The following glossary of life and health insurance terms is provided to help you understand the meaning of this specialized terminology. These are terms that describe the various products, contracted providers, organizations, and specialized services that relate to health care. These are general definitions. Some plans or carriers may define these terms differently or in a special way for special purposes. Always consult your Evidence of Coverage booklet or similar document.


Activities of Daily Living (ADLs): The basic activities and functions performed on a daily basis that are usually done without assistance. The six ADLs are: Eating, Dressing, Bathing, Toileting, Transferring, and Continence

 Acupuncture: An alternative health procedure based on ancient Chinese methods, gaining acceptance in Western hospitals, involving insertion of thin needles at specific pressure points in the body where the flow of energy is thought to be blocked meridians.

 Adjudication: Determination of the amount of payment for a claim.

 Administrative Costs: The costs assumed by an insurance company or managed care plan for administrative services such as claims processing, billing and overhead costs.

 Administrative Services Only (ASO): An arrangement under which an insurance carrier or an independent organization will, for a fee, handle the administration of claims, benefits, and other administrative functions for a self-insured group but does not assume any financial risk for the payment of benefits.

Adverse Selection: Occurs when consumers at comparatively higher risk enroll in risk pools comprised of a mix of high-risk and low-risk enrollees. To the high-risk consumer, enrolling in a plan comprised of a mix of enrollees is attractive because the average premiums will normally be lower than if they were to purchase insurance individually.

 Agent: An individual licensed by the State who sells insurance or coverage and provides service to the policyholder on behalf of the insurer or managed care plan. Could be a sole-proprietor, a member of a large firm, or an employee of the carrier and is paid a fee/commission by the carrier.

 Allergy Treatment: Treatment of allergy, which may involve allergy testing and physician's services.

 Allowable Charge: The maximum fee that a third party will reimburse a provider for a given service. An allowable charge may not be the same amount as either a reasonable or customary charge.

 Ambulatory Care or Services: Health services that are provided on an outpatient basis, in contrast to services provided in the home or to persons who are inpatients in a hospital.

Ambulatory Surgery: Surgical procedures performed that do not require an overnight hospital stay.

 Ancillary Services: Hospital services other than room and board, and professional services. They may include X-ray, drug, laboratory, or other services.

Annuity: Any investment product that pays on a scheduled basis over a set amount of time, in particular, a retirement investment that offers tax deferral on growth, but not on contributions.

 Appeal(s): An individual's dispute over the denial of a claim payment or the denial of provision of a health care service, or a coverage denial based on a contractual exclusion or limitation.

Authorization: The approval of care, for hospitalization, outpatient procedure, certain specialty, etc., by a managed care or insurance company for its member, subscriber, or insured.



 Beneficiary: A person who is eligible to receive insurance benefits.

 Benefit: Payments provided for covered services under the terms of the policy. The benefits may be paid to the insured, or on his behalf, to others.

 Benefit Agreement: The written agreement between an insurance company and a group or individual under which the carrier covers health care expenses, provides or administers health care benefits, or otherwise pays or arranges for the payment of benefits for health care services.

 Benefit Consultant: An individual or organization hired by a group plan holder to review, analyze, and make recommendations on benefit strategies, including benefit plan design, carrier selection, pricing, etc. An insurance professional who provides information, advice, and counseling for their clients.

Benefit Period: The maximum length of time for which benefits will be paid.

Birthing Center: A facility that allows mothers to give birth in a home-like setting.

 BlueCard Program: A program that links participating health care providers and the independent Blue Cross and Blue Shield Plans across the country and abroad with a single electronic process for professional, outpatient, and inpatient claims processing and reimbursement. The program allows members obtaining health care services while out of town to receive the same benefits of their Blue Cross plan and access out-of-town providers' savings. In most cases, providers bill claims directly to their local Plans without requiring up-front payment from the member.

 Board Certified: A term used to describe a physician who has passed an examination given by a medical specialty board and who has been certified as a specialist in that medical area.

