Glossary of Managed Care Terms
Glossary of Terms are available.
A person who
determines insurance policy rates, reserves and dividends, as well as conducts various
other statistical studies. You don't develop capitated rates, or agree to a capitated
contract without one of these working for you in some capacity.. (See
- Admissions Per 1,000
calculated by taking the total number of inpatient and/or outpatient admissions from a
specific group, e.g., employer group, HMO population at risk, for a specific period of
time (usually one year), dividing it by the average number of covered members in that
group during the same period, and multiplying the result by 1,000. This indicator can be
calculated for behavioral health or any disease in the aggregate and by modality of
treatment, e.g., inpatient, residential, and partial hospitalization, etc. Such
measures are commonly used by managed care entities to evaluate utilization management
- Adverse Selection
Attracting members as
enrollees into a health plan who are sicker than the general population (specifically,
members who are sicker than was anticipated when the budget for medical costs was
developed). Such members tend to use services at higher rates than other member
populations. Can quickly put you out of business in a capitated environment, unless you
can re-negotiate rate or figure out why such a plan enrollment pattern is occurring and
are able to do something about it. Traditionally, this has been the problem of the plan
sponsor or its insurance company, as opposed to providers within the plan. With the advent
of AHPs below, and a number of other risk-sharing strategies, however, the provider
may be significantly impacted by this phenomenon.
- AHP Accountable Health
(geographic) joint venture between practitioners and institutions (insurance companies,
HMOs, or hospitals) that would assume responsibility and risk for delivering medical care
to a specific population or group. Physicians and other providers would either own, work
for, or contract with these health plans. Note that this concept includes both payers
and providers in a linked system. These plans generally have some incentive to develop
preventive programs and to emphasize wellness. Is publicly accountable for the impact of
its services on the health status of a population. This was a major concept in Clinton
health reform package, but is being picked up in the marketplace. Florida, for instance,
uses this term explicitly in recent state law. Often referred to as community care
network, organized system of care, and
IDS (Integrated Delivery System)
or IHDS (Integrated Health Delivery System). Also known as Community
Accountable Healthcare Networks (CAHNs) or Health Purchasing Alliances.
- Alternate Delivery
provided in other than an inpatient, acute-care hospital. Examples within general health
services include skilled and intermediary nursing facilities, hospice programs, and home
health care. Alternate delivery systems are designed to provide needed services in a
more cost-effective manner. Most of the services provided by community mental health
centers fall into this category.
transparently provides application-to-application functionality, primarily through data
conversion and transmission, while eliminating the need for custom programming. Also
referred to as application integration gateway, application interface gateway,
integration engine, intelligent gateway. This type of software is key to developing
networks of information systems, making client-specific information available in real time
to all members of an IHDS.
- ASO Administrative
A relationship between
an insurance company or other management entity and a self-funded plan or group of
providers in which the insurance company or management entity performs administrative
services only, such as billing, practice management, marketing, etc., and does not
assume any risk.
- ATM Asynchronous
A type of cell
switching LAN/WAN technology which transfers information in a compressed mode at speeds of
gigabits (billions of bits) per second. Is most useful for transmission of high resolution
images and real time video images, as well as voice, data, video, and other types of
information. Viewed as the future network of choice because of its many advanced
capabilities. An operational definition of "broad bandwidth."Could be the
means to link the full continuum of care in a real time, "Hi, how are you?"
mode. Would permit specialists to treat patients hundreds of miles away; would permit
"on call" accessibility to scarce specialists, including behavioral health
- Audit of Provider
Treatment or Charges
A qualitative or
quantitative review of services rendered or proposed by a health provider. The review can
be carried out in a number of ways: a comparison of patient records and claim form
information, a patient questionnaire, a review of hospital and practitioner records, or a
pre- or post-treatment clinical examination of a patient. Some audits may involve fee
verification. Something we had better get used to being subjected to since this is
usually first type or "first generation" managed care approach.
A method for payment
to providers, common or targeted in most managed care arenas. Unlike the older
fee-for-service arrangement, in which the provider is paid per procedure, capitation
involves a prepaid amount per month to the provider per covered member (PMPM).
