Glossary

These definitions may help you navigate the language of managed care. Many of these definitions were taken from the National Committee for Quality Assurance website.

Accident rider: Accident coverage is an extra feature, or "rider," that will cover the costs of an accident or injury. It is available for an extra cost on some Priority Health individual health insurance plans.

Agent: An independent insurance agent, who can explain health insurance terms to you and suggest what plan would work best for your needs, your health and your budget. You don't pay more when you use an agent to buy your policy.

Alternate benefits: Under our PriorityPOS^SM plan, this refers to covered services received from providers who do not participate in the PriorityPOS network. This is sometimes referred to as "out-of-network benefits." Members will pay more for alternate benefits than for preferred (in-network) benefits.

Benefit: A health care product or service that is paid for (in part or whole) by the insurance company.

CPT: Current Procedural Terminology, the medical service coding system managed by the American Medical Association. Most services patients receive can be identified by CPT code, from office visits to complex surgeries.

Capitation: A method of paying for medical services on a per-person rather than a per-procedure basis. Under capitation, an insurance company pays a participating doctor a fixed amount per month for every member who is his or her patient, regardless of how much or how little care the member receives.

Case management: Coordinated health care for members who are at risk for or have suffered a catastrophic health episode or who have a condition that could lead to an increased use of services.

Claim: A request or bill from an individual or a health care provider to pay for covered services.

Clinical Practice Guidelines: See Practice Guidelines.

Certificate of coverage (COC): A booklet given to each person covered by a PriorityHMO^SM plan describing what is covered and what is not, subject to changes stated in any rider that might add to or delete some covered benefits.

Co-insurance, coinsurance: A payment arrangement where the patient pays a percentage of his or her health care costs and their health insurance plan pays a percentage. These are often referred to by the percentages, such as "80/20 plan" or "90/10 plan," indicating what percentage the plan pays and what percentage the member pays. Coinsurance usually begins after the member meets his or her deductible for the year.

Consumer-engaged health care (CEH): Health insurance coverage that gives members more control over their health plan costs and overall health care. Generally combines a high deductible health plan with a health savings account, health reimbursement arrangement or wellness program.

Co-pay, co-payment (copay, copayment): A fixed amount that the patient pays each time he or she receives a covered service, usually when they receive the service. Depending on the patient's plan, they may pay a co-pay for a visit to the doctor, to a specialist, to the ER, or when they receive high-tech radiology tests such as CT scans.

Coverage documents: Documents that explain exactly what coverage includes and what it does not include, how to access health care, what services require prior approval from Priority Health, and much more. Depending on what plan they have, members of Priority Health plans may receive an insurance policy, a Certificate of Coverage, an Explanation of Coverage, or a Summary Plan Description. If you don't receive one of these documents after you've been enrolled, contact your Human Resources staff or call our Customer Service number.

Covered: When a service is "covered," it means the health plan will pay for it after the member meets his or her deductible. Some services are covered before the member meets the deductible. Some services, plastic surgery for example, are usually not covered by a health plan.

Deductible: The amount that a member of a health insurance plan must pay up front each year for health care services before the plan begins to pay. For example, if your deductible is $1,000, your plan won't pay anything until you've met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services. Generally, the higher the deductible, the lower the monthly premium.

Disease management:  Educational materials and counseling from nurse case managers that can help people with chronic illnesses by keeping their conditions from getting worse.

Drugs:

• First Line Agent: A drug considered to be the first choice to treat a specific condition.
• Second Line Agent: A drug that is used to treat a specific condition if the first line agent fails, or if a patient is unable to take the first line agent.

Fee-for-service: The traditional method of paying for medical services. A doctor charges a fee for each service provided, and the insurer pays all or part of that fee. Sometimes the patient pays a copay for each visit to the doctor.

Flexible spending account (FSA): A special account that allows individuals to set aside tax-free dollars to pay for dependent care and certain health expenses that are not paid for by a health insurance plan.

