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Copyright© 1997 - 2011, Pam Pohly, All Rights Reserved.
This glossary can now also be purchased in printed book format!
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 nearby and accessible.
Sanction - Reprimand that gives binding force to a law or rule, or secures obedience to it, as the penalty for breaking it, or a reward for carrying it out. The government and its agencies can sanction hospitals, providers and health plans. Health plans sometimes seek to sanction hospitals and physicians. Medical staffs sometimes seek sanctions against its members.
SCH - See Sole Community Hospital.
SCHIP - See State Children's Health Insurance Program, below.
SCR - See Standard Class Rate.
Secondary Care - Services provided by medical specialists who generally do not have first contact with patients (e.g., cardiologist, urologists, dermatologists). In the U.S., however, there has been a trend toward self-referral by patients for these services, rather than referral by primary care providers. This is quite different from the practice in England, for example, where all patients must first seek care from primary care providers and are then referred to secondary and/or tertiary providers, as needed.
Secondary Coverage - Health plan that pays costs not covered by primary coverage under coordination of benefits rules. Any insurance that supplements Medicare coverage. The three main sources for secondary insurance are employers, privately purchased Medigap plans, and Medicaid. See Secondary Payer.
Secondary Payer - An insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other insurance depending on the situation and may or may not be Supplemental Insurance.
Second Opinion - This is when another doctor gives his or her view about what another doctor has said a patient has and how it should be treated.
Section 1115 Medicaid Waiver - The Social Security Act grants the secretary of HHS broad authority to waive certain laws relating to Medicaid for the purpose of conducting pilot, experimental or demonstration projects which are "likely to promote the objectives" of the program. Section 1115 demonstration waivers allow states to change provisions of their Medicaid programs, including: eligibility requirements, the scope of services available, the freedom to choose a provider, a provider's choice to participate in a plan, the method of reimbursing providers, and the statewide application of the program. Health plans and capitated providers can seek waivers through their state intermediaries.
Section 1915(b) Medicaid Waiver - Section 1915(b) waivers allow states to require Medicaid recipients to enroll in HMOs or other managed care plans in an effort to control costs. The waivers allow states to: implement a primary care case-management system; require Medicaid recipients to choose from a number of competing health plans; provide additional benefits in exchange for savings resulting from recipients' use of cost-effective providers; and limit the providers from which beneficiaries can receive non-emergency treatment. The waivers are granted for two years, with two-year renewals. Often referred to as a "freedom-of-choice waiver"
Self-Funding or Self-Funded Plan - Employer or organization assumes complete responsibility for health care losses of its covered employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization. In this case, the employer does not pay premiums to an insurance carrier, but, rather pays administrative costs to the insurance company or health plan, and, in essence, treats them as a third party administrator (TPA) only. However, the employee may not be able to detect any difference because the plan description and membership card may carry the name of the insurance company not the employer. Same as Self-Insured, see below.
Self-Insurance or Self-Insured - An individual or organization that assumes the financial risk of paying for health care. This term is usually used to describe the type of insurance that an employer provides. When an employer is self-insured, this means that the payer or managed care company manages the employer's funds whether than requiring the employer to pay premiums. Many employers choose to self-insure because they are then exempted from certain insurance laws and also think that they will spend less money in the short run. Employers assume the risks involved and also have full rights to all insurance claim information. Typically, the self-insured employer is a large employer. The employees or patients will not be able to discern if their employer is self-insured easily since all paperwork or benefits cards usually contain the name of the insurance company.
Same as Self-Funded. See also Third Party Administrator.
Sentinel Event - Adverse health events that may have been avoided through appropriate care or alternate interventions. Providers are required to alert JCAHO and often state licensing authorities of all sentinel events, including a review of risk factors, preventative measures and case analysis.
Service Area - The area where a health plan accepts members. For plans that require enrollees to use certain doctors and hospitals, it is also the area where services are provided. The plan may disenroll a member who moves out of the plan's service area. Service area is also a term used by hospitals to describe the geographic or catchment area from which the hospital may receive referrals or admissions. Also see Disenrollment.
Service Category Definition - A general description of the types of services provided under the service and/or the characteristics that define the service category.
Shadow Pricing - Within a given employer group, pricing of premiums by HMO based upon the cost of indemnity insurance coverage, rather than strict adherence to community rating or experience rating criteria.
Shared Risk Pool for Referral Services - In capitation, the pool established for the purpose of sharing the risk of costs for referral services among all participating providers. Commonly, this involves a group or specialty category of physicians and is based on utilization. Sometimes, risk pools are established in partnered or limited partner or foundation capitation systems, whereby both providers share risk in a limited way and health plans.
