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238 Cards in this Set

  • Front
  • Back
Reasonable and Customary
Usual, customary, and reasonable services or costs.
Reinsurance
Insurance purchased by a payer to protect from extremely high losses.
Retrospective Review
A process of judging medical necessity and appropriate billing practices for services which have already been rendered.
Second Opinion
Obtaining another professional's opinion to help determine the necessity of a medical procedure or drug treatment.
This is often required by plans before a surgical procedure.
Service Date
The date a charge is incurred for a service.
Self-Insured or Self-Funded Plan
A plan where the risk is assumed by the employer rather than the insurer.
Signout
The act of transmitting information about a patient.
Quality Management (QM)
The monitoring and maintenance of established standards of quality using techniques proposed by Crosby, Demming, and Juran.
Quality Improvement (QA)
Quality assurance or quality assessment is the activity that monitors the level of care being provided by physicians, medical institutions, or any health care vendor in order to ensure that health plan enrollees are receiving the best care possible.
The level of care is measured against pre-established standards, some of which are mandated by law.
Skilled Nursing Facility (SNF)
An institution for convalescence or a nursing home; 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.
Skilled Nursing Care
Nursing care that requires the skills of, and can only be performed by, a nurse or health professional of equivalent or greater training to achieve the medically necessary and appropriate result.
Single-Source Brand Name Drug
A prescription drug which is known only by the single trade name under which it is advertised and sold, and with respect to which a generic drug with equivalent components is not marketed.
State Insurance Commission
The state group that approves insurance certificates for each state and regulates the industry based on statutes.
Stop Loss
A form of reinsurance that protects health insurance above a certain limit.
Subrogation
The recovery of monies or benefits from a third party who is liable for the patient.
Psychogenic Pain
Pain that is caused, increased, or prolonged by mental, emotional, or behavioral factors in the absence of an organic cause.
Common types of psychogenic pain include headaches, myalgias, back pain, and abdominal pain.
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 specific disorders.
Provider
Any supplier of health care services; ie, physician, pharmacist, case management firm, etc
Technology Assessment
This term is 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 primarily meant evaluating new equipment and focused on the clinical safety and efficacy of an intervention.
In today's health care world, it includes both a broader view of clinical outcome, such as the effect on a patient's quality of life, and the effect on society, such as cost-benefit analysis.
Committees within health plans that evaluate new technologies are sometimes called Technology and Bioethics Committees (TBC).
Tertiary Care Facility
A hospital providing specialty care to patients referred from other hospitals because of the severity of their injuries or illnesses.
Third-Party Administrator (TPA)
An organization that is outside of the insuring organization that handles the administrative duties and sometimes provides utilization review.

Third-party administrators are used by organizations that actually fund the health benefits but do not find it cost effective to administrate the plan themselves.
TPL
An acronym for "third-party payers"; they are liable for the cost of an illness or injury, such as auto or homeowner insurer
UB-92
An abbreviation for Uniform Billing Code of 1992. It is the common claim form used by facilities to bill for services.
UCR
An acronym for "usual, customary, and reasonable".
Underwriting
Evaluating and determining the financial risk a member or member group will have on an insurer.
UPIN
An acronym for "unique physician identification number".
URAC
An acronym for Utilization Review Accreditation Commission.
One of the accrediting bodies of health plans.
Usual, Customary, and Reasonable (UCR)
Fee-for-service payment to physicians based on the usual and customary fee for the same service in the area where the practice is located or on some other judgment of reasonable payment.
Worker's Compensation
Laws requiring employers to furnish care to employees injured on the job.
Services performed under worker's compensation policies are usually excluded from commercial health plan coverage.
Primary Diagnosis
The code reflecting the current, most significant reason for the services or procedures provided.

If the disease or condition has been successfully treated and no longer exists, it is not billable and should not be coded.
Preventive Care
Health care emphasizing priorities for prevention, early detection, and early treatment of conditions, generally including routine physical examination, immunization, and well-person care.
Pre-existing Condition
Any medical condition that has been diagnosed or treated within a specified period before the member's effective date of coverage under the group contract.

There is often a short delay in beginning coverage when a pre-existing condition is present.
Preferred Providers
Physicians, hospitals, and other health care providers who contract to provide health services to persons covered by a particular health plan.
Prescription Drugs
Medicines which can only be obtained by law with a qualified practitioner's written prescription.

For the purposes of the policy, nitroglycerin, insulin, and insulin injection syringes are also often deemed to be prescription drugs
Clinical Pathway:
Time, activity and event are featured in a grid format that outlines categories of interventions on one axis (usually the vertical), and time (or other indicators of clinical progression) on the other axis.
Time can be measured in minutes to years, or in activities or a specific task performed to arrive at an expected outcome.
The events shown on a pathway are observable milestones that reflect progress toward the expected outcome.
Patient Care Guidelines:
Practice guidelines that include timed, tested methods of describing practice patterns.

The guidelines are useful in forming a basis for development of algorithms and clinical pathways.

They can become a statement of unity between providers and disciplines in supporting a collaborative practice base.
The following are the Institute of Medicine's recommendations on the attributes of guideline design:
• Validity: Practice Guidelines are deemed valid if they lead to the health and cost outcomes projected for them.
• Reliability/Reproducibility: If given the same evidence and development methods, another set of experts would come up with the same recommendations, and the guidelines are interpreted and applied consistently across providers.
• Clinical Applicability: Guidelines should apply to a clearly defined patient population.
Care Maps:
also called care pathways.

embrace continuing care, instead of a timed episode of care.

are primarily used in the post-acute setting and have more detail than a clinical pathway in areas that cover function, therapies, discharge planning and psychosocial needs.

are not as specific and directed as clinical pathways, and the patients for which the care map is used do not fall easily into treatment categories.
Algorithms, also known as a Decision Tree:
These are designed to reflect current standards of practice and aid in the decision-making process.

Unlike pathways or guidelines, algorithms are considered to be precise interventions, often termed "cookbook medicine".
Pre-certification (also known as Pre-authorization or Pre-auth)
In managed care it refers to the approval of care, such as a hospitalization, certain diagnostic tests, or even non-covered medications.

Preauthorization may be required before admission takes place or care is given by non-managed care providers.
Preadmission Certification
The practice of reviewing claims for hospital admission before the patient actually enters the hospital.

This cost-control mechanism is intended to eliminate unnecessary hospital expenses by denying medically unnecessary admissions.
PPO
An acronym for "preferred provider organization".

refers to a plan contracting with providers to provide services on a discounted basis.

