| PAYMENT METHODS |
| Capitation: A method of paying for medical services on a per-person rather than a per procedure or visit basis. Under capitation, a doctor’s paid a fixed amount per month for every HMO members he takes care of, regardless of how much or how little care the member receives. |
| Co-payment: A fixed payment the patient pays each time he/she visits a health plan clinician or receives a covered service. |
| Deductible: More typical in traditional health insurance. A fixed amount the patient must pay each year before the insurer will begin covering the cost of care. |
| Fee-for-Service: The traditional method of paying for medical services. A doctor charges a fee for each service provided and the insurer pays all or part of that fee. Sometimes the patient pays a co-payment for each visit to the doctor or service rendered. Back to top |
| HEALTH PLANS |
| HMO (Health Maintenance Organization): An organization that provides health care in return for pre-set monthly payments. HMOs are health plans which offer comprehensive medical benefits with strict utilization management controls. In California, HMOs are regulated by the Department of Corporations (DOC). HMOs are typically less in premium dollars, to employers and employees than PPO or EPOs. Most HMOs provide care through a network of doctors, hospitals and other medical professionals that their members must use in order to be covered for that care. The patient must use a primary care physician and must be referred for specialist consultation and/or treatment by the Primary Care Physician (PCP). The patient must be referred to a specialist provider who is contracted with the same HMO. They generally pay 100% for services provided “in-network” but no benefits if the patient uses “out of network’ providers (except in emergency situations).
HMO Model Types: (HMOs come in different forms or "models")
Staff Model HMOs: Staff model HMOs hire their own physicians. Patients (known as members or enrollees) then visit clinics for treatment. A type of HMO in which the doctors and other medical professionals are salaried employees of the HMO, and the clinics or health centers in which they practice are owned by the HMO.
Group Model HMO: A model of HMO made up of one or more physician group practices that are not owned by the HMO, but that operate as independent partnerships or professional corporations. The HMO pays the groups at a negotiated rate, and each group is responsible for paying its doctors and other staff, and for paying for hospital care or care from outside specialists.
Mixed Model HMO: A health plan that includes more than one form of HMO within a single plan. For instance, a staff model HMO might also contract with independent physician groups or with individual private practice physicians. |
| EPO (Exclusive Provider Organization): A variation of the PPO, EPOs have some similarities with HMOs. The patient is expected to pay a co-payment and has no deductible. The patient should select a physician/hospital from the panel of network providers, they should not go “out of network.” If they go out of network, the patient risks being reimbursed at 0 to 50% and may have to pay the entire fee out of pocket. Due to this restriction, EPO premiums can be priced to compete more closely with HMO’s but maintain some of the freedom of choice of the PPO. EPOs are regulated by the Department of Insurance. The benefits are structured very closely to those of an HMO, but the reimbursement is fee-for service based, not capitated. |
| Point-of-Service (POS) Plan: Point of Service Plans are based on an HMO format. They allow members to receive services either from participating HMO providers, or from providers outside the HMO network. In-network care is more fully covered; POS plans encourage the use of the primary care physician by providing the highest benefit level of services when managed/rendered by the PCP. They have reduced benefits when using or selecting an in-network specialist without the referral by a PCP (called “in-network self-referral”). POS plans have some significantly reduced benefits for out of network referrals whereby; members pay deductibles and a percentage of the cost of care, much like traditional health insurance coverage. |
| Preferred Provider Organization (PPO): A network of doctors and hospitals that provide care at a lower cost than through traditional insurance. This type of insurance typically contains two levels of benefits. The patient has the ability to choose his provider at the time services are needed/provided. The first level provides the high coverage (90%-100% of covered services) if provider is within the PPO network. The second level is about 20% lower then the in-network benefit and applies if a patient goes to a provider outside the PPO network. |
| Indemnity Insurance (80/20 Plans): This is the “traditional” form of insurance whereby a patient may select any provider at any time and with no authorization process. The insurance carrier pays 80% of the bill and the patient pays 20%. Back to top |
| HEALTH INSURANCE TERMS |
| IPA (Independent Practice Association): IPAs generally include large numbers of individual private practice physicians who are paid either a fee or a fixed amount per patient to take care of the IPA’s members. Physicians maintain their independent practices but participate in the IPA to compete for managed care business, primarily HMO business. IPAs are corporate entities formed to centralize management functions and accept financial risk for their members (e.g., capitation), the group is spread out geographically and is less formal than a traditional medical group. The IPA is run by administrators hired by the physicians to manage the contract plans. The IPA acts as an intermediary between the practice and the HMO plans and in some cases, the IPA handles the claims processing, case review and referral authorization process. |
