Common Managed Care/Insurance Terms

Co-payment

A co-payment is a flat fee paid out of pocket for medical services, usually at the time the service is rendered. This usually applies to physician office visits, prescriptions, emergency or hospital services.


Co-insurance

Co-insurance, like co-payments, is a common form of member cost-sharing, typically applied as a percentage of applicable costs after the deductible requirements are met. With traditional non-managed care plans, the percentage is based upon provider charges, sometimes up to a maximum allowable amount per service. In managed care plans, the percentage can be based upon provider contract rates.


Deductible

A deductible is the amount of medical expense a person must pay each year from his/her own pocket before the health plan will make payment.


Gatekeeper

When a primary care physician serves as the patient's initial contact for medical care and referrals, he/she is referred to as the "gatekeeper."


Out-of-Network Benefit

PPOs and HMO Point of Service plans contain an out-of-network benefit tier that is different from benefit coverage for in-network services. In PPO plans cost-sharing requirements may exist that are somewhat "hidden" in the process. For example, a number of PPO plans indicate a percentage co-insurance requirement for out-of-network, but also limit the benefit to a maximum allowable based upon average contract rates. This means the member must pay a percentage co-insurance based on the maximum allowable, plus the entire amount that exceeds the maximum.


Primary Care Physician (PCP)

A PCP is a physician designated as responsible for providing specific primary care services. This includes evaluation and treatment of a patient, including decisions regarding referral for specialty care. PCPs are generally in family practice, general practice, general internal medicine, pediatrics and sometimes obstetrics and gynecology. Under the HMO health plan model, the PCP may also be considered the gatekeeper.

While these terms are not comprehensive nor universally accepted definitions, they are meant to assist you in understanding concepts, programs, services and information relating to managed healthcare finance and delivery.