BEHAVIORAL HEALTH: Assessment and treatment of mental health and/or substance abuse disorders.

BENEFICIARIES: Persons who receive health care benefits that are paid for by a third-party fiscal intermediary, such as Medicare, Medicaid, HMOs, indemnity insurance companies, etc.

BENEFIT PACKAGE: A defined array of specific services or benefits that an HMO or insurer is obligated to provide under terms of its contracts with subscriber groups or individuals.

BENEFIT SCHEDULE: The summary of covered services, benefit limitations, and applicable copayments provided to the group.

BENEFIT SET: The health care and related services that an insurer agrees to pay for as delineated in a specific contract between the insurer and the purchaser.

BENEFIT YEAR: A 12-month period that an organization uses to administer its employee benefits program.

BOARD CERTIFIED: A designation from The American Board of Medical Specialties which certifies that a physician is qualified as a specialist in a specific practice area (e.g., family practice, internal medicine, pediatrics, etc.). In order to receive board certification, a physician must receive specialty training in an accredited program of graduate medical education and pass a comprehensive examination.

BREAK-EVEN POINT: In an HMO, the membership level at which total revenues and total expenditures are equal, thereby producing neither a net gain nor loss from operations.

BROKER MODEL PPO: An enterprise that arranges contracts between payers and providers, but is owned and controlled by an entity independent of the payers and providers. The PPO serves as the "broker" of discounted fee-for-service contracts between payers and provider networks.

BUYERS HEALTH CARE ACTION GROUP (BHCAG): A coalition of 26 self-insured employers in Minnesota which emphasizes care quality and cost effectiveness in its program. Its overall mission is to stimulate reform of the health care system by building a program founded on four principles: 1) increased quality; 2) increased provider competition; 3) increased consumer knowledge and responsibility for their own health care decisions; and 4) enhanced efficiency of health care delivery. BHCAG provides a health plan to its members which allows the consumer to choose among care systems (integrated teams of providers) according to their cost, who their providers are, and their performance in areas of quality and customer service.

The BHCAG model is a modified fee-for-service payment system which provides incentives for efficiency based on utilization. Care systems (see definition) submit a per capita target rate bid for a specified set of benefits each year, e.g., $110 per member per month. These claim targets are adjusted based upon risk to reflect differences in the illness burden of their population from the average. Care systems are evaluated on a quarterly basis, and adjustments are made to match the annual claim target. Therefore, if a system’s costs exceed the claim target, the payment amount is reduced for the next quarter, and if costs are below the target rate, the payment is increased for the subsequent quarter. BHCAG began implementation of the model January 1, 1997.

HIPAA provisions are designed to improve the availability and portability of health coverage by:

HEALTH INSURANCE: Financial protection against the medical care costs arising from disease or accidental bodily injury. Such insurance usually covers all or part of the medical costs of treating the disease or injury. Insurance may be obtained on either an individual or a group basis.

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INCURRED BUT NOT REPORTED (IBNR): For a group medical practice, IPA or PHO that engages in prepaid contracting, IBNR represents the outstanding and unreported claims for medical services that have been performed by providers that are not members of the group practice or IPA (sometimes referred to as subcontractors). Since the group practice or IPA receives its capitation payment in advance of services, IBNR represents a net, unknown liability that can be unexpectedly substantial if not carefully monitored.

JOINT PURCHASING: Combining of federal, state, and county purchasing to promote greater intergovernmental efficiencies and effectiveness. Joint purchasing should minimize the opportunity for cost-shifting which exists when different levels of government purchase separately.

LONG-TERM CARE: Services ordinarily provided in a skilled nursing, intermediate-care, personal-care, supervisory-care, or elder-care facility.

MANAGED FEE-FOR-SERVICE PRODUCT: An indemnity insurance health plan in which the cost of covered service, paid on a fee-for-service basis, is paid after the services have been performed. Techniques such as second surgical options, recertification, and utilization review are employed to avoid unnecessarily high costs.

OPEN-ENDED HMO: A health plan in which enrollees meet the requirements for "pure" members, but open-ended enrollees have the option of self-referring themselves to providers outside of the HMO’s panel of providers. This election may be made at the point or time of service. Enrollees electing to receive outside services usually do so at additional cost in the form of a co-payment or deductible.

