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List of Definitions: 

Term:  Accelerated Benefits
Definition:  Life insurance benefits that become available because of a long-term, catastrophic or terminal illness. 

Term:  Accidental Death Benefit
Definition: A provision added to a life insurance policy for payment of an additional benefit in case of death as a result of an accident.

Term:  Actuary
Definition: A professional individual responsible for reviewing the technical and financial aspects of an insurance policy, such as setting the premium rates and assessing risks.

Term: Allowed Amount
Definition: The amount of the billed charge the insurance company deems is payable by the plan.

Term:  Annuity
Definition: A contract that provides a series of payments, usually at regular intervals, for the duration of life.

Term: Ancillary Services
Definition: The name given to professional services such as laboratory tests and radiology exams.

Term: Ambulatory Care
Definition: Medical care on an out-patient basis, such as hospital outpatient clinics and ER Departments, physician's office and home health care are examples.

Term: Assignment of Benefits
Definition: The patient or guardian signs the Assignment of Benefits form so that the physician or medical provider will receive the insurance payment directly.

Term: Authorization
Definition: If a physician wants to perform a surgery, order a medical supply, or refer the patient to a specialist an authorization and approval by the health plan is required.

Term: Average Wholesale Price
Definition: This value is generally accepted as a standard measure of evaluating the cost of a particular medication.

Term:  Beneficiary
Definition: The individual or financial instrument named in the policy as the recipient of the life insurance payment at the time of policyholder’s death.

Term: Benefit Penalty
Definition: A method used by the insurance company to reduce payment on a claim when the patient or medical provider does not fulfill the rules of the health plan.

Term: The Birthday Rule
Definition: A method of determining coordination of benefits under both parent's plans of medical insurance.

Term: Bundling
Definition: A method by which the insurance company decides to combine payment for two or more medical services.

Term: Capitation
Definition: A payment methodology in which the physician is paid a set dollar amount determined by a per member per month (pmpm) calculation to deliver medical services to a specified group of people.

Term: Carve-out
Definition: Medical services that are separated from a contract and paid under a different arrangement.

Term: Case Management
Definition: A method by which a health plan attempts to control costs by directing all of the procedures for care of an individual through a nurse or other health care professional.

Term:  Cash Value
Definition: The amount available in cash given to an individual who surrenders their policy prior to death or maturity.

Term: Claim
Definition: A request for payment by a medical provider for a given medical service or item.

Term: COBRA
Definition: Consolidated Omnibus Budget Reconciliation Act

Term: Co-insurance
Definition: A percentage the patient is responsible for on a given insurance claim

Term: Contracted Provider
Definition: A medical provider that has an agreement with a health plan to accept their patients at a previously agreed upon rate for payment.

Term: Conversion Plan
Definition: When an individual terminates his/her group policy, an option to continue coverage is by purchasing an individual health plan called a conversion policy.

Term:  Convertible Term Insurance
Definition: Term insurance that could be covered into a permanent life insurance policy without evidence of insurability.

Term: Co-payment
Definition: A per occurrence payment

Term: Cost Containment
Definition: When the insurance company devises a way to reduce the benefit payment or costs associated with the health plan.

Term: Covered Expense
Definition: A medical procedure or item that is deemed payable by the insurance plan.

Term: CPT Code
Definition: Current Procedural Terminology

Term: Deductible
Definition: A set dollar amount which must be satisfied within a specific time frame before the health plan begins making payments on claims

Term: Exclusions
Definition: Those items or medical services that are not covered by the health plan.

Term: Exclusive Provider Organization (EPO)
Definition: A health plan that has the characteristics of an HMO or PPO plan.

Term: Explanation of Benefits
Definition: A summary of the payment made by your health plan to the medical provider.

Term: Extension of Benefits
Definition: The health plans offers an additional 12 months of coverage due to a disabling condition

Term: Fee for Service
Definition: A method of payment for medical services rendered

Term: Fee Schedule
Definition: A list of CPT codes and dollar amounts an insurance company will pay for a particular medical service

Term: Fixed Annuity:
Definition: During the accumulation period of a fixed deferred annuity, your money (less any applicable charges) earns interest at rates set by the insurance company or in a way spelled out in the annuity contract.  The company guarantees that it will pay not less than a minimum rate of interest. During the payout period, the amount of each income payment to you is generally set when the payments start and will not change.

Term: Formulary
Definition: A listing of pharmaceuticals the health plan pays for.

Term: Fully Insured
Definition: An Employer purchases insurance coverage from a licensed insurance company and the insurance company assumes all of the risk.

Term: HCFA 1500
Definition: The standard claim format used by health plans on which to consider payment to the medical provider.

Term: HMO
Definition: Health Maintenance Organization

Term: ICD-9 (International Classification of Diseases 9th Edition)
Definition: A standard format of identifying the illness, injury or diseases by using a three digit code.

Term: Indemnity Plan
Definition: A non PPO or HMO plan, a plan that does not have preferred provider networks or many cost containment features.

Term: Integrated Delivery System
Definition: An organization that combines hospital, physician and other medical services as part of a larger health care system.

Term: IPA (Independent Practice Association)
Definition: An organization of physicians who are contracted with an HMO plan.

Term: Managed Care
Definition: A method by which cost containment features are applied to a health plan either by limiting the reimbursement levels paid to providers or by reducing utilization.

Term: Medical Loss Ratio
Definition: The amount of the premium revenues actually spent on paying for medical services.

Term: Medical Necessity
Definition: A medical procedure or service must be performed only for the treatment of an accident, injury or illness and is not considered experimental, investigational or cosmetic.

Term: Off-label Use
Definition: The prescribing of a medication for use not approved by the FDA (Federal Drug Administration).

Term: Out of Pocket Expense
Definition: The amount the patient must pay themselves and not paid for by the insurance plan

Term: Participating Provider
Definition: A physician or other medical provider has agreed to accept a set fee for services provided to members of a specific health plan.  They are deemed to be "in-network".

Term: PCP
Definition: Primary Care Physician

Term: PPO
Definition: Preferred Provider Organization

Term: Pre-Existing
Definition: A medical condition diagnosed prior to the effective date of the health plan.

Term: Self-Insured
Definition: An Employer who underwrites their own risk. This may is good for groups with a favorable claims history.

Term: Usual & Customary
Definition: A reduction in the payment of benefits on a claim which is justified by the insurance company as "the going rate" to be paid in that geographical area.

Term: Untimely Submission
Definition: A medical claim must be submitted within the time frame given by the insurance company or the claim will be denied.

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