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Glossary of Terms in Managed Health Care
The following are definitions of commonly used terms in the medical provider, hospital and managed care industries. This dictionary is comprised of 26 individual pages, one for each letter of the alphabet. To find a certain word that starts with this letter of the alphabet, may we suggest that you please try the "find" or "search" function in your browser. Or you may simply scroll down the list. If your word starts with another letter, please use the alphabet index below.
This glossary can also be purchased in printed book format if you would like to have it handy at your desk or in your briefcase.
PACE - See Programs of All-Inclusive Care for the Elderly.
Paid Claims Loss Ratio - Paid claims divided by premiums. See also Loss Ratio.
Participating physician or Participating Provider - Simply refers to a provider under a contract with a health plan. A physician or hospital that has agreed to provide services for a set payment provided by a payer, or who agrees to other arrangements, or who agrees to provide services to a set of covered lives or defined patients. Also refers to a provider or physician who signs an agreement to accept assignment on all Medicare claims for one year. See also Assignment, Preferred Provider or Network.
Patient Liability - The dollar amount that an insured is legally obligated to pay for services rendered by a provider. These may include co-payments, deductibles and payments for uncovered services.
Patient Origin Study - A study, generally undertaken by an individual health program or health planning agency, to determine the geographic distribution of the residences of the patients served by one or more health programs. Such studies help define catchment and medical trade areas and are useful in locating and planning the development of new services.
Part A Medicare - Refers to the inpatient portion of benefits under the Medicare Program, covering beneficiaries for inpatient hospital, home health, hospice, and limited skilled nursing facility services. Beneficiaries are responsible for deductibles and copayments. Part A services are financed by the Medicare HI Trust Fund, which consists of Medicare tax payments. See also Medicare.
Part B Medicare - Refers to the outpatient benefits of Medicare. Medicare Supplementary Medical Insurance (SMI) under Part B of Title XVII of the Social Security Act covers Medicare beneficiaries for physician services, medical supplies, and other outpatient treatment. Beneficiaries are responsible for monthly premiums, copayments, deductibles, and balance billing. Part B services are financed by a combination of enrollee premiums and general tax revenues. See also Medicare.
Part D Medicare - A stand-alone drug plan, offered by insurers and other private companies to beneficiaries that receive their Medicare Part A and/or B benefits through the Original Medicare Plan; Medicare Private Fee-for-Service Plans that don’t offer prescription drug coverage; and Medicare Cost Plans offering Medicare 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 and discounting. When people join a Medicare Prescription Drug Plan, they use the plan member cards that are received from the plans when they go to the pharmacies to purchase prescriptions. When they use their cards, they will normally get discounts on their prescriptions, provided that the drugs are on the approved or covered lists and they are not operating within the "donut hole". Costs will vary depending on recipients' financial situations and which Medicare Prescription Drug Plans they chose. If an individual has limited income and resources, he or she may get extra help to cover prescription drugs for little or no cost. See also Medicare and Prescription Drug Plan.
Partial Capitation - A contract between a payer and a sub-capitor, provider or other payer whereby payments made are a combination of capitated premiums and fee for service payments. The proportion of the ratios determines the amount of risk. Sometimes certain outliers are paid as fee for service (difficult childbirth, cardiac care, cancer) while routine care (preventative, family, simple surgeries and common diagnoses) are capitated.
Partial Hospitalization Program (PHP) - Acute level of psychiatric treatment normally provided for 4 or more hours per day. Normally includes group therapies and activities with homogeneous patient populations. Is used as a referral step-down from inpatient care or as an alternative to inpatient care. Unlike intensive outpatient or simple outpatient services, PHP provides an attending psychiatrist, onsite nursing and social work. Reimbursed by payers at a rate that is roughly one half of inpatient psychiatric hospitalization day rate. Patients do not spend the night at the partial hospital.
Partial Risk Contract - A contract between a purchaser and a health plan, in which only part of the financial risk is transferred from the purchaser to the plan. Forms of this are often seen in "self-funded" plans, competitive bidding arrangements and new health plans.
Participating Physician - A primary care physician in practice in the payer's managed care service area who has entered into a contract.
Participating Provider - Any provider licensed in the state of provision and contracted with an insurer. Usually this refers to providers who are a part of a network. That network would be a panel of participating providers. Payers assemble their own provider panels.
Payer (usually Third Party Payer) - The public or private organization that is responsible for payment for health care expenses. Payers may be insurance companies or self-insured employers.
