Managed Care Glossary of Terms

Rate Band
The allowable variation in insurance premiums as defined in state regulations. Acceptable variation may be expressed as a ratio from highest to lowest (e.g., 3:1) or as a percent from the community rate (e.g., +/-20%). Usually based on risk factors such as age, gender, occupation or residence.

Rate Review
Review by a government or private agency of a hospital's budget and financial data, performed for the purpose of determining the reasonableness of the hospital rates and evaluating proposed rate increases.

Real Value
Measurement of an economic amount corrected for change in price over time (inflation), thus expressing a value in terms of constant prices. A common term in economics.

Referral
The process of sending a patient from one practitioner to another for health care services. Health Plans may require that designated primary care providers authorize a referral for coverage of specialty services.

Referral Center, also called Triage, Call Center, 24 Hour Certification or 1-800
This is a mechanism established by health plans to direct patients to approved hospitals and doctors. Often the Referral Center serves a UR function and certified or pre-certifies the care. These centers are also used by hospitals to refer patients to certain doctors, reduce use of the emergency room or to provide follow-up patient contact. Manages care organizations utilize these centers as their central hub of communications with patients and providers at the time of service.

Referral Pool
An amount set aside to pay for non-capitated services provided by a PCP, services provided by a referral specialist and/or emergency services.

Referral Service
Medical Services arranged for by the physician and provided outside the physician's office other than Hospital Services.

Refinement
The correction of relative values in Medicare's relative value scale that were initially set incorrectly.

(R.N.) Registered Nurse
Registered nurses are responsible for carrying out the physician's instructions. They supervise practical nurses and other auxiliary personnel who perform routine care and treatment of patients. Registered nurses provide nursing care to patients or perform specialized duties in a variety of settings from hospital and clinics to schools and public health departments. A license to practice nursing is required in all states. For licensure as a registered nurse (R.N.), an applicant must have graduated from a school of nursing approved by the state board for nursing and have passed a state board examination.

Reinsurance
A method of limiting the risk that a provider or managed care organization assumes by purchasing insurance that becomes effective after set amount of health care services have been provided. This insurance is intended to protect a provider from the extraordinary health care costs that just a few beneficiaries with extremely extensive health care needs may incur. Insurance purchased by an insurance company or health plan from another insurance company to protect itself against losses. A contract by which an insurer procures a third party to insure it against loss or liability by reason of such original insurance. The practice of an HMO or insurance company of purchasing insurance from another company to protect itself against part or all the losses incurred in the process of honoring the claims of policy-holders. See also stop loss. Also called "risk control" insurance. See risk.

(RVS) Relative Value Scale
An index assigning various weights to various medical services. Each weight represents a relative amount to be paid for each service. The RVS used in the development of the Medicare Fee Schedule for physicians consists of three cost components: physician work, practice expense, and malpractice expense.

(RVU) Relative Value Unit
The unit of measure for a relative value scale. RVUs must be multiplied by a dollar conversion factor to become payment amounts. This is a common term in economics.

Renewal
Continuance of coverage for a new policy term.

Reserves
Monies earmarked by health plans to cover anticipated claims and operating expenses A fiscal method of withholding a certain percentage of premium to provide a fund for committed but undelivered health care and such uncertainties as: longer hospital utilization levels than expected, over-utilization of referrals, accidental catastrophes and the like. The fiscal method of providing a fund for committed but undelivered health services or other financial liabilities. A percentage of the premiums support this fund. Businesses other than health plans also manage reserves. For example, hospitals document reserves as that portion of the accounts receivables which they hope to collect but have some doubt about its collectability. Rather than book these amounts as income, hospitals will "reserve" these amounts until paid.

(RBRVS) Resource-Based Relative Value Scale
A schedule of values assigned to health care services which give weight to procedures based upon resources needed by the provider to effectively deliver the service or perform that procedure. Unlike other relative value scales, RBRVS ignores historical charges and includes factors such as time, effort, technical skill, practice cost, and training cost. Established as part of the Omnibus Reconciliation Act of 1989, Medicare payment rules for physician services were altered by establishing an RBRVS fee schedule. This payment methodology has three components: a relative value for each procedure, a geographic adjustment factor, and a dollar conversion factor. This payment methodology has three components: a relative value for each procedure, a geographic adjustment factor, and a dollar conversion factor. A Medicare weighting system to assign units of value to each CPT code (procedure) performed by physicians and other providers.

(Retro) Retrospective Rating
Insurance coverage that provides for premium determination at the end of the coverage period, subject to a minimum and maximum based upon actual experience.

Retrospective Review Process
System for analyzing medical necessity and appropriateness of services rendered. A review that is conducted after services are provided to a patient. The review focuses on determining the appropriateness, necessity, quality, and reasonableness of health care services provided. Becoming seen as least desirable method; supplanted by concurrent reviews.