Glossary of Eldercare Terms

Access - A person's ability to obtain healthcare services.

Acute Care - Medical treatment rendered to people whose illnesses or medical problems are short-term or don't require long-term continuing care. Acute care facilities are hospitals that mainly treat people with short-term health problems.

Aggregate Indemnity - The maximum amount of payment provided by an insurer for each covered service for a group of insured people.

Aid to Families with Dependent Children (AFDC) - A state-based federal assistance program that provided cash payments to needy children (and their caretakers), who met certain income requirements. AFDC has now been replaced by a new block grant program, but the requirements, or criteria, can still be used for determining eligibility for Medicaid.

Alliance - Large businesses, small businesses, and individuals who form a group for insurance coverage.

All-payer System - A proposed healthcare system in which, no matter who is paying, prices for health services and payment methods are the same. Federal or state government, a private insurance company, a self-insured employer plan, an individual, or any other payer would pay the same rates. Also called Multiple Payer system.

Ambulatory Care - All health services that are provided on an out-patient basis, that don't require overnight care. Also called out-patient care.

Ancillary Services - Supplemental services, including laboratory, radiology and physical therapy, that are provided along with medical or hospital care.

Beneficiary - A person who is eligible for or receiving benefits under an insurance policy or plan.

Benefits - The services that members are entitled to receive based on their health plan.

Blue Cross/Blue Shield - Non-profit, tax-exempt insurance service plans that cover hospital care, physician care and related services. Blue Cross and Blue Shield are separate organizations that have different benefits, premiums and policies. These organizations are in all states, and The Blue Cross and Blue Shield Association of America is their national organization.

Board Certified - Status granted to a medical specialist who completes required training and passes and examination in his/her specialized area. Individuals who have met all requirements, but have not completed the exam are referred to as "board eligible."

Board Eligible - Reference to medical specialists who have completed all required training but have not completed the exam in his/her specialized area.

Cafeteria Plan - This benefit plan gives employees a set amount of funds that they can choose to spend on a different benefit options, such as health insurance or retirement savings.

Capitation - A fixed prepayment, per patient covered, to a healthcare provider to deliver medical services to a particular group of patients. The payment is the same no matter how many services or what type of services each patient actually gets. Under capitation, the provider is financially responsible.

Care Guidelines - A set of medical treatments for a particular condition or group of patients that has been reviewed and endorsed by a national organization, such as the Agency for Healthcare Policy Research.

Carrier - A private organization, usually an insurance company, that finances healthcare.

Carve-out - Medical services that are separated out and contracted for independently from any other benefits.

Case Management - Intended to improve health outcomes or control costs, services and education are tailored to a patient's needs, which are designed to improve health outcomes and/or control costs.

Catastrophic Health Insurance - Health insurance that provides coverage for treating severe or lengthy illnesses or disability.

CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) - A health plan that serves the dependents of active duty military personnel and retired military personnel and their dependents.

Chronic Care - Treatment given to people whose health problems are long-term and continuing. Nursing homes, mental hospitals and rehabilitation facilities are chronic care facilities.

Chronic Disease - A medical problem that will not improve, that lasts a lifetime, or recurs.

Claims - Bills for services. Doctors, hospitals, labs and other providers send billed claims to health insurance plans, and what the plans pay are called paid claims.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) - Designed to provide health coverage to workers between jobs, this legal act lets workers who leave a company buy health insurance from that company at the employer's group rate rather than an individual rate.

Co-insurance - A cost-sharing requirement under some health insurance policies in which the insured person pays some of the costs of covered services.

Cooperatives/Co-ops - HMOs that are managed by the members of the health plan or insurance purchasing arrangements in which businesses or other groups join together to gain the buying power of large employers or groups.

Co-pay - Flat fees or payments (often $5-10) that a patient pays for each doctor visit or prescription.

Cost Containment - The method of preventing healthcare costs from increasing beyond a set level by controlling or reducing inefficiency and waste in the healthcare system.

Cost Sharing - An insurance policy requires the insured person to pay a portion of the costs of covered services. Deductibles, co-insurance and co-payments are cost sharing.