The provider is then responsible for providing all contracted services (such as behavioral
health) required by members of that group during that month for the fixed fee, regardless
of the amount of charges incurred. In such an arrangement, the provider is now at risk,
picking up risk that the payer or employer used to have exclusively in fee-for-service or
indemnity arrangements. Management services, too, may be capitated. In such contracts, the
contracting party is required to provide all management services (precertification,
utilization review, case management, discharge planning, etc.) required for the fixed fee,
while the costs of treatment services are paid separately. This last model relating to
management services is the way much managed behavioral healthcare is handled presently. A
Managed Care Organization (MCO) will contract with an
or a major insurer to manage a behavioral health "carve out." (See below.) The
MCO these management services for a fixed charge per member per month (PMPM)
and subcontracts with providers, usually at a discounted fee-for-service, to serve the
A payer strategy in
which a payer separates ("carves-out") a portion of the benefit, such as
behavioral health, and hires a managed behavioral health program (MBHP)
or managed care organization (MCO) to provide these benefits. This
permits the payer to create a behavioral health benefits package, get to market quicker
with such a package, and greater control of their costs. Many HMOs and insurance companies
adopt this strategy because they do not have in-house expertise related to behavioral
health or the service "carved out."
- Case Rate
Flat fee paid for a
client's treatment based on their diagnosis and/or presenting problem. For this fee the
provider covers all of the services the client requires for a specific period of time.
Also bundled rate, or Flat Fee-Per-Case. Very often used as an intervening step
prior to Capitation. In this model, the provider is accepting some significant
risk, but does have considerable flexibility in how it meets the client's needs. Keys to
success in this mode: (1) properly pricing case rate, if provider has control over it, and
(2) securing a large volume of eligible clients.
A type of data
terminal that displays only alphanumeric or text characters and character-based graphics--
:) like this. Lacks the ability to display bit-mapped graphics that are required by
GUI programs and operating systems such as Windows and X-Windows which runs
on Unix-based systems. A primitive type of hardware, one best avoided, if costs permit.
Real time access of client data and conferencing will require more sophisticated (and
- CHIN Community Health
collection of computer and telecommunication capabilities that permit multiple providers,
payers, employers, and related healthcare entities within a geographic area to share and
communicate client, clinical, and payment information. Also known as community health
management information system.
- Clinic Without Walls
Similar to an
independent practice association (See
IPA below.), this type of physician
or provider grouping represents a legal and formal entity. Under such arrangements, the
legal entity provides administrative and support services to each physician/provider and
the provider continues to practice in his/her own facility. The provided services can
include marketing, billing and collection, staffing, management, and the like. This
arrangement permits providers to present a single "face" to the managed care
marketplace with a minimum of day-to-day disruption. Key to its success, however, is its
ability to really impose or create common billing and support services. This type of
arrangement is often a transitional stage to more integrated arrangements.
- Clinical Data
That component of a
computer-based patient record (CPR) which accepts, files, and stores clinical data over
time from a variety of supplemental treatment and intervention systems for such purposes
as practice guidelines, outcomes management, and clinical research. May also be called a data
- Clinical Decision
The capability of a
data system to provide key data to physicians and other clinicians in response to
"flags" or triggers which are functions of embedded, provider-created rules. A
system that would alert case managers that a client's eligibility for a certain service is
about to be exhausted would be one example of this type of capacity. Also a key functional
requirement to support clinical or critical pathways. (See below.)
- Clinical or Critical
A "map" of
preferred treatment/intervention activities. Outlines the types of information needed to
make decisions, the timelines for applying that information, and what action needs to be
taken by whom. Provides a way to monitor care "in real time." These pathways are
developed by clinicians for specific diseases or events. Proactive providers are
working now to develop these pathways for the majority of their intervention s and
developing the software capacity to distribute and store this information...
- Closed Panel
A type of benefit plan
in which plan members are permitted to receive services only through a specific limited
number of providers. Usually not applicable to emergency care. The provider's
nightmare: the panel closes and they are on the outside looking in... The consumer's
nightmare: their favorite or long-time physician or provider is not in the panel under
their healthcare plan...
- Collections Per 1,000
calculated by taking the total collections for services received by a specific group,
e.g., employer group, or group for which payer or provider are at risk, for a specific
period of time, dividing it by the average number of covered members or lives in that
group during that period, and multiplying the result by 1,000. This indicator may be
calculated for behavioral health care in aggregate, and/or by treatment modality of
treatment, e.g., inpatient, residential, partial hospitalization, and outpatient. A
measure used to evaluate utilization management performance. Proactive providers should
be developing the capacity to measure their performance along such dimensions...
