Glossary of Health Care and Insurance Terms

Adult Day Care — provision during the day, on a regular basis, of a range of services that may include health, medical, psychological, social, nutritional and educational services that allow a disabled person to function in the home or at a center.

Allowable Charge — The maximum charge for which a third party will reimburse a provider for a given service. An allowable charge is not necessarily the same as either a reasonable, customary, maximum, actual, or prevailing charge. 

Anesthesiologist — a physician who specializes in providing anesthetics (local or general) to patients undergoing surgery or other procedures.

Assignment of Benefits — the payment of medical benefits directly to a provider of care rather than to a member. Generally requires either a contract between the health plan and the provider, or a written release from the subscriber to the provider allowing the provider to bill the health plan.

Assisted Living Facilities — shared and supervised housing for those who cannot function independently. Various types of homes serve those who need minimal support to those more severely impaired.

Balance Billing — the practice of charging full fees in excess of covered amounts and then billing the patient for that portion of the bill that the payer does not cover. 

Board Certified — A physician or other health professional who has passed an examination given by a medical specialty board and has been certified by that board as a specialist in the subject in question.

Board Eligible — a physician who is eligible to take a specialty board examination as a result of completion of medical school and a relevant residency. Some HMOs and other health facilities accept board-eligible physicians.

Catastrophic Coverage — Health care for life-threatening conditions whose cost can drain an individual’s family income.

Chiropractor — (doctor of chiropractic) a licensed health professional (not a physician) who has extensive training and treats diseases caused by malfunction of the nerve system using manipulation and other treatments most commonly of the spine and pelvis.

CNA — certified nursing assistant.

COBRA — Consolidated Omnibus Reconciliation Act. A portion of this Act requires employers to offer the opportunity for terminated employees to purchase continuation of health care coverage under the group’s medical plan.

Coinsurance — a provision in a member’s coverage that limits the amount of coverage by the plan to a certain percentage, commonly 80 percent. Any additional costs are paid out of pocket by the member. 

Coordination of Benefits (COB) — a group health insurance policy provision designed to eliminate duplicate payments and provide the sequence in which coverage will apply (primary and secondary) when a person is insured under two contracts.

Copayment — that portion of a claim or medical expense that member must pay out of pocket. Usually a fixed amount, such as $10 in many HMOs.

Coronary Care Unit (CCU) — a unit of a hospital, usually part of ICU, especially designed and staffed to care for critically ill patients with heart attack or disease or following heart surgery.

Credentialing — refers to the obtaining and reviewing the documentation of professional providers by a health plan. The documentation includes education, licensure, certifications, insurance, evidence of malpractice insurance and malpractice history.

Custodial Care — general assistance in performing the activities of daily living, as well as board, room and other services, generally provided on a long-term basis and that does not include any skilled nursing components.

Deductible — that portion of a member’s health care expenses that must be paid out of pocket before any insurance coverage applies.

ENT (otolaryngologist) — a physician who specializes in diseases of the ear, nose and throat.

EOB (Explanation of Benefits) — a statement mailed to a member or covered insured explaining how or why a claim was paid or not paid.

ERISA (Employee Retirement Income Security Act) — one provision of this Act allows self-insured plans to avoid paying premium taxes, complying with state-mandated benefits, or otherwise complying with state laws and regulations regarding insurance, even when insurance companies and managed care plans that stand risk for medical costs must do so. Another provision requires that plans provide an Explanation of Benefit (EOB) a statement in the event of a denial of a claim, explaining why the claim was denied and informing the individual of his or her rights of appeal.

Extended Care Facility — a health care facility offering skilled nursing care, rehabilitation and convalescent services for patients no longer needing hospital care. 

Family practitioner — a physician, a generalist who cares for the whole family regardless of age.

Fiduciary — indicates the relationship of trust and confidence where one person (the fiduciary) holds or controls property for the benefit of another person. For example, the relationship between a trustee and the beneficiaries of the trust.

Flexible Spending Account — a plan that gives employees the opportunity to set aside pre-tax funds for the reimbursement of eligible tax-favored welfare benefits under Section 125 of the IRS tax code. Two plans are available, health care and dependent day care. Also called Reimbursement Accounts.

Formulary (prescription drug) — a listing of prescription medications that will be covered by a plan or insurance contract that often fosters substitution of generic or therapeutic equivalents on a cost-effective basis.

Gastroenterologist — a physician, who specializes in diseases of the stomach and intestines.

Gatekeeper — an informal though widely used term that refers to a primary care physician management model health plan. In this model, all care from providers, other than in true emergencies, must be authorized by the primary care physician before care is rendered. This is a predominant feature of most HMOs.

Gynecologist — a physician who specializes in women’s health.

HCFA (Health Care Financing Administration) — the federal agency that oversees all aspects of health financing for Medicare.

HEDIS (Health Plan Employer Data and Information Set) — a core of performance measures designed by participating managed health plans and employers to meet the employers’ need to understand the value of their health care benefits and to hold plans accountable for performance. HEDIS is offered under the sponsorship of the National Committee for Quality Assurance (NCQA).