 Brand Name Drug(s): Those drugs that are marketed under a specific trade name by a pharmaceutical manufacturer. In most cases, these drugs are still under patent protection, meaning the manufacturer is the sole source for the product.



 Calendar Year Deductible: The dollar amount for covered services that must be paid during the calendar year (January 1 – December 31) by members before the insurance company pays any benefits.

 Case Management: A utilization management program that assists the patient in determining the most appropriate and cost effective treatment plan. It is used for patients who have prolonged, expensive, or chronic conditions, helps determine the treatment location (hospital, other institution, or home) and authorizes payment for such care if it is not covered under the patient's benefit agreement. The purpose of case management is to provide optimum patient care in the most cost effective manner.

Certificate of Creditable Coverage: A document provided by your health plan that lets you prove you had coverage under that plan. Certificates of creditable coverage will usually be provided automatically when you leave a health plan. You can obtain certificates at other times as well. See also Creditable Coverage.

Certification: See Pre-Certification.

 Chemotherapy: Treatment of malignant disease by chemical or biological antineoplastic agents.

Chiropractic (Care): An alternative medicine therapy administered by a provider such as a chiropractor, osteopath, or physical therapist. The provider adjusts the spine and joints to treat pain and improve general health.

Claim: A request for payment for benefits received or services rendered. A billing record as generated and submitted by a provider or subscriber using paper or electronic media.

Coinsurance: An arrangement under which the member pays a fixed percentage of the cost of medical care after the deductible has been paid. For example, an insurance plan might pay 80% of the allowable charge, with the member responsible for the remaining 20%, which is then referred to as the coinsurance amount.

Coinsurance Maximum: The total amount of coinsurance that an individual pays each year before the carrier pays 100% of allowable charges for covered services. Coinsurance amounts differ with each contract.

 Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA): The federal law that requires employers with more than 20 employees to extend group health insurance coverage for up to 36 months after a qualifying event (e.g. termination of employment, reduction in hours, divorce). The law contains detail provisions relating, among other things, to an employer's obligation to provide notice of these rights and the circumstances under which such continuation may end. Some states, such as California, have similar laws applicable to employers with more than 20 employees.

 Continuation: See COBRA.

Continuous Coverage: Generally, health insurance coverage that is not interrupted by a break of 63 or more consecutive days. However, when you are joining a fully insured small group health plan, coverage counts as continuous if it is not interrupted by a break of 90 days or more. Employer waiting periods and HMO affiliation periods do not count as gaps in health insurance coverage for the purpose of determining if coverage is continuous

Conversion: Your right, when leaving a fully insured group health plan to convert your policy to individual health insurance. There are rules about what conversion policies must cover and what premiums can be charged

 Coordination of Benefits: The anti-duplication provision to limit benefits for multiple group health insurance in a particular case to 100% of the covered charges and to designate the order in which the multiple carriers are to pay benefits. Under a COB provision, one Plan is determined to be primary and its benefits are applied to the claim. The unpaid balance is usually paid by the secondary Plan to the limit of its liability.

 Co-payment or Co-pay: A type of member cost sharing that requires a flat amount per unit of service or unit of time. This is often a percentage of the charges but may also be a dollar amount for specified services.

 Cost Containment: A set of programs to reduce use of unnecessary or inappropriate services and to encourage provision of necessary and appropriate services in a cost-effective manner.

 Covered Medical Expense: Those expenses payable according to the terms of the member contract. The charges for these services are still subject to any cost sharing components or limits included in the contract, such as deductibles, coinsurance, co-payments, and maximums.

 Covered Services: Hospital, medical, and other health care expenses incurred by the covered person that entitle him/her to benefits under a contract. The term defines the type and amount of expense, which will be considered in the calculation of benefits.

Credentialing: An examination of a health care provider's credentials and other qualifications to determine if they should be granted clinical privileges at a health care facility or with a managed care organization.

Creditable Coverage: Health insurance coverage under any of the following: a group health plan; individual health insurance; Medicare; Medicaid; CHAMPUS (health coverage for military personnel, retirees, and dependents); the Federal Employees Health Benefits Program; Indian Health Service; the Peace Corps; state health insurance high risk pool, as well as certain coverage under state programs; policy or contract including short-term health insurance issued to an eligible individual; or policy issued to bona fide association members.

