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Pohlys - Glossary of Health Care Terms
Category: Health and Medicine > Health Care
Date & country: 13/09/2007, USA
Words: 949

A cost containment feature of many group medical policies whereby the insured must contact the insurer prior to a hospitalization or surgery and receive authorization for the service. See also Preadmission Review and Prior Approval.

See Preadmission Review.

Preadmission Testing
A utilization management and cost saving technique that requires plan members who are scheduled for inpatient care to have preliminary tests, such as X-rays and laboratory tests, performed on an outpatient basis prior to admission.

Preferred Drug List
see Formulary

Amount paid to a carrier for providing coverage under a contract. A periodic payment by the insured to the health insurance company or prescription benefit manager in exchange for insurance coverage. Varies depending on health plan or drug formulary. Money paid out in advance for insurance coverage.

Prepaid Capitation
A prospectively paid, fixed, annual, quarterly, or monthly premium per person or per family that covers specified benefits. A cost containment alternative to fee-for-service usually employed by HMOs.

Prepaid Group Practice
Prepaid Group Practice Plans involve multi-specialty associations of physicians and other health professionals, who contract to provide a wide range of preventive, diagnostic and treatment services on a continuing basis for enrolled participants. A healthcare system that offered plan members a wide range of medical services through an exclusive group of providers in return for a monthly premium payment.

Prepaid Health Plan (PHP)
Entity that either contracts on a prepaid, capitated risk basis to provide services that are not risk-comprehensive services, or contracts on a non-risk basis. Additionally, some entities that meet the above definition of HMOs are treated as PHPs through special statutory exemptions.

A method of paying for the cost of health care services in advance of their use. A method providing in advance for the cost of predetermined benefits for a population group, through regular periodic payments in the form of premiums, dues, or contributions, including those contributions that are made to a Health and Welfare Fund by employers on behalf of their employees.

Prescription Benefit Plan (PBP)
see Prescription Drug Plan below.

Prescription Drug Plan (PDP)
These plans became more commonplace with the implementation of Medicare Part D in 2006. Everyone with Medicare, regardless of income, health status, or prescription drugs used, can get some sort of prescription drug coverage. These stand-alone plans add prescription drug coverage to the Original Medicare Plan and to some Medicare Cost Plans and Medicare Private Fee-for-Service Plans. Managed by commercial and private entities, these PDPs are a type of managed care. When a people join a Medicare …

Prevailing Charge, Prevailing Fee
One of the factors determining a physician's payment for a service under Medicare, or other plan, set at a percentile of customary charges of all physicians in the locality.

The number of cases of disease, infected persons, or persons with some other attribute, present at a particular time and in relation to the size of the population from which drawn. It can be a measurement of morbidity at a moment in time, e.g., the number of cases of hemophilia in the country as of the first of the year.

Pricer, or Repricer
A person, an organization, or a software package that reviews procedures, diagnoses, fee schedules, and other data and determines the eligible amount for a given health care service or supply. Additional criteria can then be applied to determine the actual allowance, or payment, amount.

Primary Care
Basic or general health care usually rendered by general practitioners, family practitioners, internists, obstetricians and pediatricians -- who are often referred to as primary care practitioners or PCPs. Professional and related services administered by an internist, family practitioner, obstetrician-gynecologist or pediatrician in an ambulatory setting, with referral to secondary care specialists, as necessary.

Primary Care Case Management (PCCM)
This is a Freedom of Choice Waiver program, under the authority of section 1915(b) of the Social Security Act. States contract directly with primary care providers who agree to be responsible for the provision and/or coordination of medical services to Medicaid recipients under their care. Currently, most PCCM programs pay the primary care physician a monthly case management fee in addition to receiving fee-for-services payment. See also Primary Care Physician.

Primary Care Doctor
See Primary Care Physician.

Primary Care Network (PCN)
A group of primary care physicians who share the risk of providing care to members of a given health plan. See also Primary Care Physician.

Primary Care Physician (PCP)
A 'generalist' such as a family practitioner, pediatrician, internist, or obstetrician. In a managed care organization, a primary care physician is accountable for the total health services of enrollees including referrals, procedures and hospitalization. Also see Primary Care Provider.

