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| Ambulatory care |
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Ambulatory care is a general term for care that does not involve admission to an inpatient hospital bed. |
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Visits to a doctor's office are a type of ambulatory care. |
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| Ancillary care |
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Diagnostic and/or supportive services such as radiology, physical therapy, pharmacy or laboratory work. |
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| Behavioral Care Services |
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Assessment and therapeutic services used in the treatment of mental health and substance abuse problems. |
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| Beneficiary |
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A person who is eligible to receive benefits under a health benefits and eligible dependents under a benefits plan |
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| Benefit year |
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The coverage period, usually 12 months long. |
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This is used for administration of a health benefits plan. |
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| Benefits |
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The portion of the costs of covered services paid by a health plan. |
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| Capitation |
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Reimbursement methods/Physician Payment Systems of paying for healthcare services on the basis of number of patients who are covered for specific services over a specified period of time rather than cost or number of services that are actually provided. |
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Healthcare providers are compensated per person – per capita rather than per service. |
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Per member per month |
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Paid in advance for all services |
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No increase in income with more service |
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Positive incentive for keeping population healthy like Scheduling health screenings, Preventive care services and Immunizations |
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| Case Rate |
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Single fee for all services within an entire course of treatment |
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| Claims |
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The bills providers send to the insurance companies for reimbursement. |
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The information on the claim includes, date of service, services provided, provider information, diagnosis and, total charges for services. |
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| Claims Submissions |
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Type of Service |
Type of Provider |
Claims Submission |
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| Paper Form |
Electronic Form |
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| 1 |
Professional |
MD, DO, PT, DME, ASC, etc. |
CMS-1500 (08-05) |
ANSI 837 P |
| 2 |
Institutional |
Hospital, Home Health |
UB-04 |
ANSI 837 I |
| 3 |
Pharmacy |
Pharmacy, Mail Order Pharmacy |
DWC-66 (NCPDP UCF) |
NCPDP 5.1 |
| 4 |
Dental |
Dentist |
ADA J515 |
ANSI 837 D |
| 5 |
Explanation of Benefits (EOB) |
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DWC-62 |
ANSI 835 |
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| Consolidated Omnibus Budget Reconciliation Act (COBRA) |
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Continuation of terminated employees’ group coverage |
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Allow continuation after ‘qualifying event’. |
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18 months for employee |
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36 months for covered children |
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COBRA continuant must pay full premium |
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Mostly administrative fees of 2%. |
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102% of premium |
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| Code sets and Billing Formats |
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ICD-9/10-CM (diagnosis and procedures) |
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CPT-4 (physician procedures) |
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HCPCS (ancillary services/procedures) |
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CDT-2 (dental terminology) |
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NDC (national drug codes) |
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| Co-Insurance |
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Very few health plans cover 100% of your medical bills any more. This sharing of the cost is called coinsurance. |
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| Copay |
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A co pay is an amount of money you pay each time you receive care. The idea behind co pay is to put some responsibility for the cost of medical services back on those who use them the most. |
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You're expected to pay these fees, which are separate from the coinsurance, up front to the provider at the time you receive services |
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| Date of Service |
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The date the health service was provided, to the participant as specified on the claim. |
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| Deductibles |
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Deductible is the portion of medical expenses you must pay each year before the benefits of the plan are provided. |
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After the deductible is met, all additional charges will be covered to the full amount of the plan's benefits |
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| Diagnosis Related Group (DRG) |
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Payment system that classifies patients into groups based on factors like primary and secondary diagnoses, surgery and other procedures, complications, age, and gender. |
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Fixed payment regardless of the actual length/ cost. |
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| Duplicate/Dual coverage |
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When a person has coverage for the same health services under more than one health benefits plan it is considered as Duplicate or Dual coverage. |
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| Effective Date |
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The date on which coverage under a health benefits plan begins. |
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| Eligible |
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Provisions contained in each health benefits plan that specify who qualifies for coverage under that plan. |
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| Exclusions or limitations |
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Exclusions are Medical services that are not covered by the insurance plan/policy. These are conditions or circumstances in which benefits are not payable or may be limited. E.g., Cosmetic surgery |
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| Exclusive Provider Organization (EPO) |
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EPO contain a network of providers that members must use in order to obtain covered services. EPO combines HMO and PPO qualities. Members will not get benefits, if they choose to see a provider not in their network, unless in an emergency situation. |
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Key Characteristics: |