Pay-for-Performance Programs - A program of financially structured incentives for practitioners and providers in exchange or as reward for the achievement of certain benchmarks of performance. The hope is that by offering positive rewards – both for reaching thresholds of performance and for making continuous strides in improving the quality of health care – high quality health care will be delivered on a consistent basis. This approach acknowledges the reality that financial rewards are among the most powerful tools for bringing about behavior change. These incentive programs are largely untested. Pay-for-performance programs are operating in a complex reimbursement environment that often creates – by omission or commission – barriers to reaching the goal of consistent, high quality care for all patients. For example, payment systems frequently do not recognize the nuances of care delivery, nor do they always pay fairly for important aspects of care, such as activities that support patient education, continuity of care, or integration of services. One pitfall of these programs is that the financial incentives may discourage providers from treating severely ill patients in order to improve their outcome reporting. Incentives can also inadvertently discourage providers from ordering potentially life-saving procedures in order to save costs.
PBM - See Pharmacy Benefit Manager or Pharmacy Benefit Management Plan.
PBP - See Prescription Benefit Plan.
PCCM - See Primary Care Case Management.
PCN - See Primary Care Network.
PCP - Primary care physician who often acts as the primary gatekeeper in health plans. That is, often the PCP must approval referrals to specialists. Particularly in HMOs and some PPOs, all members must choose or are assigned a PCP.
See Primary Care Case Management or Primary Care Physician.
PCP Capitation - A reimbursement system for healthcare providers of primary care services who receive a pre-payment every month. The payment amount is based on age, sex and plan of every member assigned to that physician for that month.
PCR - See Physician Contingency Reserve.
PDP - See Prescription Drug Plan.
Peer Review - The mechanism used by the medical staff to evaluate the quality of total health care provided by the Managed Care Organization. The evaluation covers how well all health personnel perform services and how appropriate the services are to meet the patients' needs. Evaluation of health care services by medical personnel with similar training. Generally, the evaluation by practicing physicians or other professionals of the effectiveness and efficiency of services ordered or performed by other members of the profession (peers). Frequently, peer review refers to the activities of the Professional Review Organizations, and also to review of research by other researchers. This is the most common method utilized in managed care for monitoring the utilization by physicians. In other words, other physicians will review the decisions made by a physician. Much controversy has surfaced in this area in recent years. Some physicians are reluctant to be reviewed by physicians over the phone or by having their written records read. Some consumers suspect that peer review is not true peer review since both the providers and the reviewers often have personal financial incentives to reduce or increase medical care. See fiduciary. Nonetheless, peer review is utilized in all managed care settings.
Peer Review Committee - The hospital, clinic or MCO committee that reviews cases of health care services delivery in which the quality of care is questionable or problematic.
Peer Review Organization (PRO) - An organization established by the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 to review quality of care and appropriateness of admissions, readmissions, and discharges for Medicare and Medicaid. These organizations are held responsible for maintaining and lowering admission rates, reducing lengths of stay, while insuring against inadequate treatment. PROs can conduct review of medical records and claims to evaluate the appropriateness of care provided. PROs also exist within private carriers and providers. Peer Review itself is a process whose confidentiality in private organizations is protected by law. This allows hospitals and groups to conduct internal investigation and monitoring of care decisions and outcomes without the production of related documents in court proceedings. Providers have fought for these protections.
Penalty (on Medicare Premium) - An amount added to a senior citizen's monthly premium for Medicare Part B, or for a Medicare Prescription Drug Plan, if the citizen does not join the Medicare Plan(s) when they are first able to. The senior citizen pays this higher amount as long as the citizen has Medicare. There are some exceptions.
Pended Authorization - An authorization decision that is delayed.
Per Diem Rates - A form of payment for services in which the provider is paid a daily fee for specific services or outcomes, regardless of the cost of provision. Per diem rates are paid without regard to actual charges and may vary by level of care, such as medical, surgical, intensive care, skilled care, psychiatric, etc. Per diem rates are usually flat all-inclusive rates.
Performance Gap - The occurrence, trend, or incident that shows that a clinician's performance falls short of expected performance levels, particularly when the clinician ignores accumulated scientific evidence supporting other clinical interventions or when the clinician does not reach benchmarked targets.