Members must stay within the plan or pay a greater co-pay or higher percentage coinsurance.
POS
An acronym for "point of service".

This refers to a plan in which members do not have to choose services (HMO vs. traditional) until they need them.

Benefits may differ by choice and members may be financially motivated to choose managed care plans. (This could also refer to Place of Service or Point of Sale.)
PMPM
An acronym for "per member per month".
PMPM is often used in the context of pharmacy or medical costs; the cost of providing a particular medical service stated as the average cost to provide that service to one member for one month.
PIN
An acronym for "physician identification number".
Pharmacy Benefit Management Company
are organizations that manage pharmaceutical benefits for managed care organizations, other medical providers or employers.

contract with clients interested in optimizing the clinical and economic performance of their pharmacy benefit.
may include some or all of the following: benefit plan design, creation/administration of retail and mail service networks, claims processing and managed prescription drug care services such as drug utilization review, formulary management, generic dispensing, prior authorization and disease and health management.

can be stand-alone companies, or a health plan can have its own "in-house" PBM that acts in the same capacity as a PBM company.

PBM staff can be HMO staff who monitor the amount and use of prescribed drugs.6
PCP
An abbreviation for "primary care physician". As noted, this physician is sometimes referred to as the "gatekeeper." This is because the primary care physician is usually the first doctor a patient sees for an illness. The physician then directly treats the patient, refers the patient to a specialist (secondary care), or admits the patient to a hospital.
Often, the primary care physician is a family doctor or internist, but can also be an internist, a family practitioner, a pediatrician, or an obstetrician/gynecologist.
Per Diem Reimbursement
Reimbursement to an institution based on a set rate per day rather than on a charge-by-charge basis.
Partial Hospitalization
A situation in which the patient only stays part of each day over a long period.
Cardiac, rehabilitation, psychiatry, and chronic pain patients, for example, could use this service.
Par Provider
Shorthand for a provider who is participating in a health care plan.
P&T Committee
An abbreviation for Pharmacy and Therapeutics Committee.
is an advisory committee responsible for developing, managing, updating, and administering the drug formulary system.
are also usually charged with developing and/or approving drug-related guidelines or programs within the health-system.
can be found in MCOs, PBMs, hospitals and other related health systems
usually comprised of PCPs, specialty physicians, pharmacists, and other health care professionals. Committee members may also include nurses, legal experts, and administrators.
Patient Protection and Affordable Care Act
Signed into law on March 23, 2010.
Commonly referred to as “health care reform” when taken in conjunction with the Health Care and Education Reconciliation Act of 2010.
Patient-Centered Medical Home
An approach to providing comprehensive primary care that facilitates partnerships between individual patients, their personal providers, and when appropriate, the patient’s family.
May allow better access to health care, increased satisfaction with care, and improved health.
Out-of-Service Area
This refers to medical care received out of the geographic area that may or may not be covered, depending on the plan.
Open Enrollment Period
The period during which an MCO allows people not currently enrolled in their plan to sign-up for plan membership.
Out-of-Plan
This refers to choosing a provider who is not a member of the preferred provider network.
OON (Out-of-Network) Charge
A covered charge for treatment, care, services, or supplies provided by a non-network provider to a patient who resides inside the PPO area (whether or not the provider is located inside the PPO Area).
Covered charges are defined, with limits and exclusions, under major medical expense benefits and medical care benefit exclusions.
OOA (Out-of-Area) Charge
A covered charge for treatment, care, services, or supplies provided by a non-network provider to a patient who resides outside the PPO area (whether or not the provider is located outside the PPO area).

Covered charges are defined, with limits and exclusions, under major medical expense benefits and medical care benefit exclusions.
Off-Label Use
The use of a drug for clinical indications other than those stated in the product labeling approved by the Food and Drug Administration (FDA).

For example, if there was a drug that received FDA approval for treating diabetes and it was being used to treat cancer, its use would be off-label in this particular case.

This is often done with cancer drugs, where it is approved for certain cancers but not others.
NTOCC
An acronym for National Transitions of Care Coalition.
HEDIS
An acronym for Health Plan Employer Data and Information Set.

HEDIS is a tool used by more than 90 percent of America's health plans to measure performance on important dimensions of care and service.

It is a set of performance measures that are utilized to assist employers and other health purchasers in understanding the value of health care purchases and evaluating health plan performance.

Considered a quality measurement, this is a way for health plans to simplify and standardize measurement and reporting.

Currently, HEDIS consists of 71 measures across eight care domains.

HEDIS makes it possible to compare the health plan performance on a comparable basis.

Health plans also use HEDIS measures themselves to see where they need to focus their improvement efforts.

Some examples of HEDIS measures include: childhood immunizations, use of appropriate medications in people with asthma, controlling high blood pressure, and flu shots for adults 50 years and older. Physicians are required to comply to HEDIS guidelines for re-credentialing with most HMO plans.
HHA
An acronym for "home health agency".

A legally operated facility that primarily provides skilled nursing services to patients in their homes.

It operates under the direction of a Doctor of Medicine or Doctor of Osteopathy.

It maintains clinical records and qualifies as a home health agency under Medicare.

It does not include any facility that primarily provides care or treatment of mental disorders.
HIE
An acronym for "health information exchange". Not to be confused with health insurance exchange.
HIT
An acronym for "health information technology".
HITECH
An acronym for Health Information Technology for Economic and Clinical Health Act.
HIX
An acronym for "health insurance exchange".
Home Care
In contrast to inpatient and ambulatory care, home care is medical care ordinarily administered in a hospital or on an outpatient basis; however, the patient is not sufficiently ambulatory to make frequent office or hospital visits.

For these patients, intravenous therapy, for example, is administered at the patient's residence, usually by a health care professional.

Home care reduces the need for hospitalization and its associated costs.
Hospice
A service program, either inpatient or outpatient, which offers palliative support, counseling, and daily resources to the terminally ill and their family members, working diligently to make the patient as comfortable and pain-free as possible.
IBNR
An acronym for "incurred but not reported"; refers to expenses.

It is the financial accounting of all services that have been performed but have not yet been invoiced or recorded.
ICD
An acronym for International Classification of Diseases, which is a statistical classification system consisting of a listing of diagnoses and identifying codes for reporting diagnosis of health plan enrollees identified by physicians.

It includes coding and terminology to accurately describe primary and secondary diagnosis and provide for consistent documentation for claims. Classification is primarily numeric.