Shared Savings - A provision of most prepaid health care plans where at least part of the providers' income is directly linked to the financial performance of the plan. If costs are lower than projections, a percentage of these savings are referred to the providers.
SHIP - See State Health Insurance Assistance Program.
SHMO - See Social Health Maintenance Organization.
Significant Break in Coverage - Generally, a significant break in coverage is a period of 63 consecutive days during which an individual has no creditable coverage. In some states, the period is longer if the individual’s coverage is provided through an insurance policy or HMO. Days in a waiting period during which you had no other health coverage cannot be counted toward determining a significant break in coverage. This definition relates to Creditable Coverage and Pre-Existing Illnesses that are considered when an individual enrolls in a new health plan. See also Creditable Coverage.
Single-Stream Funding - The consolidation of multiple sources of funding into a single stream. For example, this is a key approach used in some progressive mental health systems to ensure that "funds follow consumers."
Site Appropriateness Listings - A resource for the review of surgery and certain nonsurgical interventions that indicates the most appropriate settings for common procedures.
Site-of-Service Differential - The difference in the monies paid when the same service is performed in different practice setting or by a different provider. One example would be an examination in an ER versus in a family doctor's office.
Skilled Care - A type of health care given when a patient needs skilled nursing or rehabilitation staff to manage, observe, and evaluate care. Generally refers to a level of care that is lower, or less intense, than inpatient hospital care.
Skilled Nursing Care - A level of care that includes services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse).
Skilled Nursing Facility (SNF) - A licensed institution, as defined by Medicare, which is primarily engaged in the provision of skilled nursing care. SNFs are usually DRG or PPS exempt and are located within hospitals, but sometimes are located in rehab facilities or nursing homes.
SNFs provide a level of care that requires the daily involvement of skilled nursing or rehabilitation staff and that, as a practical matter, can’t be provided on an outpatient basis. Examples of skilled nursing facility care include the provision of such services as intravenous injections and physical therapy. The need for custodial care (for example, assistance with activities of daily living, like bathing and dressing) may not, in itself, qualify for reimbursement in a skilled nursing facility by Medicare cor other health plans.
Small Group - Although each MCO's size limit may vary, generally a group composed of 1 to 99 members for which the group sponsor provides health coverage.
Small Group Market - The insurance market for products sold to groups that are smaller than a specified size, typically employer groups. The size of groups included usually depends on state insurance laws and thus varies from state to state, with 50 employees the most common size, and typically ranging from 2 to 99 members.
SMI - See Supplemental Medical Insurance.
SNF - See Skilled Nursing Facility.
Sole Community Hospital (SCH) - A hospital which (1) is more than 50 miles from any similar hospital, (2) is 25 to 50 miles from a similar hospital and isolated from it at least one month a year as by snow, or is the exclusive provider of services to at least 75 percent of its service area populations, (3) is 15 to 25 miles from any similar hospital and is isolated from it at least one month a year, or (4) has been designated as an SCH under previous rules. The Medicare DRG program makes special optional payment provisions for SCHs, most of which are rural, including providing that their rates are set permanently so that 75 percent of their payment is hospital-specific and only 25 percent is based on regional DRG rates.
Solo Practice, Solo Practitioner - A physician who practices alone or with others but does not pool income or expenses. This form of practice is becoming increasingly less common as physicians band together for contracting, overhead costs and risk sharing.
Social Health Maintenance Organization (SHMO) - A special type of health plan that provides the full range of Medicare benefits offered by standard Medicare HMOs, plus other services that include the following: prescription drug and chronic care benefits, respite care, and short-term nursing home care; homemaker, personal care services, and medical transportation; eyeglasses, hearing aids, and dental benefits.
SLMB - See Specified Low-Income Medicare Beneficiaries.
SPD - See Summary Plan Description.
Special Election Period - A term used by CMS to describe a set time that a beneficiary can change health plans or return to the Original Medicare Plan, such as: when the citizen moves outside the service area, if a Medicare+Choice organization violates its contract with the citizen, if the organization does not renew its contract with CMS, or other exceptional conditions determined by CMS. The Special Election Period is different from the Special Enrollment Period (SEP). See Election Periods, Enrollment, Penalty, or Special Enrollment Period.
Special Enrollment Period - A set time when a senior citizen can sign up for Medicare Part B, without penalty, if the citizen did not take Medicare Part B during the Initial Enrollment Period - because the citizen or the citizen's spouse were working and had group health plan coverage through an employer or union. The citizen can sign up at anytime while he or she is covered under the group plan based on current employment status. The last eight months of the Special Enrollment Period starts the month after the employment ends or the group health coverage ends, whichever comes first. See also Penalty.
