Managed Care Glossary of Terms

Disease Management
A type of product or service now being offered by many large pharmaceutical companies to get them into broader healthcare services. Bundles use of prescription drugs with physician and allied professionals, linked to large databases created by the pharmaceutical companies, to treat people with specific diseases. The claim is that this type of service provides higher quality of care at more reasonable price than alternative, presumably more fragmented, care. The development of such products by hugely-capitalized companies should be all the indicator necessary to convince a provider of how the healthcare market is changing. Competition is coming from every direction--other providers of all types, payers, employers who are developing their own in-house service systems, the drug companies.

Disproportionate Share Adjustment
A payment adjustment under Medicare's PPS for Medicaid utilization at hospitals that serve a relatively large volume of low-income patients, pregnant patients or other patients under the Medicaid program. Disproportionate share has been a continuing topic in Congress. Some wish to eradicate to reduce costs. Rural facilities, teaching hospitals and hospitals in poverty areas claim that the reduction or elimination of disproportionate share payments would cause hospitals to close, move or reduce care to the poor. DSH is a method whereby the government recognizes that hospitals treating high percentages of Medicaid payments would not be able to cover their costs and remain in service without additional government subsidy.

DRG
Diagnosis Related Groups: Diagnosis codes used to bill hospital services and visits.

Drug Formulary
Varying list of prescription drugs approved by a given health plan for distribution to a covered person through specific pharmacies. See also Formulary.

Drug Risk Sharing Arrangements
Provider organizations may be at partial, full or no risk for drug costs. Providers at partial risk share in the proportion of savings and / or cost overruns. Groups at full risk realize all the savings or absorb all of the losses. Groups at no risk absorb none of the profits or losses. These arrangements are normally made between HMOs and providers (doctors/hospitals) in the HMO's attempt to discourage the overuse of drugs which will cause a loss of profit for the HMO. In a shared risk arrangement, the HMO and provider share the losses and profits, thus aligning their incentives with one another.

(DUR) Drug Utilization Review
Review of an insured population's drug utilization with the goal of determining how to reduce the cost of utilization. Reviews often result in recommendations to practitioners, including generic substitutions, use of formularies, use of copayments for prescriptions and education. In some cases, practitioners are now penalized or rewarded depending on their drug prescription related costs and utilization. Some speculate that these incentives can adversely effect doctor decisions.

(DC) Dual Choice (Multiple Choice, Dual Option, DC)
Section 1310 of the HMO Act provides for dual choice. A choice given to employees to select between two or more health plans offered by an employer. The opportunity for an individual within an employed group to choose from two or more types of health care coverage such as an HMO and a traditional insurance plan. Many states also have legislated mandates regarding choices offered within employer packages.

Dual Eligible
A Medicare beneficiary who also receives the full range of Medicaid benefits offered in his or her state. Medicare usually pays the charges for inpatient while Medicaid will pay the co-pay for inpatient care in hospitals. Medicare will be considered the primary insurer for inpatient care for the Care/Caid patient.

(DCI) Duplicate Coverage Inquiry
Method used by an insurance company or group medical plan to inquire about the existing coverage of another insurance company or group medical plan.

Duplication of Benefits
When a person is covered under two or more health plans with the same or similar coverage.

(DME) Durable Medical Equipment
Items of medical equipment owned or rented which are placed in the home of an insured to facilitate treatment and/or rehabilitation. DME generally consist of items which can withstand repeated use. DME is primarily and customarily used to serve a medical purpose and is usually not useful to a person in the absence of illness or injury.