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Insurance Services Programs

Federal Employees Health Benefits Program

FEHB Glossary

A - B - C - D - F - G - H - I - M - O - P - Q

Accreditation — a rigorous and comprehensive evaluation process where independent organizations assess the quality of the key systems and processes that manage care organizations use. Accreditation may also include an assessment of the care and service plans are delivering in important areas of public concern such as immunization rates, mammography rates, and member satisfaction. In our FEHB Guide and our web pages we provide information on the accreditations of FEHB health plans by the American Accreditation Healthcare Commission/URAC, the the Joint Commission of Accreditation of Helathcare Organizations (JCAHO), and the National Committee for Quality Assurance (NCQA). See our accreditation information page.

Brand name drug — A prescription drug that is protected by a patent, supplied by a single company, and marketed under the manufacturer's brand name.

Brochure — A plan's description of benefits, limitations, exclusions, and definitions under the FEHB Program.

Calendar year deductible — A fixed dollar amount you must pay out of pocket before the plan will begin reimbursing you. Separate limits are usually applied on a per person and per family basis.

Catastrophic limit — The maximum amount of certain covered charges you have to pay out of your pocket during the year. Setting a maximum amount protects you. Separate limits are usually applied on a per person and per family basis.

Coinsurance — The amount you pay as your share of the medical services you receive, like for a doctor's visit. Coinsurance is a percentage of the cost of the service (e.g., 20%).

Consumer-Driven Plans — Describes a wide range of approaches to give you more incentive to control the cost of either your health benefits or health care. You have greater freedom in spending health care dollars up to a designated amount, and you receive full coverage for in-network preventive care. In return, you assume significantly higher cost sharing expenses after you have used up the designated amount. The catastrophic limit is usually higher than those common in other plans. Common features include full or partial employee responsibility for several thousand dollars in expenses, and catastrophic coverage covering costs above a certain level, usually higher than those common in other plans.

Copayment — The amount you pay as your share of the medical services you receive, like for a doctor's visit. Copayment is a fixed dollar amount (e.g., $15).

Covered charges — Services or benefits for which the health plan makes either partial or full payment.

Deductible — The amount you must pay for health care, before your health plan begins to pay. There is a deductible for each benefit period - usually a year. There may be separate deductibles for different types of services. Deductibles can change every year.

Fee-for-Service (FFS) Plan — Health coverage in which doctors and other providers receive a fee for each service such as an office visit, test, procedure, or other health care service. The plan will either pay the medical provider directly or reimburse you for covered services after you have paid the bill and filed an insurance claim. When you need medical attention, you visit the doctor or hospital of your choice.

Formulary — A list of both generic and brand name drugs that are preferred by your health plan. Many prescription drugs produce the same results. Health plans choose formulary drugs that are medically safe and cost effective. A team including pharmacists and physicians meet to review the formulary and make changes as necessary.

Gatekeeper — In a managed care plan, this is another name for the primary care doctor who gives you basic medical services and who coordinates proper medical care and referrals.

Generic drug — A prescription that is not protected by a drug patent. A generic medication is basically a copy of the brand name drug. A generic drug may have a different color or shape than its brand name counterpart, but it must have the same active ingredients, strength, and dosage form (i.e., pill, liquid, or injection), and provide the same effectiveness and safety. Generics generally cost less than brand name drugs.

Health Maintenance Organization (HMO) — A health plan that provides care through contracted or employed physicians and hospitals located in particular geographic or service areas. HMOs emphasize prevention and early detection of illness. Your eligibility to enroll in an HMO is determined by where you live or, in some plans, where you work.

HEDIS* - Health Plan Employer Data and Information Set. A set of health plan performance measures (e.g., preventative medicine, prenatal care, acute and chronic disease and member satisfaction with health plans and doctors) that look at a plan's quality of care and services. NCQA requires HEDIS and JCAHO accepts HEDIS in accrediting health plans.