Formulary: Also called "approved drug list," a formulary is a list of medications that a health plan, working with pharmacists and physicians, approves for coverage. Drugs are included in a plan's formulary based on their proven effectiveness and cost-effectiveness. Drugs not included in a plan's formulary are not covered.

Generic: A drug that has only a chemical name, as opposed to a brand name. Every drug is given a generic name to describe its chemical makeup. A generic equivalent drug is a chemical copy of the original brand-name drug. There are also generic alternative drugs, which are not chemically identical but which treat the same disease or condition.

Guaranteed issue: In certain situations, such as losing your employer-sponsored retiree health insurance, a health insurance company cannot deny you from enrolling in its Medigap policies or increase your Medigap premium because of your health conditions. This period is called your "guaranteed issue" period. During this period, you have a "guaranteed issue right" to enroll.

HCPCS: HCFA (see below) Common Procedural Coding System, an expansion of the AMA's CPT codes to account for additional services such as ambulance services, supplies, and equipment.

HCFA: Health Care Financing Administration, the agency that administers the Medicare, Medicaid, and Child Health Insurance programs.

Health maintenance organization (HMO): An organization that provides health care in return for pre-set monthly payments. Most HMOs provide care through a network of doctors, hospitals and other medical professionals that their members must use in order to be covered for that care.

Health reimbursement arrangement (HRA): A type of health insurance plan that reimburses employees for qualified medical expenses.

Health savings account (HSA): A special account owned by an individual used to pay for current and future medical expenses.

High deductible health plan (HDHP): Insurance that requires members to pay for all covered benefits, except preventive care services, until they meet a set deductible. HDHPs typically have lower premiums and higher deductibles than other health plans.

HMO models: HMOs come in different forms, or "models."

• Staff Model HMO: A type of HMO in which the doctors and other medical professionals are salaried employees of the HMO, and the clinics or health centers in which they practice are owned by the HMO.
• Group Model HMO: An HMO made up of one or more physician group practices that are not owned by the HMO, but that operate as independent partnerships or professional corporations. The HMO pays the groups at a negotiated rate, and each group is responsible for paying its doctors and other staff and for paying for hospital care or care from outside specialists.
• Independent Practice Association (IPA): IPAs generally include large numbers of individual private practice physicians who are paid either a fee or a fixed amount per patient to take care of the IPA's members.
• Mixed Model HMO: A health plan that includes more than one form of HMO within a single plan. For instance, a staff model HMO might also contract with independent physician groups or with individual private practice physicians.

Leased network/partner network: A network Priority Health has contracted with to provide services to members who live or travel outside of our standard coverage area.

Managed care organization: A general term for HMOs and all health plans that provide health care in return for pre-set monthly payments and that coordinate care through a specific network of primary care physicians and hospitals.

Network: (Also called "participating" or "in-network") The doctors, clinics, health centers, medical group practices, hospitals, and other health care providers that a health plan has selected and contracted with to care for its members.

Open enrollment period: Under Medigap, your open enrollment period is the six-month time period after enrolling in Medicare Part B. It begins on the first day of the month in which you are BOTH 1) age 65 or older and 2) enrolled in Medicare Part B.

Out-of-network: Not in the health plan's network of selected and approved doctors and hospitals. Members who get care out-of-network (sometimes called out-of-area) without getting permission from their health plan to do so may have to pay for all or most of that care themselves. Exceptions are usually made for extreme emergencies or urgent care needed when traveling away from home.

Out-of-pocket maximum: The most a plan member will pay for covered services each year, including the deductible and coinsurance.

Patient-centered medical home (PCMH): A model for care provided by physician practices aimed at strengthening the physician-patient relationship by replacing care based on illnesses and patient complaints with coordinated care and a long-term healing relationship.

