• HMO (Health Maintenance Organization): A type of managed health care insurance that provides comprehensive health services to its members in exchange for a fixed prepaid fee. This can take the form of capitation or fee schedule. There are four basic types of HMO: group, staff, independent practice association, and network.
• PPO (Preferred Provider Organization):A managed care health plan that contracts with a network or commonly referred to as a panel of health care providers to furnish services and be paid on a negotiated fee schedule. Enrollees are offered a choice to remain in-network and have a lower out-of-pocket expense or to use out-of-network providers and have a higher out-of-pocket expense. Some of these plans will evolve into Exclusive Provider Organizations (EPO) or Point of Service (POS) plans with a gatekeeper provision. These are defined in the attached index.

• Capitation: A reimbursement to physicians, usually primary care although specialists are now being capitated, that provides a fixed reimbursement per month based on the number of members that have chosen that physician as their primary care doctor. Typically, each insurance provider will indicate the medical services covered by capitation. Some of the typical services covered by capitation are: office visits, home visits, therapeutic injections, basic pulmonary function tests, suture remover urinalysis, culture screen, TB skin tests, resting and/or rhythm strip electro cardiograms, administration of allergy immunotherapy. As the patient's copayment responsibility increases, typically, the per member monthly reimbursement decreased.
• Copayment: The patient's financial obligation required for the provided medical care. This is usually indicated on their member card.
• Referral: Paperwork, individualized by each managed care insurance, that is usually completed by the primary care doctor, indicating what specialty service is being requested and authorized.
• Preauthorization or Precertification:The process if obtaining a permission to perform a service from the insurance carrier before the service is performed.
• Withhold: An amount deducted from the negotiated fee to encourage reasonable utilization of services. A percentage of this is given to provider depending on their utilization pattern e.g. ordered tests or use of specialty services

1. Adverse selection: A health plan with a disproportionate percentage of enrollees who are more likely to file claims and use services because of existing health risk conditions.
2. Age/sex rating: A method of structuring capitation payments based on enrollee/ membership age and sex.
3. Balance bill/extra bill : Physicians’ charges exceeding the medicare-allowed charges.
4. Cost shifting: A situation wherein a healtcare provider compensates for the effect of lower revenue from one payer by increasing charges to another payee.
5. Coinsurance : The portion of the balance of covered medical expenses wich a beneficiary must pay after payment of deductible. Under Medicare Part B ,the beneficiary pays coinsurance of 20 percent allowed charges.
6. Contact capitation: A new method of reimbursing specialists wherein the specialist receives a fixed amount per referral that will cover all medical services for a defined period of time. The specialist is at risk for the cost of the referral while the third party payor remains at risk for the number of referrals.
7. Dual eligible: Medicare beneficiaries who also receive the full range of Medicaid benefits offered in their state.
8. Exclusive Provider Organization (EPO): A provider network similar to a PPO wherein a patient must pay the entire cost of any care obtained outside the EPPO network of providers . EPPO typcally are paid for services rendered instead of by capitation.
9. Federally qualified HMO: An HMO that has satisfied certain federal qualifications pertaining to organizational structure, provider contracts, health service delivery information, utilization review/quality assurance, grievance procedures, financial status, and marketing information.
10. Fee-for-service (FFS): A method of payment based on individually reimbursing by procedure a negotiated amount.
11. Gatekeeper: The primary care physician in an HMO that evaluates the need for specialty service and authorizes the same. Their role is to reduce use of unnecessary services to lower costs.
12. Group Contract: The contract between the HMO and a subscribing group of beneficiaries which specifies rates, performance, relationships, schedule of benefits, and other conditions for a defined period.
13. Group Model HMO: An HMO that pays a medical group a negotiated , per capita rate, which the group distributes among its physicians, often under a salaried arrangement.
14. HMO: An organization that provides comprehensive health services to its members in return for a fixed prepaid fee.
15. Independent Practice Association (IPA): A type of HMO that contracts with individual physicians to provide services to HMO members in a negotiated per capita or fee-for-service rate. Physicians maintain their own offices and can contract with other HMOs and see other fee-for-service patients.
16. Managed Care: Any system of health service payment or delivery arrangement oriented toward coordinating and controlling medical care usage to improve quality and/or contain costs.
17. Managed Service Organization (MSO): An entity that provides practice management and other support services, such as marketing, billing, financial management, nursing pools, staff recruitment, etc. to medical groups.
18. Medicare Risk Contract: A contract between Medicare (HCFA) and an HMO or competitive medical plan for the delivery of medical care; Medicare pays the insuring entity a monthly capitated amount for the assumption of insurance risk.
19. Network HMO: A contractual relationship between an HMO and a network of physicians that provide primary and specialty care.
20. Per Member Per Month: The reimbursement strategy used by managed care companies to reimburse primary doctors per member whether the member requires medical care or not.
21. Physician-Hospital Organization (PHO): A separate legal entity owned by a hospital and participating physicians which can contract with insurance companies, HMOs or self-insured employers for the provision of medical services.
22. Point-of-service Plan (POS): A managed care plant that combines features of both prepaid and fee-for-service insurance. Members can stay in-network or go out-of-network and incur a sizeable coinsurance.
23. Preauthorization/Precertification/Referral: The process of obtaining permission from the insurance carrier before the service is delivered. In the case of the referral, the primary doctor has been empowered by the insurance company to authorize specialty care.
24. Predetermination: The process of obtaining an estimate of what an insurance carrier will pay for service(s) before the service(s) is/are performed.
25. Preferred Provider Organization (PPO): A managed care health plan that contracts with providers to furnish medical care and be paid on a negotiated fee. Enrollees have a lower out-of-pocket expense for using network providers, but they are free to choose any provider for care.
26. Schedule of Allowance: A list of specific amounts the third party payor will reimburse by procedure (CPT code).
27. Staff Model HMO: An HMO in which physicians practice solely as employees of the HMO and are usually paid a salary.
28. Utilization Management: A process that measures the use resource such as staff, facilities and services to determine medical necessity, cost effectiveness, and conformity to criteria for best use.
29. Utilization Review: The process of reviewing services provided to determine if those services were medically necessary and appropriate. You may put any amount of text you like in this area above the photos.

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