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  Home > Our Practice > Managed Care > Glossary of Mananged Care Terms

 
 
 

 
Ambulatory or Ancillary Care: Services provided on an outpatient basis. These include radiology, labs, physical therapy, outpatient surgery, etc.

Balance Billing: Doctors who are not contracted with a managed care plan may charge more for their services than the amount the plan pays. When this happens, the doctor may hold the patient responsible for the difference.

Capitation: The payment per member, per month by the insurance plan to a physician or facility for providing contracted services to managed care patients. The PCP or specialist/facility is paid the same regardless of whether a member receives services or not. As a result, the health care providers assume some financial responsibility for managing the members' care. Failure to properly manage these members can result in financial loss for the physician group.

CDHP: Consumer Directed Health Plan.

Copayment: The amount paid by a patient to the provider when using a medical service.

CPT: Current Procedural Terminology. A 5-digit medical procedure code used for obtaining insurance authorizations for payment of services rendered by a specialist or facility.

Deductible: The amount paid by a patient to medical providers every year before a health plan begins paying for coverage. There is usually a maximum annual deductible for each member on the contract and for the combined total of all members on the contract.

DME: Durable Medical Equipment

DOS: Date Of Service.

EOB: Explanation Of Benefits.

EOP: Explanation Of Payments.

EPA:
Exclusive Provider Arrangement. Insurance plan similar to an HMO. PCP coordinates care including referrals to specialists and hospital admissions, within a specified network. There are no out of network benefits for this type of product.

EPO: Exclusive Provider Organization. Insurance plan similar to a PPO. Patients must utilize contracted physicians within a specific group. Failure to use those contracted physicians offers limited or no coverage for services.

FFS: Fee For Services.

Formulary: A panel or list of medications covered by a health plan. Medications not on this list require prior authorization in order to be dispensed.

HMO: Health Maintenance Organization. Insurance plan that works within a specified group of providers and facilities (network) to reduce the cost of health care. Patients with this type of insurance require PCP referrals for most services. PCP's may receive capitation (payment per month per member) or fee for service and at a specified risk, depending on the contract with the plan.

HRA: Health Reimbursement Arrangements. A CDHP funded solely by the patient's employer.

HSA: Health Savings Account. A CDHP funded by an individual and/or employer.

ICD-9: International Classification of Diseases, 9th edition. A 3-5 digit diagnosis code used for obtaining insurance authorizations for payment of services rendered by a specialist or facility.

Individual Consideration/Plan Approval/Medical Management Review: The process by which all non-covered services are reviewed by the health plan to determine the services medical necessity or if the service is available with a participating provider.

Inpatient: Any service occurring in a hospital setting requiring a stay of 24 hours or more.

Managed Care: A means of providing health care services through a defined network of participating providers and facilities that are responsible for providing responsible, cost-effective health care, through contracts with individual health plans.

Medicaid HMO: A managed care plan coordinated through the state Medicaid plan.

Medicare HMO (aka Senior Plus, Advantage, Gold, etc.): A managed care plan coordinated through the federal Medicare program.

Non-Participating or Out of Network/Plan Provider: Medical service provider who is not contracted with a particular health insurance plan.

OON: Out Of Network.

Outpatient: Any service occurring in a hospital setting that is less than 24 hours. 23 hour admits are considered an outpatient service.

Participating or Out of Network/Plan Provider: Any medical service provider who is contracted with a particular health insurance plan.

PCP (Primary Care Physician): An Internal Medicine/General Practitioner who is responsible to the patient and the health plan to provide health care within established medical criteria and the health plan's provider network.

POS: Point Of Service. An insurance plan that works within a participating group of providers and facilities to reduce the cost of health care. Patients with this type of insurance need referrals to receive the best level of coverage. They can see Non-Participating Providers, but are generally responsible for a considerable amount of the cost themselves.

PPO: Preferred Provider Organization. Insurance plan that works within a participating group of providers and facilities to control the cost of health care. Patients with this type of insurance do not need referrals. They can see Non-Participating Providers, but get the best level of coverage from in plan providers. These plans tend not to cover routine or screening services.

Precertification or Prior Authorization/Plan Approval: The process of getting approval from the insurance plan before the patient receives services. Referrals are a form of prior authorization, and all admissions must be precertified by the admitting physician prior to that admission. These requests can be initiated by a PCP, specialist, or facility. Preferably it is the ordering physician's office that would contact an insurance company for this type of request.

Referral:Document from the patients PCP that indicates their authorization of the services so the health plan will pay for the services described and that the specialist will provide those services.

SJMH: St. Joseph Mercy Hospital, Ann Arbor

SRO: Self-Referral Option. Offered to some Blue Care Network members.

TPA: Third Party Administrator. An external organization that is contracted to handle the administrative duties for some health plans. This is usually through PPO type plans.

UMHS or UMMC: University of Michigan Health System or Medical Center
Hospital Affiliations...

Saint Joseph Mercy Health System...

University of Michigan Health System...
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