- Community Rating
The practice of some
prepayment plans whereby rates are calculated using a broad range of populations in a
community or region. Result is that net rate of premiums for plan subscribers are
reasonably uniform and not dependent on individual claim experience or the experience of
any group. This is the rating methodology required of federally qualified HMOs and of HMOs
under the laws of many states, and occasionally indemnity plans under certain
circumstances. Under such a rating system, the HMO is permitted to factor in differences
for age, sex, mix (average contract size), and industry factors; not all factors are
necessarily allowed under state laws. By averaging costs of treatment over large
populations, this method is probably fairest. Can raise rates for plans serving low use
beneficiaries such as young, healthy people. Can lower rates for plans with adverse
selection, those whose members may be older and more dependent upon receiving health care.
(See experience rating below for alternative way of arriving at rates.)
- Concurrent Review
A routine review by an
internal or external utilization reviewer, during the course of a patient's treatment, to
determine if continued treatment is medically necessary. (See below.) This
usually occurs for inpatient, residential, and partial hospitalization treatment, though
it is becoming more frequent for outpatient as well.
- Continued Stay Review
A review conducted by
an internal or external auditor to determine if the current place of service is still the
most appropriate to provide the level of care required by the client.
- Computer-based Patient
A term for the process
of replacing the traditional paper-based chart through automated electronic means;
generally includes the collection of patient-specific information from various
supplemental treatment systems, i.e., a day program and a personal care provider; its
display in graphical format; and its storage for individual and aggregate purposes. Also
called Electronic Medical Record, On-Line Medical Record, Paperless Patient Chart.
- Cost Shifting
The practice by some
providers of redistributing the (negative) difference between normal charges and amounts
received from certain payers by increasing charges made to other payers. Should really
be called "Charge Shifting." Is fairly endemic in a fee-for-service environment;
becomes nearly impossible as the environment moves to managed care. Best means to
eliminate this practice: universal coverage of all consumers.
- Days (Or Visits) Per
. An indicator
calculated by taking the total number of days (for inpatient, residential, or partial
hospitalization) or visits (for outpatient) received by a specific group for a specific
period of time (usually one year). This number is then divided by the average number of
covered members or lives in that group during the same period and multiplied by 1,000. A
measure used to evaluate utilization management performance.
- Database Management
System ( DBMS)
processing concept introduced in the late 1970s which separated data from the computer
applications that created or processed that data, thus making data more accessible and
minimizing the amount of programmer time needed to maintain computer programs. Important
concept because most CHINs or large-scale computer-based record systems will depend upon
this crucial separation between data and systems that generate or process it.
- Direct Contracting
services to members of a health plan by a group of providers contracting directly with an
employer, thereby butting out the middleman or third party insurance carrier. This can
be provider heaven, since middleman-MCO-is cut out and provider gets some portion of the
money usually made by it. Key is to price services correctly, since provider is usually at
full risk in this situation. Takes a strong IDS or AHP to pull this off..
An agreed upon rate
for service between the provider and payer that is usually less than the provider's full
fee. This may be a fixed amount per service, or a percentage discount. Providers
generally accept such contracts because they represent a means to increase their volume or
reduce their chances of losing volume.
- Disease Management
A type of product or
service now being offered by many large pharmaceutical companies to get them into broader
healthcare services. Bundles use of prescription drugs with physician and allied
professionals, linked to large databases created by the pharmaceutical companies, to treat
people with specific diseases. The claim is that this type of service provides higher
quality of care at more reasonable price than alternative, presumably more fragmented,
care. The development of such products by hugely-capitalized companies should be all
the indicator necessary to convince a provider of how the healthcare market is changing.
Competition is coming from every direction--other providers of all types, payers,
employers (who are developing their own in-house service systems), the drug companies...
- DRGs Diagnosis-Related
Payment system that
reimburses health care providers a fixed amount for all care in connection with a standard
diagnostic category. Instituted by Medicare for the payment for hospital services and now
used by many insurance companies. A form of case rate payment system.
- Drug Utilization
Either concurrent and
retrospective management of an insured population's drug utilization. The goal of such
management is to reduce the cost of drug therapies. Methods used include substitution of
generic drugs for name brands, using a formulary to limit the universe of drugs that can
be prescribed, use of co-payments for prescriptions, and encouraging the use of drugs that
will trigger rebates or discounts.