Point-of-service (POS) plan: A type of managed-care coverage that allows members to choose to receive services either from participating providers or from providers outside the PriorityPOS plan's network. In-network care from participating health care providers is more fully covered; for out-of-network care, members pay deductibles and coinsurance, much like traditional health insurance coverage.
There are two slightly different versions of the PriorityPOS^SM health plan.

• POS A refers to the network used by the traditional fully funded point-of-service (POS) plan, where for a set premium per member, Priority Health covers both the administrative and the medical costs of all members.
• POS B refers to the network used by the self-funded and shared funded versions of the POS plan, where the members' employer covers all or part of the medical costs.

Polypharmacy: When a patient uses multiple medications that duplicate or interact with each other, possibly causing an adverse drug reaction. Generally occurs when a patient visits more than one physician and is prescribed more drugs than needed for a certain condition, doesn't follow dosage or pharmacist instructions, or has too many pills to take (also called pill burden).

Practice guidelines (also called Clinical Practice Guidelines): Carefully developed guidelines on how best to diagnose and treat specific medical conditions. Practice guidelines are usually based on clinical literature showing effectiveness and on the opinions of experts. They are designed to help physicians and patients make decisions, and to help a health plan evaluate appropriateness and medical necessity of care.

Preferred benefits: Under our PriorityPOS plan, this refers to covered services received from health care providers who participate in the PriorityPOS network. This is sometimes referred to as "in-network benefits."

Preferred provider organization (PPO): A network of doctors and hospitals that provides care at a lower cost than through traditional insurance. PPO members get better benefits (more coverage) when they use the PPO's network of health care providers. They pay higher out-of-pocket costs when they choose to get care outside the PPO network.

Preventive care: Care designed to prevent disease altogether, to detect and treat it early, or to manage its course most effectively. Examples include immunization shots, screenings like Pap smears, mammograms and colonoscopies, and cholesterol checks.

Primary care: Preventive health care and routine medical care that is typically provided by a doctor trained in internal medicine, pediatrics, or family practice, or by a nurse, nurse practitioner or physician's assistant.

Primary care physician, primary care provider (PCP): A health care professional, usually an internist, pediatrician or family physician, devoted to general medical care of patients. Most managed-care plans require members to choose a primary care physician or other primary care provider (such as a nurse practitioner) who then provides or coordinates all care for that patient.

Product: A health plan, such as HMO, POS, or PPO.

Provider: A person, practice or facility that provides health care services. Providers include doctors, specialists, nurses, health centers, physical therapists, labs, hospitals, etc.

Referral: A formal request to get care from a specialist or hospital. Some specialists require a referral from a patient's primary care doctor before they will see a patient.

Rider: An addition to a member's coverage documents that describes any changes to their basic plan. For example, a contraceptive rider may add or delete contraceptive coverage.

Specialist: A doctor or other health professional whose training and expertise are in a specific area of medicine, such as cardiology or dermatology.

Specialty drug: A drug that requires special handling. It is generally self-administered and used for a chronic illness.

Specialty pharmacy: A pharmacy that specializes in the handling, distribution, and patient management of specialty drugs.

State Medicaid carve out: A group of drugs that the State of Michigan, not Priority Health, determines to be covered or not for Medicaid plan members.

Tier: Classification for drugs listed in our formulary or approved drug list.

• Generic: Equivalent or alternative to brand-name drugs, but they cost less.
• Preferred brand: Brand-name drug that requires a higher copay than generic, but a lower copay than a non-preferred drug. These drugs are commonly prescribed and selected based on their effectiveness.
• Non-preferred brand: Brand-name drug that requires an even higher level of copay. These drugs usually have lower-cost alternatives with the same or better effectiveness.
• Preferred specialty: Specialty drug that is selected based on its effectiveness, safety and cost-effectiveness.
• Non-preferred specialty: Specialty drug that requires the highest level of copay. These drugs usually have lower-cost alternatives with the same or better effectiveness.