The codes are revised periodically by the World Health Organization; the current version is ICD-10.
ICF
An acronym for "intermediate care facility". An ICF is a step-down facility for patients leaving the hospital but who cannot be discharged to home because of continuing medical needs.
IDS
An acronym for Integrated Health Care Delivery Systems, which are health care financing and delivery organizations created to provide a "continuum of care," ensuring that patients get the right care at the right time from the right provider.

This continuum of care from primary care provider to specialist and ancillary provider under a "corporate roof" guarantees that patients get cared for appropriately, thus saving money and increasing quality of care.
Indemnity Insurance
Traditional fee-for-service (FFS) coverage in which providers are paid according to the service performed.
IPA
An acronym for Individual Practice Association.

This is an organization made up of providers who, along with the rest of a group, contract with payers at a discounted fee-for-service or capitated rate.
Legend Drug
Another name for a prescription drug.
It bears the legend, "Caution: Federal Law prohibits dispensing without a prescription."
IS
An acronym for "information services," which are the administrators of the computer systems used by payers and providers.
Length of Stay
The number of consecutive days a patient is hospitalized. It is abbreviated as LOS.
Lifestyle Drugs
Drugs designed to improve the quality of life or extend the normal life span. They generally are not used to treat a life-threatening disease.

These may include drugs that would restore or improve sexual potency, enhance weight loss, restore hair growth, or reverse the effects of aging.

These drugs are often excluded from coverage in MCOs and other insurance plans.
Limits
A term that describes the ceiling for benefits payable under a plan.
Long-Term Care
Services that ordinarily are provided in a skilled nursing, intermediate care, personal care, supervisory care, or elder care facility.

A nursing home or, more specifically, a facility offering extended, non-acute care to a resident patient whose illness does not require acute care.
Loss Ratio
The ratio between the cost to deliver medical care and the amount of money taken in by the plan.
Mail-Order Pharmacy
A growing number of Health Maintenance Organizations (HMOs) and Pharmacy Benefit Management (PBM) companies affiliated with corporations or federal contracts use a mail-order pharmacy program to provide their members with discount drug rates delivered through the mail to their home.

Mail-order pharmacies can purchase drugs in larger volumes, and therefore the prices tend to be cheaper, which they pass on to the enrollees.

Some HMOs and PBMs mandate mail-order prescriptions for all long-term (maintenance) medications.
Mandated Benefits
Services mandated by state or federal law such as in child abuse or rape, and are not necessarily covered by insurers.
Maximum Allowable Charge (MAC)
An amount set by the insurer as the highest amount to be charged for a particular medical service or pharmaceutical product.
MCO
An acronym for "managed care organization". It is a generic term for exclusive provider organization (EPO), HMO, and others
Medical Waste
Any intervention that has no possible benefit for the patient, or in which the potential risk to the patient is greater than the potential benefit. Occurs if the provider is misinformed; if the patient is misinformed and the provider succumbs to patient demands; or if the provider behaves unethically.
Medically Necessary and Appropriate
The most cost-effective level or type of treatment, care, service, or supply that is consistent with the illness, injury, or other condition under treatment or care, based on the patient's overall medical history, condition, and prognosis, and current, generally accepted medical practice.
Medicare
The national program that provides medical care to the elderly, certain people with disabilities, and those who have End Stage Renal Disease (ESRD).
This program was established by Title XVIII of the Social Security Act.
Medicare Plus Choice (Medicare Advantage Plans)
The program of medical care benefits established by Title XVIII of the Social Security Act, providing an HMO option.

Extra benefits and lower co-pays are typical.
Medication Therapy Management
A distinct service or group of services that optimize therapeutic outcomes for individual patients and that are independent of, but can occur in conjunction with, the provision of a drug product.

A partnership of the pharmacist, the patient or the caregiver, and other health professionals that promotes the safe and effective use of medications and helps patients achieve the targeted outcomes from medication therapy.
MSA
An acronym for "medical savings account". An MSA is used to pay for routine medical care, and unused funds may be rolled over for use in the following year.
MTMP
An acronym for Medication Therapy Management Program.
National Transitions of Care Coalition
A group of concerned organizations and individuals who have joined together to address problems associated with transitions of care.
Founded in 2006 by the Case Management Society of America (CMSA) to define solutions addressing those gaps that impact safety and quality of care for transitioning patients.
Multi-Source Brand Name Drug
Prescription drugs available from more than one manufacturer and have at least one generic equivalent alternative available.
NAIC
An acronym for National Association of Insurance Commissioners, which is an organization of state insurance regulators.
NCQA
An acronym for National Commission for Quality Improvement.
The NCQA is an independent non-profit organization that assesses the quality of managed care plans, preferred provider organizations (PPOs), etc.
Network
A defined group of providers typically linked through contractual arrangements, which supply a full range of primary and acute health care services. A "closed" network is one in which beneficiaries are not allowed to access non-network providers, whereas an "open" network allows access to other providers at some cost to the beneficiary.
Network Provider
Any provider deemed to be a member of the network of providers under the policy with regard to a person at the time treatment, care, services, or supplies are provided to that person
Non-Network Provider
Any provider not meeting the policy definition of a network provider at the time treatment, care, services, or supplies are provided.
Nonparticipating Provider (also called a non-par provider)
A health care provider who has not contracted with the carrier or health plan to be a participating provider of health care within that particular plan or insurance.
Managed care
has rapidly evolved

Some call it "recent ancient history": the convoluted process of managing health costs which inevitably overhauled health care delivery and still provides confusion within the industry more than 40 years after its inception.

is deeply rooted and proliferates in commercial health plans, individual health plans, state workers' compensation systems, social service systems, prison systems, the military, Medicare and Medicaid.

takes on many forms and produces many different models

motivates case managers need to have significant knowledge of the payer system in which they work and understand the referral system(s) for patient services
fee for service (FFS) plans
In the 1970s were still widespread
Types of HMOs
Staff Model:
Employs providers directly and directs care through clinics, where everything is in one place (centralized).

Physicians are more like employees of the HMO in this setting rather than employees of a group or private practice.
Types of HMOs
Group Model:
Contracts with a closed panel of physicians which are paid a fixed amount per patient to provide specific services to them.
Types of HMOs
IPA (Independent Physician/Practice Association):
Contracts with independent physicians practicing individually or in single specialty groups; these physicians also usually see fee-for-service patients (non-HMO) as well.

