include walkers, wheelchairs, or hospital beds.
The date on which insurance coverage goes into effect. This date is not always the same as the date the application is completed.
A time, often 31 days, when eligible members of a group life or health insurance plan can apply for insurance without evidence of insurability. The policy holder/employer usually determines this period.
A medical condition that manifests itself by acute symptoms of sufficient severity, including severe pain, that would lead a prudent lay person who possesses an average knowledge of health and medicine to reasonably conclude that a lack of immediate medical attention will likely result in serious jeopardy to the person’s health or, with respect to a woman who is pregnant, serious jeopardy to the health of the woman or her unborn child, serious impairment to the person’s bodily functions, or serious dysfunction of one or more of the person’s body organs or parts.
Employee Retirement Income Security Act of 1974 (ERISA)
The federal law that mandates reporting and disclosure requirements for self-insured health plans. It also prohibits states from regulating insurance plans offered by employers to their employees if the employer is self-insured.
Written agreement attached to a policy that expands or reduces coverage.
Exclusions or Limitations
Specific situations, conditions, or circumstances that are listed in the policy as not being covered regardless of medical necessity or their approval or prescription by a physician or other provider.
Explanation of Benefits (EOB)
Notification sent to customer giving information on a claim processed.
Explanation of Payment (EOP)
Notification sent to provider giving information on a claim processed.
Extended Care/Skilled Nurse Facility
An institution (or a part of an institution) engaged primarily in providing inpatients medically necessary skilled nursing care.
A deductible that is satisfied by the combined expenses of all family members.
Free Look Period
The period of time after the delivery of an individual insurance policy when you can review the policy. If you change your mind about keeping the policy during this time period, you can cancel the policy and get your initial premium back.
A period of time after a premium becomes due in which you can still pay for the insurance and keep it in force. Wisconsin law requires that for health insurance it is 7 days for weekly premium policies, 10 days for monthly premium policies, and one month for all other policies.
Any dissatisfaction with the administration, claims practices, or provision of services by the health plan that is expressed in writing by, or on behalf of, a member.
Health Employer Data and Information Set (HEDIS)
HEDIS enables purchasers and consumers to readily compare the performance of managed care plans. HEDIS is a standardized set of performance measures that assesses plans' performance on a number of elements, including such things as access and quality of care. It has been used extensively by private sector purchasers to judge the quality of care provided by plans to their employees. It is sponsored, supported, and maintained by the National Committee for Quality Assurance (NCQA).
Health Insurance Risk Sharing Plan (HIRSP)
Wisconsin's high risk health insurance pool. HIRSP offers health insurance to Wisconsin residents who either are unable to find adequate health insurance coverage in the private market due to their medical conditions or who have lost their employer-sponsored group health insurance. Applicants are required to meet HIRSP eligibility criteria to qualify.
Health Maintenance Organization (HMO)
A type of managed care plan that requires members to use in-network providers.
Health Savings Account (HSA)
A health savings account (HSA) is an alternative to traditional health insurance. It is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis. An HSA must be combined with a qualified high deductible health plan.
The HIPAA Privacy Rule took effect on April 14, 2003, and requires health plans to provide its members with a Notice of Privacy Practices. The Notice explains how health plans use information about its members and under what conditions they are permitted to share that information with others.
A provider, hospital, pharmacy, or other facility that has entered into a contractual relationship with the health plan to be part of the health plan’s network. Members usually pay less when using an in-network provider.
An appeal process in which a health care professional with no connections to a member’s health plan reviews a dispute over whether treatment is medically necessary or experimental or investigational. Policy rescission determinations and denials based on a pre-existing condition exclusion are also subject to independent review.
Joint Commission (JC)
The Joint Commission evaluates and accredits nearly 15,000 health care organizations and programs in the United States. An independent, not-for-profit organization, The Joint Commission is the nation’s predominant standard-setting and accrediting body in health care.
A specified dollar amount or a set number of services the health plan will provide each member on the contract.
Managed Care Plan
Any health plan that requires or creates incentives for a member to use providers that are owned, managed, or under contract with the insurer offering the health benefit plan.
Benefits that health insurance plans are required by state or federal law to provide to policyholders and eligible dependents.
A general term for programs that promote high-quality, cost-effective health care through such activities as utilization management, quality management, and risk management.
Services, treatment, supplies, or facilities that meet the following: (1) they are consistent with and appropriate for the diagnosis or treatment of the member’s illness or injury; (2) they are commonly and customarily recognized and generally accepted by the medical profession in the United States as appropriate and standard care for the condition being evaluated or treated; (3) they are substantiated by the clinical documentation; (4) they are the most appropriate and cost effective level of care, compared to other levels of intervention, including no intervention, that can safely be provided to the member. Appropriate and cost effective does not necessarily mean the lowest price; (5) they are proven to be useful, likely to be successful, yield additional information, or to improve clinical outcome; and (6) they are not primarily for the convenience or preference of the member, his or her family, or any provider. A service, supply, treatment, or facility may be considered not medically necessary even if a provider has performed, prescribed, recommended, ordered, or approved it, or if it is the only available procedure or treatment for the condition.
