Basic Terms Defined
Affiliated Provider - An Affiliated Provider is a licensed corporation, partnership or individual with which HAP has contracted with to provide licensed health care services to Enrollees. Affiliated Provider is inclusive but not limited to hospitals, physicians, and ancillary providers of health care services.
Alliance Medicare PPO - As a member of Alliance Medicare PPO, you will still have original Medicare, but you are getting your Medicare services as a member of Alliance Medicare PPO. This means you should get most or all of your health services from the doctors, hospitals and other health providers that are part of Alliance Medicare PPO ("plan providers"). You may use non-plan providers to get covered services. However, if you use non-plan provider for care that is not emergency care, it may cost you more to use them. Alliance Medicare PPO plans are available for eligible Medicare beneficiaries who reside in one of the following counties: Macomb, Oakland, Wayne, Livingston, Lapeer, St. Clair, Monroe, Washtenaw or Genesee.
Annual Enrollment Period (AEP) for Medicare - the national enrollment period during which all Medicare beneficiaries can make changes in how they receive coverage. The annual enrollment period runs from November 15 to December 31.
Benefits - the services your health plan covers, such as physician office visits, routine physicals, etc.
Brand-name Drug - a brand-name drug carries the name given to it by the original manufacturer, who retains the exclusive right to sell the drug for a certain period. After that period has expired, the formula of the drug must be released and other manufacturers are free to develop a version of it known as a generic drug. (see Generic Drug)
COBRA - Under the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employers of 20 or more employees are required to include a coverage continuation provision in their group medical benefit plans. This provision gives an employee whose employment is terminated for any reason other than gross misconduct the right to continue coverage for up to 18 months. The continued coverage is paid for by the employee, who may be charged no more than 102 percent of the group premium rate.
Co-insurance - The percentage of covered costs for a specific service the member is financially responsible for under applicable benefit plans. Co-insurance percentages are listed in the Subscriber Contract or Group Health Insurance Policy.For example, if your Subscriber Contract or Group Health Insurance Policy states that HAP/Alliance will pay 80% of allowable charges for covered services (after your deductible and/or copay have been met), the remaining 20% is your co-insurance.
Consumer Driven Health Plan (CDHP) - health care funding arrangements that typically involve a Health Savings Account (HSA) or other type of spending account combined with a health insurance policy. The HSA is typically funded at least in part by the employer to pay for member claims up to an annual dollar amount. once the account is exhausted, the healthy insurance policy provides coverage for services. Such plans often also provide various value-added health care informational tools for members. The purpose of such plans is to involve the member more directly in the selection and purchase of health care services.
Consumerism - the trend towards consumer-centric health care, direct-to-consumer health care advertising, and increased consumer health care cost sharing.
Coordination of Benefits (COB) - a process whereby two or more health plans that insure the same person for the same losses coordinate their payments of benefits so they do not overlap and so the amount of benefits received by the insured is never greater than the amount of expenses incurred. One policy is identified as the primary policy and the other as the secondary policy. The primary policy pays all the benefits it would normally pay if there were no additional coverage. The secondary policy pays additional benefits, but the total amount of benefits received by the insured never exceeds the actual amount of expenses.
Copay - a fee paid by the member at the time of service. Typical copays are for physician office visits, emergency room or urgent care visits, and prescription drugs.
Cost Sharing - specific arrangements whereby members pay for designated portions of their covered care, through plan benefit features such as copays, co-insurance and deductibles; and or through payroll deductions funding a portion of the premium costs.
Covered Services - those medically necessary health care services and benefits that have been preauthorized by an affiliated provider according to our accepted policies.
Debit Card - a health care debit card can be issued to members with a qualified health care savings account. The card can be presented to medical or pharmacy providers to transfer funds from the applicable account for payment of health care services. For such accounts to properly qualify for tax-advantaged treatment, the administration of the debit card payments must meet IRS provisions.
Deductible - the dollar amount that a plan member must pay for eligible health expenses before HAP will begin payment for medical services. The deductible applies to each insured subscriber/member and must be met each benefit period. Deductibles typically involve annual requirements.
Delivery System – A means or procedure for providing health care services to members. In the HMO option HAP uses two delivery systems: Integrated and Open.
Dependent - an individual who receives health coverage through a spouse, parent, or other family member who is the contract or policyholder.