Specialist - A doctor who treats only certain parts of the body, certain health problems, or certain age groups. Normally, a specialist has received advanced training in a specialty field. For example, some doctors treat only heart problems. Some health plans require enrollees to obtain a referral from a primary care provider prior to seeing a specialist in order for the specialist care to be reimbursed. Also see Referral or Primary Care Physician.
Special Needs Plan - A special type of plan that provides more focused health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or who have certain chronic medical conditions.
Specialty Health Maintenance Organization (Specialty HMO) - An organization that uses an HMO model to provide healthcare services in a subset or single specialty of medical care. Also see Carve-Out.
Specific Stop Loss Coverage - The form of excess risk coverage that provides protection for the employer against high claim on any one individual. This is protection against abnormal severity of a single claim rather than abnormal frequency of claims in total. Also see Reinsurance, Stop Loss, and Individual Stop-Loss Coverage.
Specified Disease Insurance - This kind of insurance pays benefits for only a single disease, such as cancer, or for a group of diseases. Specified Disease Insurance doesn't fill gaps in Medicare coverage but may do so when combined with other types of health plan coverage.
Specified Low-Income Medicare Beneficiaries (SLMB) - A Medicaid program that pays for Medicare Part B premiums for individuals who have Medicare Part A, a low monthly income, and limited resources.
Spend Down - A term used in Medicaid for persons whose income and assets are above the threshold for the state's designated medically needy criteria, but are below this threshold when medical expenses are factored in. The amount of expenditures for health care services, relative to income, that qualifies an individual for Medicaid in States that cover categorically eligible, medically indigent individuals. Eligibility is determined on a case-by-case basis.
Spider Graphs/Charts - A technique or tool developed by Ernst & Young, to combine analyses of a market's level of managed care evolution with an internal readiness review.
Sponsor - An entity that sponsors a health plan or makes one available to members of a group. This can be an employer, a union, or some other entity.
SSI - See Supplemental Security Income.
Staff Model HMO - A closed-panel HMO whose physicians are employees of the HMO. A model in which the HMO hires its own physicians. All premiums and other revenues accrue to the HMO, which, in turn, compensates physicians. Very much like the group model, except the doctors are employees of the HMO. Generally, all ambulatory health services are provided under one roof in the staff model.
Standard Class Rate (SCR) - Base revenue requirement per member multiplied by demographic information to determine monthly premium rates.
Standard Community Rating - A type of community rating in which an MCO considers only community-wide data and establishes the same financial performance goals for
all risk classes. Also known as pure community rating.
Standard of Care - A diagnostic and treatment process that a clinician should follow for a certain type of patient, illness, or clinical circumstance.
Standards - According to the Institute of Medicine, Standards are authoritative statements of: (1) minimum levels of acceptable performance or results, (2) excellent levels of performance or results, or (3) the range of acceptable performance or results.
Standing Referral - A referral to a specialist provider that covers routine visits to that provider. It is a common practice to permit the gatekeeper to make referrals for only a limited number of visits (often 3 or fewer). In cases where the medical condition requires regular visits to a specialist, this type of referral eliminates the need to return to the gatekeeper each time the initial referral expires.
State Children's Health Insurance Program (SCHIP) - Under Title XXI of the Balanced Budget Act of 1997, the availability of health insurance for children with no insurance or for children from low-income families was expanded by the creation of SCHIP. SCHIPs operate as part of a state's Medicaid program.
Although Medicaid has made great strides in enrolling low-income children, significant numbers of children remain uninsured. From 1988 to 1998, the proportion of children insured through Medicaid increased from 15.6% to 19.8%. At the same time, however, the percentage of children without health insurance increased from 13.1% to 15.4%. The increase in uninsured children is mostly the result of fewer children being covered by employer-sponsored health insurance. The Balanced Budget Act of 1997 created a new children's health insurance program called the State Children's Health Insurance Program. This program gave each state permission to offer health insurance for children, up to age 19, who are not already insured. SCHIP is a state administered program and each state sets its own guidelines regarding eligibility and services.
State Health Insurance Assistance Program (SHIP) - A state program that gets money from the federal government to give free local health insurance counseling to people with Medicare.
State Insurance Department - A state agency that regulates insurance and can provide information about Medigap policies and other private insurance. HMOs and other managed care entities may require permission from this department in order to operate in a given state.
State Medical Assistance Office - A state agency that is in charge of the state’s Medicaid program and can give information about programs that helps pay medical bills for people with low incomes.
State Pharmacy Assistance Program - A state program that provides people assistance in paying for drug coverage, based on financial need, age or medical condition and not based on current or former employment status. These programs are run and funded by the states.