- Electronic Data
exchange of business information in a standardized, structured, machine-processable
format; electronically communicating business-to-business information, including
- Electronic Fund
The transfer of money
between businesses and individuals by use of computer-generated debit and credit entries
rather than checks or cash. How progressive behavioral health entities should bill for
Medicaid and how they should get paid by them and by Federal agencies with whom they have
- Enrolled Group
Persons with the same
employer or with membership in an organization in common, who are enrolled collectively in
a health plan. Often, there are stipulations regarding the minimum size of the group and
the minimum percentage of the group that must enroll before the coverage is available.
Same as Contract group.
Any person eligible,
as either a subscriber or a dependent, in an employee benefit plan. (Synonyms: beneficiary,
eligible individual, member, participant)
- Exclusive Provider
A type of provider
organization similar to an HMO. Such entities often use
as gatekeepers, often capitate providers, have a limited provider panel, and use an
authorization system, etc. These entities are "exclusive" because the member
must remain within the network to receive benefits. The main difference from an HMO is
that EPOs are generally regulated under insurance regulations rather than HMO
regulations. Many states refuse to permit the development of EPOs, claiming that they are
- ERISA -- Employee
Retirement Income Security Act of 1974
Also called the
Pension Reform Act, this act regulates the majority of private pension and welfare group
benefit plans in the U.S.. It sets forth requirements governing, among many areas,
participation, crediting of service, vesting, communication and disclosure, funding, and
fiduciary conduct. Key legislative battleground now, because ERISA exempts most large
self-funded plans from State regulation and, hence, from any reform activities undertaken
at state level--which is now the arena for much healthcare reform.
A term used to
describe the relationship of premium to claims for a plan, coverage, or benefits for a
stated time period. Usually expressed as a percent or ratio. See also
Loss Ratio (MLR).
- Experience Rating
premium rate for a group risk, wholly or partially, on the basis of that group's
experience or previous use of health benefit compared to premiums paid. The opposite of community
A traditional means of
billing by health providers for each service performed, with payment in specific amounts
for specific services rendered (as opposed to retainer, salary, or other contract
arrangements). Both third party payers and direct pay patients are billed in this manner. Though
much beloved by most providers, this is a dying practice...
- Fee Schedule
A listing of fees or
allowances for specified medical or health procedures, which usually represents the
maximum amounts the program or plan will pay for specified procedures. (Synonym: table
- Flat Fee-Per-Case
Flat fee paid for a
client's treatment based on their diagnosis and/or presenting problem. For this fee the
provider covers all of the services the client requires for a specific period of time. See
case rate, above. Often characterizes "second generation"
managed care systems. After the MCOs squeeze out costs by discounting fees, they often
come to this method. If provider is still standing after discount blitz, this approach can
be good for provider and clients, since it permits a lot of flexibility for provider in
meeting client needs.
- Formatting and
standards which are needed between CPR systems, as well as the CPR and other provider
systems, to ensure uniformity in how data is collected, stored, and presented. Proactive
providers are current in their knowledge of these standards and are working to make sure
that their data systems conform to these standards, where possible...
An individual, usually
a clinician, who controls the access to healthcare services for members of a specific
group. In many HMO settings, this gatekeeper is the primary care physician (PCP) or his/her staff. In other health care delivery systems (and in HMOs in
which behavioral health services are contracted out), the gatekeeper is often a case
manager of the (behavioral) health organization.
- Gross Charges Per
calculated by taking the gross charges incurred by a specific group for a specific period
of time, dividing it by the average number of covered members or lives in that group
during the same period, and multiplying the result by 1,000. This is calculated for
behavioral health care in the aggregate and by modality of treatment, e.g., inpatient,
residential, partial hospitalization, and outpatient. A measure used to evaluate
utilization management performance.
- Gross Costs Per 1,000
calculated by taking the gross costs incurred for services received by a specific group
for a specific period of time, dividing it by the average number of covered members or
lives in that group during the same period, and multiplying the result by 1,000. This is
calculated for behavioral health care in the aggregate and by modality of treatment, e.g.
inpatient, residential, partial hospitalization, and outpatient. A measure used to
evaluate utilization management performance. This is the key concept for the provider.
What matters is our cost and, in managed care, we must control this indicator and make
sure it is below our Collections per 1,000.
- Group Model
A type of
In this model, an HMO contracts with a medical group for the provision of
healthcare services. The relationship between the HMO and the medical group is generally
very close, although there are wide variations in the relative independence of the group
from the HMO. A form of closed panel health plan.