Performance Measurement – Measures and results that describe the health care being provided and the outcomes. Performance may be stated in terms of health outcome, quality of care, timeliness, correctness, percentage of goals attained or percentage of mistakes made. Performance measures may also indicate whether a health plan or provider has appropriately provided certain services expected to lead to desirable outcomes. Closely related to Continuous Quality of Improvement (CQI) and Utilization Review (UR).
Performance Improvement - See Quality Improvement
Performance Standards - Standards set by the MCO or payer that the provider will need to meet in order to maintain it’s credentialing, renew its contract or avoid penalty. These will vary from payer to payer, and contract to contract. Standards an individual provider is expected to meet, especially with respect to quality of care. The standards may define volume of care delivered per time period. Thus, performance standards for obstetrician/gynecologist may specify some or all of the following office hours and office visits per week or month, on-call days, deliveries per year, gynecological operations per year, etc.
Per Member Per Month (PMPM) - Applies to a revenue or cost for each enrolled member each month. The number of units of something divided by member months. Often used to describe premiums or capitated payments to providers, but can also refer to the revenue or cost for each enrolled member each month. Many calculations, other than cost or premium, use PMPM as a descriptor.
Personal Care Physician - See Primary Care Physician.
Personal Representative - A person authorized under state or other law to act on behalf of the individual in making health-related decisions. Examples include a court-appointed guardian with medical authority, a health care agent under a health care proxy, and a parent acting on behalf of an un-emancipated minor (with exceptions where state law gives minors the right to make health decisions). For a decedent, the personal representative may be an executor, administrator, or other authorized person.
Per Thousand Members Per Year (PTMPY) - A common way of reporting utilization. The most common example of hospital utilization, expressed as days PTMPY.
See also Patient Days or LOS.
PFFS - See Private Fee-for-Service Plans.
Pharmaceutical Cards - Identification cards issued by a pharmacy benefit management plan to plan members. These cards assist PBMs in processing and tracking pharmaceutical claims. Also known as drug cards or prescription cards. See Drug Plan.
Pharmacy and Therapeutics (P&T) Committee - The MCO committee that develops, updates, and administers the MCO's formulary and regularly reviews reports on clinical trials, drug utilization reports, current and proposed therapeutic guidelines, and economic data on drugs.
Pharmacy Benefit Management (PBM) Plan - A type of managed care specialty service organization that seeks to contain the costs of prescription drugs or pharmaceuticals while promoting more efficient and safer drug use. Also known as a prescription benefit management plan. See Drug Plan.
Pharmacy Benefit Manager (PBM) - PBMs are third party administrators of prescription drug benefits.
PHO - See Physician-Hospital Organization.
PHP - See Partial Hospitalization Program.
PHP - See Prepaid Health Plan.
Physician Attestation - The requirement that the attending physician certify, in writing, the accuracy and completion of the clinical information used for DRG assignment.
Physician Contingency Reserve (PCR) - Portion of a claim deducted and held by a health plan before payment is made to a capitated physician. Revenue that is withheld from a provider's payment to serve as an incentive for providing less expensive service. A typical withhold is approximately 20 percent of the claim. This amount can be paid back to the provider following analysis of his/her practice and service utilization patterns. See also Withhold.
Physician Current Procedural Terminology (CPT) - List of services and procedures performed by providers, with each service/procedure having a unique 5-digit identifying code. CPT is the health care industry's standard for reporting of physician services and procedures. Used in billing and records.
Physician-Hospital Organization (PHO) - An organization representing hospitals and physicians as an agent. A legal entity formed by a hospital and a group of physicians to further mutual interests and to achieve market objectives. A PHO generally combines physicians and a hospital into a single organization for the purpose of obtaining payer contracts. A contracted arrangement among physicians and hospital(s) wherein a single entity, the PHO, agrees to provide services to insurers' subscribers. The PHO serves as a collective negotiating and contracting unit. A PHO may be structured to share the risk of contracting between hospital(s) and doctors. PHOs may also own, operate or subcontract MSOs, health plans or providers. A PHO can manage risk. It is typically owned and governed jointly by a hospital and shareholder physicians.
Physician Organization - This term describes physician linkages and alliances that allow physicians to manage risk and capitation. Information systems, physician relationships, and financial integration allow these organizations to be more integrated than the traditional solo practice or IPA relationship between healthcare providers and/or managed care organizations that are working to develop a "seamless" continuum of healthcare services. Sometimes physician organizations are simply group practices or professional organizations without intention of acting as a contracting entity.