Custodial Care: Care provided primarily to assist a patient in meeting the activities of daily living, but not care requiring skilled nursing services.

 Customary and Reasonable (C&R): The amount customarily charged for the service by other physicians in the area (often defined as a specific percentile of all charges in the community), and the reasonable cost of services for a given patient after medical review of the case.



Day Treatment Center: An outpatient psychiatric facility that is licensed to provide outpatient care and treatment of mental or nervous disorders or substance abuse under the supervision of physicians.

Deductible: An amount the covered person must pay before payments for covered services begin. The deductible is usually a fixed amount or a percentage determined by the individual's contract. For example, an insurance plan might require the insured to pay the first $250 of covered expense during a calendar year.

Dental Care: Under a medical plan, dental care is dental treatment that due to the nature of the procedure or patient's medical condition may be provided in a hospital setting.

 Dependent: Person, (spouse or child), other than the subscriber who is covered under the subscriber's benefit certificate.

Diagnostic Tests: Tests and procedures ordered by a physician to determine if the patient has a certain condition or disease based upon specific signs or symptoms demonstrated by the patient. Such diagnostic tools include radiology, ultrasound, nuclear medicine, laboratory, pathology services, or tests.

 Disease Management Programs (Health Management Programs): Educational programs designed for individuals with chronic diseases designed to help maintain high quality of life and prevent future need for medical resources by using an integrated, comprehensive approach to health care coordinate with the individual's physician. Pharmaceutical care, continuous quality improvement, practice guidelines, and case management all play key roles in this effort.

Drug (prescription drug): A drug approved by the State Department of Health or the Food and Drug Administration and which by law may only be sold with a written prescription of a qualified healthcare provider.

 Drug Formulary: A list of preferred pharmaceutical products that health plans, working with an expert panel of pharmacists and physicians, have developed to encourage the dispensing of quality, cost effective medications. Formularies can be classified as:

  • Open, in which doctors are encouraged to prescribe medications on the formulary but which allow non-formulary drugs to be covered without prior authorization;
  • Restricted, in which only medications on the formulary list are covered;
  • Managed, in which doctors are encouraged to prescribe medications on the formulary, but non-formulary drugs are covered with prior authorization.

 Durable Medical Equipment: Mechanical devices, equipment, and supplies that enable a person to maintain functional ability.



 Effective Date: The date on which the coverage or a change in coverage of a contract goes into effect at 12:01 a.m.

 Eligibility Period: In contributory group insurance plans, a specified time, usually 31 days, during which a new group member who is eligible for group insurance coverage may first enroll for that coverage, usually without having to provide evidence of insurability. Also known as enrollment period.

Eligible Waiver: Employees having other verifiable group medical coverage. They are not normally included in the total number of employees when computing participation percentages.

Elimination Period: (1) Under a disability income policy, the specific amount of time an insured must be disabled before becoming eligible to receive policy benefits. In a residual disability income policy, often referred to as a qualification period. (2) Under a long-term care policy, the number of days after long-term care begins that an insured must wait before benefit payments begin. Also known as waiting period.

Emergency: In general, a sudden, serious, and unexpected acute illness, injury, or condition (including, without limitation, sudden and unexpected severe pain) that the member reasonably perceives could permanently endanger health if medical treatment is not received immediately. More detailed or slightly different definitions may apply based on applicable law.

 Emergency Care: Care for patients with severe or life threatening conditions that require immediate medical attention.

Employee Assistance Program (EAP): A worksite-based program that is designed to assist in the identification and resolution of productivity problems associated with personal concerns of employees. The program provides employees and their dependents with access to confidential, short-term counseling by qualified practitioners, in person or over the phone.

Employee Census: In group insurance, an attachment to a Request for Proposal that lists demographic information about the proposed group as a unit and about individual members within the group.

