Health Care Glossary of Terms

Fee-for-service: Traditional health care coverage where the patient or insurance company is billed for services provided.

Managed care: Treatments, as well as payments, are monitored and approved or denied by the insurance company.

Health Maintenance Organization (HMO): An HMO is a group that contracts with medical facilities, physicians, employers and sometimes individual patients to provide medical care to a group of individuals. This care is usually paid for by an employer at a fixed price per patient. Patients generally do not have any significant “out-of-pocket” expenses. The patient must see only the doctors who are members of a particular HMO. Physicians working for HMOs often are given financial incentives to decrease medical costs by limiting expensive diagnostic tests, referrals to specialists, and hospitalizations.

Medicaid: A program of health insurance provided by the state and federal government for the poor, elderly and disabled.

Medicare: Health insurance provided by the federal government for the elderly and disabled.

Point of Service: A health plan that allows the patient to choose the type of payment method (traditional, PPO or HMO) at the time service is received.

Private insurance: Traditional health care coverage purchased from an insurance company. Gives you free choice of physicians, hospitals and other health care facilities.

Premium: The amount paid for any insurance policy.

Pre-existing condition: Illnesses or problems a patient had before obtaining an insurance policy. Some insurance companies may refuse to issue a policy or not pay for care for the preexisting condition or may not pay for that condition for a set period of time.

The following acronyms are often used when discussing methods of health care coverage and payment. These explanations are provided for better understanding of these terms.

PPO – Preferred Provider Organization

IPA – Independent Physician Association

EPO – Employer Preferred Organization

PHO – Physician Health Organization

MSO – Medical Service Organization

POS – Point of Service

DED – Deductible

EOB – Explanation of Benefits

OOP – Out of Pocket

INS – Insurance

COP – Co-Payment

COI – Co-Insurance

OEP – Open Enrollment Period

BUO – Buy-Up Options

PCS – Prescription Card Services