Health Insurance Plans & Terms

Health Maintenance Organization (HMO)

Insurance plan - plan members must stay in network of providers for care; lower costs; requires referral for specialists and preauthorization for surgery

Preferred Provider Organization (PPO)

Network provides lower costs to plan members; Less restrictions on seeing a specialist; Can go to out of network providers but will cost patient more

Accountable Care Organization (ACO)

Network of doctors & hospitals that share financial & medical responsibility; coordinated care to limit spending; For Medicare patients

Capitation (full or partial)

Fixed prepayment per unit of time; paid in advance to physician for delivery of health care services; based on age, sex, medical history, etc.

Premium

Amount paid for insurance coverage (paid monthly) and expense is usually shared between employer & employee

Benefits

Payments for medical services over specified time

Deductible

Fixed dollar amount that must be paid before insurance begins to cover expenses

Coinsurance

Fixed percentage of covered charges after the deductible is met

Copayment

Fixed fee collected at time of visit

Preferred Provider

Provider on the insurance list that accepts a contracted rate for services

Patient Centered Medical Home (PCMH)

Primary care provider (PCP) coordinates treatment for patient ensure they receive necessary care

Global Budget

Fixed total dollar amount paid annually for all care to a provider; Provider determines how the money is spent

Pay for Performance

Providers compensated only if they meet criteria for quality & efficiency; Reimbursement tied to quality care

Explanation of Benefits

Statement from the insurance company detailing what was paid, denied, reduced, etc

Participating Provider

Provider agrees to write off difference between amount charged and approved fee established by the insurance

Medicare

Covers patients 65 and older by Part A (hospitalization) or Part B (routine office visits)

Medicaid

Provides health insurance to low income individuals

Tricare

Allow dependents of military personnel to receive treatment from civilian providers

CHAMPVA

Covers surviving spouses & dependent children of veterans who died as a result of their service

Workers Compensation

Covers the cost of medical care resulting from an on-the-job injury or accident

Allowed Amount

Maximum amount an insurance company will pay for a procedure or service