Managed Care Glossary of Terms

McCarran-Ferguson Act
A 1945 Act of Congress exempting insurance businesses from federal commerce laws and delegating regulatory authority to the states.

Medicaid (Title XIX)
Government entitlement program for the poor who are blind, aged, disabled or members of families with dependent children (AFDC). Each state has its own standards for qualification. A Federally aided, state-operated and administered program which provides medical benefits for certain indigent or low-income persons in need of health and medical care. The program, authorized by Title XIX of the Social Security Act, is basically for the poor. It does not cover all of the poor, however, but only persons who meet specified eligibility criteria. Subject to broad Federal guidelines, states determine the benefits covered, program eligibility, rates of payment for providers, and methods of administering the program. All states but Arizona have Medicaid programs.

Medical Allied Manpower
This category includes some sixty occupations or specialties that can be divided into two large categories based on time required for occupational training. The first category includes those occupations that require at least a baccalaureate degree, for example, clinical laboratory scientists and technologists, dietitians and nutritionists, health educators, medical record librarians, and occupational speech and rehabilitation therapists. The second group includes those occupations that require less than a baccalaureate degree, such as aides for each of the above categories as well as physician assistants and radiological technicians.

(MCE) Medical Care Evaluation Studies
The name given to a generic form of health care review in which problems in the quality of the delivery and organization of health care services are addressed and monitored. A program based on Mk--Es is recommended as a way of meeting the federal government's requirements for an internal quality assurance program for federally-qualified HMOs.

Medical Group Practice
The American Group Practice Association, the American Medical Association, and the Medical Group Management Association define medical group practice as: provision of health care services by a group of at least three licensed physicians engaged in a formally organized and legally recognized entity sharing equipment, facilities, common records and personnel involved in both patient care and business management.

Medical Informatics
Medical informatics is the systematic study, or science, of the identification, collection, storage, communication, retrieval, and analysis of data about medical care services to improve decisions made by physicians and managers of health care organizations. Medical informatics will be as important to physicians and medical managers as the rules of financial accounting are to auditors.

(MLR) Medical Loss Ratio
Cost ratio of total benefits used compared to revenues received. Usually referred to by a ratio, such as 0.96--which means that 96% of premiums were spent on purchasing medical services. The goal is to keep this ratio below 1.00--preferably in the 0.80 ranges, since the MCO's or insurance company's profit comes from premiums. Currently, successful HMOs do have MLRs in the 0.70-0.80 range. The ratio between the cost to deliver medical care and the amount of money that was taken in by a plan. Insurance companies often have a medical loss ratio of 96 percent or more: tightly managed HMOs may have medical loss ratios of 75 percent to 85 percent, although the overhead (or administrative cost ratio) is concomitantly higher. See also Loss Ratio and Incurred Claims Loss Ratio.

(MMIS) Medical Management Information System
A data system that allows payers and purchasers to track health care expenditure and utilization patterns.

(MSA) Medical Savings Account
An account in which individuals can accumulate contributions to pay for medical care or insurance. Some states give tax-preferred status to MSA contributions, but such contributions are still subject to federal income taxation. MSAs differ from Medical reimbursement accounts, sometimes called flexible benefits or Section 115 accounts, in that they need not be associated with an employer. MSAs are not currently recognized in federal statute.

(MSO) Medical Services Organization
An organized group of physicians, usually from one hospital, into an entity able to contract with others for the provision of services. See also Management Services Organization and MSO.

Medical Underwriting
The federal health benefit program for the elderly and disabled that covers over 35,000,000 beneficiaries or over 14% of the US with an annual cost of over $120 billion. Medicare pays for 25% of all hospital care and 23% of all physician services. This high cost is the source of constant debate in Congress. This refers to the Medicare program, the largest single payer in US.

Medically Necessary - Medical Necessity
Services or supplies which meet the following tests: They are appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition; They are provided for the diagnosis or direct care and treatment of the medical condition; They meet the standards of good medical practice within the medical community in the service area; They are not primarily for the convenience of the plan member or a plan provider; and They are the most appropriate level or supply of service which can safely be provided.

Medically Needy
Persons who are categorically eligible for Medicaid and whose income, less accumulated medical bills, is below state income limits for the Medicaid program. Often seen as a problem among the "working poor" or among the senior population. See spend down.

Medicare ( Title XVIII )
A federal program for the elderly and disabled, regardless of financial status. It is not necessary, as with Medicaid, for Medicare recipients to be poor. A U.S. health insurance program for people aged 65 and over, for persons eligible for social security disability payments for two years or longer, and for certain workers and their dependents who need kidney transplantation or dialysis. Monies from payroll taxes and premiums from beneficiaries are deposited in special trust funds for use in meeting the expenses incurred by the insured. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B). Medicare covers more than 34 million Americans (16% of population) at an annual estimated cost of more than $133 billion.

Medicare Approved Charge
The amount Medicare approves for payment to a physician. Typically, Medicare pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. Physicians may bill beneficiaries for an additional amount (the balance) not to exceed 15 percent of the Medicare approved charge.

(MCR) Medicare Cost Report
An annual report required of all institutions participating in the Medicare program. The MCR records each institution's total costs and charges associated with providing services to all patients, the portion of those costs and charges allocated to Medicare patients, and the Medicare payments received.

(MEI) Medicare Economic Index
An index that tracks changes over time in physician practice costs. From 1975 through 1991, increases in prevailing charge screens were limited to increases in the MEI.