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Members have a co-payments |
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No out of network benefits |
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Lower premium than PPO’s |
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Members do not have to select PCP |
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Members have mental health benefits |
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Members have pharmacy benefits |
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Routine care is covered |
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Members have vision benefits |
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Network providers submit claims to insurance company |
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No deductibles or coinsurance |
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Members are limited to selecting providers within their plan for services |
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| Explanation of benefits (EOB) |
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A statement provided by the health benefits administrator that explains the benefits provided, the allowable reimbursement amounts, any deductibles, coinsurance or other adjustments taken and the net amount paid. |
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A participant typically receives an explanation of benefits with a claim reimbursement check or as confirmation that a claim has been paid directly to the provider. |
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| Federal Employee Health Benefits Program (FEHBP) |
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A voluntary health insurance program for federal employees, retirees, and their dependents and survivors. Administered by the Office of Personnel Management (OPM), |
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FEHBP is the largest employer sponsored group healthcare program in the nation. |
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| Federal government/State government sponsored plans |
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Medicare ( Part A + Part B) |
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Medicaid |
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Tricare ( formerly known as CHAMPUS Civilian health &medical program of United states) |
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FEHB - Federal Employee health benefits plan |
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PACE- Programs of all inclusive care for the elderly |
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SCHIP - State Children’s Health Insurance Program |
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Worker’s Compensation |
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| Fee for Service (FFS) |
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Physician is paid after service has been performed |
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Income increases with volume and variety of services offered |
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Little incentive to practice preventive care or focus on improving health |
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| Fee Schedule |
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The fee determined by a health plan to be acceptable for a procedure or service, which the physician agrees to accept as payment in full also known as fee allowance, fee maximum or capped fee |
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| Generic drug |
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Generic drug is a prescription drug that has the same active-ingredient formula as a brand-name drug. |
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A generic drug is known only by its formula name and its formula is available to any pharmaceutical company. |
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| Global Fee |
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Single fee for an entire course of treatment |
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| Health insurance |
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Managing the financial risk of an individual arising out of medical emergencies like illness or accidents. |
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People cannot insure against ill health itself, rather the financial costs of ill health. Thus healthcare insurance embodies the wider concept of Sickness Expenditure Management. |
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Medical Emergencies like Illness / accidents are not planned. |
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Provide protection against the risk of financial loss resulting from the insured’s sickness or disability for a premium. |
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Available for both individuals and groups. |
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| Health Insurance Portability and Accountability Act (HIPAA) |
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HIPAA stands for the Health Insurance Portability and Accountability Act, a federal law passed in 1996 that affects the healthcare and insurance industries. |
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HIPAA has three Major Components as Transactions Code Sets, Identifiers Security Regulations and Privacy Regulations. |
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Objectives were to: |
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To improve the efficiency of healthcare delivery by standardizing the electronic exchange of certain administrative and financial data. |
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To protect the security and privacy of healthcare information. |
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The Primary intent and purpose of the law is to protect health insurance coverage for workers and their families when they change or lose their jobs. |
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| Health maintenance organizations (HMOs) |
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HMO’s are comprehensive benefit plans where the insurance company’s delegate (selected by the insured) coordinates all care for the member. The primary care physician (PCP) is responsible for making sure that the member gets appropriate care from the appropriate caregiver. The PCP is responsible for issuing referrals to other specialists or for any hospital care or ancillary services. |
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Co-payments (fixed amount to be paid by member at time of service) |
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No out-of-network services |
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Claims are submitted by participating providers who are reimbursed |
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Members need referrals/pre-certification to go to providers other than their PCP from either their PCP or insurance company |
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Routine check-ups are encouraged, for services such as eye exams, and physicals |
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Preventative measures are encouraged, for example immunizations, and well child care |
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Health education is offered in most cases (cigarette cessation, diabetes management, etc.) |
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No balance bills (difference between “reasonable and customary” and what the doctor charged) |
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HMOs provide medical treatment on a prepaid basis, which means that HMO members pay a fixed monthly fee, regardless of how much medical care is needed in a given month. In return for this fee, most HMOs provide a wide variety of medical services, from office visits to hospitalization and surgery. |
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| Independent Practice Associations (IPA) |
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IPAs are similar to HMOs, except that individuals receive care in a physician's own office, rather than in an HMO facility. |
