Managed Care Glossary of Terms

Age-Attained Rating
Similar to the above, this method for establishing health insurance premiums whereby an insurer's premium is based on the current age of the beneficiary. Age-attained-rated premiums increase in price as the purchasers grow older.

Agency for Health Care Policy and Research ( AHCPR )
The agency of the Public Health Service responsible for enhancing the quality, appropriateness and effectiveness of health care services.

Aggregate Margin
This is computed by subtracting the sum of expenses for all hospitals in the group from the sum of revenues and dividing by the sum of revenues. The aggregate margin compares revenues to expenses for a group of hospitals, rather than one single hospital.

Aggregate PPS Operating Margin/Aggregate Total Margin
This is computed by subtracting the sum of expenses for all hospitals in the group from the sum of revenues and dividing by the sum of revenues. A PPS operating margin or total margin that compare revenue to expenses for a group of hospitals, rather than a single hospital.

Aggregate Stop Loss
The form of excess risk coverage that provides protection for the employer against accumulation of claims exceeding a certain level. This is protection against abnormal frequency of claims in total, rather than abnormal severity of a single claim.

Aid to Families with Dependent Children ( AFDC )
The federal AFDC program provides cash welfare to: (1) needy children who have been deprived of parental support and (2) certain others in the household of such child. States administer the AFDC program with funding from both the federal government and state. The Personal Responsibility & Work Responsibility Act of 1996, enacted in August 1996, replaced AFDC with a new program called Temporary Assistance for Needy Families (TANF).

All Inclusive Visit Rate
Aggregate costs for any one patient visit based upon annual operating costs divided by patient visits per year. This rate incorporates costs for all services at the visit.

Allowable Charge
The maximum charge for which a third party will reimburse a provider for a given service. An allowable charge is not necessarily the same as either a reasonable, customary, maximum, actual, or prevailing charge.

Allowed Amount
Maximum dollar amount assigned for a procedure based on various pricing mechanisms. Also known as a maximum allowable

Allowed Charge
This is the amount Medicare approves for payment to a physician, but may not match the amount the physician gets paid by Medicare (due to co-pay or deductibles) and usually does not match what the physician charges patients. Medicare normally pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. The allowed charge for a nonparticipating physician is 95 percent of that for a participating physician. Non-participating physicians may bill beneficiaries for an additional amount above the allowed charge. These rates are published by the HCFA intermediary in each state.

Alternate Delivery Systems
Health services provided in other than an inpatient, acute-care hospital or private practice. Examples within general health services include skilled and intermediary nursing facilities, hospice programs, and home health care. Alternate delivery systems are designed to provide needed services in a more cost-effective manner. Most of the services provided by community mental health centers fall into this category.

Ambulatory Care
Health services provided without the patient being admitted. Also called outpatient care. The services of ambulatory care centers, hospital outpatient departments, physicians' offices and home health care services fall under this heading provided that the patient remains at the facility less than 24 hours. No overnight stay in a hospital is required.

Ancillary Services (Ancillary Charges)
Supplemental services, including laboratory, radiology, physical therapy, and inhalation therapy, that are provided in conjunction with medical or hospital care.

Anniversary Date
The beginning of an employer group's benefit year. The first day of effective coverage as contained in the policy Group Application and subsequent annual anniversaries of that date. An insured has the option to transfer from an indemnity plan (which may have maximum benefit levels) to an HMO.

ANSI
The American National Standards Institute. A national organization founded to develop voluntary business standards in the United States.

Antitrust
A legal term encompassing a variety of efforts on the part of government to assure that sellers do not conspire to restrain trade or fix prices for their goods or services in the market.

Any willing provider laws
Laws that require managed care plans to contract with all health care providers that meet their terms and conditions.

(AP or A/P) AP or A/P
Account(s) Payable

Application Integrators
Software that transparently provides application-to-application functionality, primarily through data conversion and transmission, while eliminating the need for custom programming. Also referred to as application integration gateway, application interface gateway, integration engine, intelligent gateway. This type of software is key to developing networks of information systems, making client-specific information available in real time to all members of an IHDS.

Appropriateness
Appropriate health care is care for which the expected health benefit exceeds the expected negative consequences by a wide enough margin to justify treatment. This term is not to be confused with "usual and customary" or "approved" service.