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Eye Health Insurance Glossary - Definitions of Common Terms

Eye health insurance definitions Health insurance is one of the most important purchases you make, yet many of us feel helpless when it comes to shopping for coverage.

Speaking of medical or health insurance policy or coverage, unlike most products and services we buy, itís difficult to know the full cost of our health coverage options. While most people understand the varying monthly premiums, itís far harder to understand other related technical terms. The following glossary of terms will help you understand some of the commonly used terminologies that are related with health insurance in general and vision insurance in particular.

Accreditation: An evaluative process in which a healthcare organization undergoes an examination of its policies, procedures and performance by an external organization (ďaccrediting bodyĒ) to ensure that its meeting predetermined criteria.

Acuity: Degree or severity of illness.

Administrative Services Only (ASO): A term that applies to large employers who self-insure health coverage and contract with a third party to provide various administrative services, such as claims processing and employee communications. This is common in self-insured health care plans.

Allied Health Professional: A specially trained non-physician health care provider. Allied health professionals include: paramedics, physician assistants (PA), certified nurse midwives (CNM), phlebotomists, social workers, nurse practitioners (NP), and other caregivers who perform tasks that supplement physician services.

Allowable Costs: Items or elements of an organizationís costs that are reimbursable under a payment formula. Allowable costs may exclude uncovered services, luxury items or accommodations, unreasonable or unnecessary costs and/or expenditures.

Ambulatory: Not confined to a bed, capable of moving.

Ambulatory Care: Medical care provided on an outpatient basis.

Ancillary: a term used to describe services that relate to a patientís care such as lab work, x-ray, and anesthesia.

Assignment of Benefits: When you assign benefits, you sign a paper allowing your hospital or doctor to collect your health insurance benefits directly from your insurance company. Otherwise, you pay for the treatment and the company reimburses you.

Average Length of Stay (ALOS): The average number of days in a given time period that each patient remains in the hospital.

Balance billing: The practice of billing a patient for the amount that remains after the insurerís payment and patientís copayment have been made.

Benefit: An amount payable by the insurance carrier.

Benefit period: The period of time that begins the first day a person enters a hospital or skilled nursing facility and ends 60 days after discharge without being readmitted to either type of facility.

Board Certified: Describes a physician who is certified as a specialist in his/her area of practice. To achieve board certification, a physician must meet specific standards of knowledge and clinical skills within a specific field or specialty.

Catastrophic insurance: A type of limited health insurance that serves the purpose of covering very high medical expenses. The deductibles are very high ($2,000 or above) and the premiums are low.

Claim: Notification to the insurance company from the insured or health provider (if you have assigned benefits) that a payment is due under provision of the insurance policy.

Claim Attachment: Any of a variety of hardcopy forms or electronic records needed to process a claim in addition to the claim itself.

Comprehensive coverage: Insurance is either comprehensive or limited. Comprehensive means broader coverage and/or higher indemnity payments than limited coverage.

Coinsurance: The portion of the bill for which the insured is responsible.

Condition Report: As related to patients, generally includes: (1) treated and released, (2) good, (3) fair, (4) serious & (5) critical.

Coordination of Benefits (COB): A method of integrating benefits payable under more than one group health insurance plan so that the insuredís benefits from all sources do not exceed 100 percent of the allowable medical expenses.

Co-Payment: The portion charges paid by the patient in addition to any deductible for covered services and supplies. Copayments typically range from $5 to $25.

Cost Sharing: When the consumer must pay out-of pocket to receive health care. This also can occur when an insured person pays a portion of the monthly premium for his or her health insurance.

Covered Benefit: A health service or item that is included in your health plan, and is partially or fully paid by the insurance company.

Creditable: Any previous health coverage a new plan will allow a person to use to shorten his or her pre-existing condition waiting period.

Deductible: The amount of money the insured must pay out of pocket before benefits begin. Deductibles are usually on a calendar year or policy year basis. You may choose a higher deductible to lower your premium.

Drug Formulary: A list of selected prescription drugs and their proper doses that a health plan covers.

Durable Power Of Attorney for Health Care: Allows an individual to designate in advance another person to act on his/her behalf if he/she is unable to make a decision to accept, maintain, discontinue, or refuse any health care services.

Explanation of benefits (EOB): One of these forms comes with or without an insurance check to explain what portion of the submitted bill was covered and why. If the patient has more than one policy, this is proof of what his or her primary coverage paid.

Exclusions: Specified illnesses, injuries, or conditions listed in the policy that are not covered. Experimental therapies, cosmetic surgery, and eyeglasses are common exclusions.

External review: The review of a health planís determination that a requested or provided health care service or treatment is not or was not medically necessary by a person or entity with no affiliation or connection to the health plan.

Experience Rating: A method of calculating health insurance premiums for a group based on the risks the group presents. An employer whose employees are unhealthy will pay higher rates than another whose employees are healthier.

Fee Disclosure: This is when doctors and caregivers discuss their charges with patients prior to treatment.

Fee Schedule: This is the maximum dollar amounts that are payable to health care providers for the services they provide. Medicare and insurance companies have a fee schedule for doctors who treat patients.