Enrollee: An individual who is enrolled and eligible for coverage under a health plan contract. Synonymous with member.

Enrollment Period: The period during which all employees and their dependents can sign up for coverage under an employer group health plan. Besides permitting workers to elect health benefits when first hired, many employers and group health insurers hold an annual enrollment period, during which all employees can enroll in or change their health coverage

 Equity Indexed Universal Life: A life insurance policy that offers a death benefit and a future cash value component based on the rate of return performance of the underlining client selected investment choices. A portion of the premium paid is credited to a cash value tax deferred cash accumulation account. Typically, policy owners have a choice of crediting methods: a fixed term method and or a crediting method linked to some equity related index or a combination of both.

Excess Charge: Under Part B of Medicare, you could have out-of-pocket costs if your physician or medical supplier does not accept assignment of your Medicare claim and charges more than Medicare’s approved amount. The difference to be paid is called the ‘excess charge.’

Exclusions: Specific conditions or circumstances that are not covered under the contract.

Experimental: Procedures that are not recognized under generally accepted medical standards as safe and effective for treating a particular condition.

Expiration Date: The date coverage expires.

 Explanation of Benefits (EOB): A form sent to the covered person after a claim for payment has been processed by the carrier that explains the action taken on that claim. This explanation might include the amount that will be paid, the benefits available, reasons for denying payment, or the claims appeal process.

Employee Retirement Income Security Act (ERISA): A federal act, passed in 1974, that established new standards and reporting/disclosure requirements for employer-funded pension and health benefit programs.



Family and Medical Leave Act (FMLA): A federal law that guarantees up to 12 weeks of job-protected leave for certain employees when they need to take time off due to serious illness, to have or adopt a child, or to care for another family member. When you qualify for leave under FMLA, you can continue coverage under your group health plan.

Fee For Service: See indemnity

First Dollar Coverage: Provides a set amount of money to use for routine and preventative care, without any up-front deductible. Once first dollar service coverage is exhausted, you pay 100 percent for covered services until they reach the calendar-year co-payment maximum.

Formulary: See Drug Formulary.

Full-Time Employee: An employee who meets the eligibility requirements for full-time employees as outlined in the Benefit Agreement.



Gatekeeper: Term given to a primary care provider who coordinates all medical care for a patient and determines whether services such as tests or referral to a specialist are necessary.

Generic Prescription Drug (generic drug): Safe, effective, and equivalent to brand name medications that may cost considerably less than the brand name medications. Generic drugs must meet the same high standards of quality as brand name drugs and are formulated to have the same effect in the body as the brand name version. Generic drugs often become available when a brand name drug's patent expires.

Guaranteed Issue: A requirement that health plans must permit you to enroll regardless of your health status, age, gender, or other factors that might predict your use of health services. All health plans sold to small employers in Arizona and California are guaranteed issue. If you are HIPAA eligible, insurance companies must offer you a choice of basic and standard individual health plans that are guaranteed issue.

Guaranteed Renewability: A feature in most health plans that means your coverage cannot be canceled because you get sick. HIPAA requires all health plans to be guaranteed renewable. Your coverage can be canceled for other reasons unrelated to your health status.



Healthcare Group of Arizona (HCG): A state-run program in Arizona that offers group health coverage to small businesses with 50 or fewer employees, including the self-employed, and political subdivisions (state, counties, cities, towns, school districts and agricultural districts) as long as employers and employees meet specified requirements. The HCG plan is a managed care plan.

Health Benefit Plan: A health insurance product offered by a health plan company that is defined by the benefit contract and represents a set of covered services and a provider network.

Health Care Financing Administration (HCFA): Federal government agency that administers Medicare and Medicaid.

Health Insurance Portability and Accountability Act (HIPAA): A federal health benefits law passed in 1996, effective July 1, 1997, which among other things, restricts pre-existing condition exclusion periods to ensure portability of health-care coverage between plans, group and individual; requires guaranteed issue and renewal of insurance coverage; prohibits plans from charging individuals higher premiums, co-payments, and/or deductibles based on health status.