Physician Payment Review Commission - Established by Congress in 1986 to advise it on reforms of Medicare policies for paying physicians. Submits a report to Congress annually.
Physician Practice Management Company (PPMC) - A company that provides management and administrative support, often with capital for clinical expansion. The usual management fee is 15-30% of net revenue minus the non-provider related clinic expenses. In most cases, gives physicians a long-term contract to continue working in their practice and sometimes an equity (ownership) position in the company.
Physician Services - Services provided by an individual licensed under state law to practice medicine or osteopathy. Physician services given while in the hospital that appear on the hospital bill are not included in this definition.
PI - See Performance Improvement
Plan Administration - A term often used to describe the management unit with responsibility to run and control a managed care plan - includes accounting, billing, personnel, marketing, legal, purchasing, possibly underwriting, management information, facility maintenance, servicing of accounts. This group normally contracts for medical services and hospital care. If an insurance company is the underwriter, it may serve as its own administrator or may contract to a 3rd party administrator. The plan administrator is a person or organization specifically designated by the terms of the plan. If the plan does not make such a designation, then the plan sponsor is generally the plan administrator. Self-insured plans do the same.
See also Third Party Administrator.
Plan Document - The document that contains all of the provisions, conditions, and terms of operation of a pension or health or welfare plan. This document may be written in technical terms as distinguished from a summary plan description (SPD) that, under ERISA, must be written in a manner calculated to be understood by the average plan participant.
Plan Funding - The method that an employer or other payer or purchaser uses to pay medical benefit costs and administrative expenses.
Plan Sponsor - An entity that sponsors a health plan. This can be an employer, a union, or some other entity.
Play or Pay - Proposal to make employers provide health care coverage for employees or pay a special government tax.
PMPM - See Per Member Per Month.
Point-of-Service Plan or Point-of-Service Option (POS) - A health services delivery organization that offers the option to its members to choose to receive a service from participating or a nonparticipating provider. Generally the level of coverage is reduced for services associated with the use of non-participating providers. Managed care plan that specifies that those patients who go outside of the plan for services may pay more out of pocket expenses. A health insurance benefits program in which subscribers can select between different delivery systems (i.e., HMO, PPO and fee-for-service) when in need of health care services and at the time of accessing the services, rather than making the selection between delivery systems at time of open enrollment at place of employment. Typically, the costs associated with receiving care from the "in network" or approved providers are less than when care is rendered by non-contracting providers. Or the costs are less if provided by approved providers in either the HMO or PPO rather than "out of network" or "out of plan" providers. This is a method of influencing patients to use certain providers without restricting their freedom of choice too severely.
Pooling - Combining risks for groups into one risk pool. The practice of underwriting a number of small groups as if they constituted one large group. Also see Risk.
Portability - Requirement that health plans guarantee continuous coverage without waiting periods for persons moving between plans. The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors. This is a new protection for beneficiaries involving the issuance of a certificate of coverage from previous health plan to be given to new health plan. Under this requirement, a beneficiary who changes jobs is guaranteed coverage with the new plan, without a waiting period or having to meet additional deductible requirements. Primarily, this refers to the requirement that insurers waive any pre-existing condition exclusion for beneficiaries previously covered through other insurance. See also HIPAA.
POS - See Point-of-Service Plan.
PPMC - See Physician Practice Management Company.
PPO - See Preferred Provider Organization.
PPS Inpatient Margin - A measure that compares DRG based operating and capital payments with Medicare-allowable inpatient operating and capital costs. It is calculated by subtracting total Medicare-allowable inpatient operating and capital costs from total PPS operating and capital payments and dividing by total PPS operating and capital payments.
PPS Operating Margin - A measure that compares PPS operating payments with Medicare-allowable inpatient operating costs. This measure excludes Medicare costs and payments for capital, direct medical education, organ acquisition, and other categories not included among Medicare-allowable inpatient operating costs. It is calculated by subtracting total Medicare-allowable inpatient operating costs from total PPS operating payments and dividing by total PPS operating payments.
PPS Year - A designation referring to hospital cost reporting periods that begin during a given Federal fiscal year, reflecting the number of years since the initial implementation of PPS. For example, PPS1 refers to hospital fiscal years beginning during Federal fiscal year 1984, which was the first year of PPS. For a hospital with a fiscal year beginning July 1, PPS 1 covers the period from July 1, 1984, through June 30, 1985. (See also Fiscal Year)
Practical Nurses - Practical nurses, also known as vocational nurses, provide nursing care and treatment of patients under the supervision of a licensed physician or registered nurse. Licensure as a licensed practical nurse (L.P.N.) or in California and Texas as a licensed vocational nurse (L.V.N.) is required.
