A
Accreditation - Certification by a non-governmental accrediting organization that a given healthcare provider meets that organization’s standards.
Acuity Level - A means of measuring the level of care required for inpatient and outpatient services.
Adjudication - The process used by a health plan to verify and process claims.
Advance Directive - A document, recognized under State and Federal law, that provides for an individual’s wishes should that individual need medical attention when he or she is unable to make medical care decisions. It is made up of three parts: a living will, designation of healthcare agent, and wishes regarding anatomical gifts or organ donation. Download the Advance Directive Form.
Allowable Charge - The maximum amount that a health plan will pay for a given covered service or supply based on the provider’s geographic region.
Ambulatory Surgery - Surgical procedures performed that do not require an overnight hospital stay. Procedures can be performed in a hospital or licensed surgical center (up to 23 hours). Also called outpatient surgery.
Ambulatory Services - Services performed that do not require an overnight stay (up to 23 hours).
Ancillary Services - Hospital services exclusive of such services as room and board, dietary, nursing and supplies; some examples are radiology and laboratory services.
Appeal - A process used to request a health plan to reconsider a previous adverse benefit determination such as a denial or reduction of benefit or service. There may be different appeal processes for members and providers.
Assignment of Benefits - A procedure whereby a person authorizes payment of any allowable benefits directly to a healthcare provider.
Authorization - The process by which a covered service is approved by a health plan’s medical care management department. Also see pre-authorization.
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B
Balance Billing - Balance billing may occur when the out-of-network provider’s charge exceeds a health plan’s allowable charge. The member may be required to pay the difference between the health plans allowable charges and the out-of-network provider’s requested charge.
Benefit - Covered service that a member is entitled under the terms of his/her policy. Health plan members can view their Summary of Benefits at My Optima.
Board Certified - Physicians or other health professionals who have passed an examination given by a medical specialty board and have been certified by that board as a specialist in the subject in question.
Bridge – Same meaning as deductible, but is used in reference when discussing Consumer Driven Health Plans.
Broker - A licensed insurance professional who sells insurance coverage to employer groups or individuals.
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C
Centers of Excellence - Healthcare facilities selected for specific services based on criteria such as experience, outcomes, efficiency, and effectiveness.
Certificate of Creditable Coverage - A certificate of creditable coverage is intended to help you and your dependents in case you lose or change health plan coverage. Under a federal law known as HIPAA, you or your dependents may need evidence of coverage to reduce a pre-existing condition exclusion period under another plan, to help get special enrollment in another plan, or to get certain types of individual health coverage even if you have health problems. When you change health care coverage, or if you or your dependents lose coverage under a health plan, the plan sponsor is usually required to provide written certification of how long you and your dependents were covered under that plan. You or your dependents can also request a certificate of creditable coverage if one is not automatically provided to you.
Certificate of Insurance (COI) - The legal document describing a member’s coverage under a PPO or POS health plan.
Claim - A request for payment of benefits.
Claim Lag - The length of time between the service date of a claim and the date the claim is processed.
COBRA – (Consolidated Omnibus Budget Reconciliation Act of 1985.) COBRA permits eligible employees and beneficiaries to continue their health coverage for a period of time after it would normally terminate. The continuation of coverage requires the individual to pay a monthly premium.
Coinsurance – Shared cost of covered services paid by the plan and the member. The coinsurance begins only after a member has met his/her deductible.
Concurrent Review - A form of utilization review in which hospital admissions are reviewed and certified within 24 hours of admission, and are monitored for appropriateness thereafter.
Conversion - A member’s option to purchase an individual policy on termination of group coverage without evidence of insurability.
Coordination of Benefits (COB) - A typical insurance provision whereby responsibility for payment for medical services is allocated between carriers when a person is covered by more than one group health benefit program. Download a Coordination of Benefits form.
Copayment (or copay) - A fixed amount, paid at the time services are rendered, that a member of a health plan pays when seeing a participating provider for services.
Covered Services - Health services and benefits to which members are entitled under the terms of their benefit contract.
CPT Code – Current Procedural Terminology Code. The CPT code is used to identify and report services on the claim form.
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D
Deductible - The dollar amount that a covered person is responsible to pay before benefits are payable under a health plan for covered services. Such amounts will not be reimbursed under a health plan. After any applicable deductible amount has been paid, benefits for covered services will be payable in accordance with the rates shown on the Schedule of Benefits.
Dependent - A dependent is a family member who can be covered by a subscriber’s health plan. A dependent could be a subscriber’s spouse or unmarried children (natural, step, or adopted).