 Health Maintenance Organization (HMO): An organization that provides a wide range of comprehensive health care services for a specified group at a fixed periodic payment. Members then receive all the medical services they need through a group of contracting doctors and hospitals, often with no additional co-payments or fees. Members are generally limited to using providers designated by the HMO.

 Hearing Services: Testing and services related to hearing.

 HIPAA eligible: Status you attain once you have had 18 months of continuous creditable health coverage. To be HIPAA eligible, you also must have used up any COBRA continuation coverage; you must not be eligible for Medicare or Medicaid; you must not have other health insurance; and you must apply for individual health insurance within 63 days of losing your prior creditable coverage. You are also HIPAA eligible if your health plan was not renewed by an insurer who discontinued offering and renewing individual health benefit plans in Arizona.

HMO: See Health Maintenance Organization.

Home Health Care: Health services rendered to an individual as needed in the home. Such services are provided to aged, disabled, sick, or convalescent individuals who do not need institutional care.

Home Infusion Therapy: The administration of intravenous drug therapy in the home. Home infusion therapy includes the following services: solutions and pharmaceutical additives; pharmacy compounding and dispensing services; durable medical equipment; ancillary medical supplies; and nursing services.

Hospice: A facility or service that provides care for terminally ill patients and support to their families, either directly or on a consulting basis with the patient's physician. Emphasis is on symptom control and support before and after death.

 Hospital: An institution whose primary function is to provide inpatient services, diagnostic and therapeutic, for a variety of medical conditions, both surgical and non-surgical. In addition, most hospitals provide some outpatient services, particularly emergency care.



ID Card/Identification Card: A card issued by a carrier to a covered person, which allows the individual to identify himself or his covered dependents to a provider for health care services. The card is subsequently used by the provider to determine benefit levels and to prepare billing statement.

Immunizations: Specific types of injections to prevent infectious diseases and viral infections.

In-Network: Refers to the use of providers who participate in the carrier's provider network. Many benefit plans encourage covered persons to use participating (in-network) providers to reduce the individual's out of pocket expense.

 Indemnity: (1) Benefits paid in a predetermined amount in the event of a covered loss. (2) A traditional insurance plan that reimburses for medical services provided to patients based on bills submitted after the services are rendered. Also known as fee-for-service.

Infertility: Term used to describe the inability to conceive or an inability to carry a pregnancy to a live birth. Also includes the presence of a condition recognized by a physician as the cause of infertility.

Infusion Therapy: The administration of intravenous drug therapy. Infusion therapy includes the following services: solutions and pharmaceutical additives, pharmacy compounding and dispensing services, durable medical equipment, ancillary medical supplies, and nursing services.

 Inpatient: Service provided while the patient is admitted to the hospital for at least a 24-hour period.

 Investigative Procedures or Medications: Those that have progressed to limited use on humans, but which are not widely accepted as proven and effective within the organized medical community.



Key Man Insurance: A life insurance policy protecting a corporation or business from the death of a key employee.



Life insurance: A contract that pays a death benefit to a beneficiary upon the demise of the insured person. Death benefits are common to all types of life insurance.

Lifetime Maximum: Maximum amount the plan will pay toward a member's coverage in a lifetime. The amount varies depending on the type of coverage the member carries.



 Managed Care: Any form of health plan that initiates selective contracting to channel patients to a limited number of providers and that requires utilization review to control unnecessary use of health services.

 Maternity Care: The care of women before and during childbirth as well as the care of newborn babies.

 Medicaid: A program providing comprehensive health insurance coverage and other assistance to certain low-income Arizona residents. All other states have Medicaid programs, too, though eligibility levels and covered benefits will vary. In Arizona, Medicaid is referred to as the Arizona Health Care Cost Containment System (AHCCCS). In California it is referred to as MediCal.