Primary Care Provider (PCP)
The provider that serves as the initial interface between the member and the medical care system. The PCP is usually a physician, selected by the member upon enrollment, who is trained in one of the primary care specialties who treats and is responsible for coordinating the treatment of members assigned to his/her plan. See also Gatekeeper.

Primary Coverage
Plan that pays its expenses without consideration of other plans, under coordination of benefits rules.

Primary Physician Capitation
The amount paid to each physician monthly for services based on the age, sex and number of the Members selecting that physician.

Primary Source Verification
A process through which an organization validates credentialing information from the organization that originally conferred or issued the credentialing element to the practitioner. Also see Credentialing.

Principal Diagnosis
The medical condition that is ultimately determined to have caused a patient's admission to the hospital. The principal diagnosis is used to assign every patient to a diagnosis related group. This diagnosis may differ from the admitting and major diagnoses.

Prior Approval
A formal process for obtaining approval from a health insurer before a specific treatment, procedure, service or supply has been provided. Completing this process ensures that the patient receives full benefits for the specified services. Health insurers may require prior approval for specific services or products, including home health assistance, durable medical equipment, surgery, or skilled nursing facility stays. While this is a process of obtaining approval from the insurer that the insure…

For purposes of the HIPAA Privacy Rule, privacy means an individual's interest in limiting who has access to personal health care information. See also HIPAA Privacy Rule.

Privacy Board
A board of members authorized by the HIPAA Privacy Rule to approve a waiver of authorization for use and/or disclosure of identifiable health information. For research purposes, the Institutional Review Board may also function as the Privacy Board. See also HIPAA Privacy Rule.

Privacy Notice
Institution-wide notice describing the practices of the covered entity regarding protected health information. Health care providers and other covered entities must give the notice to patients and research subjects and should obtain signed acknowledgements of receipt. Internal and external uses of protected health information are explained. It is the responsibility of the researcher to provide a copy of the Privacy Notice to any subject who has not already received one. If the researcher does pr…

See Peer Review Organization or Professional Review Organization.

Aggregated data in formats that display patterns of health care services over a defined period of time.

Profile Analysis or Profiling
Review and analysis of profiles to identify and assess patterns of health care services. Expressing a pattern of practice as a rate some measure of utilization (of costs or services) or outcome (as functional status, morbidity, or mortality) aggregated over time for a defined population of patients. This is used to compare with other practice patterns. May be used for physician practices, health plans, or geographic areas.

Prospective Payment System (PPS)
A payment method that establishes rates, prices or budgets before services are rendered and costs are incurred. Providers retain or absorb at least a portion of the difference between established revenues and actual costs. (1) The Medicare system used to pay hospitals for inpatient hospital services; based on the DRG classification system. (2) Medicare's acute care hospital payment method for inpatient care. Prospective per-case payment rates are set at a level intended to cover operating costs …

Prospective Review
The review and possible authorization of proposed treatment plans for a patient before the treatment is implemented.

Protected Health Information
Under HIPAA, this refers to individually identifiable health information transmitted or maintained in any form.

Usually refers to a hospital or doctor who 'provides' care. A health plan, managed care company or insurance carrier is not a healthcare provider. Those entities are called payers. The lines are blurred sometimes, however, when providers create or manage health plans. At that point, a provider is also a payer. A payer can be provider if the payer owns or manages providers, as with some staff model HMOs.

Provider Excess
Specific or aggregate stop loss coverage extended to a provider instead of a payer or employer.

Provider Manual
A document that contains information concerning a provider's rights and responsibilities as part of a network.

Provider Profiling
The collection and analysis of information about the practice patterns of individual providers, physicians and hospitals.

See Professional Standards Review.

Psychotherapy Notes
These include notes recorded by the health care provider who is a mental health professional during a counseling session, either in a private session or in a group. These notes are separate from documentation placed in the medical chart and do not include prescriptions. Specific patient authorization is required for use and disclosure of psychotherapy notes.

See Per Thousand Members Per Year.