Donut Hole - a name for a step in some Part D Medicare plans in which you pay all of your expenses for eligible drugs. Also known as the "coverage gap."
Drug Formulary - the list of drugs chosen by HAP that is used to treat patients. All drugs on the formulary are approved by the Food and Drug Administration. Drugs outside of the formulary are only used in rare, specific circumstances. Medicare beneficiaries use a formulary that is approved by a Medicare prescription drug plan.
Drug Search – an online application that lets you review prescription drug information specific to your benefits. View expected copay for any prescription drug, as well as generic alternatives, precautions and other details.
Emergency - care necessary to screen and stabilize a member in cases where a person with no medical training, acting reasonably, believes that an emergency medical condition exists.
Employer Funded - employee benefits that are paid for by the employer, in the form of premium payments, health savings account funding, or other applicable items.
Exclusive Provider Arrangement (EPA) - a managed care program that functions very much like an HMO. Members must choose a PCP who authorizes referrals and arranges hospital admissions. Members must use the EPA provider network exclusively.
Exclusive Provider Organization (EPO) - a managed care program in which members receive care within a specific provider network. Although members must use the EPO provider network exclusively, they are not required to select a PCP. Although referrals are not required for specialty care, medical services received outside of the EPO network are not covered.
First-dollar Coverage - a plan design, or a portion of it with no deductible is said to offer first-dollar coverage-that is, it pays benefits beginning with the first dollar of covered expenses, rather than the insured having to pay expenses until the deductible is satisfied.
Flexible Spending Account (FSA) - an account that reimburses the participant for qualified health costs, dependent care expenses and commuter costs through one pre-tax savings account. Employees or employers or both fund the account. At the end of each year, unused dollars are forfeited by the account holder.
Formulary - the list of drugs chosen by HAP that is used to treat patients. All drugs on the formulary are approved by the Food and Drug Administration. Drugs outside of the formulary are only used in rare, specific circumstances. Medicare beneficiaries use a formulary that is approved by a Medicare prescription drug plan.
Generic Drug - a generic drug has the same active ingredients as the original brand-name drug, but it may use different inactive ingredients (such as fillers) that may affect the color or shape of the drug. In other respects, the drug is clinically identical. Generic drugs usually cost 30 to 60 percent less than the corresponding brand-name drugs, and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand-name drugs.
HAP Preferred PPO - a program in which contracts are established with providers of medical care. Providers under such contracts are referred to as "preferred providers." Usually, the benefit contract provides fewer and/or lower copays for services received from preferred providers, thus encouraging covered persons to use these providers. Services from non-participating providers are provided for significantly higher copays.
HAP Senior Plus - a managed care plan for people with Medicare offered by HAP (HAP Senior Plus is not a "Medigap" or supplemental Medicare insurance policy).
Health Reimbursement Arrangement (HRA) – an HRA can be offered in conjunction with a high-deductible health plan, and is funded by the employer for each participating employee. It pays for eligible health care expenses typically covered under the medical plan. Unused funds can be carried over to the next year to cover future health care expenses, an incentive to employees to use their personal HRA wisely. If funds are exhausted, the employee is responsible for satisfying the remaining deductible before the plan begins to pay. If the employee changes jobs, the money stays with the employer.
Health Savings Account (HSA) - a funding mechanism in which the participant pays for health costs through a fully insured, tax-exempt savings account. Employees or employers or both fund the account. An HSA is subject to regulations mandated by the federal government that limit coverage to IRS section 213(d) medical coverage. All unused amounts carry over indefinitely during a participant's lifetime.
High Deductible Health Plan (HDHP) - this term generally refers to a health benefit plan with a large deductible, but it has a specific meaning in the context of health savings accounts (HSAs). It is a policy that meets the requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to have a specified deductible.
Hold Harmless - a provider contract stipulation that prevents a HAP HMO member from being billed for charges incurred for services received from an affiliated provider due to circumstances beyond their control.
HMO (Health Maintenance Organization) - a form of health coverage that emphasizes preventive care. With an HMO, members prepay a premium for health services, which generally includes inpatient and outpatient care. For the member, it means reduced out-of-pocket costs and no paperwork.
Integrated Delivery System - In the HMO option using the Integrated Delivery System, your Personal Care Physician (PCP) coordinates your care and make arrangements for you, as necessary, to see other physicians and hospitals that are affiliated with his or her group practice.