They are paid by capitation for the HMO patients and by traditional means for their non-HMO patients.
Types of HMOs
POS (Point of Service) Model:
Patients can receive care by both physicians contracting or not contracting with the HMO.

This is sometimes called an "open-ended" HMO. Physicians not contracting with the HMO but who see HMO patients are paid according to the services provided.

The patient is incentivized to see contracted providers within the HMO.
Health Maintenance Organization (HMO)
A form of health insurance in which its members prepay a premium for health services, which generally includes inpatient and ambulatory care.

For the patient, it means reduced out-of-pocket costs (ie, no deductible), no paperwork (eg, insurance forms), and only a small co-payment for each office visit to cover the paperwork handled by the HMO.
Health Insurance Marketplace
A concept initiated under the Affordable Care Act of 2010 for providing a "one-stop shop" for individuals and businesses to search for, compare, choose, and purchase health insurance in a competitive marketplace.

Under the Act, each state is required to have a health insurance "exchange," or marketplace, but can decide whether to operate it independently in accordance with federal law or to hand over operation of the marketplace to the federal government.

The Act mandated that all states have fully operational exchanges in place by January 1, 2014.

Health Insurance Exchanges is another name for Health Insurance Marketplace.
Health Information Technology for Economic and Clinical Health Act
Enacted under the American Recovery and Reinvestment Act of 2009, this act incentivized the nationwide use of electronic health records.
Health Information Technology
An umbrella term encompassing electronic medical records, electronic health records, and other means of managing health information with computerized systems for the storage, retrieval, sharing, and use of health information in communication and clinical decision making.
Health Information Exchange
Refers to the mobilization of health care information electronically across organizations.
Health Care Reform
Common term for the collective changes to the health care industry as a result of the Patient Protection and Affordable Care Act of 2010 in conjunction with the Health Care and Education Reconciliation Act of 2010.
Health Care and Education Reconciliation Act
Signed into law on March 30, 2010.

Commonly referred to as “health care reform” when taken in conjunction with the Patient Protection and Affordable Care Act of 2010.
HCPCS Modifiers
Modifiers should, or in some cases must, be used to identify circumstances that alter or enhance the description of a service or supply.

They are recognized by carriers nationally and are updated annually by CMS.

Level II/Local modifiers are assigned by individual Medicare carriers and are distributed to physicians and suppliers through carrier newsletters.

The carrier may change, add, or delete these local modifiers as needed.

An acronym for the HCFA's common procedural coding system. They are codes used by Medicare and other payers to describe products, procedures and supplies.
HCFA
An acronym for Health Care Financing Administration, which is now known as CMS.

This is the federal agency that oversees all of the money for Medicare.
Handoff
A type of care transition: the process of transferring responsibility for care.

Typically refers to a patient changing providers or settings within one level of care.

Includes a temporary transfer of care, such as from inpatient, clinic, or ED to the OR, procedure area, or diagnostic area; can also include a change in provider or change in service, such as nursing staff shift change, resident sign-outs, or house staff rotation change.

Not to be confused with signout.
GxT
An abbreviation which stands for "graded exercise test".
Grace Period
The period of time after a member has terminated employment, for which he or she is still covered.
Generic Drug
A prescription drug which is known by its common name rather than a brand or branded name.

Its active ingredient is equivalent to its brand name counterpart.

By law, generic drugs must meet the same standards for safety, purity, strength, and effectiveness as a brand name drug.

Generic drugs are a chemically equivalent copy of the brand name drug whose patent has expired and they are typically less expensive.
Gatekeeper
A practice in which a member's care must be provided by a primary care physician (PCP), unless the physician refers the member to a specialist or approves the care provided by a specialist.

Many Health Maintenance Organizations (HMOs) rely on the PCP to be the "gatekeeper."

This health care provider screens patients seeking medical care and effectively eliminates costly and sometimes needless specialty referrals for diagnosis and management.

The gatekeeper is responsible for administration of the patient's treatment and must coordinate and obtain authorization for all medical service's laboratory studies, specialty referrals, and hospitalizations.

In most HMOs, if an enrollee visits a specialist without prior authorization from his or her designated PCP, the enrollee must pay for medical services.

Sometimes enrollees have plans that do not require a specialist referral; in these cases the enrollee would not be subject to "gatekeeping" by their PCP.
Freestanding Outpatient Surgical Center
A health care facility, that is physically separate from a hospital, which provides pre-scheduled, outpatient surgical services.

It may also be called a surgicenter
Fee Schedule
The maximum fees a plan will pay for services, primarily listed by CPT codes.
Formulary
A specific list of drugs that are covered within a given health plan (MCO), health system or hospital which may be used in patients that are being cared for in that particular setting.

The list is continually updated as new information about medications becomes available.

When drugs are reviewed for formulary inclusion, efficacy and safety are considered first, followed by cost.

If, however, the safety and efficacy are the same for agents being reviewed, cost may be considered first.

The formulary usually includes other information on related products and information, representing the clinical judgment of physicians, pharmacists, and other experts in the diagnosis and/or treatment of disease and health promotion.

The most common types of formularies are closed and open formulary.

They may also be referred to as a Preferred Drug List.
Fee-For-Service (FFS)
Traditional provider reimbursement in which the physician is paid according to the service performed.

This is the reimbursement system used by conventional indemnity insurers.
Extension of Benefits
A component of some health care insurance policies that allows medical coverage to continue past the termination date of the policy for employees not actively at work.
Extended Care Facility
A nursing home or other long-term care setting that offers skilled, intermediate, or custodial care.
Experimental Drugs
Drugs that are still being investigated.

They are not yet approved by the Food and Drug Administration (FDA) for any use. Additionally, there is not enough accumulated scientific data to establish medically appropriate use of the drug for treatment of a disease.

However, the FDA has established programs to allow patients with an immediately life-threatening disease "early access" to new treatments.

Since patients who have exhausted standard therapeutic options may be willing to accept additional risks and potentially dangerous side effects from drug products still under study, these programs allow patients access to investigational drugs.

Experimental/investigational drugs are usually excluded benefits in managed care organizations and therefore are not covered for enrollees.
Exclusions
Also referred to as exceptions; refers to services or drugs not covered by the health
ERISA
An acronym for Employee Retirement Income Security Act.

This act has several provisions protecting both the payer and member, including requiring that payers send the member an EOB when a claim is denied.
EOB
An acronym for "explanation of benefits". It is a statement mailed to the health plan or insured member (and sometimes provider) explaining claim and payment.
Emergicenter
A health care facility, the primary purpose of which is the provision of immediate, short-term medical care for urgent medical conditions.
Episode of Care
All treatments rendered in a specified time frame for a specific disease.
EPO
An abbreviation for Exclusive Provider Organization.

