Consumer Tools - Glossary of Terms

Terms beginning with the letter C:

COB
Coordination of Benefits. See Nonduplication of Benefits.

COBRA
See Consolidated Omnibus Budget Reconciliation Act of 1986.

Cafeteria Plan - Arrangements under which employees may choose their own benefit structure. Sometimes these are varying benefit plans or add-ons provided through the same insurer or 3rd party administrator, other times this refers to the offering of different plans or HMOs provided by different managed care or insurance companies.

Calendar Year
January 1 through December 31 of the same year. Many deductible amount provisions are on a calendar year basis under major medical plans. Also, benefits under basic hospital surgical and medical plans are usually stated as so much for each calendar year.

Capitation (CAP)
A rate paid, usually monthly, to a health care provider. In return, the provider agrees to deliver the health services agreed upon to any covered person.

Carrier
Usually a commercial insurer contracted by the Department of Health and Human Services to process Part B claims payments.

Carrier Replacement
This refers to a situation where one carrier replaces one or more carriers.

Carry Over Provision
In major medical policies, allowing an insured who has submitted no claims during the year to apply any medical expenses incurred in the last three months of the year toward the new calendar year's deductible.

Carve-out
Medical services that are separated from a contract and paid under a different arrangement.

Case Management
The assessment of a person's long term care needs and the appropriate recommendations for care, monitoring and follow-up as to the extent and quality of services to be provided.

Case Manager
A person, usually an experienced professional, who coordinates the services necessary under the case management approach.

Certificate Booklet - the plan agreement. A printed description of the benefits and coverage provisions intended to explain the contractual arrangement between the carrier and the insured group or individual. May also be referred to as a policy booklet

Certificate of Coverage (COC)
Outlines the terms of coverage and benefits available in a carrier's health plan.

Charges
These are the published prices of services provided by a facility. CMS requires hospitals to apply the same schedule of charges to all patients, regardless of the expected sources or amount of payment. Controversy exists today because of the often wide disparity between published prices and contract prices. The majority of payers, including Medicare and Medicaid, are becoming managed by health plans that negotiate rates lower than published prices. Often these negotiated rates average 40% to 60% of the published rates and may be all-inclusive bundled rates.

Chemical Dependency Services
The services required in the treatment and diagnosis of chemical dependency, alcoholism, and drug dependency.

Claim
A request for payment by a medical provider for a given medical service or item.

Claims Review - The method by which an enrollee's health care service claims are reviewed prior to reimbursement. The purpose is to validate the medical necessity of the provided services and to be sure the cost of the service is not excessive.

Cognitive Impairment
A deficiency in the ability to think, perceive, treason or remember resulting in loss of the ability to take care of one's daily living needs.

Coinsurance Clause
A provision stating that the insured and the insurer will share all losses covered by the policy in a proportion agreed upon in advance, i.e., 80-20 would mean that the insurer would pay 80% and the insured would pay 20% of all losses. See also Percentage Participation.

Community Rating
Under this rating system, the charge for insurance to all insureds depends on the medical and hospital costs in the community or area to be covered. Individual characteristics of the insureds are not considered at all.

Composite Rate
One rate for all members of the group regardless of their status as single or members of a family.

Comprehensive Major Medical
A plan of insurance which has a low deductible, high maximum benefits, and a coinsurance feature. It is a combination of basic coverage and major medical coverage which has virtually replaced separate hospital, surgical and medical policies with each having its own deductible requirements. Also see Major Medical Insurance.

Concurrent Review
A case management technique which allows insurers to monitor an insured's hospital stay and to know in advance if there are any changes in the expected period of confinement and the planned release date.

Conditionally Renewable
A contract that provides that the insured may renew it to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions stated in the contract.

Confining
A form of disability or sickness that confines the insured indoors, usually at home or in a hospital. Many policies state that coverage is afforded only if the insured is confined.

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986
Legislation providing for a continuation of group health care benefits under the group plan for a period of time when benefits would otherwise terminate. Continuation rights apply to enrolled persons and their dependents. Coverage may be continued for up to 18 months if the insured person terminates employment or is no longer eligible. Coverage may be continued for up to 36 months in nearly all other cases, such as loss of dependent eligibility because of death of the enrolled person, divorce, or attainment of the limiting age.