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| In-Network Benefits |
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Higher percent of coverage when members stay with in the network of providers specific to their health plan. |
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| Inpatient care |
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Care given to a patient admitted to a hospital, extended care facility, nursing home or other facility. |
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| Long-term care |
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The range of services typically provided at skilled nursing, intermediate-care, personal care or elder-care facilities. |
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| Managed Care |
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A medical delivery system that attempts to manage the quality and cost of medical services that individual receives. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease. |
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Definition: Integration of both financing and delivery of healthcare within a system that seeks to manage the accessibility, cost, and quality of that care |
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| Maximum Dollar Limit |
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The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. |
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They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year. |
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| Medicaid |
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The federal government provides the state governments with funding to offer Medicaid plans to those who qualify. |
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In order to be eligible for Medicaid, the individual or family must be of low income and one of the following: |
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Pregnant, Child or teenager (normally up until the age of 18, but some states allow up until 21), Blind, Disabled |
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Family with children under 18. |
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| Medicare Part A |
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Free to all those who qualify (no premium.) This benefit is given from taxes contributed towards Medicare by the taxpayers, who eventually will need Medicare. |
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Key Characteristics: |
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Covers inpatient care hospital services |
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Covers skilled nursing facilities |
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Covers hospice |
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Covers some home health care |
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Members need Medigap insurance to pay for certain items that Medicare does not cover. |
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| Medicare Part B |
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Medicare Part B provides coverage for services not covered by Medicare Part A. (Given to to those who are eligible for Medicare upon paying small amount of premium) |
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Key Characteristics: |
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Covers visits to doctor/physician |
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Pays for therapies, including occupational/physical |
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Covers some preventative services (annual physical exam) |
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Members have a $100 deductible |
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Members need Medigap insurance to pay for deductibles and coinsurance to reduce their out of pocket payments. |
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| Medigap |
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It is a state approved private medical expense insurance policy that provides reimbursement for services not covered by Medicare such as out-of-pocket expenses, ( e.g., deductibles and coinsurance payments), or benefits for some medical expenses specifically excluded from Medicare coverage. Medicare supplements are available in two major forms: Medigap and Medicare SELECT policies. |
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| Network |
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Network is a group of health care providers under contract with a managed care company within a specific geographic area. |
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| Open Enrollment |
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A period when eligible persons can enroll in a health benefits plan. |
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| Out of Pocket |
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Co payments, deductibles or fees paid by participants for health services or prescriptions. |
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| Out-of-Network Benefits |
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Out-of-Network Benefits is a Lower percent of coverage when members go outside of the network of providers specific to their health plan. |
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| Outpatient |
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An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. |
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The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed. |
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| Pended Claim |
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Claims that require additional information prior to completing the adjudication process due to a specific reason code. |
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| Per Diem |
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Negotiated fee to a hospital for each inpatient day |
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| Policyholder |
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Policyholder is the group or individual to whom an insurance contract is issued. |
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| Preventive Care |
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Medical and dental services aimed at early detection and intervention. |
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| Preferred Provider Organization (PPO) |
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PPO’s are benefit arrangements designed to supply services at a discounted cost by providing incentives for members to use designated healthcare providers. Members also have the option to see other providers not in the PPO network, at a higher cost to them. PPO’s generally offer more covered services for in-network benefits than out. |
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No or low deductible for in-network services |
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Lower coinsurance rate for in-network services |
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Members have option to go out of the network |
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Higher deductible for out-of-network services |
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Higher coinsurance rate for out-of-network services |
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Routine care is covered |
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Members have vision benefits |
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Mental health benefits |
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Pharmacy |
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Network providers submit claims to insurance company |
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| Premium |
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The money charged by the insurance company to provide services and insurance/monthly payment paid to the insurance company for your coverage. |
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| Primary Care Physician (PCP) |