The Leapfrog Group - a national coalition of purchasers, health plans, and employer groups that is an industry leader in fostering health care improvements to reduce medical errors and improve patient safety. Leapfrog uses research data to identify and encourage implementation of programs that have been shown to improve the quality of hospital care.
Lifetime Maximum - a dollar or service limit imposed under a plan of benefits for a specific benefit or for the entire policy that total cumulative payments or covered services by HAP cannot exceed, over the entire time the policy is in force.
Maximum Allowable Charge - the maximum amount HAP will pay for a covered service under the terms of the policy.
Medical Center – made up of many physicians – both personal care physicians and specialists – all under one roof. Most medical centers offer other services, such as laboratory, X-ray and optical, within the same building.
Medical Savings Account (MSA) - a private fund, similar to an IRA (Individual Retirement Account), set up to save for future qualified medical expenses from the fund. MSAs were enabled under the federal Health Insurance and Portability and Accountability Act of 1996.
Medicaid - a joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Most health care and prescription drug costs are covered if you qualify for both Medicare and Medicaid.
Medicare - Title XVIII of the Social Security Act that provides payment for medical and health services to the population aged 65 and over regardless of income, as well as certain disabled persons and persons with end-stage renal disease.
Medicare-approved Amount - this is the payment amount that Medicare has agreed a physician or other provider may charge for a service or supply provided to a Medicare beneficiary. It may be less than the actual amount normally charged by a physician or provider. If the physician "accepts assignment," the difference between the approved amount and the physician's fee schedule may not be charged to you. If the physician does not accept assignment, the maximum amount you can be charged is an additional 15%.
Medicare Advantage Plan- Medicare Advantage plans are authorized by "Part C" of the Medicare laws. These plans are approved by Medicare but are run by private companies. They provide all your Medicare Part A and Part B coverage and must cover medically necessary services. They may also provide extra benefits, like eyeglasses, vision and hearing exams, and prescription drugs.
Medicare Part A - hospital insurance provided by Medicare that can help pay for inpatient hospital care, medically necessary inpatient care in a skilled nursing facility, home health care, hospice care and end-stage renal disease treatment.
Medicare Part B - Medicare-administered medical insurance that helps pay for certain medically necessary practitioner services, outpatient hospital services and supplies not covered by Part A hospital insurance of Medicare coverage. Physicians' services are covered under Part B even if they're provided to a member in an inpatient setting. Part B can also pay for some home health services when the beneficiary doesn't qualify for Part A.
Medicare Part C - Medicare Advantage plans are sometimes called "Part C." These plans are approved by Medicare but are run by private companies. They provide all your Part A and Part B coverage and must cover medically necessary services. They may also provide extra benefits, like eyeglasses, vision and hearing exams, and prescription drugs.
Medicare Part D - optional Medicare Prescription Drug Plan available to all people with Medicare through private companies like health plans and insurance companies. Medicare Part D can be purchased with a Medicare Advantage plan, or as a stand-alone plan with prescription drugs only.
Medicare Supplement Insurance, or Medigap - an insurance policy sold by private insurance companies that helps pay some deductibles or co-insurance that Original Medicare does not pay (the "gaps" in Original Medicare). There are 12 standardized policies, labeled Plan A through Plan L. (Medigap policies only work with Original Medicare.)
Medigap - an insurance policy sold by private insurance companies that helps pay some deductibles or co-insurance that Original Medicare does not pay (the "gaps" in Original Medicare). There are 12 standardized policies, labeled Plan A through Plan L. (Medigap policies only work with Original Medicare.)
NCQA (National Committee for Quality Assurance) - an independent, nonprofit organization, that leads the effort to assess, measure and report on the quality of care provided by the nation's managed care organizations. Its mission is to provide purchasers and consumers with an unprecedented ability to evaluate the quality of different health plans and to make their enrollment decisions based on demonstrated value rather than simply on cost.
Non-Affiliated Provider - a medical partnership or individual physician that does not have a contract with HAP.
Open Delivery System - In the HMO using the Open Delivery System your Personal Care Physician (PCP) coordinates your care, but you may seek needed care from any HAP contracted specialist, and you may use any HAP contracted hospital.
Open Enrollment Period (OEP) for Medicare - the open enrollment period runs from January 1 through March 31. This 'switch period' offers a single opportunity to enroll into, or disenroll from, a Medicare Advantage plan. You cannot add or drop Medicare prescription drug coverage at this time.