Hematologist — a physician who specializes in the blood disorders.

HIPAA (Health Insurance Portability and Accountability Act of 1996) — Federal legislation that improves access to health insurance when changing jobs by restricting certain preexisting condition limitations and guarantees availability and renewability of health insurance coverage for all employers regardless of claims experience or business size. 

HMO (Health Maintenance Organization) — A prepaid medical group practice plan that provides a comprehensive predetermined medical care benefit package. Most HMOs place at least some of the risk for medical expenses on the providers and most utilize primary care physicians as gatekeepers, but not all.

Home Health Agency (HHA) — an organization providing skilled nursing and other therapeutic services in the patient’s home.

Home Health Services — items and services provided as needed in patients’ homes by a home health agency or by others under arrangement made by and HHA. Can range from skilled nursing care and physical therapy to personal care and help with household chores.

Homemaker Service — agency providing services of trained homemakers for persons needing assistance in the home during illness or in situations where the parent or guardian is absent from the home.

Hospice — health care facility or service providing medical care and support services such as counseling to terminally ill persons and their families.

Hospital — a legally constituted institution having organized facilities for the care and treatment of sick and injured persons on an inpatient basis, including facilities for diagnosis and surgery under the supervision of a staff of one or more licensed physicians and which provides 24-hour nursing services.

Indemnity Plans — in these traditional fee-for-service group health insurance plans, the patient chooses any doctor or hospital he or she wants to use. The employer pays premiums to the health insurance company to cover the costs of providing benefits and administering claims. The employee may pay a portion of the monthly insurance premiums, an annual deductible and /or copayments per medical visit.

Intensive Care Unit (ICU) — a unit of a hospital especially designed and staffed to meet the specific needs of critically or seriously ill patients.

Internist — a physician who specializes in adult medicine (ages 18 and over).

JCAHO (Joint Commission for the Accreditation of Health Organizations) — a not-for-profit organization that performs accreditation reviews primarily on hospitals and other institutions. Most managed care plans require any hospital under contract to be accredited by the JCAHO.

Long-Term Care Insurance — coverage designed to pay some or all of long-term costs, thereby preventing depletion of the policyholder’s assets.

LPN — licensed practical nurse.

Mail Order Drug Program — a method of dispensing medication directly to the patient through the mail by means of mail order drug distribution company. Offers greatly reduced costs for prescriptions, especially for long-term therapy.

Managed Care — health care programs that impose some controls on the utilization of health care services and providers who offer such care, and/or the fees charged for such services. Managed care can by provided through HMOs, PPOs, and managed indemnity plans. The primary goal is to deliver cost-effective health care without sacrificing quality or access.

Medicaid (Title XIX) — a medical benefits program administered by the states and subsidized by the federal government that pays certain medical expenses for those who meet income and other guidelines.

Medical student — a student enrolled in medical school (medical school is a four—year program) You may hear the term 2nd-year or 3rd-year medical student. 

Medicare — administered by the Social Security Administration, Medicare is the U.S. federal government plan for paying certain hospital and medical expenses for those who qualify, primary those over age 65. Part A, Hospital insurance, provided for inpatient hospital and posthospital care. Part B pays for medically necessary doctors’ services and outpatient services.

Medicare Supplement Policy — a voluntary, contributory private insurance plan available to Medicare eligibles to cover the costs of deductibles, coinsurance, physicians’ services and other medical and health services not covered by Medicare. Also, called Medigap policies.

National Committee on Quality Assurance (NCQA) — an independent, private sector group that reviews care quality and other procedures of managed care organizations to render an accreditation. 

Neonatal Intensive Care Unit (NICU)— a unit of a hospital, especially designed and staffed to care for critically ill newborns.

Neonatologist — a physician who specializes in the treatment and diagnosis of newborns (up to 28 days of life).

Neurologist — a physician who specializes in diseases of the nervous system (e.g. multiple sclerosis, stroke).

Neurosurgeon — a physician who specializes in surgery of the nervous structures; brain and spinal cord.

Nurse Practitioner — a registered nurse who had completed a nurse practitioner program —masters or certificate and is trained in providing primary care services. 

Obstetrician — a physician who specializes in delivering babies.

Occupational Therapist — a licensed allied health professional who specializes in creative activities that promote recovery and rehabilitation of patients.

Oncologist — a physician who specializes in treatment of tumors/cancer.

Open Enrollment Period — the period when an employee may change health plans; usually occurs once per year.

Ophthalmologist — a physician who specializes in diseases of the eye.

Optician — an licensed health professional (not a physician) who makes glasses and contacts.

Optometrist — a licensed health professional (not a physician) who specializes in examinations of the eye and prescribes eyeglasses and contacts for correction.

Orthopedist (orthopedic surgeon) — a physician who specializes in injuries and diseases of the bones.