Disease Management (also called Condition Management) - An educational program geared toward members with chronic disease or other medical conditions, to help members better understand and manage their condition. Condition Management Programs offered by Optima Health.
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E
Eligibility date - The date an individual and/or dependents become eligible for benefits under an employee benefit plan.
Emergency Care - Healthcare services are provided in an emergency facility or setting after the onset of a medical condition that manifests itself by symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could be reasonably be expected by the prudent lay person, who possesses an average knowledge of health and medicine, to result in a) serious jeopardy to the mental or physical health of the individual, or b) danger of serious impairment to bodily functions, or c) serious dysfunction of any bodily organ, or d) in the case of a pregnant woman, serious jeopardy to the health of the fetus.
Enrollee - An individual who is enrolled in a benefit plan. Enrollees are also referred to as members.
Evidence of Coverage (EOC) - The legal document describing a member’s coverage under a HMO health plan.
Evidence of Insurability - A personal description that lists factors regarding a person’s physical condition, medical history, and other information on which an insurer could base an underwriting decision.
Explanation of Benefits (EOB) - A printed explanation, sent to health plan members, that describes the benefits received and services for which a healthcare provider has requested payment.
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F
Face Sheet – Legal document that outlines copay, coinsurance and other benefit information for HMO products.
Family Deductible - A deductible which is satisfied by the combined expenses of all covered family members.
Fee-for-Service - A method of payment that is based on charges for each individual service or treatment rendered.
Formulary – see Preferred, Standard and Premium drug list.
Fully insured - An insurer collects premiums from an employer group or individual and assumes financial risk for medical expenses incurred. Optima Select HMO, Optima Advantage POS, Optima Premier PPO and Optima Direct Open Access are all fully insured health plan products.
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G
Generic drug - A drug which is the pharmaceutical equivalent to one or more brand name drugs. Such generic drugs have been approved by the Food and Drug Administration as meeting the same standards of safety, purity, strength, dosage form and effectiveness as the brand drug.
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H
Health Employer Data and Information Set (HEDIS) - A set of performance measures designed to help individuals understand the value of healthcare services and measure health plan performance.
Health Maintenance Organization (HMO) – A health plan that utilizes a designated group, or network of doctors, hospitals, labs and other providers to provide healthcare services to members. See health plan product descriptions. To receive benefits, the member must first see his/her Primary Care Physician for care or for a referral, except in the case of an emergency. The member’s choice of providers is restricted to those in the network. Find an Optima Health participating provider.
HIPAA – Health Insurance Portability and Accountability Act of 1996. This is a federal law comprised of two parts that impact the member’s health plan benefits. Part I allows a person who has group health insurance to qualify immediately for comparable coverage when that person has lost an existing policy due to a job change. Part II addresses healthcare information and the privacy and security of a patient’s health information.
Hospice - A facility or service that provides care for the terminally ill patient and provides support to the family.
HRA – Health Reimbursement Account. Used in reference to Consumer Driven Health Plans. An employer sets aside a fixed dollar amount for employees to use towards their medical coverage. Once the HRA has been exhausted, the member’s Bridge amount begins.
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I, J, K
Immunizations - Inoculations with vaccines to establish resistance to specific infectious diseases. View Optima Health’s Immunization schedule.
Indemnity Coverage (usually referred to as Out of Network) - Coverage for treatment and services from providers who are not participating in the network, or coverage for visits to a provider without using a referral from your primary care physician.
Individual Conversion - Coverage given to a member who is no longer eligible for group coverage, has exhausted all COBRA eligibility, when applicable, and has had no break in coverage.
In Network - Refers to the use of providers who participate with the health plan’s network. Many plans require members to use a participating (in-network) provider to receive benefits or the highest level of benefits. Find an Optima Health participating provider.
Inpatient - An individual who is receiving care for 24 hours or more as a registered patient in a hospital or other facility.
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L
Lifetime Maximum - The maximum dollar amount of health benefits a member can receive while insured or covered under the plan, even if the member’s coverage is interrupted or terminated and later reinstated.
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M
Managed Care (usually referred to as In Network) – Receiving care from a contracted provider. Indicates that a member is receiving healthcare from a network of physicians and facilities that has made arrangements with the member’s health plan to hold down costs, meet quality guidelines, and direct the member to the most appropriate level of care. Managed care benefits apply when you stay within a network of healthcare providers. All of the healthcare providers in the health plan’s network are listed in the health plan's Provider Directory. To find an In Network provider, use our “Find a Doctor” search feature.
Mandated benefit - Specific coverage that an insurer or plan sponsor is required to offer by law. Mandated benefits in insurance contracts vary from state to state according to each state’s insurance laws.