- GUI Graphical User
A software or
operating system interface that displays "real" pictures on the screen. These
pictures may represent other things--icons. GUIs permit the use of screen elements such as
windows, scrollbars, buttons, pointers, etc. Think of Windows, which you undoubtedly
have on your desktop...
- HCFA 1500
The Health Care
Finance Administration's standard form for submitting physician service claims to third
party (insurance) companies.
- Health Level Seven
An existing Formatting
and Protocol Standard, it is an interface specification that operates at the
application level for transmitting health-related data. This standard has largely been
used for transmission of data among departments within institutions for orders, clinical
observations, test results, etc. Specific parts of HL7 have applicable CHIN
use where such data needs to be transmitted between institutions and systems.
- HIPC Health Insurance
A government or
quasi-government entity established to purchase bulk health insurance for businesses and
individuals. Not too different from a wholesaler in the retail business. Its intent is to
purchase health insurance for the cooperative's members at prices and terms more favorable
than would generally be available to the participants. Was a key concept in Clinton
health plan and died with that legislation. The market is developing somewhat similar
entities, however, some even with governmental participation... See Health Plan
Purchasing Cooperatives below.
- HMO Health Maintenance
The definition of an
HMO has evolved constantly. Originally, an HMO was defined as a prepaid organization that
provided health care to voluntary enrolled members in return for a preset amount of money
on a PMPM (per member per month) basis. With the increase of self-insured
business and of other arrangements that might not involve prepayment, that definition is
no longer accurate. Presently, the definition needs to encompass two key elements: a
health plan that places at least some of the providers at risk for medical expenses, and a
health plan that utilizes PCPs (primary care physicians) as gatekeepers
(although there are some HMOs that do not). Obtaining care without a primary care
physician's referral, or obtaining care from a non-network member, usually results in no
payment for services by the payer organization.
- HPPC Health Plan
Critical piece of
Clinton plan. Now being developed in market with demise of proposed legislation. Permits
creation of purchasing agent for large groups of employers in a region. This
"purchasing agent" would shop for best price and best outcomes. Would provide
small employers some market muscle and might encourage them to provide health coverage. Because
small business was one of most vociferous opponents of federal health plan, it remains to
be seen how active it shall be in using this mechanism.
- IBNR Incurred but not
Refers to claims which
reflect services already delivered, but, for whatever reason, have not yet been
reimbursed. These are bills "in the pipeline." This is a crucial concept for
proactive providers who are beginning to explore arrangements that put them in the role of
adjudicating claims--as the result, perhaps, of operating in a sub-capitated system
(see below). Failure to account for these potential claims could lead to some very bad
decisions. Good administrative operations have fairly sophisticated mathematical models to
estimate this amount at any given time...
- IDS/I(H)DS Integrated
(Health) Delivery System
This is the
"Holy Grail" right now of healthcare providers. Linkage of all regional
services--vertical and horizontal--into one legal entity able to negotiate with the
marketplace. In its most integrated form, even includes insurance or financing function,
so that there is no division between provider and payer. See Accountable Health
Plan (AHP). Also called Integrated Medical System.
- Indemnity Health
A traditional health
insurance plan with little or no benefit management, a fee-for-service reimbursement
model, and few restrictions on provider selection. Think of a dinosaur...
A point or means of
interaction between two systems. Your keyboard is an interface, as is your monitor screen.
Common interactions between systems in the healthcare environment include patient/client
demographic, claims/accounts receivable, and clinical orders. These large volume
interactions require system-to-system interfaces. Such interactions can occur in
"real time" or in batch mode. In real time or inter-active mode, interaction
directly impacts database, you and data base are in "Hi, how are ya?" mode; in
batch mode, interactions are "batched" for later processing. In a managed care
system, real time interaction is almost always required. A case manager must know what
resources a client has expended, to make resource allocation decisions about a client.
- IPA Independent
Physician Association; Individual Practice Association; Independent Provider Association
This set of
initials is one of the most fluid now in circulation. Originally, it meant a type of
health maintenance organization allowing physicians to work out of their own offices
instead of a central facility. These HMOs typically are formed and operated by physicians
and marketed to employers. Under this arrangement, physicians still see their individual
patients, as well as patients from the HMO.