OPEN ENROLLMENT PERIOD: The period of time stipulated in a group contract in which eligible persons in a group may choose a health plan alternative for the coming benefit year. There is also an open enrollment period as defined in the Federal HMO Regulations requiring HMOs who meet certain criteria to conduct annual open enrollments for periods of not less than 30 days (refer to 110.107 of the Federal HMO Regulations).

OPERATING COSTS: In the health field, the financial requirements necessary to operate an activity which provides health service. These costs normally include the costs of personnel, materials, overhead, depreciation, and interest.

OUTCOMES MANAGEMENT: A clinical outcome is the result of medical or surgical intervention or nonintervention. Managed care is now attempting to better manage the clinical outcomes of their enrollees to increase patient and payer satisfaction while holding down costs. It is thought that through a database of outcomes experience, caregivers will know better which treatment modalities result in consistently better outcomes for patients. Outcomes management will, as a natural consequence, lead to medical protocols.

OUT-OF-AREA BENEFITS: The scope of emergency benefits (and related limitations) available to HMO members while they are temporarily outside their defined service areas. Some HMOs offer unlimited out-of-area emergency coverage, while others impose a stated maximum annual dollar benefit. Emergency coverage is usually the only HMO benefit in the total benefit package for which members may need to file claims forms for reimbursement of out-of-pocket expenditures for care.

OUTLIER: A patient who varies significantly from other patients in the same DRG (such as a longer or shorter length of stay, death, leaving against medical advice, etc.) Also, a person whose performance varies significantly from established normative standards (e.g., a physician whose utilization patterns are notably abnormal).

OUT-OF-POCKET COSTS: The share of health services payments paid by the enrollee.

OUTPATIENT: A patient who receives health care services without being admitted to a hospital.

PARTIAL COMPETITIVE BIDDING: This rate-setting methodology determines premium rates through bids submitted by competing plans or networks, but the purchasing organization reserves the right to impose a predetermined rate or budget if bids are too high. In this sense, quasi-competitive bidding has more in common with a regulatory rate setting methodology. Competitive bids are used primarily to determine whether the regulated rates can be undercut.

PARTIALLY INTEGRATED MEDICAL GROUP: A medical group practice resulting from the merger of multiple practices into a single legal entity, under an arrangement in which the former separate practices retain some autonomies or individual attributes. The merged group usually features integrated elements such as common ownership of assets, common responsibility for liabilities, centralized governance and management, a consolidated and uniform array of employee benefits, and all former common-law employees under single management. Non-integrated elements often include determining income allocation by cost center (among members of each former practice), retention of local facilities and identity, continued use of existing medical records, operational jurisdiction over employees, and discretionary participation in certain clinical administrative systems. PIMGs are generally used as a transitory step toward the achievement of a fully integrated medical group. Sometimes referred to as a "clinic without walls".

PARTICIPATING PHYSICIAN: A physician who accepts assignments of fees for professional services rendered to patients covered by Medicare.

PATIENT BILL OF RIGHTS:  A generic term for legislation enacted at either the state or federal level that protects patients from various practices of health insurance or managed care organizations.  Examples of elements of this type of legislation include the right to appeal coverage decisions for medical necessity and the right to sue health plans.

PATIENT DUMPING: The transfer of patients by one provider to another for unwarranted reasons, such as the patient’s inability to pay for medical services. Under certain circumstances, patient dumping is illegal.

PAYER: An organization, such as insurance company or HMO, that pays or reimburses a provider for health care services rendered by that provider to a patient or health plan member. A fiscal intermediary between purchasers and consumers of health care.

PAYER PROFILE: An analysis of the sources of revenue for health care providers such as medical practices and hospitals; i.e., the percentage of total revenues received from payers such as HMOs, PPOS, insurance companies, Medicare, Medicaid, Workers Compensation, employers, etc.

PAYER VENTURES: A joint venture between two or more providers for the purpose of locating, negotiating, obtaining and/or entering into contracts with payers. PHOs are often a form of payer venture.