Mandated offering - Similar to a mandated benefit, except that instead of being a requirement in each policy, the coverage needs to be available to employer groups to purchase if those choose.
Medically Necessary - Procedures, treatment, supplies, equipment or services determined to be:
- Appropriate for the symptoms, diagnosis or treatment of a medical condition; and
- Provided for the diagnosis or direct care and treatment of the medical condition; and
- Within generally accepted standards of good medical practice; and
- Not primarily for the convenience of the member or the member’s provider; and
- The most appropriate procedure, treatment, supply, equipment or level of service which can safely be provided.
Medical necessity does not guarantee payment.
Medicaid - Program administered by the state’s Department of Medical Assistance Services (DMAS) under the Centers for Medicare and Medicaid Services (formerly HCFA). Get more information Optima Health’s Medicaid HMO.
Medicare - entitlement program run by Centers for Medicare and Medicaid Services (CMS). Administered by the Social Security Administration under CMS (formerly HCFA), Medicare is the U.S. federal plan for paying certain hospital and medical expenses, for qualified individuals (generally those over age 65).
Member - Each individual enrolled and eligible for services in the health plan.
Member Services - A group of health plan employees who are trained to help member’s understand and use the benefits in the member’s specific plan. Optima Health plan members can reach Member Services by calling the number on the front of their member ID card.
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N
Network - The doctors, facilities and other medical providers with whom the health plan contracts to provide healthcare to its members.
Non-Par (Non-Participating) Provider - Any physician, hospital, pharmacy, laboratory or other diagnostic center not contracted with a member’s health plan to provide services.
Non-Plan (Non-Par) Provider – Same as Non-Par Provider
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O
OHP - Optima Health Plan.
Open Access Plan – type of health plan which allows a member to self-refer to a network physician. See health plan product descriptions.
Open Enrollment - The period (usually once a year) during which subscribers in a health benefit plan have the option to enroll or make changes to the health plan.
Out-of-Pocket Maximum (OOP max or MOOP) - The maximum amount that a health plan member will have to pay for covered expenses under the plan. When the OOP max is met, the health plan pays for covered expenses at 100%.
Out-of-Network - The use of non-network (non-par) providers. Members enrolled in preferred provider organizations (PPO) and point-of-service organizations (POS) have the option to go out of network but may pay some additional costs, such as meeting the deductible, paying coinsurance and being subject to balance billing.
Outpatient Surgery - Surgical procedures performed that do not require an inpatient admission (up to 23 hours).
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P
Participating Provider - Any physician, hospital, pharmacy, laboratory or other diagnostic center under contract with the health plan to provide services to members at a specified cost. Find an Optima Health participating provider.
Penalty – Failure to obtain pre-authorization may result in a charge of up to $500. See pre-authorization.
Per Diem Payment - Fixed amount of payment per day of hospital stay regardless of the quantity and value of the services rendered.
Pharmacy and Therapeutics (P&T) Committee - A group of physicians, pharmacists and other healthcare providers who advise a managed care plan regarding safe and effective use of medications. The P&T Committee manages the formulary and acts as the organizational line of communication between the medical and pharmacy components of the health plan.
Pharmacy Tier Definitions
- Preferred (Tier 1) - The majority of widely dispensed generic drugs. Preferred drugs are covered at the lowest copay level. Some brand-name drugs may be included in this category.
- Standard (Tier 2) - The brand-name equivalents of the generic Preferred (Tier 1) drugs, plus certain brand-name drugs that are not available as generic drugs.
- Premium (Tier 3) - Those generic and brand name drugs not included by the Plan on another tier. These may include single source brand name drugs that do not have a generic equivalent or therapeutic equivalent.
- Premium Plus (Tier 4) – Those drugs that are not recognized by the health plan to be any more effective than other drugs available at the other tier levels or found over the counter.
Point-of-Service Plan (POS) – A type of health plan that allows members to go outside the network for non-emergency care, but may result in a lower level of benefits and higher out-of-pocket costs for the member. See health plan product descriptions.
Pre-admission Review - Review of an elective hospitalization prior to a patient’s admission in order to ensure that the services are necessary and that they should be provided in an inpatient hospital setting.
Pre-authorization - Pre-authorization is a review of all pertinent medical information to determine medical coverage for certain medical services. A member’s physician/provider can obtain pre-authorization from the health plan’s Medical Care Management department 7-10 days prior to the services rendered. The following medical services require pre-authorization:
- Any hospital admission
- Any inpatient or outpatient surgery
- Skilled nursing facility admission
- Obstetrical admission
- Outpatient diagnostic tests
- Rental or purchase of durable medical equipment / prosthetics
- Home Health care / hospice
- Rehabilitation services: cardiac, pulmonary and vascular
- Therapy services: physical, occupational, speech
Certification of medical necessity is not a guarantee of medical payment. Benefits are always paid according to the member’s eligibility and the provisions of the health plan. Failure to obtain pre-authorization may result in a penalty of up to $500. Plan members may view authorizations online at My Optima.
