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Kids and Health Care: Key Health Insurance Terms & Definitions - P Through U

PEER REVIEW

Groups of doctors who are paid by the federal government to conduct pre-admission, continued stay and reviews of services provided to Medicare patients by Medicare-approved hospitals are referred to as peer review organizations (PROs).

PRE-EXISTING CONDITIONS

An important concept in health coverage is the preexisting condition, or a physical condition that existed prior to the effective date of a policy. This is a hot-potato liability issue among insurers.

In short, what happens if your kids have health problems before you change jobs and get new health insurance at your new work?

Until the 1990s, the new insurance company could refuse to pay for medical care related to the health issues your children had before switching coverage. This caused a number of high-profile lawsuits during the 1980s and 1990s. Finally, in 1997, the Health Insurance Portability and Accountability Act or HIPAA (also known as the Kennedy-Kassebaum Act) quashed pre-existing condition limits.

As of July 1997, insurance companies can impose only one 12-month waiting period for any pre-existing condition treated or diagnosed in the previous six months. As long as you have maintained coverage without a break for more than 62 days, your prior health coverage will be credited toward the pre-existing condition exclusion period.

One exception: Pregnancy can be excluded as a preexisting condition. So, try not to change jobs if you or your spouse is expecting.

An exception to the exclusion: The 12-month waiting period is waived for any newborn or adopted child who's covered within 30 days.

If you've had group coverage for two years, switch jobs and move to another plan, the new health plan can't impose another pre-existing condition exclusion period.

PREFERRED PROVIDER ORGANIZATION (PPO)

A health plan that encourages savings by establishing a network of preferred providers -- health professionals who agree to provide medical services to plan members for discounted rates. Plan members may go "out of network" to seek medical services from non-affiliated medical professionals. Members are charged higher copayments for this option.

PRIMARY CARE PHYSICIAN

These physicians provide basic health services to their patients. General practitioners, pediatricians, family practice physicians and internists are recognized by health plans as primary care physicians.

HMOs require that members be assigned to a primary care physician who functions as a gatekeeper.

PROSPECTIVE PAYMENT

A system of Medicare reimbursement, which bases most hospital payments on the patient's diagnosis at the time of hospital admission rather than the costs the hospital actually incurs prior to discharging the patient is called a prospective payment system.

RISK CONTRACT

This is an arrangement through which a health provider agrees to provide a range of medical services to a population of patients for a pre-paid sum of money. The physician is responsible for managing the care of these patients and risks losing money if expenses exceed the pre-determined amount.

SKILLED NURSING CARE

Skilled nursing care is daily nursing and rehabilitative care that is performed only by, or under the supervision of, a skilled professional or technical personnel. The care is based on a physician's orders and performed directly by or under the supervision of a registered nurse. This care would include administering prescription drugs, medical diagnosis, minor surgery, etc.

A skilled nursing facility is a facility, licensed by the state, which provides 24-hour nursing services under the supervision of a physician or RN.

UTILIZATION REVIEW

This includes the various methods used by health plans to measure the amount and appropriateness of health services used by its members. These checks can occur before, during and after services have been sought or received from health professionals.

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