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Health Insurance - Glossary of Terms

Allowable Fee, or Usual and Customary Reimbursement (UCR): The maximum amount a health insurer will pay for a service or procedure.

Assignment: The legal transfer of one person"s interest in an insurance policy to another person.

Balance Billing: A billing practice in which you are billed for the difference between what your insurer pays and the fee that the provider normally charges. Balance billing is prohibited under most HMO contracts in New York, but may arise when you use services of out-of-network providers under a PPO or POS arrangement.

Coinsurance: Some insurance coverage requires you to pay a percentage of the cost of covered medical services, usually 20-30 percent. For example, you pay 20 percent of the cost, and your insurance pays 80 percent of the cost. Your portion of the cost is the coinsurance.

Commercial Insurers: Health insurance can also be written by life insurers, property/casualty insurers and other types of insurers. These insurers offer products similar to those provided by nonprofit indemnity insurers. (See non-profit indemnity insurers.) Policyholders are subject to deductibles and significant out-of-pocket costs unless they use a preferred provider network.

Complaint: A complaint occurs whenever a consumer or provider complains to the State of New York about a health insurer or HMO.

Copayment: A flat fee for specified medical services required by some insurers. For example, you pay a $10 copayment for a doctor visit or a $50 copayment for a hospital stay.

Deductible: The amount you must pay each year for your medical expenses before your insurance policy starts paying. Deductibles are common in fee-for-service coverage and PPOs.

Exclusive Provider Organization (EPO) Plan: A type of coverage in which the insurer contracts with doctors, hospitals and other types of providers to form a network of providers. Certain services may require pre-authorization or a referral may be needed to see a specialist. In an EPO, members must use the providers who belong to the EPO network or their expenses will not be covered.

External Appeal/External Review: You may request an independent external review when you are denied health care services on the basis that those services are experimental, investigational, or not medically necessary. The review is conducted by an external review organization that is not affiliated with your insurer, your doctor, or your family.

Fee-for-Service (FFS): Also known as indemnity insurance, FFS is a type of health coverage that typically allows you to go to any doctor or provider. Your insurance company will reimburse your provider for each covered service provided. Deductibles and coinsurance usually apply in FFS coverage.

First-level Internal Appeal Process: Once you have received a decision on your utilization review appeal, you have completed the first-level internal appeal process. If the decision is not in your favor, you are entitled to request an external review. If you and your insurer waive the first-level review, you are then permitted to proceed directly to an external review. (See utilization review appeal and external review.)

Grievance: A grievance is a complaint to an HMO by a member or provider about an action or decision. Decisions regarding the medical necessity of a service are not considered grievances. They are handled as utilization review appeals. (See utilization review appeal.)

Health Maintenance Organization (HMO): The HMO arranges for, or contracts with, a variety of health care providers to deliver a range of services to consumers who make up its membership. All HMOs employ managed care strategies that emphasize prevention, detection and treatment of illness. HMOs use primary care physicians as the coordinator of patient care needs. An HMO may offer consumers an HMO plan or POS plan. (See health maintenance organization plan and point of service plan.)

Health Maintenance Organization (HMO) Plan: A type of coverage that provides comprehensive health services to members in return for a monthly premium and copayment. In an HMO plan, members may choose a primary care physician (PCP) who coordinates each assigned member’s care. The PCP refers patients to specialists and provider services as needed. Although many HMOs require their members go to the doctors and other providers in the HMO provider network, some HMO plans offer the option to go out-of-network (for example in a POS plan). HMO plans often require members receive a referral from their PCP before seeing a specialist. (See primary care physician and point of service plan.)

Non-profit Indemnity Insurers: Non-profit indemnity insurers employ managed care strategies but offer a more traditional approach to coverage than HMOs. Non-profit indemnity insurers reimburse policyholders, physicians and hospitals. Non-profit policyholders are subject to deductibles and out-of-pocket costs that are considerably higher than those required by HMOs unless they use a preferred provider network.

Out-of-pocket maximum: The amount of co-insurance a member must pay before out-of-network claims will be paid at 100% of the allowed amount.

Participating Provider: A health care provider (e.g., doctor, psychologist, hospital) who agrees to accept the terms, conditions and allowable payments of an insurer.

Point of Service (POS) Plan: A type of managed care coverage that allows members to choose to receive services either from participating HMO providers or from providers outside the HMO’s network. Members pay less for in-network care. For out-of-network care, members usually pay a deductible and coinsurance.

Preferred Provider Organization (PPO): A type of managed care coverage based on a network of doctors and hospitals that provides care to an enrolled population at a prearranged discounted rate. PPO members usually pay more when they receive care outside the PPO network.

Primary Care Physician (PCP): An internist, pediatrician, family physician, general practitioner, or in some instances an obstetrician/gynecologist. If you are enrolled in an HMO, you usually must choose a PCP from a list of participating providers. The PCP coordinates your care and makes referrals to specialists as needed.

Prompt Pay Complaint: A complaint from a consumer or provider to the New York State Department of Financial Services about the late payment of claims.

Referral: Authorization from your primary care physician or health insurer to see a specialist or receive a special test or procedure. HMOs often require that you obtain a referral for most specialty care. It is important to know what your health insurer’s rules and procedures are for referrals.

Schedule of Allowances: The set dollar amount the insurance policy covers for each procedure.

Self-Insured Health Plan: In this type of plan, an employer will pay for employees’ health care costs out of a fund that the company has set aside for medical expenses. Employers may contract with an outside organization, often an insurance company, to administer the plan. Under a federal statute known as ERISA, the U.S. Department of Labor has authority over self-insured employer health plans. Therefore, New York’s consumer protection and insurance laws do not apply.

Specialist: A doctor who has been specially trained in and practices a specific type of medicine other than primary care (e.g., cardiologists, dermatologists, gastroenterologists). If you are enrolled in an HMO, you usually will need a referral from your primary care physician to see a specialist.

Utilization Review (UR) Appeal: A UR Appeal occurs when a consumer asks an insurer to reconsider its refusal to pay for a medical service the insurer considers experimental, investigational, or not medically necessary. (See first-level internal appeal process.)

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