Medically Necessary: Procedures, supplies equipment, or services that are determined to be:

  • Appropriate and necessary for the diagnosis and treatment of the medical condition
  • Provided for the diagnosis or direct care and treatment of the medical condition
  • Within standards of good medical practice within the organized medical community
  • Not primarily for the member's convenience, or for the convenience of the physician or another provider
  • The most appropriate procedure, supply, equipment, or service which can be safely provided. The most appropriate procedure, supply, and equipment or service must satisfy the following requirements:
    1. There must be valid scientific evidence demonstrating that the expected health benefits from the procedure, supply, equipment, or service are clinically significant and produce a greater likelihood of benefit, without a disproportionately greater risk of harm or complications, for the member and the particular medical condition being treated than other possible alternatives
    2. Generally accepted forms of treatment that are less invasive have been tried and found to be ineffective or are otherwise unsuitable
    3. For hospital stays, acute care as an inpatient is necessary due to the kind of services the member is receiving and the severity of the condition and safe and adequate care cannot be received by the member as an outpatient or in a less intensified medical setting.

Medicare: The federal government's hospital and medical insurance program for the aged, totally disabled, and those with end-stage renal disease. There are three parts – A, B, and D. Part A is the hospital portion and is mandatory for all eligibles. Those who elect part B coverage, pay an additional premium to the federal government. Part D provides prescription drug coverage.

Medicare Supplement (Medigap) Insurance: Insurance sold by private insurance companies to fill “gaps” in Original Medicare Plan coverage. Medigap policies only work with the Original Medicare Plan.

Member: An individual or dependent who is enrolled in and covered by a health care plan. Also called enrollee or beneficiary.

Mental Health/Behavioral Health: Conditions that affect thinking and the ability to figure things out which affect perceptions, mood, and behavior. Such disorders are recognized primarily by symptoms or signs that appear as distortions of normal thinking or distortions of the way things are perceived (seeing or hearing things that are not there). Disorders can also be recognized by moodiness, sudden or extreme changes in mood, depression, and highly agitated or unusual behavior.



National Committee of Quality Assurance (NCQA): An independent, non-profit organization that accredits managed health care plans by measuring the quality of care and service provided by managed care plans such as HMOs. Its standards are intended to help assure HMO members have the opportunity to receive high quality health care and excellent service.

 Negotiated Rate: The amount participating providers agree to accept as payment in full for covered services. It is usually lower than their normal charge. Negotiated rates are determined by Participating Provider Agreements.

Network: The doctors, clinics, hospitals, and other medical providers that a carrier contracts with to provide health care to its covered persons. Individuals are generally limited to network providers for full coverage of their health costs.

Non-Participating Provider: A medical provider who has not contracted with a carrier or health plan to be a participating provider.



Occupational Therapy: Treatment to restore a physically disabled person's ability to perform activities such as walking, eating, drinking, toileting, and bathing.

Original Medicare Plan: A fee-for-service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare and is accepting new Medicare patients. After your deductible, Medicare pays its share of the Medicare-approved amount and you pay your share (coinsurance).

Open Enrollment: For employers with a dual or multiple choice of health plans, the annual time period in which employees can select among the plans offered.

Out-Of-Network: The use of health care providers who have not contracted with the carrier to provide services. HMO members are generally not reimbursed if they go out-of-network except in emergency situations. Covered persons of preferred provider organizations and HMOs with point-of-service options may go out-of-network, but must pay additional costs including deductibles and co-insurance.

Out-of-Pocket Maximum: The maximum amount for qualifying covered services you would have to spend in any one year before your plan pays 100% of your covered costs for most services. It is a sum of deductible and coinsurance amounts.

 Outpatient: A patient who is receiving ambulatory care at a hospital or other health facility without being admitted to the facility.

Outpatient Surgery: Surgical procedures performed that do not require an overnight stay in the hospital or ambulatory surgery facility. Such surgery can be performed in the hospital, a surgery center, or physician office.



Partial Day Treatment: A program offered by appropriately licensed psychiatric facilities that includes either a day or evening treatment program for mental health or substance abuse. Such care is an alternative to inpatient treatment.

Participating Hospital: A hospital that has entered into an agreement with the insurance company to provide hospital services as a participating provider. The hospital, by entering into the agreement, is a participating hospital for all members and covered persons.