Today, this set of
initials also includes entities that contract with groups of providers, including
corporate providers such as behavioral health centers. Each provider agrees to see
patients/clients from plans who contract with the HMO of which the IPA is a part and to
serve these clients for agreed-upon fees. Such IPAs often are not associated with a single
HMO, but serve a number of them under contract. This is especially the case in specialty
services such as behavioral health. This model is another example of entities that are in
the "wholesale" as opposed to the retail business, since IPAs tend to
contract with payers who market their own plans to employers
- ISDN Integrated
Services Digital Network
protocols developed by telephone companies to permit telephone networks to carry data,
voice, video, and other source material digitally. Has large bandwidth, permitting fast
and accurate transmission of large amounts of data. Usually a fairly large one-time
cost to get each workstation ISDN-able and fairly large costs to use on an ongoing basis.
Yet, potential to transmit so much data reliably makes this mode very attractive for
entities developing CHINs or networks. As cost comes down, this may be the
preferred way to develop communication networks for providers.
- LATA Local Access
A defined region in
which a telephone and long distance carrier operates. Important concept for those CHINs
that depend upon phone lines. When creating communications networks, you try to avoid
crossing boundaries of these, if possible, since costs escalate dramatically when there is
a need to communicate over more than one LATA.
- Legacy Systems
-- both hardware and software -- which have been inherited through previous acquisition
and installation. Most often, these systems run business applications which are not
integrated with each other. Newer systems which stress open design and distributed
processing capacity are gradually replacing such systems.
- Local Exchange Carrier
The telephone company
that provides and supports the local connection to the public switched telephone network.
In many areas of the US, the LEC is one of the seven Regional Bell Operating Companies
(RBOCs) or "Baby Bells." These LECs become crucial partners for any
organization or group of organizations seeking to develop a CHIN or, more conservatively,
simply seeking to integrate their information system across many sites.
- Managed Behavioral
Health Program (MBHP)
An organization that
assumes the responsibility for managing the behavioral health benefit for an employer or
payer organization under a "carve out" arrangement. The management may range
from utilization management services to the actual provision of the services through its
own organization or provider network. Reimbursement may be on a fee-for-service, shared
risk, or full-risk basis. Also called a Managed Care Organization or an MCO, though
this is a specialty MCO.
- Managed Health Care
A system that uses
financial incentives and management controls to direct patients to providers who are
responsible for giving appropriate care in cost-effective treatment settings. Such systems
are created to control the cost of health care. Note that there is no direct reference
to quality in this definition...
- Master Patient/Member
An index or file with
a unique identifier for each patient or member that serves as a key to a patient's or
member's health record.
- Medically Necessary
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 a plan provider; and
they are the most
appropriate level or supply of service which can safely be provided.
This standard is
becoming the most important one for providers to focus upon. Note that many of the
rehabilitation services common to behavioral healthcare, especially to severely disabled
populations, may not meet such a test, or do so only by stretching their meaning...
- MLR Medical Loss Ratio
The amount of revenues
from health insurance premiums that is spent to pay for the medical services covered by
the plan. Usually referred to by a ratio, such as 0.96--which means that 96% of premiums
were spent on purchasing medical services. The goal is to keep this ratio below
1.00--preferably in the 0.80 range, since the MCO's or insurance company's profit
comes from premiums. Currently, successful HMOs do have MLRs in the
One of the following:
Organization An organized group of physicians, usually from one hospital, into an
entity able to contract with others for the provision of services, or
Medical) Services Organization An entity formed by, for example, a hospital, a group
of physicians or an independent entity, to provide business-related services such as
marketing and data collection to a grouping of providers like an IPA, PHO or CWW. This
second definition is becoming the almost exclusive usage.
- Multiple Employer
A legal trust
established by a plan sponsor that brings together a number of small, unrelated employers
for the purpose of providing group medical coverage on an insured or self-funded basis. Not
quite a Health Plan Purchasing Cooperative, but along the same lines. More market-oriented
and usually smaller in scale.
- Network Model
A health plan that
contracts with multiple physician groups or other providers to deliver health care to
members. Generally limited to large single or multi-specialty groups. Distinguished from
group model plans that contract with a single medical group, from IPAs that contract
through an intermediary, and from direct contract plans that contract with individual
physicians in the community. Many current behavioral healthcare networking efforts are
attempts to create service systems along this line, or to integrate behavioral healthcare
practices into such entities.
- Object Oriented
around an object model, as opposed to relational or flat databases. "Objects"
are anything: video clips, files, reports, etc. This model seeks to group many different
types and sources of data as objects and to create a common way to deal with them. Allows
modular development of software and better reflects the way people really think. This
is the latest generation of software. See Relational
Data Model below.
