|
Coinsurance - The arrangement by which both the insured and the insurer share, in a specific ratio, the covered losses under a policy. (i.e. An insurer pays 80%, while patient pays 20%).
Copay/Copayment - A designated dollar amount that an insured must pay to a contracted provider or hospital for eligible service rendered instead of submitting claims or paying a co-insurance percentage. It usually applies to HMO or PPO plans.
Deductible - A flat amount the insured must pay before the insurance company will make any benefit payments under a policy.
Evidence or Explanation of Coverage (EOC) or Explanation of Benefits (EOB) - A booklet provided by the carrier to the insured summarizing benefits under an insurance plan.
Formulary - A list of approved prescription drugs; a list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost effective for patient care. Organizations often develop a formulary under the aegis of a pharmacy and therapeutics committee. In HMO's, physicians are often required to prescribe from the formulary.
HMO (Health Maintenance Organization) - An institution that offers prepaid medical care to subscribing members. For a set fee, participants receive all their health care from the HMO's own facilities and doctors, or from independents contracted by the HMO. No benefits are provided if the insured goes out of the network. The HMO may be sponsored by the government, employer, school, hospital, credit union, insurance company or hospital-medical plans.
Medically Necessary - Medical Necessity - Services or supplies which meet the following tests: They are appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition; They are provided for the diagnosis or direct care and treatment of the medical condition; They meet the standards of good medical practice within the medical community in the service area; They are not primarily for the convenience of the plan member or plan provider; and They are the most appropriate level or supply of service which can safely be provided.
PPO (Preferred Provider Organization) - Similar to an indemnity plan, but with a network of physicians, the insured is allowed to choose a doctor or hospital from a preferred provider list, which are doctors and hospitals who have agreed to group pricing and will follow the procedures and policies of the plan, or any other non-network provider. Lower fees are arranged with the network or providers, giving a financial incentive to stay within the network. A higher cost or co-pay is generally required for medical services obtained from outside sources.
Prior Authorization - A formal process requiring a provider to obtain approval to provide particular services or procedures before they are done. This is usually required for non-emergency services that are expensive or likely to be abused or overused. A managed care organization will identify those services and procedures that require prior authorization. |