Participating Medical Group (PMG) and Individual Practice Association (IPA): A group of physicians who have an agreement with a carrier to furnish medical services to their HMO members.

Participating Physician: A physician who has entered into an agreement with a carrier to provide medical services as a participating provider to their members.

Participating Provider: A physician, hospital, pharmacy, laboratory, or other appropriately licensed provider of health care services or supplies, that has entered into an agreement with a managed care entity to provide such services or supplies to a patient enrolled in a health benefit plan.

PCP: See Primary Care Physician.

Physical Therapy: Treatment involving physical movement to relieve pain, restore function, and prevent disability following disease, injury, or loss of limb.

Plan Benefit Maximum: Maximum amount the carrier will pay toward an individual's coverage. The amount varies depending on the type of coverage the individual carries.

Point-of-Service (POS): An option provided by some HMOs that allows covered persons to go outside the plan's provider network for care, but requires they pay higher cost sharing than they would for network providers.

PPO: See Preferred Provider Organization

Pre-Authorization: A procedure used to review and assess the medical necessity and appropriateness of elective hospital admissions and non-emergency outpatient services before the services are provided.

Pre-Certification: Refers to certifying the medical necessity and level of care in advance. Pre-certification does not guarantee that contract benefits will be available.

Pre-Certification Review: Utilization management performed prior to a patient's admission, stay, or other service or course of treatment. Also known as Prior Authorization.

Pre-Existing Condition: A health condition or medical problem that was diagnosed or treated before enrollment in a new health plan or insurance policy. Some pre-existing conditions may be excluded from coverage.

Preferred Provider Organization (PPO): A delivery system where providers are under contract to a carrier to provide care at a discount or for a fixed fee, and the health plan provides incentives to patients to use the contracting providers. The PPO does not assume insurance risk, and it does not facilitate the sharing of risk by its covered persons.

Prescription: A written order or refill notice issued by a licensed medical professional for drugs, which are only available through a pharmacy.

Preventive Care: Proactive health care designed to keep people from getting sick or hurt. It includes immunizations and screenings. A key part of preventive medicine is making sure patients know how to improve their health by altering their lifestyles. Refers to certifying the medical necessity and level of care in advance.

Primary Care Physician (PCP): A doctor designated by an HMO or other managed health care company to be the first physician a patient contacts for any medical problem. The doctor acts as the patient's regular physician and as a gatekeeper who determines if the patient needs to see a specialist or requires hospitalization.

Prior Authorization: The process of obtaining pre-approval of coverage for a health care service or medication.

Prosthetic Devices: A device that replaces all or a portion of a part of the human body. These devices are necessary because a part of the body is permanently damaged, is absent, or is malfunctioning.

Provider: A licensed health care facility, program, agency, or health professional that delivers health care services.

Provider Network: That set of providers with which a carrier has contracted to provide services to the Accountable Health Plan's covered persons. In the case of a "fee-for-service" or non-network Health Benefit Plan, the Provider Network will be deemed to be all licensed providers of covered services.



Radiation Therapy: Treatment of disease by x-ray, radium, cobalt, or high-energy particle sources.

Rate Adjustment Factor (RAF):

Rating: During the underwriting process for insurance, the act of approving an application on a basis other than the basis for which the policy was applied for, including actions such as approving the application at a higher premium rate than applied for or with less coverage than applied for. The resulting policy is said to be a rated policy.

 Reasonable and Customary: The amount customarily charged for the service by other physicians in the area (often defined as a specific percentile of all charges in the community) and the reasonable cost of services for a given patient after medical review of the case. Also known as Usual and Customary (U&C) or Customary and Reasonable (C&R).

Referral: A recommendation by a physician or insurer that an individual receive care from a different doctor or facility.

Respiratory Therapy: Treatment of illness or disease that is accomplished by introducing dry or moist gases into the lungs.

Retrospective Review: A review of claims and medical records for medical necessity and appropriateness after the episode of care is concluded and before and/or after the claim is submitted by the provider.