PEER REVIEW: Reviewing a practitioner’s practice to determine if they meet qualitative standards, fall within an acceptable range, and employ efficacious procedures. Peer review is performed by practitioners in the same specialty and geographic area.

PEER REVIEW ORGANIZATION (PRO): A private organization that subcontracts with HCFA to review the medical appropriateness of services and quality of care provided to Medicare beneficiaries.

PENETRATION: The percentage of business than an HMO captures in a particular subscriber group or in a defined market area. For example, signing up 10 enrollees or members out of 100 eligible persons represents a 10 percent penetration.

PER MEMBER, PER MONTH (PMPM): The revenue or cost attributable to an HMO member for a month.

PER THOUSAND MEMBERS PER YEAR (PTMPY): A common measurement of hospital inpatient utilization; e.g., a medical group practice utilized 950 inpatient days per year, per one thousand enrolled members per year.

PERFORMANCE GOALS: Desired outcomes for a set of clients that is prospectively defined and measured. Performance goals could be set for managed care plans, clients, or other involved parties. Financial incentives or penalties could be imposed on involved parties based on whether or not those goals are met.

PHARMACEUTICAL CARE: A fairly new concept in providing health care; it is a strategy that attempts to utilize drug therapy more efficiently to achieve definite outcomes that improve a patient’s quality of life. A pharmaceutical care system requires a reorientation of physicians, pharmacists, and nurses toward effective drug therapy outcomes. It is a set of relationships and decisions through which pharmacists, physicians, nurses, and patients work together to design, implement, and monitor a therapeutic plan that will produce specific therapeutic outcomes.

PHARMACEUTICAL BENEFITS MANAGEMENT (PBM) COMPANY: An organization that manages pharmacy use of a defined set of clients. PBMs are usually subcontractors to managed care companies.

PHARMACY AND THERAPEUTICS (P&T) COMMITTEE: A group of physicians, pharmacists, and other health care providers from different specialties, who advise a managed care plan regarding safe and effective use of medications. The P&T Committee manages the formulary and acts as the organizational line of communication between the medical and pharmacy components of the health plan.

PHARMACY SERVICES ADMINISTRATIVE ORGANIZATION (PSAO): An organization that is dedicated to provide prescription benefits to enrollees of managed care plans that utilizes existing community pharmacies. The PSAO contracts as a provider group with the managed care organization, so that the individual pharmacies receive negotiating representation in numbers and the prepaid health plan does not have to provide the capital necessary to start, own, and operate their own pharmacy department.

PHYSICIAN DISPENSING: A physician gives the patient his or her initial doses of a commonly prescribed drug during the office visit. The prescription is usually refilled at the pharmacy and not the physician’s office. Doctors who dispense medications usually stock 20 to 30 drugs (antibiotics, anti-inflammatories, etc.) Pharmacists see this as a reduction in their market share, whereas physicians see this as both an extra service and convenience to their patients.

PHYSICIAN ORGANIZATION (PO): A generic term for an organization of physicians, which technically could be a professional corporation, partnership, IPA, PPO, foundation, etc., as well as physicians organized as partially or fully integrated group practices.

PHYSICIAN-HOSPITAL ORGANIZATION (PHO): A generic term referring to a variety of ventures organized by hospitals and physicians. In contemporary usage, the most common venture is the formation of a new organization to engage in payer contracting initiatives. In these arrangements, the PHO is usually owned by both physicians and hospitals, often with equal ownership and governance representation, for the purpose of procuring the administering payer contracts from HMOs, PPO, insurance companies, or other fiscal intermediaries.

POINT-OF-SERVICE MODEL: Sometimes referred to as an "open-ended" HM0, the point-of-service model is one in which the patient can receive care either by physician contracting with the HMO or by those not contracting. Physicians not contracting with the HMO but who see an HMO patient are paid according to the services performed. The patient is incented to utilize contracted providers through the fuller coverage offered for contracted care.

