Glossary of Terms

Ambulatory Care
Health care services that do not require hospitalization of a patient, such as those delivered at a physician’s office, clinic, medical center or outpatient facility.
 
Authorization
An authorization is the approval of care, such as for a hospitalization. Authorizations can be granted by health plans, hospitals or medical groups, depending on who is financially responsible for the health services to be rendered.
 
Clinical Trials
Scientifically controlled research studies involving people. Such studies are used to determine the effectiveness of a new treatment or pharmaceutical, or to compare standard medications or procedures with others that may be equal or better.
 
Coinsurance
Portion of covered health care costs for which the covered person has a financial responsibility, usually according to a fixed percentage. Often coinsurance applies after meeting a deductible requirement.
 
Coordination of Benefits
Provision that applies when a person is covered by more than one insurance plan. Coordination of benefits requires that payment of benefits be coordinated by all plans in order to eliminate over-insurance or duplication of benefits.
 
Co-Payment
Cost-sharing arrangement in which the insured person pays a specified share of the charge for a specified service, such as $10 for an office visit. The insured person is usually responsible for payment at the time the health care is rendered.
 
Deductible
Amount of eligible expense an insured person must pay from his/her own pocket before the insurance company will pay for eligible benefits.
 
HMO (Health Maintenance Organization)
A healthcare service plan that requires its subscribers or members, except in a medical emergency, to use the services of designated physicians, hospitals or other providers of medical care.
 
IPA (Independent Practice Association)
A group of physicians that contracts for services with insurance plans.
 
Knox-Keene Act
This legislation provides protection to patients through a variety of requirements imposed on HMOs in California. Requirements cover services and characteristics such as marketing, financial, administrative, access and quality assurance.
 
MediCal
California’s version of Medicaid, this federal health insurance program is administered and operated individually by participating state and territorial governments. It provides medical benefits to eligible low-income and disabled persons needing health care. The federal and state governments share the program costs.
 
MediCal Managed Care
MediCal benefits for which the eligible person must choose a Primary Care Physician who manages all care provided to the eligible person via treatment or referrals for treatment by specialists. Patients who do not follow the prescribed guidelines are responsible for all charges associated with that episode of care and are not covered by the state MediCal program.
 
Medicare
Federally administered health insurance program that covers the cost of hospitalization, medical care and some related services for eligible persons. Medicare has two parts: PART “A” covers inpatient services, nursing home care, home health care, and hospice care; PART “B” covers outpatient services, physician services, medical equipment and supplies. Medicare covers those individuals 65 years or older and younger disabled people and dialysis patients.
 
Medi-Medi
Refers to those individuals who are dually eligible for Medicare and MediCal programs.
 
Non-Covered Services
Those services not covered by benefits policy.
 
Out-of-Network
Any insured person who receives care from a provider not holding a contract with the insured person’s insurance company is receiving services out-of-network. When a patient receives care out-of-network, he or she may be financially responsible for the care provided to them.
 
PCP (Primary Care Physician)
Physician whose practice is devoted to internal medicine, family/general practice or pediatrics.
 
POS (Point of Service)
Option offered by a health plan allowing the covered person to choose to receive a service from a participating or non-participating provider, with different benefit levels associated with the use of each.
 
PPO (Preferred Provider Organization)
An arrangement whereby a third-party payer contracts with a group of medical care providers who furnish services at lower-than-usual fees and in return guarantees a certain volume of patients.
 
Payor or Payer
A health plan, medical group, hospital, employer, individual or other entity that is financially responsible for payment of health care services.
 
Premium
The amount paid to an insurance carrier or health plan for providing insurance coverage under a contract.
 
Provider
In this document, provider refers to physician, hospital, nurse, pharmacy or any individual or group of individuals that provides a health care service.
 
*Most of the terms and definitions herein were taken from the Aventis Managed Healthcare: A Reference Guide.