Chapter 2 – Introduction to Health Insurance

Medical Care
Includes the identification of disease and the provision of care and treatment to persons who are sick, injured, or concerned about their health status
Health Care
Efforts made to maintain or restore especially by trained and licensed professionals. Expands definition to include preventive services
Preventive Services
Designed to help individuals avoid health and injury problems. Preventive exams may result in early detection of health problems, allowing less drastic and less expensive treatment options
Health Insurance or Healthcare Insurance
A contract between a policy holder and a third party payer or government health program to reimburse the policy holder for all or a portion of cost of medically necessary treatment or preventive care provided by healthcare professionals
Policy Holder
Person who signs a contract with a health insurance company and who, thus, owns the health insurance policy. The policy holder is the insured or enrollee. In some cases policy might include coverage for dependents.
Third Party Payer
A healthcare insurance company that provides coverage, such as Blue Cross/Blue Shield
Group Health Insurance
Health Insurance coverage subsidized by employers and other organizations (labor unions etc). These plans distribute the cost of health insurance among group members so the cost is typically less per person and broader coverage is provided than that offered through health insurance plans.

The Patient Protection and Affordable Care Act of 2010 includes a small business healthcare tax credit to help small business and small tax exempt organizations afford the cost of covering their employees.

Individual Health Insurance
Private health insurance policy purchased by individuals or families who do not have access to group health insurance coverage. Applicants can be denied coverage, and they can also be required to pay higher premiums due to age, gender and/or pre-existing medical conditions
Public Health Insurance
Federal and State government health program (ex. Medicare, Medicaid, SCHIP, Tricare) available to eligible individuals
Single Payer Plan
Centralized healthcare system adopted by some Western nations (ex. Canada, Great Britain ) and funded by taxes. The government pays for each residents health care which is considered a basic social course
Socialized Medicine
A type of single payer system in which the government owns and operates healthcare facilities and providers receive salaries. The VA healthcare program is a form of socialized medicine.
Universal Health Insurance
The goal of providing every individual with access to health coverage, regardless of the system implemented to achieve that goal.
Federal Employers Liability Act (FELA)
Signed by President Theodore Roosevelt. Legislation that protects and compensates railroad workers who are injured on the job
Federal Employees Compensation Act (FECA)
Provides civilian employees of federal government with medical care, survivor benefits, compensation for lost wages. The Office of Workers Compensation Program (OWCP) administers FECA
Hill-Burton Act
Provided federal grants for modernizing hospitals that had become obsolete because of lack of capital investment during Great Depression and WWII (1929-1945). In return for Federal Funds, facilities were required to provide services free or at a reduced rates to patients unable to pay for care
Third-Party Administrators (TPA)
Indirect result of Taft-Hartley which administer healthcare plans and process claims, thus serving as a system of checks and balances for labor and management
World Health Organization (WHO)
Developed the International Classification of Diseases (ICD)
International Classification of Diseases (ICD)
Classification system used to collect data for statistical purposes
Major Medical Insurance
Provides coverage for catastrophic or prolonged illness and injuries. Most of these programs incorporate large deductibles and lifetime maximum amounts
Deductible
Amount for which the patient is financially responsible before an insurance policy provides payment
Life Time Maximum Amount
Max benefits payable to a health plan participant
MediCare
(Title XVIII of the Social Security Amendments of 1965) provides healthcare services to Americans over the age of 65. Originally administered by Social Security Administration.