*HEDIS is a registered trademark of the National Committee for Quality Assurance

In-Network — You receive treatment from the doctors, clinics, health centers, hospitals, medical practices, and other providers with whom your plan has an agreement to care for its members. Examples include a Fee-For-Service plan's PPO or a Health Maintenance Organization. Members have fewer out-of-pocket costs when they use in-network providers.

Managed care — A very broad term that generally refers to a system that manages the quality of health care, access to care, and the cost of that care. For example, a formulary controls the quality of medications dispensed to enrollees; a referral ensures that you see the right specialist for your condition; and going to a hospital that has an agreement with your plan can save both you and the plan money.

Open Season Guide - a tool to help you understand the choices you have under the FEHB Program. The guide directs you through the abundance of plan choices and helps you make a decision.

Out-of-Network — You receive treatment from doctors, hospitals, and medical practitioners other than those with whom the plan has an agreement, and pay more to do so. Members in a PPO-only option who receive services outside the PPO network generally pay all charges.

Outpatient deductible — A fixed dollar amount you pay out-of-pocket for non-inpatient services. This is usually targeted at specific services or supplies and is different from a calendar year deductible.

Point of Service (POS) — A product offered by an HMO or FFS plan that has features of both. In an HMO, the POS product lets you use providers who are not part of the HMO network. However, there is a greater cost associated with choosing these non-network providers. You usually pay deductibles and coinsurances that are substantially higher than the payments when you use a plan provider. You will also need to file a claim for reimbursement, like in an FFS plan. The HMO plan wants you to use its network of providers, but recognizes that sometimes enrollees want to choose their own provider.

In an FFS plan, the plan's regular benefits include deductibles and coinsurance. But in some locations, the plan has set up a POS network of providers similar to what you would find in an HMO. The plan encourages you to use these providers, usually by waiving the deductibles and applying a copayment that is smaller than the normal coinsurance. Generally, there is no paperwork when you use a network provider.

Preferred Provider Organization (PPO) — Under the FEHB Program, PPOs are only available through enrollment in a Fee-For-Service plan. The PPO is similar to FFS insurance except it uses a network of providers. PPO's give you the choice of using doctors and other providers within the plan's network (the PPO benefit), or using ones outside the plan's network. You don't have to use the PPO, but there are advantages if you do. (Be aware, however, that some of the services provided in a PPO hospital may not be covered by PPO arrangements. Room and board will be covered, but anesthesia and radiology, for instance, will probably be covered under non-PPO benefits.)

Premium Conversion — The FEHB Program has incorporated the pre-tax payment of health insurance premium contributions as a tax-saving benefit feature for federal and postal employees. Career federal and postal employees have health benefits premium contributions automatically withheld from pay as "pre-tax money", which means the premium amount is not subject to income, Social Security, or Medicare taxes. Employees may choose not to participate in premium conversion by completing a form waiving this treatment and paying with "after-tax money". When your premium contributions are withheld on a pre-tax basis, certain Internal Revenue Service (IRS) guidelines affect your ability to change coverage. You may elect to reduce your coverage (cancel your FEHB enrollment or go from Self and Family to Self Only coverage) only during an FEHB Open Season, or upon have a Qualified Life Status Change.

Prescription Drugs, Brand Name and Generic — A brand name drug is approved by the Food and Drug Administration (FDA), and is supplied by one company (the pharmaceutical manufacturer). The drug is protected by a patent and is marketed under the manufacturer's brand name.

When a drug patent expires, other companies may produce a generic version of the brand name drug. A generic medication, also approved by the FDA, is basically a copy of the brand name drug and is marketed under its chemical name. A generic drug may have a different color or shape than its brand name counterpart, but it must have the same active ingredients, strength, and dosage form (i.e., pill, liquid, or injection).

Provider — A doctor, hospital, health care practitioner, pharmacy, or health care facility.

Quality — Quality is how well health plans keep their members healthy or treats them when they are sick. Good quality health care means doing the right thing at the right time, in the right way, for the right person - and getting the best possible results.