PRACTICE GUIDELINES: Explicit recommendations for the management of defined clinical problems. Guidelines are developed from medical literature and expert panels and may be endorsed by professional societies. Guidelines may be used by insurers to evaluate the quality and appropriateness of medical care by comparing actual practices with a guideline’s recommendations. Results of such comparisons may be used for several purposes: reimbursement, provider education, provider feedback, and credentialing/recredentialing. (see also clinical pathways)

PROFESSIONAL CORPORATION (or Association): A corporation licensed under state statutes to operate a professional practice. Most states impose special requirements for the organization and operation of the PC. For example, most states require that the individual professional retain personal liability for acts of professional malpractice, and place restrictions on the sale or transfer of stock in the corporation. Many states also impose restrictions on the qualifications (professional licensure) for persons eligible to be shareholders, directors, or officers of the corporation. Some states have "Professional Association" statutes that are similar to professional corporation statutes; the terms are used more or less interchangeably.

PROFESSIONAL REVIEW ORGANIZATION (PRO): An organization that reviews the activities and records of a health care provider, institution, or group. The reviewer is generally a physician if a physician is the subject of the review; a group of administrators, physicians, and allied health care personnel if a hospital is the subject of the review; etc. The PRO can be state-sponsored or independent.

PROFESSIONAL SERVICES AGREEMENT (PSA): An agreement in which physicians (and possibly other professionals) agree to provide their services to a person or organization. For example, physicians may enter into a PSA with an Integrated Health care System to provide services to the IHS’ patients.

PROFILING: Profiling is an analytic tool that uses epidemiological methods to compare practice patterns of providers on the dimensions of cost, service use, or quality of care. The provider’s pattern of practice is expressed as a rate, aggregated over time for defined population of patients.

PROSPECTIVE PAYMENT: A prospective payment is a payment that is received before care is actually needed. It gives the provider organization a financial incentive to utilize fewer resources, as they get to keep the difference between what is prepaid and what is actually used.

PROSPECTIVE PAYMENT SYSTEM (PPS): A payment method used by Medicare for hospital inpatient services in which predetermined amounts, based on the DRG system, are paid to hospitals as reimbursement for their inpatient operating costs for treating beneficiaries.

PROVIDERS: Institutions and individuals who are licensed to provide health care services (for example, hospitals, skilled nursing facilities, physicians, dentists, etc.) May also refer to medical supply firms and vendors of durable medical equipment.

PROVIDER EDUCATION: Guidelines are intended to reduce the uncertainty in medical decision-making by providing explicit protocols for the management of common clinical problems. Guidelines offer providers standards of care. By following guidelines, providers can eliminate much of the variation in care that consumes resources but may not contribute to improved patient outcomes.

PROVIDER FEEDBACK: Data describing providers’ practice patterns compared with guidelines can be reported to providers in an effort to improve the efficiency of their practices.

PROVIDER NETWORKS: An organized group of care providers selected by a health plan because they meet the plan’s standards for efficient quality practice. The network manages health care costs through several techniques:
     Credentialing: This process is undertaken to document the provider's professional qualifications and ability to meet standards for quality, cost-effectiveness, and access required by the health plan.
     Shared financial risk: Providers often share the financial risk of health care delivery by accepting a capitated payment. Alternatively, a percentage of provider's fees may be withheld to cover a health plan's deficits at year end. Under a withholding system, providers receive an annual payment from the withheld pool based on the financial experience of the plan and their own performance.
     Rate negotiation: The health plan negotiates lower provider fees in exchange for anticipated increased volume. These discounts are then passed along to purchasers.
     Consumer incentive: The consumer has a financial incentive to use the network because the consumer assumes greater out-of-pocket expense when a provider is seen outside the network.

PURCHASING POOL: Organization that groups together workers in small businesses, those who are self-employed, and other uninsured into larger pools that can achieve better ratings and deeper discounts. These better rates come from being able to spread risk over larger numbers of individuals. Besides the economies of scale, purchasing pools hope to maintain volume purchasing power for their members.

QUALITY IMPROVEMENT: A continuous process that identifies problems in health care delivery, examines solutions to those problems, and regularly monitors the solutions for improvement

QUALITY-OF-LIFE MEASURES: An assessment of patients’ perceptions of how they deal with their disease or with their everyday life when suffering from a particular condition. It is subjective in the sense that the kinds of information cannot be measured objectively; however, it has been in the health care literature for at least 20 years. Through statistical means, the indices that have been developed to measure various aspects of quality of life have been validated over time, and the measures are fairly reliable and reproducible.