- Out-of-Area Benefits
Benefits supplied by a
plan to its subscribers or enrollees when they need services outside the geographic limits
of the HMO. These benefits usually include emergency care benefits, plus low
fee-for-service payments for nonemergency care.
- PCP Primary Care
A Primary Care
Provider such as a family practitioner, general internist, pediatrician and sometimes an
ob/gyn. Generally, a PCP supervises, coordinates, and provides medical care to members of
a plan. The PCP may initiate all referrals for specialty care. Within behavioral
health, case managers are often the PCP; role often done by outpatient therapist.
Alternatively, it is possible to conceive of a system in which behavioral health services
are integrated into the PCP practice directly...
- PCP Capitation
A reimbursement system
for health care providers of primary care services who receive a pre-payment every month.
The payment amount is based on age, sex and plan of every member assigned to that
physician for that month. Specialty capitation plans also exist, but are little used. PCPs
contract with specialists to get their service. When pay to specialist is also capitated,
this is a sub-capitation system. This model is the specialists' nightmare; makes
their income completely dependent upon the PCP. In this context, behavioral health
providers are usually viewed as specialists. Suggests a need to be very close to primary
care physicians, and another reason to seek integration with them...
- PHO Physician-Hospital
An arrangement among
physicians and hospital(s) wherein a single entity, the PHO, agrees to provide services to
insurers' subscribers for a single price. Formerly called a MeSH or medical staff-hospital
organization. Often superseded by a medical foundation, which carries out similar role,
but which is more integrated in its governance and operation. One of the most common
and active structural developments in healthcare. Just about every hospital is seeking to
develop one of these with its medical staff--or a portion of it--so that together they can
provide a single "face" to the managed care market...
- PMPM Per Member Per
to a revenue to or cost by a provider for each enrolled member each month.
- PMPY Per Member Per
Same as above, as
applies to year.
- PPO Preferred Provider
A variation of
traditional fee-for- service care arrangements. A group of physicians, dentists, and/or
hospitals and other practitioners contracts with a payer to provide employees with
services at competitive rates. The employee is not penalized or prevented from using his
or her regular physician, even if that physician does not participate in the PPO;
in such cases, however, the participant usually pays a higher fee or co-payment. PPOs
usually provide incentives for provider participation, such as a competitive rate
structure or the implication of increased volume. In addition, PPOs generally use primary
care physicians to assure that hospitalization occurs only when absolutely necessary, with
extensive concurrent utilization review.
which enable physicians and other clinicians to electronically record findings, enter
orders, and review information from the location at which care is provided. A good
example of "real time" interaction. Input from clinician directly changes
database. At the heart of "tele-medicine."
- POS Point-of-Service
A type of benefit plan
in which the insured person can choose to use a non-participating provider at a reduced
coverage level and with more out-of-pocket cost. Such POS plans combine both HMO-like
systems with indemnity systems. Often known as open-ended HMOs or PPOs, these plans permit
insured to choose providers outside the plan, yet are designed to encourage the use of
network providers. One of the most popular plans with consumers and employers.
Represents area of greatest HMO growth.
authorization required by some payers before health benefit payments will be authorized.
procedure whereby a health provider submits a treatment plan to a third party before
treatment is initiated. The third party usually reviews the treatment plan, monitoring one
or more of the following: patient's eligibility, covered service, amounts payable,
application of appropriate deductibles, copayment factors and maximums. Under some
programs, for instance, predetermination by the third party is required when covered
charges are expected to exceed a certain amount. Similar processes: pre-authorization,
precertification, pre-estimate of cost, pretreatment estimate, prior authorization.
- Prepaid Group Practice
A plan under which
contractually-specified health services are rendered by participating physicians to an
enrolled group of persons, with a fixed periodic payment in advance made by or on behalf
of each person or family.
Aggregated data in
formats that display patterns of health care services over a defined period of time.
- Profile Analysis
Review and analysis of
profiles to identify and assess patterns of health care services.
- Provider Organization
A practice, clinic,
mental health center, hospital, or other organization that is employed by managed health
programs to provide treatment services.