| Managed Care Organization: An umbrella term for HMOs and all health plans that provide health care in return for pre-set monthly payments and coordinate care through a defined network of primary care physicians and hospitals. |
| Managed Health Care: A system that uses financial incentives and management controls to direct patients to providers who are responsible for giving appropriate care in cost-effective treatment settings. Such systems are created to control the cost of health care. |
| Network: The doctors, clinics, health centers, medical group practices, hospitals, and other providers that an HMO, PPO, or other managed care network plan has selected and contracted with to care for its members. |
| Out-of-Network: Not in the HMO’s network of selected and approved doctors and hospitals. HMO members who get care out-of-network (sometimes called out-of-area) without getting permission from the HMO to do so may have to pay for all or most of that care themselves. Exceptions are usually made for extreme emergencies or urgent care needed when traveling away from home. |
| Practice Guidelines: Information on diagnosing and treating specific medical conditions. Practice guidelines, often based on clinical literature and expert consensus, are designed to help physicians and patients make decisions, and to help a health plan evaluate appropriateness and medical necessity of care. |
| Preventive Care: Care designed to prevent disease altogether, to detect and treat it early, or to manage its course most effectively. Examples of preventive care include immunizations and regular screenings like Pap smears or cholesterol checks. |
| Primary Care: Preventive health care and routine medical care that is typically provided by a doctor trained in internal medicine, pediatrics, or family practice, or by a nurse, nurse practitioner or physician’s assistant. |
| Primary Care Physician (PCP): A physician, usually an internist, pediatrician or family physician, devoted to general medical care of patients. Most HMOs require members to choose a primary care physician, who is then expected to provide or obtain authorization for all care for that patient. |
| Referral: A formal process that authorizes an HMO member to get care from a specialist or hospital. To assure coverage, an HMO patient generally must get a referral from his or her primary care doctor before seeing a specialist. |
| Specialist: A doctor or other health professional whose training and expertise are in a specific area of medicine, like cardiology or dermatology. Most HMOs require members to get a referral from their Primary Care Physician before seeing a specialist. Back to top |
| GOVERNMENT PROGRAMS |
| CalOptima: A County Organized Health System authorized by federal law to administer Medi-Cal benefits for Orange County residents. Visit their website: http://www.caloptima.org or contact them by telephone at: (714) 246-3500 or toll free: (888) 587-8088. |
| Healthy Families: A state and federally funded health coverage program for children with family incomes above the level eligible for no cost Medi-Cal and below 250% of the Federal income guidelines ($36,000 for family of three). Visit their website: http:/www.healthyfamilies.ca.gov or contact them by telephone, toll free at: (800) 880-5305. |
| Medi-Cal: Eligible to California residents, eligibility depends on category. Pregnant women with income less than or equal to 200% of Federal Poverty Level (FPL), children ages 1-5 with family incomes less than or equal to 133% FPL, and children 6-19 and parents in families with income less than or equal to 100% FPL. Most recipients have no co-payments or premiums. Visit their website: http:/www.medi-cal.ca.gov or contact them by telephone, toll free at: (888) 747-1222. |
| Medicare: Eligible to people 65 years of age and older; some people with disabilities under age 65, or people with End-Stage Renal Disease.Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Part A covers hospital inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, and some home health care. Most people get Part A automatically when they turn age 65. A monthly premium is not charged for Part A because you or a spouse paid Medicare taxes through employment. Doctors' services, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care may be covered under Part B. Enrolling in part B is optional and a monthly premium is charged. Visit their website: http:/www.medicare.gov or contact them by telephone, toll free at: (800) 772-1213. |
MSI: You may be eligible for MSI if you - are a legal resident of Orange County,
- are between the ages of 21 and 64,
- have a current medical need,
- cannot pay for the medical care you need,
- complete the MSI application,
- meet current Federal Poverty Guidelines for income,
- meet property guidelines.
Visit their website: http:/www.oc.ca.gov/hca/medical/msi or contact them by telephone, at: (714) 480-6333. |
Websites of Other Available Health Coverage Programs:
California Department of Health Services– (www.dhs.cahwnet.gov)
Department of Managed Health Care– (www.dmc.ca.gov)
Programs Available to Low-Income Californians– (www.cbp.org) |