Original Medicare - the term "Original Medicare" refers to Medicare Part A and Medicare Part B benefits combined, with no additional benefits included. Deductibles and limitations apply.
Out-of-pocket Expenses or Costs - the dollar amounts the member is responsible to pay after HAP has made payment for provider services rendered. Out-of-pocket expenses result from cost sharing requirements including deductibles, co-insurance, and copays, as well as non-covered benefits, and costs in excess of plan maximums.
Out-of-pocket Limit - The most you pay for covered services during a benefit period (usually a calendar year) before HAP begins to pay 100 percent of the allowed amount. All copays, coinsurance and deductible amounts count toward your out-of-pocket limit. The out-of-pocket limit never includes your monthly premium or non-covered services.
Provider Search & PCP Select – HAP's computerized system that assists you in selecting a personal care physician (PCP). You can make your selection by logging in to Online Services then going to Doctors and Hospitals>Provider Search and PCP Select. You may also call our PCP Select line toll-free at (888) 742-2727 and a PCP Selection Assistant will help you select a PCP based on your preferences.
Personal Care Physician (PCP) - an affiliated physician who has agreed to coordinate the medical care of members. A personal care physician may practice in the area of family practice, internal medicine or pediatrics.
PCP directed care - a preauthorization from a PCP, according to HAP's policies, for the delivery of a defined specialty service or consultation that is a covered benefit for a member.
Physician's Hospital Affiliation – a term used by HAP to describe providers grouped together to serve members. A physician's hospital affiliation is usually comprised of physicians working in private offices. It may also include a hospital (or hospitals) linked to those physician groups. The PCP you choose will coordinate your medical care and direct you to specialists, normally within the same hospital affiliation.
Plan Design - the specifications for a given plan of benefits, including the applicable cost sharing requirements that apply, as well as the list of covered benefits, exclusions and limitations.
Point-of-Service (POS) - a type of health plan that allows members to choose to receive medical services from affiliated or non-affiliated providers. Higher out-of-pocket expenses are incurred by using non-affiliated providers.
Preauthorization - prior approval by HAP for the delivery of specified services.
Preferred Provider Organization (PPO) - members do not have a PCP. Members can self-refer, and receive a higher level of benefits when they receive care from participating providers, and a lower level of benefits when they receive care from non-participating providers.
Premium - a premium is the total amount charged the policyholder for coverage. For example, an employer providing a group health plan to its employees is charged a certain amount per covered employee-this is the premium rate. That rate is multiplied by the number of covered employees to obtain the total amount the employer pays for coverage.
Prescription Medication - a drug which has been approved by the Food and Drug Administration and which can, under federal or state law, be dispensed only according to a prescription.
Preventive Care - health care services intended to prevent a medical condition from occurring, or to detect the onset of a condition early so that it can be more effectively treated. Preventive care includes regular medical check-ups, screening tests, vaccinations, and the encouragement of a healthy lifestyle.
Prior Authorization- to be sure certain drugs or medical services are used correctly and only when truly necessary, your plan may require a "prior authorization." This means you or your physician need to get approval from your plan before a particular drug or service will be covered.
Special Enrollment Period (SEP) for Medicare - a period during which, because of a specific event, individuals have the opportunity to make an election outside of the Annual or Open Enrollment Periods. Examples include, but are not limited to, change of residence outside of plan's service area and loss of employer group coverage.
Step Therapy - a type of prior authorization for some prescription medications. With step therapy, in most cases, you must first try using certain less expensive drugs that have been proven effective for most people with your condition before you can get a similar, more expensive brand-name drug covered.
Tiers - to lower costs, a plan places prescription drugs in its formulary into different "tiers." Your drug copay will vary, depending on the tier. For example, one approach to tiers is the following:
Tier 1: Generic drugs
Tier 2: Preferred brand drugs
Tier 3: Non-preferred brand drugs
Tier 4: Specialty drugs
Third Party Administrator - an organization providing specified administrative services for HAP or for a self-insured employer. Services can include claims processing, eligibility maintenance, premium billing and collection, financial accounting, etc.
Urgent Care - an urgent medical condition that is not life threatening, but may require prompt attention. Sprained ankles, most burns, and minor wounds requiring stitches are typical examples of urgent conditions.