Public Health Authority
A federal, state, local or tribal person or organization that is required to conduct public health activities.

This entity not only pays the premium, but also controls the premium dollar before paying it to the provider. Included in the category of purchasers or payers are patients, businesses and managed care organizations. While patients and businesses function as ultimate purchasers, managed care organizations and insurance companies serve a processing or payer function.

Purchasing Alliances
Locally based, privately operated organizations that offer affordable group health coverage to businesses with fewer than 100 employees. Also known as purchasing pools, health insurance purchasing co-ops, employer purchasing coalitions, or purchasing coalitions.

Pure Community Rating
See standard community rating.

QA, QI, or QM
See Quality Assurance, Quality Improvement, or Quality Management.

See Quality Assurance Reform Initiative.

See Quality Improvement System for Managed Care.

Qualified Beneficiary
Generally, qualified beneficiaries include covered employees or enrollees, their spouses and their dependent children who are covered under a group health plan. In certain cases, retired employees, their spouses and dependent children may be qualified beneficiaries.

Quality is, according to the Institute of Medicine (IOM), the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Quality can be defined as a measure of the degree to which delivered health services meet established professional standards and judgments of value to consumers. Quality may also be seen as the degree to which actions taken or not taken maximize the probability of be…

Quality Assurance (QA)
Activities and programs intended to assure the quality of care in a defined medical setting. Such programs include peer or utilization review components to identify and remedy deficiencies in quality. The program must have a mechanism for assessing its effectiveness and may measure care against pre-established standards. Also called quality improvement. A formal methodology and set of activities designed to access the quality of services provided. Quality assurance includes formal review of care…

Quality Improvement (QI)
Also called performance improvement (PI), QI is a management technique to assess and improve internal operations. QI focuses on organizational systems rather than individual performance and seeks to continuously improve quality rather than reacting when certain baseline statistical thresholds are crossed. The process involves setting goals, implementing systematic changes, measuring outcomes, and making subsequent appropriate improvements. QI implies that concurrent systems are used to continuou…

Quality Management (QM)
Used interchangeably with Quality Assurance (QA), Quality Management usually involves an internal review process that audits the quality of care delivered and implements corrective actions to remedy any deficiencies identified in the quality of direct patient care, administrative services or support services. The process can employ peer review, outcomes assessment, and utilization management techniques to assess and improve the quality of care. The level of care may be measured against preestabl…

Quality Management Committee
The MCO committee that oversees the organization's quality assessment and improvement activities in both clinical and nonclinical areas.

Rate Band
The allowable variation in insurance premiums as defined in state regulations. Acceptable variation may be expressed as a ratio from highest to lowest (e.g., 3:1) or as a percent from the community rate (e.g., +/-20%). Usually based on risk factors such as age, gender, occupation or residence.

Rate Review
Review by a government or private agency of a hospital's budget and financial data, performed for the purpose of determining the reasonableness of the hospital rates and evaluating proposed rate increases.

Rate Spread
The difference between the highest and lowest rates that a health plan charges small groups. The National Association of Insurance Commissioners' Small Group Model Act limits a plan's allowable rate spread to 2 to 1.

The process of calculating the appropriate premium to charge purchasers, given the degree of risk represented by the individual or group, the expected costs to deliver medical services, and the expected marketability, profitability and competitiveness of the MCO's plan.

See Resource-Based Relative Value Scale.

Real Value
Measurement of an economic amount corrected for change in price over time (inflation), thus expressing a value in terms of constant prices. A common term in economics.

A reduction in the price of a particular pharmaceutical obtained by a PBM from the pharmaceutical manufacturer.

A situation in which the state insurance commissioner, acting for a state court, takes control of and administers the assets and liabilities of an MCO.

An MCO's periodic review of the qualifications of a current network provider to verify that the provider still meets the standards for participation in the network. See Credentialing.

The process of sending a patient from one practitioner to another for health care services. Health Plans may require that designated primary care providers authorize a referral for coverage of specialty services. Normally, this type of referral means a written order from the enrollee's primary care doctor for the enrollee to see a specialist or get certain services. In many HMOs or Health Plans, an enrollee must get a referral before the enrollee can get care from anyone except the primary care …

Referral Pool
An amount set aside to pay for non-capitated services provided by a PCP, services provided by a referral specialist and/or emergency services.