Cost Shifting - When one group of patients does not pay for services, such as uninsured or Medicare patients, healthcare providers pass on the costs for these health services to other groups of patients.

Coverage - A person's healthcare costs are paid by their insurance or by the government.

Covered Services - Treatments or other services for which a health plan pays at least part of the charge.

Deductible - The amount of money, or value of certain services (such as one physician visit), a patient or family must pay before costs (or percentages of costs) are covered by the health plan or insurance company, usually per year.

Diagnostic Related Groups (DRGs) - A system for classifying hospital stays according to the diagnosis of the medical problem being treated for the purposes of payment.

Direct Access - The ability to see a doctor or receive a medical service without a referral from your primary care physician.

Disease Management - Programs for people who have chronic illnesses, such as asthma or diabetes, that try to encourage them to have a healthy lifestyle, to take medications as prescribed, and that coordinate care.

Disposable Personal Income - The amount of a person's income that is left over after money has been spent on basic necessities such as rent, food, and clothing.

Early and Periodic Screening, Diagnosis, and Treatment Program (EPSDT) - As part of the Medicaid program, the law requires that all states have a program for eligible children under age 21 to receive a medical assessment, medical treatments and other measures to correct any problems and treat chronic conditions.

Elective - A healthcare procedure that is not an emergency and that the patient and doctor plan in advance.

Emergency - A medical condition that starts suddenly and requires immediate care.

Employee Retirement Income Security Act (ERISA) - A Federal act, passed in 1974, that established new standards for employer-funded health benefit and pension programs. Companies that have self-funded health benefit plans operating under ERISA are not subject to state insurance regulations and healthcare legislation.

Employer Contribution - The contribution is the money a company pays for its employees' healthcare.

Exclusions- Health conditions that are explicitly not covered in an insurance package and that your insurance will not pay for.

Exclusive Provider Organizations (EPO) /Exclusive Provider Arrangement (EPA) - An indemnity or service plan that provides benefits only if those hospitals or doctors with which it contracts provide the medical services, with some exceptions for emergency and out-of-area services.

Federal Employee Health Benefit Program (FEP) - Health insurance program for Federal workers and their dependents, established in 1959 under the Federal Employees Health Benefits Act. Federal employees may choose to participate in one of two or more plans.

Fee-for-Service - Physicians or other providers bill separately for each patient encounter or service they provide. This method of billing means the insurance company pays all or some set percentage of the fees that hospitals and doctors set and charge. Expenditures increase if the increase This is still the main system of paying for healthcare services in the United States.

First Dollar Coverage - A system in which the insurer pays for all employee out-of-pocket healthcare costs. Under first dollar coverage, the beneficiary has no deductible and no co-payments.

Flex plan - An account that lets workers set aside pretax dollars to pay for medical benefits, childcare, and other services.

Formulary - A list of medications that a managed care company encourages or requires physicians to prescribe as necessary in order to reduce costs.

Gag Clause - A contractual agreement between a managed care organization and a provider that restricts what the provider can say about the managed care company.

Gatekeeper - The person in a managed care organization, often a primary care provider, who controls a patient's access to healthcare services and whose approval is required for referrals to other services or other specialists.

General Practice - Physicians without specialty training who provide a wide range of primary healthcare services to patients.

Global Budgeting - A way of containing hospital costs in which participating hospitals share a budget, agreeing together to set the maximum amount of money that will be paid for healthcare.

Group Insurance - Health insurance offered through business, union trusts or other groups and associations. The most common system of health insurance in the United States, in which the cost of insurance is based on the age, sex, health status and occupation of the people in the group.

Group Model HMO - An HMO that contracts with an independent group practice to provide medical services.

Guaranteed Issue - The requirement that an insurance plan accept everyone who applies for coverage and guarantee the renewal of that coverage as long as the covered person pays the policy premium.

Healthcare Benefits - The specific services and procedures covered by a health plan or insurer.

Healthcare Financing Administration (HCFA) - The federal government agency within the Department of Health and Human Services that directs the Medicare and Medicaid programs. HCFA also does research to support these programs and oversees more than a quarter of all healthcare costs in the United States.