RATE SETTING: The process by which DHS determines the monthly premium paid to health plans for providing health care services to MA/GAMC clients. DHS estimates the cost of care for client categories based on a fee-for-service system, and then sets the health plan rates at 90-95% of that estimated cost. DHS assigns each client to a rate cell based on client age, gender, geographic area, eligibility status and other factors, and assigns each rate cell a price. By using a large number of rate cells DHS attempts to ensure that an appropriate payment is made based on intensity of service needs.

RATING: The method that is used to determine the cost of premiums to the members of a managed health care or indemnity insurance plan.

RATING - COMMUNITY RATING: A rating method in which actuarial statistics are used regarding a total population to determine a uniform premium.

RATING - EXPERIENCE RATING: A rating method in which actuarial statistics are used regarding a specific group (e.g., age, sex, etc.) to determine the premium.

REFERRALS: Based on client need, a process of arranging appropriate services to ensure coordination, follow-up, non-duplication of services, and communication between providers. This process may or may not include authorized payment for services.

REIMBURSEMENT: A payment to a provider in exchange for the performance of health services. The term more technically is applicable to payments made to providers by Medicare or Medicaid.

REINSURANCE: Protection purchased by HMOs, IPAs or PHOs from insurance companies that specialize in underwriting risks that substantially exceed basic or conventional limits of liability. Reinsurance coverages for HMOs typically apply to elements such as individual and aggregate stop-losses, out-of-area claims, and insolvency of the HMO.

RELATED PARTY RULE: A Medicare rule that the cost of supplies furnished to a provider by an organization that is related to the provider by common ownership or control are reimbursed at the related organization’s cost rather than at the price paid by the provider. The purpose is to avoid payment by Medicare of exorbitant price mark-ups arranged by the related entities.

RESOURCE-BASED RELATIVE VALUE SCALE (RBRVS): A HCFA payment method by which physicians receive an amount set forth in a fee schedule based on the relative prices and values of the procedures.

RETROSPECTIVE UTILIZATION REVIEW: Services are evaluated retrospectively for appropriateness according to established criteria in order to avoid over or under utilization in the future. Payment may be denied for claims judged to be inappropriate. Retrospective utilization review is not necessarily linked to the payment of claims. Instead, an insurer may provide educational feedback to physicians about their patterns of practice. For example, physicians whose patients have significantly longer than average hospital stays may be shown the statistics and encouraged to bring their practices closer to the norm.

RETURN ON PRODUCTION (ROP): The ratio of the total economic benefit of the owners or individual physician (including compensation, benefits, and undistributed earnings) to the net service charges generated by the medical practice or individual physician.

REVENUE: The gross amount of earnings received by an entity for the operation of a specific activity. It does not include any deductions for such items as expenses, bad debts, or contractual allowances.

RISK: There are two distinct types of risk: financial risk and insurance risk. All three levels of government have financial risk in the funding of health and human services. County government has both a direct responsibility to its residents to manage financial risk to county property tax revenues and responsibilities under statute as a subdivision of state government, which involve financial risk. The challenge is to determine how each level of government should contribute to sharing the financial responsibilities and financial risk, which involves consideration of the appropriate tax to provide the funding.

Insurance risk, or risk-bearing as a term of art in the insurance industry, is specifically in reference to the business of insurance and is regulated by government.

RISK ADJUSTMENT: A means of adjusting capitation rates paid to prepaid plans in order to more accurately reflect the expected cost of providing health care services to an individual. The ACG case mix system is one method currently being used.

RISK ASSESSMENT: A process to differentiate between the apparently healthy population from those who need further assessment.

RISK CONTRACT: An agreement between the Health Care Financing Administration (HCFA) and a health maintenance organization (HMO) requiring the HMO to furnish at a minimum all Medicare-covered services to Medicare-eligible enrollees for an annually determined, fixed monthly payment rate from the government and a monthly premium paid by the enrollee. The HMO is then liable for services regardless of their extent, expense or degree.

RISK POOL: A defined patient population and geographic location to which revenue and expenses are determined. A risk pool seeks to define expected claim liabilities of a given defined account as well as required funding to support the claim liability.

