Health care edition of Currents (.pdf)

A reference guide to health care lingo

people on stationary bikes Not sure what a PPO or TPA is? You’re not alone. This list of definitions will help you get familiar with some of the terms and acronyms used when discussing health care plans.

Coinsurance
A percentage of the cost for services you must pay to a provider once the deductible is met.

Copayment or Copay
A fixed dollar amount you must pay to a provider at the time services are received.

Covered Health Services
Health services, supplies, or equipment provided for the purpose of preventing, diagnosing, or treating a sickness, injury, mental illness, substance abuse, or symptoms. Covered health services are supported by national medical standards of practice and are consistent with conclusions of prevailing medical research. Covered services under the University’s health care plans are defined in the plan document.

Deductible
The amount of out-of-pocket expenses that you must pay for health services before the plan begins to pay benefits for many covered services.

Health Savings Account (HSA)
A health savings account (HSA) is a tax advantaged savings plan that individuals can use to cover current and future medical expenses. It allows you to set aside pretax money, invest the funds within a broad range of choices, and then withdraw the money tax free for qualified health care expenses. HSA funds roll over from year to year. Note: You must be enrolled in an HSA-eligible plan in order to contribute to an HSA.

HSA-Eligible Plan
For 2011, the federal government generally defines an HSA-eligible plan as those with an individual deductible of at least $1,200, or family deductible of at least $2,400. Other requirements must be met as well. Based on guidelines, the federal government will review these amounts each year and increase them, if appropriate.

Negotiated Costs
The amount the network provider has agreed with the third-party administrators (TPAs) to accept as payment in full for covered services.

Network Provider
A provider who participates in the third-party administrator’s network. A non-network provider does not participate in the network.

Out-of-Pocket Maximum
The maximum amount you could pay out of your own pocket for covered health care expenses in a calendar year for deductible and coinsurance. Copays and the cost of prescription drugs are not included (with the exception of the PPO HSA-Eligible Plan).

Preferred Provider Organization (PPO)
A preferred provider organization, or PPO, is a health care benefit plan that allows those covered to receive care by network and non-network providers. In many cases those covered will receive a higher level of benefits for using a network provider in addition to the lower fees charged by the provider. The network provider will automatically bill the plan, and patients are not billed for charges higher than the amount allowed by the TPA.

Reasonable Charges
(Also referred to as “Reasonable and Customary” or “Usual, Customary, and Reasonable”)
For services provided by or on behalf of a network physician, the reasonable charge is an amount that does not exceed negotiated costs. For services provided by non-network providers, the maximum amount considered under your plan for payment is reasonable charges. The third-party administrator develops reasonable charges taking into account factors such as the complexity of the service, the range of services provided, and the prevailing charge level in the geographic area where the provider is located.

Third-Party Administrator (TPA)
A third-party administrator (TPA) processes health care claims and provides additional services for members. The University offers the choice of two TPAs to administer its health care plans: Aetna or Excellus BlueCross BlueShield.

University of Rochester

A reference guide to health care lingo