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Average wholesale price (AWP)
a term commonly used in pharmacy contracting. |
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Cafeteria plan
a flexible benefits plan that generally offers a choice
of two or more qualified benefits or the option of cash. |
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Capitation
a per-member monthly payment to a provider that covers
contracted services and is actuarially determined on the
basis of costs expected to be incurred. This is an alternative
to the fee-for-service arrangement. |
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Case
management
a form of utilization review used with high-cost cases
in which a health care professional monitors and manages
treatment and suggests alternatives to lengthy hospital
stays. The case manager supervises the administration
of medical or ancillary services to a patient, typically
one who has a catastrophic disorder or is receiving mental
health services. |
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COBRA
The Consolidated Omnibus Reconciliation Act of 1985, which
requires employers to offer their covered employees and
beneficiaries the opportunity to purchase continuing health
care coverage under the group's medical plan. |
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Coinsurance
a provision that limits the amount of coverage by the
plan to a certain percentage, commonly 80 percent. |
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Community
rating
the rating methodology required of federally qualified
HMOs. The HMO must obtain the same amount of money per
member for all plan members. Community rating does, however,
allow for variability by allowing the HMO to factor in
differences for age, sex and industry factors, although
they are not all necessarily allowed under state law |
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Concurrent review
a form of utilization review in which hospital admissions
are reviewed and certified within 24 hours after admission
and are monitored for appropriateness thereafter. |
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Copayment
that portion, usually a fixed amount, of a claim or medical
expense that the member or covered insured must pay out-of-pocket.
Coordination of benefits (COB) - an agreement using language
developed by the National Association of Insurance Commissioners
that prevents double payment for services when an insured
has coverage from two or more sources. The agreement determines
which organization has primary responsibility for payment
and which has secondary responsibility. |
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Cost sharing
the apportioning of health care costs between a health
care plan and the individual participants through employee
contributions, deductibles and coinsurance. |
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Credentialing
examination of a physician or other health care provider's
credentials to determine if he or she should be entitled
to clinical privileges at a hospital or managed care organization. |
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Current procedural technology
(CPT)
a coding system developed by the American Medical Association
to categorize different medical procedures, each represented
by a five-digit code. The system is used frequently for
billing purposes. |
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Deductible
a set amount that a covered individual must pay before
an insurance program begins reimbursing for medical expenses.
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Diagnostic related groups (DRGs)
a coding system used to determine the amount that Medicare
reimburses each hospital that provides its insureds with
service, as part of its prospective payment system. Each
DRG corresponds to a patient condition. (Also see RBRVS)
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Dual choice
a requirement that certain employers must offer a federally
qualified HMO as an alternative to its traditional indemnity
insurance plan. |
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Employee assistance program
(EAP)
a program of counseling and other forms of assistance
for employees suffering from alcoholism, substance abuse,
or emotional or family problems. |
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Exclusive provider organization
(EPO)
a more rigid type of preferred provider organization (PPO)
that requires members to use only designated providers
or relinquish reimbursement altogether. PPOs, in contrast,
encourage members to use "preferred" providers
through more generous reimbursement but will still reimburse
for nonpreferred providers. |
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Experience rating
a method of determining premiums that adjusts a groups
rate based on the demographic characteristics and utilization
experience of that particular group as opposed to using
averaged data for multiple groups. |
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Fee-for-service (FFS)
traditional provider reimbursement used by conventional
indemnity insurers in which the physician is paid according
to the service performed. The patient is responsible for
a pre-determined percentage of the fee, typically 20%.
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Formulary
the panel of drugs chosen by a hospital or managed care
organization to treat patients. Drugs outside the formulary
are not used except in specified circumstances. |
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