Medicaid
(Title XIX of the Social Security Amendments of 1965) is a cost sharing program between the federal and state governments to provide healthcare services to low-income Americans
Civilian Health and Medical Program – Uniformed Services (CHAMPUS)
Originally designed as a benefit for dependents of personnel serving the armed forces and uniformed branches of the Public Health Service and the National Oceanic and Atmospheric Administration; now called TriCare
Self-insured (or self funded) employer-sponsored group health plans
Allows a large employer to assume the financial risk for providing health care benefits to employees; employer does not pay fixed premium to a health insurance payer, but establishes a trust fund (of employer and employee contributions) out of which claims are paid
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
Program that provides health benefits for dependents of veterans rated as 100 percent permanent and totally disabled as a result of service connected conditions, veterans who died of service connected conditions. Veterans who died on duty with less than 30 days of active service
Employee Retirement Income Security Act of 1974 (ERISA)
Mandated reporting and disclosure requirements for group life and health plans (including managed care plans) permitted large employers to self ensure employee healthcare benefits and exempted large employers from taxes on health insurance premiums
Copayments (copay)
Provision in an insurance policy that requires the policy holder or patient to pay a specified dollar amount to a healthcare provider for each visit or medical service received
Coinsurance
The percentage the patient pays for covered services after the deductible has been met and the copayment has been paid
Omnibus Budget Reconciliation Act of 1981 (OBRA)
Federal law that requires providers to keep copies of any government insurance claims and copies of all attachments filed by the provider for a period of 5 years; also expanded Medicare and Medicaid programs
Tax Equity and Fiscal Responsibility Act of 1992 (TEFRA)
Created Medicare risk programs, which allowed federally qualified HMO’s and competitive medical plans that met specified Medicare requirements to provide Medicare – covered services under a risk contract
Prospective Payment System (PPS)
Issues predetermined payments for services
Per Diem
Latin Term meaning “for each day” which is how retrospective cost-based rates were determined; payments were issued based on daily rates
Diagnosis-Related Groups (DRG)
Prospective payment system that reimburses hospitals for inpatient stays
CMS-1500
Form used to submit Medicare claims previously called HCFA-1500
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Allows employees to continue healthcare coverage beyond the benefit termination date
CHAMPUS Reform Initiative (CRI)
Conducted in 1988; resulted in a new health program called Tricare – Prime, Standard, Extra
Clinical Laboratory Improvement Act (CLIA)
Established quality standard for all laboratory testing to ensure the accuracy, reliability, and timeliness of patient test results regardless of where the test was performed
Medicare Catastrophic Coverage Act
Mandated the reporting of ICD-9-CM diagnosis codes on Medicare Claims; in subsequent years, private 3rd party payers adopted similar requirements for claims submissions. Effective 1 Oct 14, ICD-10-CM diagnosis codes will be reported
Evaluation and Management (E/M)
Services that describes patient encounters with providers for evaluation and management of general health status
Resource-Based Relative Value Scale (RBRVS) System
Payment system that reimburses physicians practice expenses based on relative values for three components of each physicians services; physician work, practice expense, and malpractice insurance expense.
Usual and Reasonable Payments
Based on fees typically charged by providers in a particular region of the country
Fee Schedule
List of predetermined payments for health care services provided to patients. Fee is assigned to each CPT code
National Correct Coding Initiative (NCCI)
Developed by CMS to promote national correct coding methodologies and to eliminate improper coding practices
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Mandates regulations that govern privacy, security and electronic transactions standards for health care information.
Balanced Budget Act of 1997 (BBA)
Addresses health care fraud and abuse issues and provides for Department of Health and Human Services (DHHS) office of the Inspector General (OIG) Investigative and audit services in health care fraud cases
State Children’s Health Insurance Program (SCHIP)
Also abbreviated as CHIP, provides health insurance coverage to uninsured children whose family income is up to 200% of the federal poverty level (monthly income limits for a family of four also applies)
Skilled Nursing Facility Prospective Payment System ( SNF PPS)
Implemented (as a result of the BBA of 1997) to cover all cost (routine, ancillary, and capital) related to services furnished to Medicare Part A beneficiaries
Resource Utilization Groups (RUGs)
Based on data collected from resident assessments (using data elements called the Minimum Data Set, or MDS) and relative weights developed from staff time data
Minimum Data Sets
Date elements collected by long term care facilities
Home Health Prospective Payment System (HHPPS)
Reimbursement methodology for home health agencies that uses a classification system called home health resource group (HHRGs), which establishes a predetermined rate for health care services provided to patients for each 60-day episode of home health care.
Outcomes and Assessment Information Set (OASIS)
Group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the bases for measuring patient outcomes for purposes of outcome based quality improvement
Financial Services Modernization Act (FSMA)
Prohibits sharing of medical information among health insurers and other financial institutions for use in making credit decisions; also allows banks to merge with investments and insurance houses, which allows them to make a profit not matter what the status of the economy, because people usually house their money in of the options; also called Gramm-Leach Bliley Act.
Outpatient Prospective Payment System (OPPS)
Uses ambulatory payment classification (APCs) to calculate reimbursement; was implemented for billing of hospital-based Medicare outpatient claims.
