Glossary

A, B 

C

Capitation A form of managed care reimbursement in which the primary care provider is paid a monthly stipend for each enrolled patient regardless of whether he ever sees or treats the patient or not.  

Catastrophic Insurance Insurance with such a high deductible that it only covers "catastrophic illness" or illnesses in which there are very high bills.

D

Deselection   The HMO term for firing a physician.

E

F

First Dollar Coverage  Insurance with no deductible.

G 

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H 

HMO   Health Maintenance Organization. A corporation financed by insurance premiums whose physicians provide medical services within certain financial, geographic, and professional limits, to enrolled members and their families.

I 

Indemnity Insurance  Insurance in which the scope of coverage is limited only by medical necessity.  Patients are directly reimbursed once a deductible is satisfied.  There usually is a co-payment (10-30%) which the patient is responsible for.  The fees that are reimbursed are predetermined by specific UCR's (usual, customary & reasonable) fee schedules, which are supposedly the results of market surveys.  In indemnity insurance plans, patients have complete freedom to select physicians, hospitals, pharmacies, and treatment plans.

J, K, L 

M 

Managed Care Insurance Insurance in which the insurance plays a major role in deciding the scope of covered services, as opposed to indemnity insurance, in which the scope of covered services is limited only by medical necessity. 

Managed Indemnity Indemnity insurance in which medical services require pre-authorization, but the scope of which is limited only by "medical necessity" (i.e., community standards of medical care). 

Medical Necessity  A need for medical services that holds up to community standards of medical care (includes many new experimental treatments).

MSA Medical Savings Account (Medical IRA, Medisave Acct.)  A medical insurance plan that allows patients to use tax-exempt funds to pay initial medical bills without insurance company interference. An overlying or umbrella insurance policy (either indemnity or PPO) then covers expenses after a deductible is met.  

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N 

O

Out-of-NetworkServices from a physician or facility not in your managed care plan.  

P

Point-Of-Service This HMO option allows patients some coverage for out-of-network physicians' fees after a deductible has been satisfied.  Services obtained out of network are still significantly limited by the HMO.

PPO  Participating physicians in this type of managed care agree to accept significantly lower fees for their services from the insurance company when treating their enrollees. There tends to be less micro-managing of medical care by the insurance company in PPO plans. 

Private Practice Partnership An Oxford HMO program in which a fixed quarterly fee is paid by the HMO (Oxford) to a group of physicians who then provide all primary and most specialty care for all HMO enrollees.  Physicians are rewarded with direct profit sharing with the HMO for minimizing the quality and cost of care provided to patients.  Excess medical expenses must be totally paid for by the physicians, thus diminishing their income.

Q, R, S, T, U, V

W

Withhold The HMO practice of holding back a portion of the physician's payment until the end of the year when that money is paid to the physician if he has kept medical costs to the HMO below a certain threshold.