Glossary
Aid for Families with Dependent Children (AFDC)
the federal welfare program for poor moms and their children, being replaced in Wisconsin by the W2 program.
Block grant
federal and state monies can either be attached to specific programs or they can be delegated to a general category, with flexibility in spending left up to the target agency. Among the more common grants are maternal and child health block grants that states receive from the federal government.
Capitation
Providers offer services but are paid a fixed fee per patient for a range of services. Providers are NOT reimbursed for services that exceed the allotted amount.
Copayment
a costsharing requirement in which the insured person assumes a portion of the costs of covered services after the deductible is met.
Deductible
the outofpocket expenses that must be paid by an insured person before the insurer will begin reimbursing the insured person for additional expenses.
Early Periodic Screening, Diagnosis and Treatment Program (EPSDT)
a federally mandated preventive health program for Medicaid eligible children. In Wisconsin, this program is called Health Check. EPSDT services began to be offered by the States in the 1970s and have been expanded substantially over the years, most significantly through provisions of the Omnibus Budget Reconciliation Acts of 1989 and 1990. Briefly, EPSDT services include complete health checkups (such as health and developmental histories, physical exams) at periodic intervals, more frequently if necessary; immunizations; and health education/anticipatory guidance regarding normal growth and development. EPSDT covers all medically necessary diagnostic and treatment services coverable by Medicaid and any problems detected during the screening. EPSDT also includes vision, dental and hearing services. These services are offered at no charge to Medicaid recipients from infancy to age 21. To facilitate knowledge of and access to these services, States are required to conduct outreach efforts to inform recipients about EPSDT services and to provide them with assistance in making appointments and arranging transportation for EPSDTrelated care.
FQHC is the term used to describe the decision by Congress to pay, on a cost basis, all Medicare and Medicaid patients claims in community health centers, homeless clinics, migrant health centers, and certain "look alike" clinics. Before the FQHC, most clinics were paid on a flat rate that often did not cover costs. The clinics made up for this through grants from the federal government and through cost shifting. The FQHC mechanism presents an opportunity for rural community and Migrant Health Centers and for practices providing care to the underserved to attract revenues that will make working in public facilities more attractive for physicians and primary care providers.
Congress also passed legislation allowing for costbased payments to certain primary care practices that qualified as Rural Health Clinics. These practices had to employ a nurse practitioner, nurse midwife or physician assistant at least halftime, and had to be located in a rural area.
Feeforservice
the traditional payment method where the insurer (patient, insurance company, or government) pays providers per services rendered.
Gatekeeper
a primary care physician responsible for overseeing and coordinating all aspects of a patient's medical care. The gatekeeper may have to preauthorize other specialty care or hospital admission.
Health Maintenance Organizations (HMO's)
HMO's provide a wide range of health services to members who pay a fixed monthly premium. HMO members have a primary care physician who is responsible for coordinating their care. These physicians also are the "gate keepers" for special services. HMO members almost always must get referrals from their primary care physicians before they see medical specialists.
High Risk Insurance Pool (HIRSP)
Wisconsin has operated a high risk health insurance pool known as the Wisconsin Health Insurance Risk Sharing Plan (HIRSP) since 1979. It currently provides health insurance to approximately 8000 Wisconsin residents. Any state resident under age 65 who has been rejected by a health insurer for medical reasons, has a diagnosis of AIDS, or has a significant premium increase, and is not eligible for employer sponsored health insurance qualified for enrollment in the pool. There is no limit to the number of individuals who are permitted to enroll in the pool. Enrollees pay premiums and a significant deductible and copayment. There is also a six month waiting period to have a preexisting condition covered by the insurance. (link to Office of the Commissioner of Insurance). Wisconsin is currently asking permission for the HIRSP to meet the requirements for a high risk insurance pool required by the Health Insurance Portability and Accountability Act (KassebaumKennedy bill of 7/96, click here for press release about bill). Minor changes would be needed but it is expected to be accepted.
Independent Physician Association (IPA)
an organized form of prepaid medical practice in which participating physicians remain in their independent office settings, seeing both enrollees of the IPA and privatepay patients. Participating physicians may be reimbursed by the IPA on a feeforservice basis or a capitation basis.
Medical savings account (MSA)
as part of the attempt to hold down health care costs and increase access to health care and health insurance, Congress passed The Health Insurance Portability and Accountability Act (KassebaumKennedy bill of 7/96, click here for press release about bill) which allowed for the establishment of medical savings accounts. These accounts would allow income to be sheltered taxfree, with the expectation that the money would be used to pay outofpocket health care expenses. To be eligible to open an MSA: 1) you have to be either selfemployed or work for a firm of less than 50 employees; 2) you have to be covered by a high deductible (catastrophic) health insurance policy; and 3) you cannot have any other medical insurance. For a family policy, if you have to pay $3000$4500 of the yearly medical expenses, this is considered a high deductible policy. The legislation sets $5500 as the maximum high deductible limit. A family can contribute up to 75% of the policy's deductible annually into the MSA. That amount is sheltered from federal taxes. Any bank can open the MSA. You are not required to take money from your MSA to pay medical bills, though there is a penalty for nonmedical withdrawals before age 65.
Medicare Select and Medicare Cost Contracts
Medicare Select and Cost Contracts are two types of Medigap insurance that supplement traditional Medicare insurance coverage. However, they do have an important "managed care" feature: Medicare Select and Cost Contracts will only ply full supplemental benefits if covered services are obtained through specified doctors and hospitals; and as a consequence, these policies are expected to have lower premium s for consumers. Medicare Select policies may be offered by traditional insurers or health maintenance organizations. Medicare Cost Contracts are only offered through health maintenance organizations.
Medicare Risk Contract, or Medicare HMO
Under a risk contract, the HMO receives a set fee from Medicare in exchange for providing all Medicare covered care, so the HMO is at financial risk to deliver the services for that fixed price. The HMO may also charge the policyholder a premium to cover additional benefits such as Medicare deductibles and co payments, preventive health care exams, vision and dental care, or prescription drugs. However, the one risk contract offered in Wisconsin does not offer vision and dental care, or prescription drugs.
Managed Care
prepaid medical plans that attempt to control health care costs through a preventative health care approach.
the federalstate health care coverage program for lowincome Americans. Covers citizens of all ages.
the federal health care coverage program for older Americans and the disabled.
Outcomes data
researchbased information that asks what difference a drug, procedure, or other health care intervention really makes in a patient's health.
Physician Hospital Organization (PHO)
a joint venture between hospitals and their staffs used to contract with managed care plans. Such plans allow physicians and hospitals to retain maximum independence. They are cocapitalized by both hospitals and physicians to manage costs and quality.
Preferred Provider Organizations (PPO's)
a health care arrangement between purchasers of care (employers, insurance companies) and a network of providers; attempts to provide reasonable costs to consumers through low deductibles and copayments when using providers within the network.
Preventive health care
an approach to medicine that attempts to promote and maintain the health of people.
Primary Care Physician
general practitioners, pediatricians, family practice physicians, internists, and sometimes obstetricians/gynecologists providing a full range of basic health services to their patients.
Rural Health Clinics
See Federally Qualified Health Centers
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