Health Coverage Glossary
Authorization or pre-authorization: The approval given by your health insurer for the provider to treat you. Once the insurer gives an authorization, they have essentially indicated that the procedure is a covered service.
Appeal: An appeal is a patient or provider asking the patient’s insurance company to re-consider either the amount of payment or the coverage of the procedure. Usually, an appeal begins after a procedure is completed and the patient or the provider do not agree with the insurance company’s payment.
Benefit: A benefit is a covered procedure or service.
Bundling: Bundling is a term insurance companies use to pay for similar procedures. Often bundling allows the health insurance company to pay less for bundled procedures than they would have if they had paid for each procedure separately.
Case Management: A process of coordinating the care for a patient with a team of individuals, often from both the provider or hospital as well as the insurer. The goals of case management are to combine the right care with a reasonable utilization and cost. May also be known as utilization review or care coordination.
Certificate of Authority (COA): Licensure to an insurer or HMO from a state allowing it to cover patients in that state.
Chart Note: The notes, lab results and information a health care provider enters into a patient's chart. A chart can be either a paper folder full of files or an electronic summation of a patient's records.
Chronic Disease / Chronic Condition: A disease or diagnosis that a patient has for an extended period of time, or for a lifetime, such as diabetes or long-term back pain. Chronic diseases often create secondary diseases that are associated with the condition.
Claim: The bill or invoice that a medical provider submits to an insurer in order to receive reimbursement. Health care caims are often submitted electronically and are produced on a standardized form with standard codes and terminology.
COBRA: COBRA is short for the Consolidated Omnibus Budget Reconciliation Act which gives people who have been covered by a health insurance group plan an option to continue that coverage for a set amount of time after that person leaves the group. For instance, a person who is covered by their employer’s group health insurance but leaves that job can remain covered under that health plan for a limited time.
Computerized Physician Order Entry (CPOE): Allows physicians to electronically enter any patient's orders. This reduces the possibility of communication, medication and treatment errors.
Co-Payment: A co-payment is the amount that a patient must pay for each procedure or a prescription. The amount is set in advance by the patient’s insurance plan.
Co-Insurance: Co-insurance is the amount a patient must pay after the health insurance plan has paid their portion and discounted the amount paid the provider. This is often a percentage of the total charge.
Deductible: Deductible is an amount set by the health insurance plan that a patient must pay before the health plan begins to pay. Usually, once the patient meets the deductible the health plan pays a larger portion of the claim amounts.
Denial: A denial is when a health plan does not cover a procedure and the patient is expected to pay the whole bill. (See Appeal and Authorization)
Donut Hole: In Medicare Part D prescription coverage, the donut hole is when the Medicare patient is expected to pay for his or her drugs without any benefit of Medicare Part D coverage. Once a the patient pays a certain amount of prescription costs out of their own pocket, Medicare Part D coverage once again pays for some prescription costs.
Drug Tier: A health plan assigns every drug to a tier depending on its cost and effectiveness. Usually, the higher the tier, the more the drug costs. Generics are usually the least expensive, sit on the lowest tier and have the lowest co-payment. The newest drugs usually are on the highest and most expensive tier.
EHR or Electronic Health Records: A tool for providers and patients to keep their medical records and notes electronically; the total personal health records maintained electronically by a medical provider that may be shared to authorized professionals. Medical professionals authorized by the individual may access these records. These records conform to national interoperability standards and may be used by any authorized professional anywhere. EHR may also refer to billing and scheduling electronically. When used optimally, EHR provides nearly instant access to a person’s health records by any medical professional authorized access.
Electronic Signature: Any legally recognized electronic means that indicates the person signing agrees or intends to agree to the electronic document.
EMR or Electronic Medical Records: The total personal health records maintained electronically by a medical provider. This term usually refers to electronic records obtainable by one health organization. These records do not conform to the interoperability standards and are not available to any patient-authorized medical professional anywhere
Elective Procedure: An elective procedure is one that treats a condition that is not medically necessary. An example would be a face lift just because your chin sags a bit. Reconstruction after an auto accident would probably not be an elective procedure.
Flexible Spending Account: A Flexible Spending Account is a savings account of you own money that a company holds to cover your medical or other expenses, such as child care. It has some income tax advantages. In order to get that money out, you will have to submit a claim form and the claim will have to be for something that is covered by the Flexible Spending Account. Co-payments, Co-Insurance and deductibles are usually acceptable expenses. Flexible Spending Account is the generic name for Health Savings Account.
Formulary: A list of drugs and medications approved / encouraged for use by a specific group plan, insurer, or health care payer. A "Closed Formulary" refers to drug coverage plans which will only pay for medications that are on their list.