An EPO is a form of preferred provider organization of PPO, in which patients must visit a caregiver that is on its panel of providers.

If a visit to an outside provider is made, the EPO will offer limited or no coverage for the office/hospital visit.
EMR
A digital version of a patient's paper chart in the clinician’s office.

An EMR contains the medical and treatment history of the patient in one practice and is not easily shared with other providers or organizations outside of the practice.
ELOS
An acronym for "estimated length of stay"; refers to the average number of days of hospitalization required for a given illness or procedure.

It is based on prior histories of patients who have been hospitalized for the same illness or procedure.
Electronic Health Record (EHR)
A digital collection of health information about an individual or a population entered by multiple providers or organizations.

EHRs can be shared across health care settings and can be created, managed, and consulted by authorized clinicians and staff from multiple organizations.
EDI
An acronym for "electronic data interchange."

EDI refers to the electronic transference of information such as claims, certifications, quality assurance reviews, and utilization data.
Economic Waste
Any intervention for which the value of expected benefit is less than the expected costs. More common than medical waste because of third-party payment.
EAP
An acronym for "employee assistance program"; refers to employer provided, short-term counseling that is offered to members to quickly resolve transient emotional problems and to identify on-going mental or substance abuse problems for subsequent referral. EAPs are often limited to a handful of visits.
DRG
An acronym for "diagnosis related group"; refers to a statistical system of classifying any inpatient stays into groups, for purposes of payment.

DRGs may be primary or secondary, and an outlier classification also exists. It is also the form of reimbursement that the Centers for Medicare and Medicaid Services (CMS) uses to pay hospitals for Medicare patients.

They are also used by a few states for all payers and by some private health plans for contracting purposes.
Days per Thousand
A standard unit of measurement of utilization determined by calculating the number of hospital days used in a year for each thousand covered lives.
Deductible
A fixed amount of health care dollars of which a person must pay 100% before his or her health benefits begin.

Most indemnity plans feature a $200 to $1200 deductible, and then pay up to a defined percentage of money spent for covered services above this level.
Disallowance
A denial by a health care payer for portions of the claimed amount.

Examples could include coordination of benefits, services that are not covered, or amounts over the fee maximum.
DOS
An acronym for "date of service"; refers to the date on which the care was provided.
Credentialing
The reviewing of medical degrees, licensure, malpractice and any disciplinary record of medical providers to determine if they should be entitled to privileges at a hospital, health system or to contract with a managed care organization (MCO).

Credentialing is usually performed for panel and quality assurance purposes.
CPT Modifiers
Additional codes that indicate that a service was altered in some way from the stated CPT description without actually changing the basic definition of the service.

Modifiers can indicate: a service or procedure that has both a professional and a technical component; a service or procedure that was performed by more than one physician; that only part of a service was performed; that an adjunctive service was performed; that a bilateral procedure was performed; that a service or procedure was provided more than once; an unusual event occurred, or a procedure or service was altered in some way.

A complete listing of all modifiers used in CPT coding is located in an appendix of CPT.
CPT Code
A unique set of 5-digit identifying numerical code that accompanies a list of medical services performed by physicians and other health care providers.

CPT codes are developed and maintained by the American Medical Association. It has become the industry coding standard for reporting.
Comorbidity
Pre-existing conditions that cause an increase in length of stay by at least one day in ~75% percent of cases.

It is used in DRG reimbursement.
Concurrent Review
A screening method by which a health care provider reviews a procedure or hospital admission performed by a colleague to assess its necessity.
Continuous Quality Improvement
According to the National Learning Consortium, CQI is the use of a structured planning approach to evaluate and improve current processes to achieve desired outcomes and enhance efficiency and effectiveness.
Continuum of Care
Clinical services provided during a single inpatient hospitalization, or for multiple conditions over a lifetime. It provides a basis for evaluating quality, cost, and utilization over the long term.
Co-payment or Co-pays
A nominal, out-of-pocket fee paid by the patient.

It is a fee to help offset paperwork and other administrative costs for each office visit, prescription filled, or diagnostic test.

Today, nearly all health plans have implemented multi-tiered co-pays, particularly for pharmacy benefits.

In managed care plans, the member pays the co-payment while checking-in for his or her appointment. Services subject to a co-payment are not subject to deductible and coinsurance.

For example, a prescription for a generic drug may be associated with only a $7.50 co-pay; a prescription for a preferred brand-name drug may have a $15 co-pay; and a co-pay for a non-preferred brand-name drug may be $50.
Coinsurance
The percentage of the costs of medical services paid by the patient. It is a characteristic of different types of insurance plans, including managed care plans. The coinsurance payment is usually about 20% of the cost of the medical services after the deductible is paid.
COBRA
An acronym for Consolidated Omnibus Reconciliation Act.

It is the legislation that in part requires employers to offer terminated employees the opportunity to continue buying insurance coverage as part of the employee's group.
COB
An acronym for "coordination of benefits".

It is an agreement that prevents double payment for services when the member is covered by two or more sources.

The agreement dictates which organization is primarily and secondarily responsible for payment.
Clinical Peer Reviewer
A health care professional that holds an unrestricted license in at least one state, who is in the same or similar specialty as the medical condition, procedure, or treatment being subjected to utilization review, and who routinely provides the health care services being subjected to utilization review.
Claims Reviewer
A payer employee who reviews claims like an auditor, looking at coding, prior authorizations, contract violations, etc.
Claim Manual
The administrative guidelines used by claims processors to process claims according to company policy and procedure.
Claim Lag
The time between the incurred date of the claim or service and its submission; as well as the time between the incurred date of the claim and its payment.
Carrier
The insurance company which holds the financial risk and is responsible for administering the plan benefits.
Certificate of Coverage
A description of the benefits included in a carrier's plan.

The certificate of coverage is required by state laws and represents the coverage provided under the contract issued to the employer.
CHAMPUS
An acronym for Civilian Health and Medical Program of the Uniformed Services.

It is the federal medical benefits reimbursement program for dependents of military personnel, military retirees, and others. It is now known as TRICARE.
Charge
A charge is deemed to be incurred on the date on which the treatment, care, service, or supply is made or given.