Pre-existing Condition - A condition (whether physical or mental) regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within the six month period ending on the enrollment date. Pregnancy is usually not treated as a pre-existing condition.
Preferred, Standard & Premium Drug List - List of covered drugs. View Optima Health’s Preferred Standard & Premium drug list.
Preferred Provider Organization (PPO) - A type of health plan which encourages a member to use in-network providers, but that also provides reduced benefits for covered services if the member chooses an out-of-network provider for care. See health plan product descriptions.
Preventive Care - This includes checkups, physicals, immunizations, well-baby visits, and screenings such as mammograms, pap smears, prostate exams, and other visits designed to keep members healthy, identify health problems in the early stages, and to help members maintain and improve health.
Primary Care Physician (PCP) - Some plans require a primary care physician to coordinate a member’s healthcare. These participating providers are family practice, internal medicine and pediatric physicians. Registered Optima Health plan members who are required to choose a PCP may do so online at My Optima.
Prior authorization - See pre-authorization.
Prospective Review - Review of a proposed schedule of treatment which could include patient care or discharge plans and any policies and procedures that specify how care is or will be provided.
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Q
Qualifying Event - An event allows the member to make changes to his/her health plan coverage. Also can qualify the employee or beneficiary for continued coverage under COBRA. Examples include divorce, marriage, birth of a child, termination of employment, or death.
Quality Improvement (QI) - A continuous process that identifies problems, examines solutions to those problems, and regularly monitors the solutions implemented for improvement.
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R
Release of Information (ROI) – A legal document designed to protect a member’s privacy by allowing only the persons designated by the member to obtain or change the member’s personal health information. A signed ROI form authorizes the health plan to release or change information to the designated agent. Download an ROI form.
Reconsideration - A request for reconsideration (also referred to by providers as rebilled or corrected claims) is a claim that has been resubmitted by the provider for the same patient, same date of service and the same diagnosis. The original claim was either not processed or the benefits were reduced due to missing or incorrect information.
Referral – A referral is completed by a Primary Care Physician (PCP) when the PCP believes that it is medically necessary for a member to see another provider or specialist. Health plan members who receive a referral should:
- Confirm with the PCP that the referral is to a specialist in the health plan’s network.
- Ask how many visits and the length of time the referral covers.
- Check to see exactly what the referral covers (Is it for Consultation only, or consultation and treatment?)
Optima Health members can view their referrals online on My Optima.
Retrospective Review – The process where emergency room and urgent care center claims and their supporting documentation are reviewed by the clinical department to determine the health plan’s liability for payment. Also known as post-service review.
Rider – Additional health benefit purchased by the employer such as expanded vision and infertility services.
Routine Care – see Preventive Care.
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S
Schedule of Benefits – Legal document that outlines copay, coinsurance and other benefit information for PPO and POS products.
Self Funded – Health plan where the employer group assumes all risk and is responsible for paying all claims.
Service Area - The geographic area that a health plan serves.
Specialist -A physician who specializes in a particular field of medicine, such as ophthalmology or oncology.
Subscriber - The individual, employee, or retiree eligible for coverage under the plan.
Summary of Benefits – A document that outlines some of the benefits an individual may receive if he or she becomes a member of the health plan. Members of the health plan can view their Summary of Benefits online at My Optima.
Summary Plan Description (SPD) - A document containing specific information, such as covered benefits, about the health plan for self-funded groups.
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T
Third-Party Administrator (TPA) or Payor – An entity that provides certain administrative services to group benefits plans, such as accounting, claims review and payment, claims utilization review and maintenance of employee eligibility records
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U, V
Usual, Customary, Reasonable (UCR) Charges - The maximum amount the health plan will consider eligible for reimbursement to non-participating providers. The UCR is based on customary fees paid to providers with similar training and experience in a given geographic area.
Utilization Review - Evaluation of healthcare delivery, using objective medical criteria, to ensure that the services are medically necessary, provided in the most appropriate setting and is quality care.
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W
Waiting Period - The earliest that benefits will be available for defined pre-existing condition.
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X, Y, Z
Some definitions and term borrowed from the Health Insurance Answer Book, Third Edition, 1991; Glossary of Health Care Terms, Second Edition 1991; and A thru Z Managed Care Terms. Novartis,1997.