Health Insurance - Financial protection against the healthcare costs caused by treating disease or accidental injury.

Health Insurance Portability and Accountability Act (HIPAA) - Also known as Kennedy-Kassebaum law, this guarantees that people who lose their group health insurance will have access to individual insurance, regardless of pre-existing medical problems. The law also allows employees to secure health insurance from their new employer when they switch jobs even if they have a pre-existing medical condition.

Health Insurance Purchasing Cooperatives (HIPCs) - Public or private organizations that get health insurance coverage for certain populations of people, combining everyone in a specific geographic region and basing insurance rates on the people in that area.

Health Maintenance Organization (HMO) - A health plan provides comprehensive medical services to its members for a fixed, prepaid premium. Members must use participating providers and are enrolled for a fixed period of time. HMOs can do business either on a for-profit or not-for-profit basis.

Health Plan Employer Data and Information Set (HEDIS) - Performance measures designed by the National Committee for Quality Assurance to give participating managed health plans and employers to information about the value of their healthcare and trends in their health plan performance compared with other health plans.

Home Healthcare - Skilled nurses and trained aides who provide nursing services and related care to someone at home.

Hospice Care - Care given to terminally ill patients. Hospital Alliances- Groups of hospitals that join together to cut their costs by purchasing services and equipment in volume.

Indemnity Insurance - A system of health insurance in which the insurer pays for the costs of covered services after care has been given, and which usually defines the maximum amounts which will be paid for covered services. This is the most common type of insurance in the United States.

Independent Practice Association (IPA) - A group of private physicians who join together in an association to contract with a managed care organization.

Indigent Care - Care provided, at no cost, to people who do not have health insurance or are not covered by Medicare, Medicaid, or other public programs.

In-patient - A person who has been admitted to a hospital or other health facility, for a period of at least 24 hours.

Integrated Delivery System (IDS) - An organization that usually includes a hospital, a large medical group, and an insurer such as an HMO or PPO.

Integrated Provider (IP) - A group of providers that offer comprehensive and coordinated care, and usually provides a range of medical care facilities and service plans including hospitals, group practices, a health plan and other related healthcare services.

Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) - A national private, non-profit organization that accredits healthcare organizations and agencies and sets guidelines for operation for these facilities.

Limitations - A "cap" or limit on the amount of services that may be provided. It may be the maximum cost or number of days that a service or treatment is covered.

Limited Service Hospital - A hospital, often located in a rural area, that provides a limited set of medical and surgical services.

Long-term Care - Healthcare, personal care and social services provided to people who have a chronic illness or disability and do not have full functional capacity. This care can take place in an institution or at home, on a long-term basis.

Malpractice Insurance - Coverage for medical professionals which pays the costs of legal fees and/or any damages assessed by the court in a lawsuit brought against a professional who has been charged with negligence.

Managed care - This term describes many types of health insurance, including HMOs and PPOs. They control the use of health services by their members so that they can contain healthcare costs and/or improve the quality of care.

Mandate - Law requiring that a health plan or insurance carrier must offer a particular procedure or type of coverage.

Means Test - An assessment of a person's or family's income or assets so that it can be determined if they are eligible to receive public support, such as Medicaid.

Medicaid - An insurance program for people with low incomes who are unable to afford healthcare. Although funded by the federal government, Medicaid is administered by each state. Following very broad federal guidelines, states determine specific benefits and amounts of payment for providers.

Medical IRAs - Personal accounts which, like individual retirement plans, allow a person to accumulate funds for future use. The money in these accounts must be used to pay for medical services. The employee decides how much money he or she will spend on healthcare.

Medically Indigent - A person who does not have insurance and is not covered by Medicaid, Medicare or other public programs.

Medicare - A federal program of medical care benefits created in 1965 designed for those over age 65 or permanently disabled. Medicare consists of two separate programs: A and B. Medicare Part A, which is automatic at age 65, covers hospital costs and is financed largely by employer payroll taxes. Medicare Part B covers outpatient care and is financed through taxes and individual payments toward a premium.

Medicare Supplements or Medigap - A privately-purchased health insurance policy available to Medicare beneficiaries to cover costs of care that Medicare does not pay. Some policies cover additional costs, such as preventive care, prescription drugs, or at-home care.