RISK SHARING: A method of distributing the insurance or financial risk in serving a population. It involves the sharing of financial risk or gain between the purchaser and the provider of health care services.

SATURATION: Regarding HMOs, a condition occurring when an HMO achieves its maximum penetration either in a subscriber group or in the market itself.

SCREENING: The method by which managed care organizations limit access to health care for unnecessary reasons. In most HMOs, a phone call to the physician or his or her medical office staff is required before an office visit can be arranged. "Gatekeepers" and concurrent review are other methods of screening patients.

SCREENS: Limitations placed on reimbursement to hospitals for outpatient services under the Medicare and Medicaid program.

SECOND OPINION PROGRAMS: Patients are instructed to seek a second opinion before undergoing certain common surgical procedures that have been judged to be over utilized. These programs may be mandatory (patient must obtain second opinion in order to receive insurance coverage) or voluntary (insurer will pay for a second opinion if patient decides to obtain it).

SELF-FUNDING: Often confused with self-insurance, a self-funded health care plan is funded entirely by the employer. Self-funded plans may be self-administered, or the employer may contract with an outside administrator for an administrative-services-only arrangement. Self-funded plans obtain stop-loss insurance to cover catastrophic illnesses.

SELF-INSURED: An organization (usually an employer) that assumes the financial risk of employees’ health benefits’ costs, rather than purchasing insurance from an insurance company, HMO, or other fiscal intermediary. Also, a hospital may self-insure for malpractice insurance, rather than purchase from an insurer.

SERVICE AREA: A geographical territory that an HMO or other provider organization designates for offering and providing enrollment or service to members. Since reasonable access to the health care services is a primary objective of HMOs and providers, a common standard is that members or patients should not have to travel more than 30 minutes in order to reach a service site.

SERVICE COORDINATOR: An alternate nomenclature for "case manager" to reduce negative implications that consumers are "cases" and that they require "management" in order to achieve their life goals.

SINGLE PAYER SYSTEM: A health care system in which all payments for defined benefits or services are paid from a single source, typically the national government. Most of the western industrialized nations have some form of a single payer system, with the notable exception of the United States.

SKILLED NURSING FACILITY (SNF): Typically an institution for convalescence or a nursing home, the skilled nursing facility provides a high level of specialized care for long-term or acute illness. It is an alternative to extended hospital stays or difficult home care.

SOCIAL HMO (SHMO): A demonstration project for a managed care program designed to integrate long-term and acute care for Medicare beneficiaries over age 65, with a major objective of reducing the utilization of nursing homes by the elderly.

STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP): SCHIP was enacted as part of BBA 1997 as the new Title XXI of federal statutes.  It provides funds for states to expand health insurance to children of low income families.  Each state has a unique SCHIP program. 

SUBCAPITATION: An arrangement in which a health care provider receiving capitated income from an HMO pays subcontracting providers on a capitated basis, the payment therefore representing subcapitation. A medical group practice, for example, may receive capitation income from an HMO and then make payment to subcontracting physicians (for specialty services not available within the group) on a capitation basis.

SUBROGATION: A provision in a health plan contract requiring the insured individual to assign any rights to recover damages to the insurer. Such provisions are not legal in all states.

SUBSCRIBER: An employer, union, or association contracting with an HMO for prepaid health care plan that is offered to eligible enrollees.

SUBSTANCE ABUSE: Abusing alcohol or other drugs that place a person’s social, economic, psychological welfare in potential danger and/or endangering the public, or a combination (also called chemical dependency.)

SUPPLEMENTAL HEALTH SERVICES: The benefits an HMO offers which exceed basic health service requirements established in the Federal HMO Regulations.

SUPPLEMENTAL MEDICARE PLAN: Medicare gap or wraparound insurance providing coverage for some services, deductibles and/or copayments not included in conventional Medicare coverage. The coverage is designed to give Medicare beneficiaries an opportunity to fill the gaps in basic Medicare coverage.

SURGICENTER: A separate, free-standing medical facility specializing in outpatient or same-day surgical procedures. Surgicenters drastically reduce the costs associated with hospitalizations for routine surgical procedures because extended inpatient care is not required for the specific disorders treated by them.

TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982 (TEFRA):  The federal law that created the current risk and cost contract provisions under which health plans contract with HCFA and the Medicare program.

TECHNOLOGY ASSESSMENT: The term used to describe the evaluation process of new or existing diagnostic and therapeutic devices and procedures. Technology assessment evaluates the effect of a medical procedure, diagnostic tool, medical device, or pharmaceutical product. In the past, technology assessment meant primarily evaluating new equipment, focusing on the clinical safety and efficacy of an intervention. In today’s health care world, it includes a broader view of clinical outcomes, such as the effect on a patient’s quality of life, and the effect on society.

TERTIARY CARE: Tertiary care is administered at a highly specialized medical center. It is associated with the utilization of high-cost technology resources.

THERAPEUTIC SUBSTITUTION: A drug that is believed to be therapeutically equivalent (i.e., will achieve the same outcome) to the exact drug prescribed by a physician is substituted by the dispensing pharmacist without the need to obtain physician permission.

THIRD-PARTY ADMINISTRATOR (TPA): An administrative organization (other than an employee benefit plan or health care provider) which collects premiums, pays claims and/or provides administrative services. A fiscal intermediary that is neither an insurance company nor an HMO.

THIRD-PARTY PAYER: An organization that pays for or underwrites coverage for health care expenses.

TIERED BENEFITS:  A method to provide different levels of co-payment or co-insurance in a health insurance plan.  An example of a pharmacy benefit with tiering would be to charge the enrollee a 5% co-pay for generic drugs, 15% for drugs on the formulary and 30% for all other drugs. 

TISSUE-TYPE PLASMINOGEN ACTIVATOR (t-PA): Tissue-type plasminogen activator, a product introduced in 1988 to treat patients with heart attacks caused by blood clots, has been a focal point for arguments regarding costs versus benefit. Its treatment cost is high relative to other conventional agents with which it is compared, but it has some advantages over those drugs. Some insurers and government programs have refused to reimburse its high cost although many physicians favor its use.

TOTAL QUALITY MANAGEMENT (TQM): A method originally developed by W. Edward Deming for examining systems and processes at medical group practices to identify and remedy inefficiency, error, or redundancy in operations or the total patient care experience. The system is based, in part, on obtaining information and comments from staff and patients in order to evaluate and resolve procedural or service deficiencies.

TRENDING: A calculation used to anticipate future utilization of a group based on past utilization by applying a trend factor, the rate at which direct and indirect medical costs are changing.

TRIAGE: Availability of skilled personnel to assess and direct client to appropriate location for urgent, emergent or crisis care.

TRIPLE OPTION: The choice of indemnity insurance, preferred provider arrangement, or HMO plan, as offered to beneficiaries.

UNINSURED: People who lack public or private health insurance.

URGENT CARE CENTER: A medical facility where ambulatory patients can be treated without an appointment, and receive immediate, non-emergency care. The urgent care center may be open 24 hours a day; patients calling an HMO after hours with urgent, but not emergent, clinical problems, are often referred to these facilities.

UTILIZATION: The frequency with which a benefit is used, a service is performed, or a referral is made. For example, HMO utilization of inpatient (hospital) services is commonly expressed as the number of inpatient days per year per thousand members. The relative rate of service utilization is a critical factor for the financial success of providers in prepaid contracting.

UTILIZATION MANAGEMENT (UM): A process for measuring the use of available resources (including professional staff, facilities, and services) to determine medical necessity, cost effectiveness, and conformity to criteria for optimal use.

UTILIZATION REVIEW (UR): A systematic, retrospective review designed to determine the medical necessity and economic appropriateness of health services.

UTILIZATION REVIEW ACCREDITATION COMMISSION (URAC): A corporation formed to improve quality of utilization review in health care.

WORK-UP: The total patient evaluation, which may include laboratory assessments, radiologic series, medical history, and diagnostic procedures.

WRAP-AROUND SERVICES: Set of services intended to address the interrelated social and mental health service needs of individuals eligible for acute care. Acute care services and continuing care services are more likely to be successful when supplemented by other supports. Alternatively referred to as social services.