Second Opinion: The voluntary option or mandatory requirement to visit another physician or surgeon regarding diagnosis, course of treatment, or having specific types of elective surgery performed.

Service Area: The geographic area an insurer, health plan, or health care provider services.

Skilled Nursing Facility: An institution (or a distinct part of an institution) that is primarily engaged in providing skilled nursing care and related services for patients who require medical care, nursing care, or rehabilitation services.

Speech Therapy: Treatment or the correction of a speech impairment that resulted from birth or from disease, injury, or prior medical treatment.

Subscriber: The individual in whose name a contract is issued or the employee covered under an employer's group health contract.

Substance Abuse/Chemical Dependency: Conditions that include, but are not limited to (1) psychoactive substance induced mental disorders; (2) psychoactive substance use dependence; and (3) psychoactive substance use abuse. Chemical dependency does not include addition to or dependency on, tobacco or food substances (or dependency on items not ingested).



Term Life Insurance: The original form of life insurance and is considered to be pure insurance protection because it builds no cash value. Term life insurance is temporary, as it covers only a specific period of time, the relevant term. If the insured dies during the term, the death benefit will be paid to the beneficiary. Because the term expires the insurer often does not have to pay out making term insurance the most inexpensive way to purchase a substantial death benefit on a coverage-per-premium dollar basis.



Universal Life Insurance: A flexible-premium, adjustable benefit life insurance policy that accumulates account value. The flexibility of the policy allows you to change the amount of insurance as your needs change over time.

Urgent Care: The services received for a sudden, serious, or unexpected illness, injury or condition, other than one which is life threatening, that requires immediate care for the relief of severe pain or diagnosis and treatment of such condition.

Utilization Management: (1) A process that evaluates health care on the basis of appropriateness, necessity, and quality. For hospital review, it can include pre-admission certification, concurrent review with discharge planning, and retrospective review. (2) One of the six categories of Standards of Quality used by NCQA, which examines the consistency and the reasonableness of the determinations of necessary services. Also looks at how well the plan responds to member and physician appeals.

Utilization Review: A review process designed to evaluate the appropriateness of health care services.

Usual, Customary, and Reasonable: A "usual" charge is the amount that is most consistently charged by an individual physician for a given service. A "customary" charge is the amount that falls within a specified range of usual charges for a given service billed by most physicians with similar training and experience within a given geographic area. A "reasonable" charge is a charge that meets the Usual and Customary criteria, or is otherwise reasonable in light of the complexity of treatment of the particular case. Under a UCR Program, the payment is the lowest of the actual billed charge, the physician's usual charge, or the area customary charge for any given covered service.

Urgent Care: An unexpected illness or injury that is not life threatening but requires outpatient medical care that cannot be postponed. An urgent situation requires prompt medical attention to avoid complications and unnecessary suffering, such as a high fever. Examples include skin rashes or ear infections.


Variable Universal Life Insurance: A type of life insurance, that builds a cash value. The cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The premiums can vary from nothing in a given month up to maximums defined by the IRS code for life insurance. This flexibility is in contrast to whole life insurance that has fixed premium payments that typically cannot be missed without lapsing the policy.


Waiting Period: The time you may be required to work for an employer before you are eligible for health benefits. Not all employers require waiting periods. Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous. If your employer requires a waiting period, your pre-existing condition exclusion period begins on the first day of the waiting period.

Well Baby/Well Child Care: Routine care, testing, checkups, and immunizations for a generally healthy child from birth through the age of six.

 Wellness Program: A health management program that incorporates the components of disease prevention, medical self-care, and health promotion. It utilizes proven health behavior techniques that focus on preventive illness and disability, which respond positively to lifestyle related interventions. Programs are designed to integrate with existing health care benefits; e.g., flex benefits, HMO, PPO; support the reduction in the demand for health care resources; and address the issues of dependent coverage and services for high-risk employees.

Whole Life Insurance: Insurance on the life of the insured for a fixed amount at a definite premium that is paid each year in the same amount during the entire lifetime of the insured - ordinary life insurance, straight life insurance.