If it is not shown otherwise and a single charge is made for a series of treatments, services, supplies, or care sessions, each will be deemed to bear a pro rata share of the charge.
Chronic Pain
An ongoing condition that lasts longer than normal periods for healing from tissue injury or recovery from illness and persists for up to 3–6 months or more. Underlying causes include any injury or illness that is not related to cancer; thus, chronic pain is sometimes referred to as chronic noncancer pain (CNCP). Chronic pain is now recognized and treated as a separate disease entity.
Chemical Dependency Services
Services and supplies used in the diagnosis and treatment of alcoholism, chemical dependency, and drug dependency which is defined and classified by the US Department of Health and Human Services.
Certificate of Coverage
A description of the benefits included in a carrier's plan.

The certificate of coverage is required by state laws and represents the coverage provided under the contract issued to the employer.
CHAMPUS
An acronym for Civilian Health and Medical Program of the Uniformed Services.

It is the federal medical benefits reimbursement program for dependents of military personnel, military retirees, and others. It is now known as TRICARE.
Charge
A charge is deemed to be incurred on the date on which the treatment, care, service, or supply is made or given.

If it is not shown otherwise and a single charge is made for a series of treatments, services, supplies, or care sessions, each will be deemed to bear a pro rata share of the charge.
Care Coordination
An approach to health care delivery that supports the efforts of novel integrated delivery systems - such as the PCMH and ACO - that focus on improving patient handoffs among clinicians, timely transmission of information, adequate communication, and appropriate follow-up, in order to help navigate the patient through the care continuum with the ultimate goal of decreasing medication errors, hospital readmissions, and emergency department visits for patients with chronic or complex conditions who see multiple providers.
CapM
The contract maximum, which is the limit or "cap" that the insurance company will pay out for a given individual.
Carrier
The insurance company which holds the financial risk and is responsible for administering the plan benefits.
Capitation
A method of payment used in managed care as a per-member monthly payment to a provider that covers contracted services and is paid in advance of its delivery.

In essence, a provider agrees to provide specified services to health plan members usually in a health maintenance organization (HMO) for this fixed, predetermined payment for a specified length of time (usually a year), regardless of how many times the member uses the service.

The rate can be fixed for all members or it can be adjusted for the age and sex of the member, based on actuarial projections of medical utilization.
Breakthrough Pain
Pain that occurs as a transitory condition despite analgesia for chronic pain.

From onset, the time to maximum intensity ranges from 10–15 minutes, and the median duration of pain experienced is 30–60 minutes.
Cafeteria Plan
A corporate benefits plan under which all employees are permitted to choose among two or more benefits that consist of cash and certain qualified benefits. Cafeteria plans are also called flexible benefit plans or flex plans.
Benefit Level
.The limit or degree of service a person is entitled to receive based on his or her contract with a health plan or insurer.
AWP
When referring to medications, it is an acronym for "average wholesale price".

It is the published average cost of a drug product paid by the pharmacy to the wholesaler.

It is specific to drug strength, dosage form (eg, capsule, tablet, solution, vial), package size, and manufacturer or labeler.

When it is not referring to medications, this abbreviation also stands for "any willing provider".

Statutes requiring a provider network to accept any provider who meets the network's usual selection criteria.
Authorization (also called Pre-authorization or Pre-certification)
In managed care it refers to the approval of care, such as a hospitalization, certain diagnostic tests, or even non-covered medications.

Preauthorization may be required before admission takes place or care is given by non-managed care providers.
Assignment
An arrangement in which the provider submits the claim on behalf of the patient and is reimbursed directly by the patient's plan.
ASO
An acronym for providing "administrative service only". It is a contract stipulation between a plan and an insurance company in which the insurance company assumes no risk and provides only administrative services for a fixed fee per employee.
Appeal
A formal request by a covered person or provider for reconsideration of a decision, such as a utilization review recommendation, a benefit payment (eg, claim) or administrative action.
Ambulatory Surgical Center
A legally operated facility that specializes in surgical procedures and has a staff of Doctors of Medicine or Doctors of Osteopathy, along with registered nursing services.

An ambulatory surgical center does not have facilities for patients to stay overnight, and it is accredited by the Accreditation Association for Ambulatory Healthcare or meets similar standards.
ALOS
An acronym for "average length of stay".

It is a benchmark average used for analysis of utilization.

It is calculated as the average number of patient hospitalization days for each admission, articulated as an average of population within the plan for a given period of time.
Alternate Care
Medical care received in lieu of inpatient hospitalization.

Examples include outpatient surgery, home health care, and skilled nursing facility care. It also may refer to non-traditional care delivered by providers such as midwives.
Alcoholism or Drug Addiction Treatment Facility
A legally operated, free-standing facility or clinic, or part of a hospital that specializes in alcohol or drug addiction treatment programs.

These programs operate under the direction of Doctors of Medicine or Doctors of Osteopathy, have nursing services, and are accredited by the Joint Commission (JCAHO), or meet similar standards.
Age/Sex Rating
Structuring premium payments based on members' age and gender.
AHA
An acronym for American Hospital Association.
Allowable Charge
Charge based on amounts accepted by other providers in the area for similar treatment, care, services, or supplies.

It is the maximum fee that a third party will reimburse a provider for a given service.
Adjudication
The process of completing all validity, process, and file edits necessary to prepare a claim for final payment or denial, or the processing of a claim through a series of edits to determine proper payment.
Affordable Care Act
Another name for Patient Protection and Affordable Care Act.
Administrative Costs
The costs assumed by a managed care plan for administrative services, such as claims processing, billing, and overhead costs.
ACO
An acronym for Accountable Care Organization.
Accountable Care Organization
An entity charged with the bundling of care services of hospitals, physicians, other entities and care providers who are delivering services during an episode of care.

Providers/organizations share in the cost savings achieved as a result of coordination.
Adverse Selection
The risk of enrolling members who are sicker and will require more medical services than initially assumed and who will utilize more expensive services more frequently.
The ongoing process of measuring products, services, and practices against competitors or leaders in a given specialty.
Benchmarking
A management technique to achieve optimal outcomes and efficient resource utilization for a given patient population
Case Management
The cyclical process to assess, measure, change a process, re-measure, and reassess for ongoing incremental improvements.
Continuous Quality Improvement
The continuous process of identifying and delivering the most efficient combination of resources for the treatment or prevention of disease, within a selected patient population.
Disease Management
The process of assessing multiple factors including care effectiveness, side effects, administrative and general costs, and patient satisfaction.
Outcomes Management
The published guidelines for patient management which includes protocols, critical paths, and algorithms.
Practice Parameters
Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in measures of performance.
Re-engineering
Balancing the cost and quality effects of care by improving care delivery processes, and eliminating unnecessary care variances
Value Analysis
Episodic care
describes the way hospital systems used to work when patients checked in for a variety of reasons.