Osteopath (DO) — a specialty that emphasizes the theory that the body can make its own remedies given normal structural relationships, environmental conditions and nutrition, Osteopathic physicians are granted the Doctor of Osteopathy (DO) degree. 

Outpatient Services — medical and other services provided by a hospital or other qualified facility such as a mental health clinic, rural health clinic, mobile x-ray unit or freestanding dialysis unit. Services include outpatient patient physical therapy, diagnostic x-ray and laboratory tests and radiation therapy.

Outpatient Surgical Facility — a freestanding center within a hospital that is approved and licensed by the state to perform outpatient diagnostic services or surgical treatment of an illness or injury.

Pediatrician — a physician who specializes in children’s health (up to age 18).

PCP (Primary Care Physician) — generally applies to internists, pediatricians, family physicians and general practitioners and occasionally obstetrician/gynecologists. This physician in a managed care plan who is responsible for coordinating all care for an individual patient, from providing direct services to referring the patients to specialists and hospital care.

Physician’s Assistant(PA) — a licensed allied health professional who works under the supervision of a doctor and is trained to perform certain medial procedures previously reserved for physicians.  

Physical Therapist — a licensed allied health professional who treats diseases or injuries by physical means; exercise, manipulation, electricity, heat, cold and water. 

Plastic Surgeon – a physician who specializes in the repair, restoration or improvement of lost, injured or defective body parts.

Podiatrist (doctor of podiatry) — a licensed health professional (not a physician) who specializes in treatment of the feet.

POS (Point-of-service) Plan — a health plan that allows members to choose to receive services from a participating or nonparticipating network provider, usually with a financial disincentive for going outside the network. 

PPO (Preferred Provider Organization) — a plan that contracts with physicians at a discount for services. Providers exchanged discounts for increased volume and prompt payments. Participants’ out-of-pocket costs are usually lower than under an indemnity (fee-for-service plan.).

Precertification — the process of obtaining authorization from the health plan for hospital admission or for certain outpatient procedures or tests, e.g. MRI. Failure to obtain precertification often results in a financial penalty or denial of payment for the admission or procedure. 

Preexisting Condition — a physical and/or mental condition of an insured person that existed prior to the issuance of his or her policy. Some plans may cover these conditions after a waiting period of six months to a year. 

Preventive Care — comprehensive care emphasizing priorities for prevention, early detection and early treatment of conditions, generally including routine physical examinations, immunizations and well-person care.

Primary Care — basic or general health care as opposed to specialist care.

Primary Care Physician (PCP) — a physician, usually a pediatrician, family practitioner or internist who oversees the total care of patients, referring the patient to other professionals as appropriate.

Proctologist — a physician who specializes in disease of the anus, rectum and sigmoid colon.

Psychiatrist — a physician who specializes mental, emotional and behavioral disorders.

Psychologist (doctor of psychology) — a health professional (not a physician) who specializes in the mental or behavioral characteristics of an individual or group. Provides psychological testing for diagnosis of mental and behavioral disorders. Psychologists are granted a Doctor of Psychology degree.

Reasonable and Customary (R&C) charge — the prevailing charge made by physicians or similar expertise for a similar procedure in a particular geographic area. Also called Usual, Customary and Reasonable fees.

Renal (kidney) dialysis Center — a facility that furnishes the full spectrum of diagnostic, therapeutic and rehabilitative services (except transplantation) required for the care of dialysis patients.

Resident Physician — a physician who has graduated from medical school and is currently in specialty training (interns are now called 1st-year residents).

Rheumatologist — a physician who specializes in treatment of rheumatic diseases; inflammation of joints and muscles (e.g. rheumatoid arthritis).

RN — registered nurse, a nurse with 2 to 4 years of training. 

Self-Insured Plan — a health, dental or vision plan in which the risk for cost is assumed by the company rather than an insurance company or managed care plan. In a sense, the employer is acting as an insurance company by paying claims with the money ordinarily earmarked for premiums. 

Self-Referral — the process whereby a patient seeks care directly from a specialist without seeking authorization from the primary care physician.

Skilled Nursing Facility (SNF) — a care setting for patients who no longer require hospital care, but need 24-hour nursing care and other health care services. 

Subrogation — the right of an employer or insurance company to recover benefits paid to a plan participant through legal suit, if the action causing the medical expense was the fault of another individual.

Surgeon — a physician who specializes in treating disease and illness by surgery.

Tertiary Care — specialized health care, needed by relatively few people, such as select rehabilitation services, highly technical medical procedures such as burn centers. 

TPA (third-party administrator) — a firm that provides administrative functions (e.g. claims processing, membership, etc.) for a self-insured health plan. 

Unbundling — the practice of a provider charging separately for services that normally are covered under one procedure code. 

Urologist — a physician who specializes in treatment of urinary tract and kidney.

Urgent Care Center — an ambulatory care facility that provides 24-hour service to treat minor conditions such as cuts, bruises, sprains and suture removal’ less costly than emergency room treatment.