Continuation
Allows terminated employees to continue their group health insurance coverage under certain conditions.

Continuing Care Retirement Communities (CCRCs)
Residential communities set up to provide residents with easy access to health care.

Contract - A legal agreement between a payer and a subscribing group or individual which specifies rates, performance covenants, the relationship among the parties, schedule of benefits and other pertinent conditions. The contract usually is limited to a 12-month period and is subject to renewal thereafter. Contracts are not required by statute or regulation, and less formal agreements may be made.

Contract Year
This period runs from the effective date to the expiration date of the contract.

Contracted Provider
A medical provider that has an agreement with a health plan to accept their patients at a previously agreed upon rate for payment.

Contributory Program - Program where the employee and the employer or the union shares the cost of group coverage.

Conversion Plan
When an individual terminates his/her group policy, an option to continue coverage is by purchasing an individual health plan called a conversion policy.

Coordination of Benefits (COB)
A group policy provision which helps determine the primary carrier in situations where an insured is covered by more than one policy. This provision prevents an insured from receiving claims overpayments.

Copay
This is an arrangement where the covered person pays a specified amount for various services and the health care provider pays the remainder. The covered person usually must pay his or her share when the service is rendered. Similar to coinsurance, except that coinsurance is usually a percentage of certain charges where the co-payment is a dollar amount.

Copay Provision
Often used with major medical policies. The copay provision states what percentage of a claim the company will pay and what percentage the insured will pay. For example, an 80 percent copay provision would provide that the insurer pay 80 percent of claims and the insured pay 20 percent.

Copayment
See Copay.

Corridor Deductible
A Major Medical deductible that provides for a deductible, or "corridor," after the full payment of basic hospital and medical expenses up to a stated amount. In the event of further expenses, payment is on the basis of participation or coinsurance, such as 80%-20% or 85%-15%, and the deductible is that portion paid by the insured.

Cosmetic Procedures
Procedures which improve the appearance, but are not medically necessary.

Cost Containment
When the insurance company devises a way to reduce the benefit payment or costs associated with the health plan.

Cost of Living Benefit
An optional disability benefit where the monthly benefit will be increased annually once the insured is on claim for 12 months.

Cost Sharing
A situation where covered persons pay a portion of the health costs such as deductibles, coinsurance, or copayment amounts.

Coverage
What the health plan does and does not pay for. Coverage includes almost everything mentioned in this booklet: benefits, deductibles, premiums, limitations, etc.

Covered Benefit - A medically necessary service that is specifically provided for under the provisions of an Evidence of Coverage. A covered benefit must always be medically necessary, but not every medically necessary service is a covered benefit. For example, some elements of custodial or maintenance care, which are excluded from coverage, may be medically necessary, but are not covered.

Covered Entity – Under HIPAA, this is a health plan, a health care clearinghouse, or a health care provider who transmits any health information in electronic form in connection with a HIPAA transaction. For purposes of the HIPAA Privacy Rule, health care providers include hospitals, physicians, and other caregivers, as well as researchers who provide health care and receive, access or generate individually identifiable health care information.

Covered Expenses

Health care expenses incurred by an insured or covered person that qualify for reimbursement under the terms of a policy contract.

Covered Person

A person who pays premiums into the contract for the benefits provided and who also meets eligibility requirements.

Credentialing

This involves approving a provider based on certain criteria to provide or participate in a health plan.

Current Procedural Terminology (CPT) - A standardized mechanism of reporting services using numeric codes as established and updated annually by the AMA. A manual that assigns five digit codes to medical services and procedures to standardize claims processing and data analysis. The coding system for physicians' services developed by the CPT Editorial Panel of the American Medical Association; basis of the Medicare coding system for physicians services. A medical code set of physician and other services, maintained and copyrighted by the American Medical Association (AMA), and adopted by the Secretary of HHS as the standard for reporting physician and other services on standard transactions. See Coding.

Custodial Care

Care that is primarily for meeting personal needs such as help in bathing, dressing, eating or taking medicine. It can be provided by someone without professional medical skills or training but must be according to doctor's orders.