Ambulatory Payment Classifications (APCs)
Prospective payment system used to calculate reimbursement for outpatient care according to similar clinical characteristics and in terms of resources required.
Medicare, Medicaid, and SCHIP Benefits Improvement and Protections Act of 2000 (BIPA)
Requires implementation of a 400 billon prescription drug benefit, improved Medicare Advantage (formerly called Medicare+Choice) benefits, faster Medicare appeals decisions, and more
Consumer-driven health plans (CDHPs)
Health care plan that encourages individuals to located the best healthcare at the lowest possible price, with the goal of holding down costs; also called Consumer-directed health plan
Inpatient Rehabilitation Facility Prospective Payment System (IRFPPS)
Implemented as a result of the BBA of 1997; utilizes information from a patient assessment instruments to classify patient into distinct groups based on clinical characteristics and expected resource need.
Quality Improvement Organizations (QIOs)
Performs utilizations and quality control review of health care furnished, or to be furnished, to Medicare beneficiaries
Medicare Prescription Drug Improvement and Modernization Act (MMA)
Adds new prescription drug and preventive benefits and providers extra assistance to people with low incomes
Medicare Contracting Reform (MCR) Initiative
Established to integrate the administration of Medicare Parts A and B fee-for-service benefits with new entities called Medicare administrative contractors (MACs); MACs also replaced Medicare carriers, DMERCs, and fiscal intermediaries
Inpatient Psychiatric Facility Prospective Payment System (IPF PPS)
System in which Medicare reimburses inpatient psychiatric facilities according to a patient resource use and costs; it replaces the cost based payment system with a per-diem IPFPPS
American Recovery and Reinvestment Act of 2009 (ARRA)
Authorized an expenditure of 1.5 billon for grants for construction`, renovation, and equipment and for acquisition of health information technology systems
Health Information Technology for Economic and Clinical Health Act (HITECH ACT)
Included in the American Recovery and Reinvestment Act of 2009 and amended the Public Health Service Act to establish and office of National Coordinator for Health Information Technology within HHS to improve health care quality, safety and efficiency.
Patient Protection and Affordable Care Act (PPACA)
Focuses on private health insurance reform to provide better coverage for individuals with pre-existing condition, improve prescription drug coverage under Medicare and extend the life Medicare Trust fund by 12 years
HealthCare and Education Reconciliation Act (HCERA)
Includes healthcare reform initiatives that amend the Patient Protection and Affordable Care Act to increase tax credits to buy healthcare insurance, eliminate special deals. Provided to Senators, close the Medicare “donut hole” delaying taxing of Cadillac Health Care plans until 2018 and so on
Investing in Innovations (i2) Initiative
Designed to spur innovations in health information technology (Health IT) by promoting research and development to enhance competitiveness in US
Patient Record (Medical Record)
Documents health care services provided to a patient
Continuity of Care
Documenting patient care services so that others who treat the patient have a source of information on which to base additional care and treatment
Problem Oriented Record
A systematic method of documentation that consists of four components: data base, problem list, initial plan, and progress notes
Electronic Health Record
Global concept that includes the collection of patient info documented by a number of providers at different facilities regarding one patient
Record Linkage
Allows patient information to be created at different locations according to a unique patient identifier or identification number
Electronic Medical Record (EMR)
Considered part of the EHR, the EMR is created on a computer using a keyboard, a mouse, an optical pen device, a voice recognition system, a scanner, or a touch screen; records are created using vendor software, which assists in provider decision making; numerous vendor offer EMR software, mostly to provider office practices that require practice management solution
Total Practice Management Software (TPMS)
Used to generate the EMR, automating medical practice functions of registering patient, scheduling appointments, generating insurance claims and patient statements, processing payments from patient and 3rd party payers, and producing administrative and clinical reports
Meaningful EHR User
Providers who demonstrate that certified EHR technology is used for electronic prescribing, electronic exchange of health information in accordance with law and HIT standards, and submission of information on clinical quality measures; and hospitals that demonstrate that certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve quality of care and that technology is used to submitted information on clinical quality measures
Personal Health Record
Web based application that allows individuals to maintain and manage their health information and that of others for whom they are authorized such as family members in a private, secure, and confidential environment