Practice Parameters, Practice Guidelines - Systematically developed statements to standardize care and to assist in practitioner and patient decisions about the appropriate health care for specific circumstances. Practice guidelines are usually developed through a process that combines scientific evidence of effectiveness with expert opinion. Practice guidelines are also referred to as clinical criteria, protocols, algorithms, review criteria, and guidelines. The American Medical Association defines practice parameters as strategies for patient management, developed to assist physicians in clinical decision-making. Practice parameters may also be referred to as practice options, practice guidelines, practice policies, or practice standards.
Preadmission Review, Pre-Admission Certification, Pre-Certification, or Pre-Authorization - Review of "need" for inpatient care or other care before admission. This refers to a decision made by the payer, MCO or insurance company prior to admission. The payer determines whether or not the payer will pay for the service. Most managed care plans require pre-cert. This is a method of controlling and monitoring utilization by evaluating the need for service prior to the service being rendered. The practice of reviewing claims for inpatient admission prior to the patient entering the hospital in order to assure that the admission is medically necessary. A method of monitoring and controlling utilization by evaluating the need for medical service prior to it being performed. The process of notification and approval of elective inpatient admission and identified outpatient services before the service is rendered. An administrative procedure whereby a health provider submits a treatment plan to a third party before treatment is initiated. The third party usually reviews the treatment plan, monitoring one or more of the following: patient's eligibility, covered service, amounts payable, application of appropriate deductibles, co-payment factors and maximums. Under some programs, for instance, predetermination by the third party is required when covered charges are expected to exceed a certain amount. Similar processes: preauthorization, precertification, pre-estimate of cost, pretreatment estimate, and prior authorization.
See also Prior Approval.
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.
Pre-Authorization - 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.
Pre-Cert - See Preadmission Review.
Pre-Existing Condition, Preexisting Condition - A medical condition developed prior to issuance of a health insurance policy that may result in the limitation in the contract on coverage or benefits. Normally this is defined as a health problem for which the new enrollee received health care services before the date that the new health plan benefit begins. Some policies exclude coverage of such conditions and the exclusion may continue for a specific period of time or indefinitely. Federally qualified HMOs cannot limit coverage for pre-existing conditions. New statutes in 1997 and 1998 altered the freedom other health plans have enjoyed in setting preexisting time limits. Certification of prior coverage may mean new insurers would need to waive preexisting clauses for some subscribers. See HIPAA, Portability
and also Creditable Coverage.
Preferred Drug List – see Formulary
Preferred Provider Organization (PPO) - Some combination of hospitals and physicians that agrees to render particular services to a group of people, perhaps under contract with a private insurer. A health care delivery system that contracts with providers of medical care to provide services at discounted fees to members. Members may seek care form non-participating providers but generally are financially penalized for doing so by the loss of the discount and subjection to co-payments and deductibles. The services may be furnished at discounted rates and the insured population may incur out-of-pocket expenses for covered services received outside the PPO if the outside charge exceeds the PPO payment rate. A PPO can also be a legal entity or it may be a function of an already formed health plan, HMO or PHO. The entity may have a health benefit plan that is also referred to as a PPO. PPOs are a common method of managing care while still paying for services through an indemnity plan. Most PPO plans are point of service plans, in that they will pay a higher percentage for care provided by providers in the network. Many insurers will offer PPOs as well as HMOs. Generally PPOs will offer more choice for the patient and will provide higher reimbursement to the providers. See also point of service.
Premium - 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.
Prepayment - 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 Benefit Managers (PBMs) - Firms that contract with health plans or plan sponsors (such as employers) and specialize in claims processing and administrative functions involved with operating a prescription drug program. PBMs negotiate with pharmaceutical companies and prescription drug wholesalers to obtain a discount on bulk orders of prescription drugs. PBMs may also attempt to influence doctors’ prescribing behavior or patients’ drug utilization by manipulating the cost of certain prescription drugs to influence the use of alternative and comparable drug therapies.