State Survey - A process that varies by state and is responsible for assuring that hospitals or other health providers comply with Medicare, Medicaid, fire safety or other rules and regulations.
Statutory Solvency - An MCO's ability to maintain at least the minimum amount of capital and surplus specified by state insurance regulators.
Step Protocol – see Step Therapy below.
Step Therapy (and Fail First Requirements) - Drug plans may require an enrollee to try one drug before the plan will pay for another drug. Step therapy aims to control costs by requiring that enrollees use more common drugs which are usually less expensive. The process of beginning drug therapy for a medical condition with the most cost-effective and safest drug therapy and progressing to other more costly or risky therapy is called Step Therapy or Fail First Requirement. Progression to a new medication is predicated on the former medication failing to provide symptomatic relief or cure; hence “fail first.” Physicians and drug plans may disagree on the proper Step Therapy and patients are encouraged to become knowledgeable and decisive in agreeing to protocols. Also called “step protocol.”
Stop Loss Insurance - Insurance purchased by an insurance company or health plan from another insurance company to protect itself against losses. A type of insurance coverage that enables provider organizations or self-funded groups to place a dollar limit on their liability for paying claims and requires the insurer issuing the insurance to reimburse the insured organization for claims paid in excess of a specified yearly maximum. Reinsurance purchased to protect against the single overly large claim or the excessively high aggregated claim during a set period. Providers when purchasing Malpractice, Workers Comp and Liability coverages, may also use Stop Loss. Also see Reinsurance and Specific Stop Loss.
Structural Integration - The unification of previously separate providers under common ownership or control.
Sub-Capitation, Subcap or Subcapitation - An arrangement whereby a capitated health plan pays its contracted providers on a capitated basis.
In other words,the senior organization being paid under a capitated system contracts with other junior providers on a capitated basis, sharing a portion of the original capitated premium. Sometimes called Junior Cap. Can be done under Carve Out, with the providers being paid on a PMPM basis.
Subscriber - Employment group or individual that contracts with an insurer for medical services. Person or group responsible for payment of premiums, or person whose employment is the basis for membership in a health plan. Usually synonymous with enrollee, covered individual or member.
Subscriber Contract - A written agreement that describes the individual's health care policy. Also called subscribe certificate or member certificate.
Subsidy - A monetary grant paid by the government to a private person or company to assist an enterprise deemed advantageous to the public.
Subrogation - Procedure where insurance company recovers from a third party when the action resulting in medical expense (e.g. auto accident) was the fault of another person. The recovery of the cost of services and benefits provided to the insured of one health plan when other parties are liable.
Summary Plan Description (SPD) - In self-funded plans, a written explanation of the eligibility for and benefits available to employees required by ERISA.
Supplemental Insurance - Any private health insurance plan held by a Medicare beneficiary or commercial beneficiary, including Medigap policies and post-retirement health benefits. Supplemental usually pays the deductible or co-pay and sometimes will pay the entire bill when the primary carrier's benefits are exhausted.
See Secondary Payer.
Supplemental Medical Insurance (SMI) - Part B of the Medicare program. Part B normally covers the outpatient services, as opposed to Part A that covers inpatient. This voluntary program requires payment of a monthly premium, which covers 25 percent of pro-ram costs. Beneficiaries are responsible for a deductible and coinsurance payments for most covered services. See also Part B.
Supplemental Payer - Any private health insurance plan held by a Medicare beneficiary or commercial beneficiary, including Medigap policies and post-retirement health benefits. Supplemental usually pays the deductible or co-pay and sometimes will pay the entire bill when the primary carrier's benefits are exhausted.
See Secondary Payer.
Supplemental Security Income (SSI) - A federal cash assistance program for low-income aged, blind and disabled individuals established by Title XVI of the Social Security Act. States may use SSI income limits to establish Medicaid eligibility.
Supplemental Services - Optional services a health plan covers or provides.
Supplier - Generally, any company, person, or agency that provides supplies (such as medicines, linens or prostheses) to medical providers or that provides medical items or services, like wheelchair or walkers, directly to patients.
Surplus - The amount that remains when an insurer subtracts its liabilities and capital from its assets.
Surplus Lines Tax - A tax imposed by state law when coverage is placed with an insurer not licensed or admitted to transact business in the state where the risk is located. Unlike premium tax for admitted insurers, the surplus lines tax is not included in the premium and must be collected from the policyholder and remitted to the state.
This glossary can also be purchased in printed book format if you would like to have a copy for your briefcase or desk.
Copyright© 1997 - Present Date, Pam Pohly, All Rights Reserved.