Patients often stayed for several days, and then came back often when medical conditions/problems not addressed in the first stay could be addressed in a follow-up stay.
The Continuum of Care
is defined as a holistic, or whole, system that includes a wide range of access points to health care.

Some of these include preventive care, wellness management, ambulatory and sub-acute care, surgical and inpatient centers, home health care, assisted living/long-term care (LTC), transitional care, and hospice care.
the shift in risk from payers to providers in a managed care environment
paradigm shift in the US which was caused by managed care has introduced limited payments to providers and has also caused providers, including hospitals and physicians, to take financial responsibility for the expense of health care

a new awareness that has become apparent, motivating the population to stay healthy in order to control spiraling health care costs

motivated importance of team effort and need to be successful the first time around in patient care, recognized as critical steps in the acute and post-acute health care delivery systems.

enlightened the delusion that it is okay to treat sick patients in a sick system without a good action plan for achieving wellness
Evidence-based Medicine (EBM)
is relatively new to managed care

promotes the collection, interpretation and integration of valid, important and applicable patient-reported, clinician-observed, and research-derived evidence

aims to apply evidence gained from the scientific method to certain parts of medical practice.

seeks to assess the quality of evidence relevant to the risks and benefits of treatments (including lack of treatment).

is the conscientious use of current best evidence in making decisions about the care of individual patients or the delivery of health services
Current best evidence
is up-to-date information from valid, relevant research
What is one example of a health care setting in which evidence-based practices are being explored to improve outcomes, provide predictability, and decrease costs associated with chronic diseases
Disease management
Accountable Care Organization (ACO)
is a network of doctors and hospitals that shares responsibility for providing care.

Under the Affordable Care Act of 2010, ACOs would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least 3 years

might be an independent practice association (IPA) teaming up with a community hospital

Providers who participate share in the savings that result from their coordination, which serves as an incentive to provide more efficient and effective care.

If, at the end of the year, Medicare determines that the ACO has provided care for less than the average cost to treat a beneficiary in that geographic region, the ACO is entitled to share in the cost savings.
Accountable Care Organizations, through utilization and increased accountability of “extended medical staff” of local acute care hospitals, aim to solve this problem with the following 3 essential elements of ACOs:
1. The ability to provide, and manage with patients, the continuum of care across different institutional settings, including at least ambulatory and inpatient hospital care and possibly post acute care;
2. The capability of prospectively planning budgets and resource needs; and
3. Sufficient size to support comprehensive, valid, and reliable performance measurement.
Patient-Centered Medical Home (PCMH) concept
it is believed that patients who have better relationships with their providers will require less hospital and emergency care and will have better health outcomes, thus decreasing utilization and curbing escalating costs

a place where patients feel recognized and supported as they receive medical care.

According to the National Committee for Quality Improvement (NCQA), the Patient Centered Medical Home is “a health care setting that facilitates partnerships between individual patients and their personal physicians, and when appropriate, the patient’s family.

Care is facilitated by registries, information technology, health information exchange, and other means to assure that patients get the indicated care when and where they need and want it, in a culturally and linguistically appropriate manner.”
A physician practice is operating as a patient-centered medical home if it performs certain standards.There are 9 standards, including 10 must-pass elements, which can result in 1 of 3 levels of recognition :
The NCQA has worked with several different government agencies to promote the concepts foundational to the PCMH.

Practices seeking recognition complete a Web-based data collection tool and provide documentation that validates responses.

Achieving recognition validates that a physician practice is operating under core principles which distinguish it as providing exceptional patient-centered care.

Some of the elements required for a practice to be considered a PCMH include:

written standards for access and patient communication;
charting tools for organizing information;
data review for identifying conditions seen in the practice;
adoption of evidence-based guidelines;
active support of patient self-management;
systematic identification of abnormal test results; referral tracking; and performance measurement and reporting.
PCMH
goal is to redesign primary care practice so that the patient will see the primary care physician as a source of help for navigating the complex health care system.

purpose is to realize the positive goals of the managed care movement

Contrary to systems working against the gatekeeper model, it is about empowering patients by engaging them with a provider who they know and trust, who can help them navigate the fragmented health care system. Redundant medical tests, duplicate x-rays and ancillary referrals to competing specialists is wasteful and expensive. Providers practicing in a medical home can coordinate the specialist care that patients receive.
Care Coordination
can be described as an approach to health care delivery that supports the efforts of novel integrated delivery systems – such as the Patient-Centered Medical Home (PCMH) and Accountable Care Organizations (ACOs) – that focus on improving patient hand-offs among clinicians, timely transmission of information, adequate communication, and appropriate follow-up, in order to help navigate the patient through the care continuum.

patients with chronic or complex conditions who see multiple physicians and care providers may be spared from facing medication errors, hospital readmissions, and avoidable emergency department visits

has been cited by the Institute of Medicine (IOM) as a priority to transform the health care system.
In 2012, the American Medical Association (AMA) called upon the Centers for Medicare and Medicaid Services (CMS) to adopt
new Current Procedural Technology (CPT) codes for paying physicians for time spent on transitional care management services, such as discussing a care plan, connecting patients to community services, transitioning them from inpatient settings, and preventing readmissions.

The CMS’s decision to adopt the codes demonstrates their support of physicians participating in “care coordination” services in emerging models of care like the PCMH and ACO.2
Other care coordination models, as identified by the Agency for Healthcare Research and Quality (AHRQ),
include targeted case management, managed care organizations, community health workers, and other community services.