Member - The person enrolled in a health plan.

National Committee on Quality Assurance (NCQA) - An independent national organization that reviews and accredits managed care plans and measures the quality of care offered by managed care plans.

Network - A group of affiliated contracted healthcare providers (physicians, hospitals, testing centers, rehabilitation centers etc.), such as an HMO, PPO, or Point of Service plan.

Non-contributory Plan - A group insurance plan that requires no payment from employees for their healthcare coverage.

Non-participating Provider - A healthcare provider who is not part of a health plan. Usually patients must pay their own healthcare costs to see a non-participating provider.

Nurse Practitioner - A nurse specialist who provides primary and/or specialty care to patients. In some states nurse practitioners do not have to be supervised by a doctor.

Open Enrollment Period - A specified period of time during which people are allowed to change health plans.

Open Panel - A right included in an HMO, which allows the covered person to get non-emergency covered services from a specialist without getting a referral from the primary care physician or gatekeeper.

Out of Pocket Costs or Expenditures - The amount of money that a person must pay for his or her healthcare, including: deductibles, co-pays, payments for services that are not covered, and/or health insurance premiums that are not paid by his or her employer.

Outcomes - Measures of the effectiveness of particular kinds of medical treatment. This refers to what is quantified to determine if a specific treatment or type of service works.

Out of Pocket Maximum - The maximum amount that a person must pay under a plan or insurance contract.

Outpatient Care - Healthcare services that do not require a patient to receive overnight care in a hospital.

Participating Physician or Provider - Healthcare providers who have contracted with a managed care plan to provide eligible healthcare services to members of that plan.

Payer - The organization responsible for the costs of healthcare services. A payer may be private insurance, the government, or an employer's self-funded plan.

Peer Review Organization (PRO or PSRO) - An agency that monitors the quality and appropriateness of medical care delivered to Medicare and Medicaid patients. Healthcare professionals in these agencies review other professionals with similar training and experience. [See Quality Improvement Organizations]

Percent of Poverty - A term that describes the income level a person or family must have to be eligible for Medicaid.

Physician Assistant - A health professional who provides primary and/or specialty care to patients under the supervision of a physician.

Physician Hospital Organizations (PHOs) - An organization that contracts with payers on behalf of one or more hospitals and affiliated physicians. Physicians still own their practices.

Play or Pay - This system would provide coverage for all people by requiring employers either to provide health insurance for their employees and dependents (play) or pay a contribution to a publicly-provided system that covers uninsured or unemployed people without private insurance (pay).

Point of Service (POS) - A type of insurance where each time healthcare services are needed, the patient can choose from different types of provider systems (indemnity plan, PPO or HMO). Usually, members are required to pay more to see PPO or non-participating providers than to see HMO providers.

Portability - A person's ability to keep his or her health coverage during times of change in health status or personal situation (such as change in employment or unemployment, marriage or divorce) or while moving between health plans.

Postnatal Care - Healthcare services received by a woman immediately following the delivery of her child.

Pre-authorization - The process where, before a patient can be admitted to the hospital or receive other types of specialty services, the managed care company must approve of the proposed service in order to cover it.

Pre-existing Condition - A medical condition or diagnosis that began before coverage began under a current plan or insurance contract. The insurance company may provide coverage but will specifically exclude treatment for such a condition from that person's coverage for a certain period of time, often six months to a year.

Preferred Provider Organization (PPO) - A type of insurance in which the managed care company pays a higher percentage of the costs when a preferred (in-plan) provider is used. The participating providers have agreed to provide their services at negotiated discount fees.

Premium - The amount paid periodically to buy health insurance coverage. Employers and employees usually share the cost of premiums.

Premium Cap - The maximum amount of money an insurance company can charge for coverage.

Premium Tax - A state tax on insurance premiums.

Prepaid Group Practice - A type of HMO where participating providers receive a fixed payment in advance for providing particular healthcare services.

Preventive Care - Healthcare services that prevent disease or its consequences. It includes primary prevention to keep people from getting sick (such as immunizations), secondary prevention to detect early disease (such as Pap smears) and tertiary prevention to keep ill people or those at high risk of disease from getting sicker (such as helping someone with lung disease to quit smoking).

