by Gail Carlson, MPH Ph.D, State Health Education Specialist, University of Missouri Extension

Balance Billing -
The practice of a provider billing a patient for all charges not paid for by the insurance plan. Balance billing is generally prohibited by managed care plans.

Capitation -
The insurer pays health providers a set amount for each person enrolled in the managed care plan rather than for the number and type of services delivered. The amount paid may vary by factors such as age and sex of the enrolled member.

Closed panel -
A managed care plan that contracts with physicians on an exclusive basis for services and does not allow those physicians to see patients for another managed care organization.

Coinsurance -
Under conventional insurance plans, there is often a limit on the amount covered by the plan, commonly 80% of UCR charges. Any additional costs are paid by the member out of pocket.

Copayment -
That portion of a claim or medical expense that a member of a health plan must pay out of pocket. Usually this is a fixed amount, $5 or $10, for each visit.

Credentialing -
The process of obtaining and reviewing the documentation (licensure, certifications, insurance, etc.) of health professionals. Generally, this includes reviewing information given by the provider and verifying that the information is correct and complete.

Deductible -
That portion of an individual's health care expenses that must be paid out of pocket before insurance coverage applies. A common deductible is $200. Deductibles are used in insurance plans and PPOs, but usually not in HMOs.

Fee-for-service -
The traditional method of reimbursing physicians, hospitals and other health care providers for their services. Providers are paid each visit. The fees increase as more services are provided or as more expensive services are substituted for less expensive ones.

Formulary -
A listing of drugs that a physician may prescribe. The physician is requested or required to use only formulary drugs unless there is a valid medical reason to use a non-formulary drug.

Gatekeeper -
A primary care physician (PCP) in a managed-care plan who is responsible for monitoring a patient's care and deciding when specialized care or tests are needed. Except in actual emergencies, all care from providers other than the member's PCP must be authorized by the gatekeeper.

Group model -
An HMO that contracts with a medical group for the provision of health care services. The relationship between the HMO and the medical group is generally very close, although there are wide variations in the independence of the group from the HMO.

Managed-care -
A general term for any system of health care delivery organized to improve cost effectiveness. It includes arrangements with doctors and hospitals to supply health care services to members for a set fee, criteria for the selection of health care providers, significant financial incentives for members to use providers in the plan and formal programs to monitor the amount of care and quality of services.

Midlevel Practitioner (MLP) -
Non-physicians who deliver medical care, generally under the supervision of a physician. Some examples of MLPs are physician's assistants, clinical nurse practitioners and nurse midwives.

Network -
A selected group of physicians, hospitals, laboratories, and other health care providers who participate in a managed-care plan's health delivery program. Providers agree to follow the plan's procedures, permit the monitoring of their practices and provide certain negotiated discounts in exchange for a guaranteed patient pool.

Open panel -
A managed care plan that contracts with private physicians to deliver care in their own offices.

Primary Care Physician (PCP) -
The term usually applies to internists, pediatricians, family physicians, and general practitioners. It may also apply to obstetrician/gynecologists.

Point Of Service (POS) -
Generally, the plan enrolls each member in both an HMO (or HMO-like) system and a conventional insurance plan. Members do not have to choose how they will receive services until they need them. The amount the member is reimbursed depends on whether the member chooses to use the plan or go outside the plan for services.

Service plan -
A health insurance plan that has direct contracts with providers but is not necessarily a managed care plan. Providers bill the plan directly rather than billing the member and are paid directly by the plan.

Staff model -
AN HMO that employs providers directly. These providers see members at the HMO's own facilities.

Usual, Customary, or Reasonable Fees (UCR) -
A method of reimbursing providers on the basis of a profile of prevailing fees in an area. One common method is to average all fees and then pay providers 80% or 90% of that average amount.

Utilization Review (UR) -
A general term for an insurance or managed care plan's review of the health care provided to its members. This includes such activities as granting prior approval before hospitalization or doing certain procedures; coordinating a patient's care and rehabilitation once they have left the hospital; and making decisions about whether a second opinion is necessary.

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