A federal health insurance program for people age 65 and older and some younger disabled people. In original Medicare, you can go to any doctor or hospital that participates in Medicare. Medicare will pay the doctor or hospital directly for eligible services they provide. Medicare has two parts: Part A, which covers hospital services and Part B, which covers doctor services.
Any person eligible for health care services under the subscriber's contract, which includes spouse and dependents.
A significant misstatement in an application form. An insured is required to answer truthfully all questions on an insurance application. The insurance company can void the policy if it would not have issued a policy had it known the facts.
National Committee for Quality Assurance (NCQA)
NCQA is a non-profit organization that evaluates and accredits managed care plans. It is also responsible for implementing the Health Employer Data and Information Set (HEDIS) data reporting system that provides standardized performance measures for managed care plans.
A person, entity, or institution that has not entered into a contractual agreement with us to provide covered services.
A provider, hospital, pharmacy, or other facility that has not entered into a contractual relationship with the health plan to be part of the health plan’s network. Members usually pay more or services may not be covered when using an out-of-network provider.
The most you will have to pay in any given year for all services received under an insurance policy. This amount includes coinsurance and deductibles. If you exceed this amount, the insurance company will pay all other expenses for the remainder for that year.
A person, entity, or institution that has entered into a contractual agreement with us to provide covered services. A provider’s participation status may change from time to time. Please refer to our online provider directory or contact us for a listing of participating providers.
Point of Service (POS) Plan
A type of managed care plan that allows members to use out-of-network providers but at an additional cost (usually a higher coinsurance and/or deductible). You receive the highest level of benefits from in-network providers.
A written contract for insurance between the insurance company and the policyholder.
The person who owns the insurance policy. For an individual policy, this is usually the insured person. For a group policy, this is usually the employer or an association with which the employer is affiliated.
An illness or injury for which medical advise, diagnosis, care or treatment was recommended or received prior to your effective date.
The process of receiving written approval from us for certain services or products prior to obtaining the services or products. A pre-service authorization is also required in order to seek services from a non-participating provider.
Preferred Provider Organization (PPO) Plan
A type of managed care plan where coverage for expenses incurred by a preferred (in-network) provider are paid at a higher level than the coverage available for services received from a non-preferred (out-of-network) provider.
The amount of money you and/or your employer pays in exchange for insurance coverage.
Preventive Health Care
Health care that seeks to prevent the occurrence of conditions by fostering early detection of disease and morbidity and which focuses on keeping patients well.
Primary Care Practitioner (PCP)
A participating provider who is responsible for coordinating all of your medical care and practices in the area of family medicine, internal medicine, pediatrics, general practice, or obstetrics/gynecology. Your primary care practitioner is responsible for knowing your complete medical history, performing routine health care duties, and referring you to a specialist when necessary.
An insurance policy, plan, or program that pays first on a claim for medical care. This could be Medicare or other health insurance.
A document or form containing special provisions that are not contained in the policy contract. Such forms are to be added or attached to the policy.
Schedule of Benefits
A summary of covered expenses.
Opinions obtained from more than one provider as to the best course of treatment, usually with regard to surgery. Some groups require second opinions for certain procedures.
An insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other health insurance depending on the situation.
A group health plan offered by an employer to its employees where the benefits are paid for entirely by the employer. Self-insured plans are exempt from regulation by state laws, but are subject to certain federal requirements under ERISA.
The geographic area where the plan accepts members and has contracted providers that you are required to use.
A health plan will conduct facility site reviews to evaluate the physical accessibility, physical appearance, adequacy of waiting and examining room space, availability of appointments, adequacy of medical/treatment record keeping, safety sanitary practices, confidentiality safeguards, and HIPAA compliance of the clinical facilities where care is provided by a health plan in accordance with regulatory and accreditation agencies.
The right of the insurance company to recover from a liable third party the amount paid under the policy.
The practice of billing for multiple components of a service that were previously included in a single fee.
Care received for an illness or injury with symptoms of sudden or recent onset that require medical care the same day.
Usual and Customary
The amount for a health care service directly provided to you by a health care provider that we determine is reasonable for comparable services, treatment, or materials within a geographical area. Geographical area means a zip code area or a greater area if needed to find an appropriate cross section of accurate data.
A method of claims review whereby we analyze a case, either prospectively, concurrently, or retrospectively to determine if the treatment given is necessary and appropriate.