- PTMPY Per Thousand
Members Per Year
A common way of
reporting utilization. The most common example is hospital utilization, expressed as days
PTMPY. For outpatient-oriented providers, this indicator would reflect VISITS
- Relational Data Model
A database management
scheme that permits reports to be pulled from many different files, provided there is a
common--or related--element linking all the files. This is currently most powerful way
of developing databases. Slowly being supplanted by Object-oriented Databases noted
Relative Value Scale (RBRVS)
A Medicare weighting
system to assign units of value to each CPT code (procedure) performed by physicians and
other providers. The number of units or value for each procedure includes a portion for
physician skill, expenses associated with the procedure, and geographic area. Loved by
"process" docs such as PCPs, since adoption of this scale by Medicare increased
their pay; despised by "transaction" docs such as specialists and surgeons,
since they lost money per transaction...
- Retrospective Review
A review that is
conducted after services are provided to a patient. The review focuses on determining the
appropriateness, necessity, quality, and reasonableness of health care services provided. Becoming
seen as least desirable method; supplanted by CONCURRENT reviews...
- Risk Sharing
A method by which
medical insurance premiums are shared by plan sponsors and participants. In contrast to
traditional indemnity plans in which insurance premiums belonged solely to insurance
company that assumed all risk of using these premiums. Key to this approach is that the
premiums are ONLY payment providers receive; provides powerful incentive to be
parsimonious with care..
- Self-Funded Health
Plans that provide for
the reimbursement of medical expenses incurred by an employee, his/her spouse, or his/her
dependents by the employer or a group of employers, as opposed to an insurance company. In
such arrangements, the employer assumes all the risk, unless it can share some of it with
a managed care entity or a group of providers. Many variations of this approach are
possible. It is possible to insure some benefits and self-insure others; to self-insure or
self-fund all benefits up to a certain aggregate claim level; or to set certain individual
claim limits for self-funding and insure above that level. See self-insurance
A program for
providing group insurance with benefits financed entirely through the internal means of
the policyholder, as opposed to purchasing coverage from commercial carriers. These
plans and those directly above are exempt from ERISA and from most regulation. Thus, they
are much used by large employers.
An arrangement that
exists when an organization being paid under a capitated system contracts with other
providers on a capitated basis, sharing a portion of the original capitated premium. Can
be done under Carve Out, with the providers being paid on
a PMPM basis.
The TCP/IP (Internet)
standard high-level protocol for establishing terminal connections to a host computer over
a network. Allows users to access a remote host (computer) as if their terminal were
directly connected to it. A must for "real time" networks.
- TPA Third-Party
out-of-house professional firm providing administrative services, such as paying claims,
collecting premiums, and carrying out other administrative support services, for employee
benefit plans. (Synonyms: administrative agent, carrier, insurer, underwriter)
- Treatment Episode
The period of
treatment between admission and discharge from a modality, e.g., inpatient, residential,
partial hospitalization, and outpatient. Many healthcare statistics and profiles use
this unit as a base for comparisons.
- UB-92 Uniform Bill
Bill form used to
submit hospital insurance claims for payment by third parties. Similar to HCFA 1500, but
reserved for the inpatient component of health services.
Can be expressed in a
variety of ways:
The extent to which a
given group uses specified services in a specified period, expressed as the number of
services used per year per 1,000 or per 1,000 persons eligible for the services.
Utilization rates may be expressed in other types of ratios, e.g., per eligible persons
The extent to which
the members of a covered group use specified services over a specific period, in the
aggregate. Usually expressed as the number of services used per year. Utilization rates
are established to help in comprehensive health planning, budget review, and cost
- Value Added Networks
that combine transmission and applications on a single network, offering enhanced services
that change the data in some desirable way upon entry and/or exit from the Permit data
communications between similar or dissimilar equipment. These services--packet
assembly/disassembly, protocol/speed/code conversions--permit the communication across
different hardware and software. Thus, the value-added. When you hear about the
Information Highway, these VANs are a critical component of it. The biggest companies in
America and abroad are working to develop these value-added capacities, so that
communications can occur relatively transparently across all types of hardware and
software. CHINs and the development of any integrated information systems will be greatly
enhanced as these giants develop and deliver these services.
- Withhold Pool
The amount withheld
from a PCP's capitation payment or a specialist's payment amount to cover
expenditures greater than budgeted or expected in serving a specified enrollee group. This
is one of the most common ways to incentivize specialists--read "behavioral health
providers"--under managed care. If utilization is less than withhold pool, or if pool
relatively unused, specialists get some portion of that pool back as payment.
- Italicized font is used to signal directions,
market preference, and editorial comment about concepts. This Glossary should be used as a
"work in progress" rather than the "end of the road".