Referral Services
Medical Services arranged for by the physician and provided outside the physician's office other than Hospital Services.

The correction of relative values in Medicare's relative value scale that was initially set incorrectly.

Registered Nurses (RN)
Registered nurses are responsible for carrying out the physician's instructions. They supervise practical nurses and other auxiliary personnel who perform routine care and treatment of patients. Registered nurses provide nursing care to patients or perform specialized duties in a variety of settings from hospital and clinics to schools and public health departments. A license to practice nursing is required in all states. For licensure as a registered nurse (R.N.), an applicant must have graduat…

Rehabilitative services are normally ordered by a doctor to help a patient recover from an illness or injury. These services are given by nurses and physical, occupational, and speech therapists. Examples include working with a physical therapist to help a patient walk after surgery or working with an occupational therapist to help a patient learn how to get dressed after a stroke.

An insurance arrangement whereby the MCO or provider is reimbursed by a third party for costs exceeding a pre-set limit, usually an annual maximum. A method of limiting the risk that a provider or managed care organization assumes by purchasing insurance that becomes effective after set amount of health care services have been provided. This insurance is intended to protect a provider from the extraordinary health care costs that just a few beneficiaries with extremely extensive health care need…

Relative Value Scale (RVS)
An index assigning various weights to various medical services. Each weight represents a relative amount to be paid for each service. The RVS used in the development of the Medicare Fee Schedule for physicians consists of three cost components: physician work, practice expense, and malpractice expense.

Relative Value Unit (RVU)
The unit of measure for a relative value scale. RVUs must be multiplied by a dollar conversion factor to become payment amounts. This is a common term in economics. RVUs are often used in physician practice management to compare performance of doctors within a group.

Continuance of coverage for a new policy term.

Renewal Underwriting
The process by which an underwriter reviews each year all the selection factors that were considered when the contract was issued, then compares the group's actual utilization rates to those the MCO predicted to determine the group's new renewal rate. Also see Premium.

Report Card
An accounting of the quality of services, compared among providers over time. The report card measures and compares providers on predetermined, measurable quality and other outcome indicators. Hospitals and insurance companies may publish their report card results if favorable. Generally, consumers use report cards to choose a health plan or provider, while policy makers may use report card results to determine overall program effectiveness, efficiency, and financial stability.

Repricer, Re-Pricer, or Pricer
A person, an organization, or a software package that reviews procedures, diagnoses, fee schedules, and other data and determines the eligible amount for a given health care service or supply. Additional criteria can then be applied to determine the actual allowance, or payment, amount.

When used by HIPAA, this term refers to a systematic investigation, including research development, testing and evaluation, designed to develop or contribute to generalizable knowledge.

Monies earmarked by health plans to cover anticipated claims and operating expenses A fiscal method of withholding a certain percentage of premium to provide a fund for committed but undelivered health care and such uncertainties as: longer hospital utilization levels than expected, over-utilization of referrals, accidental catastrophes and the like. The fiscal method of providing a fund for committed but undelivered health services or other financial liabilities. A percentage of the premiums su…

Retiree, for the RDS Program
An individual who is provided coverage under a group health plan after that individual has retired.

Retrospective Rating (Retro)
Insurance coverage that provides for premium determination at the end of the coverage period, subject to a minimum and maximum based upon actual experience.

Retrospective Review Process
System for analyzing medical necessity and appropriateness of services rendered. 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. When conducted by an MCO, this occurs after treatment is completed in order to authorize payment and medical necessity and appropriateness of care.…

Revenue Share
The proportion of a practice's total revenue devoted to a particular type of expense. For example, the practice expense revenue share is that proportion of revenue used to pay for practice expense.

See Rural Health Clinic.

See Regional Home Health Intermediary.