Fee-For-Service: A reimbursement mechanism that pays providers for each service or procedure they perform; opposite of capitation.

First-Dollar Coverage: A health insurance policy with no required deductible.

Formulary: The list of prescription drugs covered fully or in part by a health plan.

Gatekeeper: Term used to describe the coordination role of the primary care provider (PCP) who manages various components of a memberís medical treatment, including all referrals for specialty care, ancillary services, durable medical equipment, and hospital services.

Grace Period: A specified period immediately following premium due date, during which payment can be made to continue the policy in force without interruption.

Guaranteed Issue: The coverage is available regardless of prior medical history.

Guaranteed Renewable: An insurance contract that an insurer cannot terminate, providing the insured pays the required premiums in a timely manner. With these contracts, insurers have the right to raise premiums but only for an entire class of policyholders.

Health insurance: Commonly called accident and health insurance protection against financial loss from a personal accident or illness.

Hospital Benefits: Benefits an insurance company pays when an insured person is hospitalized. They include reimbursement for both inpatient and outpatient medical care expenses.

Inpatient Indemnity insurance: Traditional insurance that pays providers on a fee-for-service basis.

Lifetime maximum: Total benefits that the insurance company will pay per individual over a lifetime.

Limitations: Conditions or circumstances for which benefits are not payable or are limited.

Major Hospitalization Policy: Health insurance to cover medical expenses over and above that of a basic health insurance policy. This insurance only applies to expenses the patient incurs while they are hospitalized.

Mandated benefit: A requirement in state or federal law that all health insurance policies provide coverage for a specific health care service.

Maximum Allowable Charge: The highest amount the insurance company will allow as a covered benefit for a particular medical service.

Medically Necessary: Many insurance policies will pay only for treatment that is deemed "medically necessaryĒ to restore a personís health. For instance, many policies will not cover LASIK for cosmetic purposes.

Medicaid: A federal and state funded program that provides hospital and medical coverage to low-income people who meet certain criteria, such as: age 65 or older, blind, children under age 19, disabled, expecting mothers, immigrants.

Medical Loss Ratio: The total cost of health care benefits divided by the total premium.

Medicare: A federal government program that provides health care coverage for all eligible individuals age 65 or older or under age 65 with a disability, regardless of income or assets.

Member: An enrollee, beneficiary, or insured. A member includes people who enroll or subscribe to a health insurance plan, and includes their eligible dependents.

Morbidity Rate: An actuarial term for the likelihood that medical expenses will occur.

Out-of-pocket limit: A cap or limit placed on a patientís out-of-pocket costs, after which the plan provides full coverage for all costs for the remainder of the year.

Outpatient Services: Health care services provided to a patient in or out of a hospital facility, when medical or surgical care does not include an overnight hospital stay.

Performance Standards: These are standards an individual health care provider is expected to meet to achieve the desired quality of care.

Preadmission Review: Requires an insured person or their doctor to obtain prior authorization from the health care plan before any non emergency hospitalization occurs.

Pre-existing condition: A health condition (disease) that existed before a policy was purchased. It is usually anything for which a patient has seen a doctor during the previous 6 months and will not be covered during the waiting period, which is typically six to twelve months after the effective date of coverage.

Pre-existing condition waiting period: The first days of an illness that are not covered by insurance.

Premium: The amount paid to an insurance company for providing insurance coverage.

Preventive benefits: Covered services that are intended to prevent disease or to identify disease while it is more easily treatable.

Primary Care: Basic care including initial diagnosis and treatment, preventive services, maintenance of chronic conditions, and referral to specialists.

Primary care physician (PCP): A physician who serves as a group member's primary contact within the health plan. In a managed care plan, the primary care physician provides basic medical services, coordinates and, if required by the plan, authorizes referrals to specialists and hospitals.

Point of service (POS) plan: A type of health plan allowing the covered person to choose to receive a service from a participating or a nonparticipating provider; benefits are generally structured so that the patient is responsible for a lower portion of the charges when seeing a participating rather than a nonparticipating provider.

Provider: The supplier, physician, psychologist, pharmacist, or other health care professional providing a service to the insured.

Stop-loss: The point during a calendar year when your insurance policy pays 100 percent of costs for the remainder of the year. Thus, your out-of-pocket expenditures, or losses, stop. Most policies pay 80 percent and the individual pays 20 percent.

Subscriber: A person who holds an insurance policy. Also known as the enrollee, member, insured, certificate holder, or policyholder.

Urgent care: Care for injury, illness, or another type of condition (usually not life threatening) which should be treated within 24 hours. Also refers to after-hours care, and to a health planís classification of hospital admissions as urgent, semi-urgent, or elective.

Utilization: A numerical measure of use of a single service or type of service, such as hospital care, prescription drugs, or doctor services, by a given population group over a given period of time.

Utilization Review (UR): A health insurance companyís review to determine if the health care services a provider or facility gives to a member or group of members is necessary and appropriate.

Waiting period: The time after the beginning date of a policy when benefits are not payable.

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