Primary Care - Basic or general routine office medical care, usually from an internist, obstetrician-gynecologist, family practitioner, or pediatrician.

Primary care provider (PCP) - The health professional who provides basic healthcare services. The PCP may control patients' access to the rest of the healthcare system through referrals.

Private Insurance -  Health insurance that is provided by insurance companies such as commercial insurers and Blue Cross plans, self-funded plans sponsored by employers, HMOs or other managed care arrangements.

Provider - An individual or institution who provides medical care, including a physician, hospital, skilled nursing facility, or intensive care facility.

Provider-Sponsored Organization (PSO) - Healthcare providers (physicians and/or hospitals) who form an affiliation to act as insurer for an enrolled population.

Quality Assessment - Measurement of the quality of care.

Quality Assurance and Quality Improvement - A systematic process to improve quality of healthcare by monitoring quality, finding out what is not working, and fixing the problems of healthcare delivery.

Quality Improvement Organization (QIO) - An organization contracting with HCFA to review the medical necessity and quality of care provided to Medicare beneficiaries.

Quality of Care - How well health services result in desired health outcomes.

Rate Setting - These programs were developed by several states in the 1970's to establish in advance the amount that hospitals would be paid no matter how high or low their costs actually were in any particular year. (Also known as hospital rate setting or prospective reimbursement programs)

Referral System - The process through which a primary care provider authorizes a patient to see a specialist to receive additional care.

Reimbursement - The amount paid to providers for services they provide to patients.

Risk - The responsibility for profiting or losing money based on the cost of healthcare services provided. Traditionally, health insurance companies have carried the risk. Under capitation, healthcare providers bear risk.

Self-insured - A type of insurance arrangement where employers, usually large employers, pay for medical claims out of their own funds rather than contracting with an insurance company for coverage. This puts the employer at risk for its employees' medical expenses rather than an insurance company.

Single Payer System - A healthcare reform proposal in which healthcare costs are paid by taxes rather than by the employer and employee. All people would have coverage paid by the government.

Socialized Medicine - A healthcare system in which providers are paid by the government, and healthcare facilities are run by the government.

Staff Model HMO - A type of managed care where physicians are employees of the health plan, usually in the health plan's own health center or facility.

Standard Benefit Package - A defined set of benefits provided to all people covered under a health plan.

Third Party Administrator (TPA) - An organization that processes health plan claims but does not carry any insurance risk.

Third Party Payer - An organization other than the patient or healthcare provider involved in the financing of personal health services.

Uncompensated Care - Healthcare provided to people who cannot pay for it and who are not covered by any insurance. This includes both charity care which is not billed and the cost of services that were billed but never paid.

Underinsured - People who have some type of health insurance but not enough insurance to cover their the cost of necessary healthcare. This includes people who have very high deductibles of $1000 to $5000 per year, or insurance policies that have specific exclusions for costly services.

Underwriting - This process is the basis of insurance. It analyzes the health status and history, claims experience (cost), age and general health risks of the individual or group who is applying for insurance coverage.

Uninsured - People who do not have health insurance of any type. Over 80 percent of the uninsured are working adults and their family members.

Universal Coverage - This refers to the proposal that all people could get health insurance, regardless of the way that the system is financed.

Utilization Review - A program designed to help reduce unnecessary medical expenses by studying the appropriateness of when certain services are used and by how many patients they are used.

Utilization - How many times people use particular healthcare services during particular periods of time.

Vertical Integration - A healthcare system that includes the entire range of healthcare services from out-patient to hospital and long-term care.

Waiting Period - The amount of time a person must wait from the date he or she is accepted into a health plan (or from when he or she applies) until the insurance becomes effective and he or she can receive benefits.

Withhold - A percentage of providers' fees that managed care companies hold back from providers which is only given to them if the amount of care they provide (or that the entire plan provides) is under a budgeted amount for each quarter or the whole year.

Worker's Compensation Coverage - States require employers to provide coverage to compensate employees for work-related injuries or disabilities.

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