The chance or possibility of loss. For example, physicians may be held at risk if hospitalization rates exceed agreed upon thresholds. Potential financial liability, particularly with respect to who or what is legally responsible for that liability. With insurance, the patient and insurance company share risk but the company's risk is limited by the policy's dollar limitations. In HMO's, the patient is at risk only for copayments and the cost of non-covered services. The HMO, however, with its i…

Risk Adjuster
A measure used to adjust payments made to carriers or payers on behalf of a group of enrollees in order to compensate for spending, that is expected to be lower or higher than average, based on the health status or demographic characteristics of the enrollees. An actuarial result of analysis.

Risk Adjustment
The way that payments to health plans are changed to take into account a person's health status. A system of adjusting rates paid to managed care providers to account for the differences in beneficiary demographics, such as age, gender, race, ethnicity. Medical condition, geographic location, at-risk population (i.e. homeless), etc. A process by which premium dollars are shifted from a plan with relatively healthy enrollees to another with sicker members. It is intended to minimize any financial…

Risk Assessment
Anticipating the cost of providing health care to groups of enrollees. Actuarial assessments examine utilization history, demographics, health characteristics, environmental attributes, and other sociological, economic and market characteristics. Risk assessment can also include, less commonly, the identification of etiology of health problems.

Risk Contract
A risk contract is broadly any contract that results in any party assuming insurance or business risk. Normally this means, in health care, that if the employer, health plan or provider assumes risk, it is agreeing to cover the expense of increased utilization beyond the projected costs or payment provided. Normally risk is assumed by the health plan or insurance carrier but can be carried by the provider in capitated arrangements or by the employer in self-insured arrangements. A contract payme…

Risk Corridor
A financial arrangement between a payer of health care services, such as a state Medicaid agency, and a provider, such as a managed care organization that spreads the risk for providing health care services. Risk corridors protect the provider from excessive care costs for individual beneficiaries by instituting stop-loss protections and they protect the payer by limiting the profits that the provider may earn.

Risk Factor
Any characteristic, behavior, or condition which, based on history, utilization, or theory, is thought to directly influence susceptibility to a specific health problem, increase costs or result in increased utilization.

Risk Load
In underwriting, a factor that is multiplied into the rate to offset some adverse parameter of the group.

Risk Measure
The expected per capita costs of health care services to a defined group in a specific future period.

Risk Pool
A pool of money that is at risk for being used for defined expenses. Commonly, if the pool money that is put at risk is not expended by the end of the year, some or all of it is returned to those managing the risk. Two different definitions are in use: 1) A pool of funds set aside as reserves to be used for defined expenses. Under capitation, if all of the risk pool is not used by the end of the contract year, it is usually disseminated to participating providers, and, 2) Legislatively created p…

Risk Selection
Occurrence when a disproportionate share of high or low users of care joins a health plan. See Adverse Selection.

Risk Sharing
The distribution of financial risk among parties furnishing a service. For example, if a hospital and a group of physicians from a corporation provide health care at a fixed price, a risk-sharing arrangement would entail both the hospital and the group being held liable if expenses exceed revenues. Methods 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 th…

Risk-Adjusted Capitation
An actuarial term, this refers to methodology of payment to providers which reflects fixed payment amounts per member per month and then is adjusted further to take into account the lower or higher costs of providing care to individuals or groups of individuals, based on health status or characteristics.

Risk-Bearing Entity
An organization that assumes financial responsibility for the provision of a defined set of benefits by accepting prepayment for some or all of the cost of care. A risk-bearing entity may be an insurer, a health plan or self-funded employer; or a PHO or other form of PSN. Health plans (except under employer self-insured programs) usually are risk bearing. Providers and provider organizations, if capitated, can also be risk bearing. There are 2 types of risk: insurance risk and business risk, eac…

Rural Health Clinics Act
Establishes a reimbursement mechanism to support the provision of primary care services in rural areas. Public Law 95-210 was enacted in 1977 and authorizes the expanded use of physician assistants, nurse practitioners and certified nurse practitioners; extends Medicare and Medicaid reimbursement to designated clinics; and raises Medicaid reimbursement levels to those set by Medicare.

See Relative Value Scale or RBRVS.