Prescription Drug Benefit (PDB) or Prescription Drug Coverage – see Prescription Drug Plan
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 Prescription Drug Plan, they use the plan member cards that are received from the plans when they go to the pharmacies to purchase prescriptions. When they use their cards, they will normally get discounts on their prescriptions, provided that the drugs are on the approved or covered lists and they are not operating within the "donut hole". Costs will vary depending on recipients' financial situations and which Medicare Prescription Drug Plans they chose. If an individual has limited income and resources, he or she may get extra help to cover prescription drugs for little or no cost. See also Medicare Part D and Medicare Prescription Drug Plan.
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.
Prevalence - 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.
Preventive Care or Preventive Services - Health care that emphasizes prevention, early detection and early treatment, thereby reducing the costs of healthcare in the long run. Health care that seeks to prevent or foster early detection of disease and morbidity and focuses on keeping patients well in addition to health them while they are sick (for example, Pap tests, pelvic exams, flu shots, and screening mammograms).
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 insurer will pay for the service or supply, patients often confuse this with medical authorization, which it is not. A patient and physician may still seek the treatment or supply even though the insurer has not agreed to pay for it. Prior authorization is usually required for non-emergency services that are expensive or likely to be overused. A managed care organization will identify those services and procedures that require prior authorization, without which the provider may not be compensated or the patient may not be reimbursed. Typically, prior approvals are valid for a set length of time as long as the patient’s benefits do not change between the date the approval is given and the date the service or product is provided. See also Pre-authorization.
Prior Authorization for Medical Services or Supplies – See Prior Approval above.
Prior Authorization for Drug Benefits - The process for obtaining drug coverage from a prescription benefit manager. If a physician feels that, for medically necessary reasons, a patient needs a certain medication that is not on the patient’s drug formulary or requires prior authorization, the prescribing physician may request an exception by contacting the patient’s prescription benefit manager. Prior authorization may be required for a number of reasons, such as the potential toxicity or the potential abuse of the drug. Prior authorization is similar to prior approval but typically used only in reference to drug benefits. Prior authorization is designed to encourage appropriate drug use and to assist in reducing drug benefit costs. See also Prior Approval.
Privacy - 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 provide the notice, the researcher should also obtain the subject's written acknowledgement of receipt. These have become more common and visible in hospitals and physician offices due to HIPAA requirements.
Private Fee-for-Service Plan (Medicare) - A type of Medicare Advantage Plan in which the patient may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare Program, decides how much it will pay and what the patient pays for the services. In this arrangement, the citizen may pay more or less for Medicare-covered benefits.
PRO - See Peer Review Organization or Professional Review Organization.
Professional Review Organization (PRO) - An organization that reviews the services provided to patients in terms of medical necessity professional standards; and appropriateness of setting.
Professional Standards Review (PSRO) - A physician-sponsored organization charged with reviewing the services provided patients who are covered by Medicare, Medicaid and maternal and child health programs. The purpose of the review is to determine if the services rendered are medically necessary; provided in accordance with professional criteria, norms and standards; and provided in the appropriate setting.
Profile - 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.
Programs of All-Inclusive Care for the Elderly (PACE) - PACE combines medical, social, and long-term care services for frail people to help people stay independent and living in their community as long as possible, while still receiving medical care they need. PACE is available only in states that have chosen to offer it under Medicaid. To be eligible, an enrollee must: 1) be 55 years old or older, 2) live in the service area of the PACE program, 3) be certified as eligible for nursing home care by the appropriate state agency, and, 4) be able to live safely in the community.
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 in an efficient hospital for treating a typical inpatient in a given diagnosis-related group. Payments for each hospital are adjusted for differences in area wages, teaching activity, care to the poor, and other factors. Hospitals may also receive additional payments to cover extra costs associated with atypical patients (outliers) in each DRG. Capital costs, originally excluded from PPS, are being phased into the system. By 2001, capital payments will be made on a fully prospective, per-case basis.
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.
Provider - 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.
Provider Services Organization (PSO) - Defined by CMS as a public or private entity that is established or organized by a health care provider or group of affiliated providers; that provides a substantial proportion of the services under its Medicare contract directly through the provider or group of affiliated providers; and in which the provider or affiliated providers directly or indirectly share substantial financial risk and have at least a majority financial interest. Similar to the concept of MSO, see Medical Services Organization, or Management Services Organization.
PSRO - 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.
PTMPY - 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.Purchaser - 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.
Purchasing Coalitions and Purchasing Pools - See purchasing alliances.
Pure Community Rating - See standard community rating.
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