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A physician, usually a family or general practitioner, internist or pediatrician, who provides a broad range of routine medical services and refers patients to specialists, hospitals and other providers as necessary. |
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Under some benefits plans, a referral by the primary care physician is required to obtain services from other providers. Each covered family member chooses his or her own PCP from the network's physicians. |
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| Provider |
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Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, physical therapists, and others offering specialized health care services. |
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Hospital and Physicians are generally termed as providers. |
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Providers are of the following types: |
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Participating |
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Non Participating |
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| # |
Participating |
Non Participating |
| 1 |
Physician contracts with an insurance company |
Physician not contracted with an insurance company |
| 2 |
Is granted to receive payment that is allowed
and payable
under the plan, but it does not
guarantee him/her payment in
full or what
he/she charge. |
The payment rate is comparably lower |
| 3 |
High benefit level |
Low benefit level |
| 4 |
Negotiated rates |
Reasonable & customary charges |
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| Point of Service (POS) |
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POS plans work very similar to both HMO and Indemnity plans. POS allows the member the option to be either in-network, or out-of-network. |
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Members have option to go in-network or out-of-network |
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In-network services have greater coverage, less member liability |
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If OON, then member will have deductible, and coinsurance and any balance bills |
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If in-network, then members will have co-payments |
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For in-network benefits, members are required to get referrals/pre-certifications from their PCP or the health insurance carrier |
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Generally the same benefits offered as HMO with options to go in-network, or OON |
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If provider is participating, they will submit claims, if not, members would have to do so |
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Have a network of providers to chose from for in-network services |
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More expensive than HMO generally cheaper than PPO |
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| Pre-existing Condition |
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An illness or condition which was treated or diagnosed before the policy was issued. Many policies will not pay benefits for pre-existing conditions, or will only cover treatment of them after the policy has been in force for a specified period of time. This varies based on whether the policy is group or individual coverage. |
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| Private Health Plans |
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Private companies offer insurance to the Individuals & Groups. |
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In order to keep premiums at a lower rate, they have come up with different benefit plans to allow the customer (either group or individual) to chose or customize there coverage based on their needs and financial situation. |
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HMO (Health maintenance organizations) |
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PPO (Preferred provider organizations) |
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EPO (Exclusive provider organization) |
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POS (Point of service) |
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| Reasonable and Customary Fees |
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The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference. |
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| Referral |
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If a primary care physician determines that a participant has a condition which requires the attention of a specialist, the physician makes a referral to a specialist. Under some benefits plans, a referral by the primary care physician is required to obtain services from other providers. |
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| Relative Value Scale (RVS) |
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A method used by health plans of determining provider reimbursement that assigns a weighed unit value to the CPT code based on the cost and intensity of that service. |
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| Resource based Relative Value Scale (RBRVS) |
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Weighted unit value based on all resources used in service -- physical or procedural, education, mental, and financial. |
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| Salary System |
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Some health plans pay salaries to physicians who are employees |
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| Service Area |
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The geographical area covered by a network of health care providers. |
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| Specialists |
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Specialists are providers whose practices are limited to treating a specific disease (e.g., oncologists), specific parts of the body (e.g., ear, nose and throat), a specific age group (e.g., pediatrician), or specific procedures (e.g., oral surgery). |
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| State Children’s Health Insurance Program (SCHIP) |
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The State Children’s Health Insurance Program (SCHIP) is designed to provide health assistance to uninsured, low-income children either through separate programs or through expanded eligibility under state Medicaid programs. |
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| Tricare |
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A Department of Defense, regionally managed healthcare program for active duty and retired members of the uniformed services and their families that combines military healthcare formerly known as CHAMPUS (the Civilian Health and Medical Program of the United States), is a Department of Defense, regionally managed healthcare program for active duty and retired members of the uniformed services and their families that combines military healthcare resources and networks of civilian healthcare professionals. |
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| Usual, Customary and Reasonable (UCR) or Covered Expenses |
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An amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor, or required for treatment |
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| Waiting Period |
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The amount of time you must wait after buying a policy before coverage begins or a period of time when you are not covered by insurance for a particular problem |
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| Worker’s Compensation |
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It is a state mandated insurance program that provides for healthcare costs & lost wages to qualified employees & their dependents if an employee suffers a work related injury or disease. |
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| Reference List |
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