Generic Drug: A generic drug has the same active ingredients as the name-brand drug but may have different fillers and form. Generics act just like their name-brand counterpart, but are much less expensive
Health Savings Account: A Health Savings Account, a type of a Flexible Savings Account, is a savings account of your own money that a company holds for you to cover medical expenses. It has some income tax advantages. In order to get that money out, you must submit a claim form and that claim must be for something that is covered by the Health Savings Account. Co-payments, Co-insurance and deductibles are usually acceptable expenses. The money that is left in your Health Savings Account cannot roll over to be used the next year. If it is not used, it is lost.
Health Reimbursement Account: This is a type of health plan offered by some companies to encourage consumers to become more aware of the cost of their medical choices. Many times there are at least three layers of patient payment segments. For instance, the initial level offers some coverage without any copayments or coinsurance out-of-pocket expenses for the patient. When that amount is reached, then the patient pays the full cost of the services. Once the patient reaches a certain out-of-pocket spending level, the insurance resumes covering services, usually at a percent of the cost. In the third tier, the patient reaches their out-of-pocket spending maximum and the insurance company pays at 100 percent for covered services.
HIPAA or Health Information Portability and Accountability Act: The actual name is the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule. It protects and sets the guidelines for storage, sharing and transporting a patient's personal and health information to any other person or organization. Every one who handles health records must follow these standards including health insurers, health facilities, health providers, data entry clerks, etc.
HMO: A Health Maintenance Organization requires its members to see specific doctors that are members of the plan. Usually these plans do not pay for any services from providers outside of their network.
Medicare: A Federally funded health coverage for people who qualify. These people are those over age 65 who pay their premiums and have paid into the system for a certain number of qualifying quarters and people with certain disabilities and conditions such as End Stage Renal Disease. Contact the Social Security Administration for eligibility rules and more details about the Medicare program.
Medicaid: A state and Federally funded health coverage for pregnant women, children and certain people with disabilities and conditions who have a low income. Contact your state for eligibility and other qualifications for this coverage.
Network: Simply put, your health insurance network is those facilities and health care providers who accept your insurance plan. Try and use network providers so that you can limit your out-of-pocket expenses.
Out-of-Network: Providers and facilities not considered to be part of your insurance network. Using them will often result in higher costs to you.
Out-of-Pocket: This is the money you pay that is addition to your monthly health insurance premiums. It may have other restrictions, such as some companies do not count co-payments or co-insurance. Make sure you understand what your health insurance plan accepts towards your out-of-pocket expenses and keep track of those expenses.
Personal Health Records: The records of individuals to help them monitor their own health and health care. This information is managed, stored and controlled by the individual. This information would be useful to make more informed health decisions.
Precertification or Precert: This is the contact you or your health care provider makes with your insurance company prior to any surgery or procedure. The precertification process ensures that the insurance company will cover the procedure.
Preexisting Condition: Is a condition or disease that you had before you signed up for the insurance. Read the information provided by the health plan carefully to make sure you understand what will and will not be covered for a preexisting condition.
Preventive Care: These are the tests and procedures that help identify conditions or diseases early. In every case, it is easier and more effective to treat a condition that is found early.
Primary Care Physician: Your Primary Care Physician or PCP is the doctor that you go to for most of your issues. He or she is the one that keeps track of all your conditions and medications, managing your healthcare. For some insurance plans, you must see your PCP and get a referral to see a specialist. Primary Care Physicians are typically Family Medicine or Internal Medicine doctors, or in the case of children, Pediatricians.
PPO: Preferred Provider Organization is a network of providers who have agreed to accept a certain insurance plan.
Open Access: Is an insurance plan that does not require you to see your PCP for a referral to a specialist.
Referral: Instructions from one physician (usually a PCP) to see another, more specialized physician. Often required by insurance companies if a patient needs to see a Specialist.
Risk: A risk is the statistical probability of you getting a certain disease or experiencing a specific condition taking into account your age, gender, family history and activities.
Second Opinion: It is asking another qualified health care professional to evaluate all the information about you and your condition to form an opinion of your treatment options.
Specialist: Physicians who practice medicine in focused areas such as Dermatology, Cardiology, Orthopedics, Neurology, and other areas. Many health plans require a referral from a primary care physician before paying for care from a specialist.
Usual and Customary (also known as “Reasonable and Customary”): This refers to the price of a certain service or procedure in a specific region. Usually, health insurance companies pay a percentage of the usual and customary charge, then you are responsible for the rest of the bill.
Waiting Period: This is the time between when you buy your health insurance and the time coverage begins. Make sure you understand this term when you sign up of health insurance.