ALPHABET SOUP: Health Care Definitions
for Children and Youth with Special Health Care Needs
Families in the
Access - Ability to receive services from a health care
system or provider.
Acute Care - Medical services provided after an accident
or for a disease, usually for a short time.
Adverse Selection - Occurs when those joining a health
plan have higher medical costs than the general population; if
too many enrollees have higher than average medical costs,
the health plan experiences adverse selection.
Ambulatory Care - Outpatient medical services (not
provided in a hospital).
Benefits - Health and related services guaranteed to be
provided in a health plan.
Capacity - Ability of a health organization to provide
necessary health services.
Capitation - Way of pre-paying a health plan, provider, or
hospital for health services based on a fixed monthly or yearly
amount per person, no matter how few or many services a
CMS/Centers for Medicare and Medicaid Services- The
the State Children’s Health Insurance Program (SCHIP).
Co-payment - What a consumer pays for each health visit
or service received.
Coverage - Agreed upon set of health services that a plan
will pay for and/or provide.
Deductible - Annual amount that consumer agrees to pay
for health services before the insurance plan pays.
Dual-Eligibles - People who are eligible for both Medicaid
DME/Durable Medical Equipment - Necessary medical
equipment that is not disposable; for example, wheelchairs,
walkers, ventilators, commodes.
Enrollee - Person (consumer) who is covered under a
health insurance plan, whether fee-for-service or managed
care (see “Fee for Service” and “Managed Care”).
EPSDT/Early and Periodic Screening, Diagnosis and
Treatment Program - Mandatory Medicaid benefits and
services for Medicaid-eligible children and adolescents under
age 21; designed to ensure children’s access to early
and comprehensive preventive health care and treatment. State
Medicaid programs must provide EPSDT benefits.
ERISA/Employee Retirement Insurance Security Act -
Federal act that allows businesses to develop self-funded
health insurance programs. Such programs can limit benefits
packages because they are not under the jurisdiction of state
Fee for Service - Traditional health insurance, allowing
consumer to choose providers and services, often with a
deductible and co-payment. Also known as indemnity
Formulary - List of approved prescription medications
which a health plan pays for; medicines not listed in the
formulary are not covered.
Gatekeeper - Person, usually a primary care physician,
designated by health plan to decide what services will be
provided and paid for; approves all referrals, and sometimes
Grievance Procedure - Defined process in a health plan
for consumers or providers to use when there is disagreement
about a plan’s services, billings, or general procedures.
HMO/Health Maintenance Organization - Health plan
that requires its enrollees to use only certain health providers
and hospitals, usually those within its own network.
HEDIS - System for determining the quality of a health
plan’s services and outcomes, based on certain data. HEDIS
data, information, and guidance about children are limited.
High Risk Insurance Pools - State programs that enable
people with health problems to join together to purchase
health insurance; even with subsidies, premium rates are high
because pool members are high risk.
Indemnity Health Insurance - Usually a fee-for-service
health plan that reimburses physicians and other providers for
health services furnished to plan enrollees.
Long-term Care (LTC) - a variety of services which help
meet both the medical and non-medical need of people with a
chronic illness or disability who cannot care for themselves
for long periods of time.
Mandatory Enrollment - Requirement that certain
groups of people must enroll in a program. Medicaid managed
care is an example.
Managed Care - Way of financing and delivering health
care for a set fee using a network of specific providers and
services. The organizations that deliver managed care are
known as MCOs (Managed Care Organizations), HMOs
(Health Maintenance Organizations), and PPOs (Preferred
MCO/Managed Care Organization- Health organization,
whether for-profit or non-profit, that finances and delivers
health care using a specific provider network, services and
Medicaid - Federal program described in Title XIX
(“nineteen”) of the Social Security Act that pays for health
services for certain categories of people who are poor, elderly,
blind, disabled or who are enrolled in certain programs,
including Medicaid waivers. Included are children whose
families receive government assistance. Medicaid is financed
with federal and state funds.
Medicare - Title XX of the Social Security Act which pays
for health care for the elderly and adults who are disabled.
Medical Necessity - Legal term used to determine
eligibility for health benefits and services. It describes services
that are consistent with a diagnosis, meet standards of good
medical practice, and are not primarily for convenience of the
PCCM/Primary Care Case Management - System that
pays primary care providers a monthly fee to coordinate
medical services, especially as used by Medicaid.
PHP/Prepaid Health Plan - Health organization that
receives prepaid capitation (see “Capitation”) payments for
select set of benefits; for example, physician services or lab
POS/Point of Service Plan - Health plan whose members
can choose their services when they need them, either in the
HMO or from a provider outside the HMO at some cost to the
member. Also a plan in which the primary provider directs
services and referrals.
PPO/Preferred Provider Organization - Managed care
organization (MCO) that contracts with a network of
providers who deliver services for set fees, usually at a
discount to the MCO. PPOs usually sell to insurers and
employers and do not assume insurance risk.
Quality Assurance - Monitoring and improving health
care, either an individual plan or broad health systems review,
in a consistent and organized way.
Reinsurance - Insurance purchased by a health plan to
protect against extremely high medical costs, either for
specific groups or individuals.
Risk - Refers to the chance that a health plan or a provider
takes when they agree to deliver health services to a group of
people for a certain payment rate, even if costs for the services
exceed the payments.
Risk Adjustment - The higher capitation (see
“Capitation”) rate paid to providers or health plans for
services to a group of enrollees whose medical care is known
to be more costly than average.
Risk-sharing - Occurs when two parties, usually Medicaid
and an MCO, agree through a formula to share any losses that
result when medical costs exceed payments.
SNF/Skilled Nursing Facility - An institution providing
skilled nursing and related services to residents; a nursing
Spend-down - The process in which a consumer uses up
all income and assets on medical care in order to qualify for
Stop-loss - A form of health insurance that provides
protection for medical expenses above a certain limit.
SSI/Supplemental Security Income - Monthly cash
assistance for people, including children, who have low
incomes, and who meet certain age or disability guidelines. In
most states, SSI also includes access to Medicaid.
Utilization Review - A series of processes to ensure that
medically necessary acute inpatient and outpatient care has
been provided in the most appropriate and cost-effective
Waivers - The result of a process that allows state
Medicaid agencies to apply for and receive permission from
CMS to provide services not otherwise covered by Medicaid
and/or to do so in ways not described by the Social Security
Act. Most Medicaid managed care programs require waivers.
The waivers, which can differ greatly, are known by their
numbers (1115, 1119), as home-and community-based, or as
Katie Beckett Waivers.
National Grassroots Network of Families and Friends Speaking on Behalf of Children and Youth with Special Health Care Needs
Toll Free: 1-888-835-5669 / E-mail: firstname.lastname@example.org / Internet: http://www.familyvoices.org