link patients to community resources, integrate behavioral and specialty care into a patient’s care plan, track the care received by a patient and follow up to ensure communication has occurred regarding the care plan.
Care coordination models
emphasize patient safety and quality improvement, patient education, transitions of care, and engagement of patients and families in prevention, self-care, and adoption of health information technology to improve effective health care access – all tenets of the CMSA Standards of Practice for Case Management
Managed Care Organizations
In MCOs, network development occurs to provide integration of care while maximizing appropriate access to and levels of care

provider applicants to the network must be able to fit within the criteria and be able to demonstrate—on an ongoing basis—their ability to meet or exceed the criteria and the set standards
Managed Care Organization Networks are generally patterned after these criteria, which are intended to provide and achieve:
• Member needs
• Demonstrated skills
• Credentials (board certification)
• Facility accreditation
• Community reputation
• Geographic distribution
• Ability to meet standards of the benefit plan
• Unified governance/leadership
• Administration of all access points of patient care
• Cost-centered models
• Continual accountability for patient care
• Operational systems that promote holistic care
Case managers are often responsible for recognizing whether a network provider is meeting the criteria of the benefit plan. Questions to address would include:
• Can the network achieve scale quickly and aggressively?
• What are the purchaser's expectations?
• Is there an adequate supply of primary care physicians (PCPs)?
• Are there information systems for tracking cost per covered life and support integration?
• Do standards exist for high-cost/high-risk services?
Once a patient is enrolled, the managed care organization (MCO) can gain access control through
internal and external systems that identify patient/client patterns of health care usage.
It is critical for the MCO to control the often haphazard use of the health care system, especially by beneficiaries with high health care costs and with chronic conditions.Internal ways to control access include internal demand management:
• Triage occurs through a nurse telephone call line, or via other forms of demand management
• All enrollees are triaged to appropriate locations: ER, outpatient clinics, wellness centers, physicians' offices
• Physicians can assume leadership roles to encourage patient use of the organization's triage system.
• While decreasing in popularity, some Health Maintenance Organizations (HMOs) still utilize the gatekeeper model. This allows primary care physicians (internal medicine, family practice, pediatrics and sometimes OB/GYN) to control access to specialty physicians through the use of referral requirements
Physicians should be brought into the MCO's integrated network based upon
the needs of the population, including educational needs. This helps balance the workload among physicians and maximizes their effectiveness.
Shift in Health Care Delivery Sites
In the 1970s, traditional health care settings included
hospitals, EDs/ERs, clinics, physician's offices and nursing homes.
Shift in Health Care Delivery Sites
In the 1980s, the shift began with
specialty hospitals, specialty outpatient surgical centers (for operating on patients in an outpatient rather than an inpatient setting), EDs/ERs, physician group practices with different specialty providers, skilled nursing facilities (SNFs), and freestanding specialty centers, such as women's health centers and home care facilities.
Shift in Health Care Delivery Sites
The 1990s heralded in different health care systems including
integrated delivery systems, Emergency Rooms/Fast Track Centers, specialty acute care clinics, long-term acute care hospitals, sub-acute facilities, long-term care (LTC) facilities and aging-in-place communities.
Shift in Health Care Delivery Sites
In the current era we see
payer-generated resource centers, payer-generated community outreach programs, hospitalists (physicians working only within hospitals), school clinics interfacing with payers, primary health care centers, more physician group practices, and re-engineering of hospital and health care systems.
Shift in Health Care Delivery Sites
After the passing of the Affordable Care Act in 2010 we saw development of the
Patient-Centered Medical Home (PCMH) model and creation of Accountable Care Organizations (ACOs).
paradigm shift 1980-90s
following the government's inability to enact universal health care

Payers aggressively assumed individual responsibility to offer different managed care plans to both large and small employers

was achieved through capitation, through co-payments required of those insured members (patients), and through coverage limitations, including limitations or denials based upon pre-existing conditions
The 1980s brought in the use of
Diagnosis-Related Groups (DRGs).
DRGs
required acute care systems to assume some risk and accountability for patient lengths of stay (LOS) based upon each patient's admission diagnosis or diagnoses
The concepts of managed care began to gain traction as health care costs continued to spiral upwards and employers struggled with health care premium increases. During these years,
managed care gained momentum as larger employers were required to offer managed care plans as well as FFS plans to their employees as health care options.

Costs that did have a "cap" were deeply capitated, and processes for preauthorization or concurrent review were quite cumbersome. Thus, managed care plans were often as expensive or more costly than FFS plans, and employees were not given incentives to purchase a managed care plan. At the time, professional standards review organization (PSRO) committees governed health care utilization.


NOTE:To make the managed care plans more affordable, payers created a paradigm shift, whereby they transposed the risk of providing quality, cost-effective care from the payer to the provider.
Since the early 1990s, what did federal and state governments do, what did physicians struggle with, and what did disabled Americans gain?
Since the early 1990s, federal and state governments have increasingly enacted legislation that imposes limitations on the extent of denials and controls allowable by managed care organizations, including other types of insurance companies.

Additionally, physicians struggled to maintain their physician-client relationships, and disabled Americans gained recognition in managed care delivery models via the Americans with Disabilities Act (ADA) legislation.
In the late 1990s, what happened to integrated delivery systems, patient privacy, global health care, and Medicare and Medicaid ?
In the late 1990s, integrated delivery systems were created both with and without walls.

Both Medicare and Medicaid systems move to managed care delivery systems, and global health care systems were able to more effectively collaborate and communicate with the emergence of the information superhighway.

It was during this time, as well, that patient privacy and patient safety took on new meaning.
What changes happened medically in 2000s?
In the 2000s, consumer technology-driven wellness models emerged, and the health delivery system was influenced by aging Americans.

Care coordination occurred in multidisciplinary models with the resurgence of better, more integrated disease management models.

There was improvement and proliferation of carve-out models for disease management (DM), utilization management (UM), and care management (CM). Additionally, alternative medicine gained a foothold as an adjunct to traditional Western medicine.
Within managed care
capitation allows organizations to better control costs and access to service: capitation means paying a provider a set amount of money per member per month (PMPM).

advantages of this system are that organizations can budget for medical costs

The model places a degree of risk and also reward on the provider, and it encourages providers to become more active in controlling health care utilization
Disadvantages of managed care and the PMPM system
include a disparate control flow of referrals, patient "dumping", the required use of carve-outs, the realization that non-participating services exist, and the challenges of covering new technologies or drugs that are rapidly entering the marketplace.
In order to ensure quality care in managed care models, case managers can utilize a number of different quality processes—individually or as department-wide initiatives—which include
initiating member satisfaction surveys; recognizing, identifying and analyzing patient utilization patterns; investigating increased emergency room (ER) utilization; investigating member complaints; carrying out routine chart audits; establishing ambulatory care standards, quality indicators and access standards; and implementing industry-accepted guidelines and protocols.
Fee-for-service payments
contributed to health care services that were reactive rather than proactively oriented


were primarily based upon costs resulting from illness and injury, rather than focusing on preventive measures to keep patients healthy and free from illness/injury.

Predetermined fees for services and products were similar to the "reasonable and customary" costs already being charged by providers and did not require the provider to assume any significant risk for managing the patient or for authorizing the service.