Glossary of Terms

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PPM (Physician Practice Management) Firm: A firm that purchases physicians’ practices in exchange for a percentage of the gross receivables. The PPM leases the office back to the physician or employs the physician on a salaried basis. The PPM then contracts with area MCOs.

PPO (Preferred Provider Organization): A select, approved panel of physicians, hospitals and other providers who agree to accept a discounted fee schedule for patients and to follow utilization review and preauthorization protocols for certain treatments.

PSN (Provider Sponsored Network): These range from loose alliances between physicians to legal entities formed between hospitals and physicians for the purposes of managed care contracting.

PSO (Provider Sponsored Organization): A term used in Medicare reform legislation to define a providers sponsored health plan hat would be licensed to provide coverage of the Medicare benefits package.

Providers: Institutions and individuals licensed to provide health care services, for example, hospitals, physicians, pharmacists, etc.

Resource-Based Relative Value Scale (RBRVS): This is a relative scale developed for the Health Car Financing Administration for use by Medicare. The RBRVS assigns relative values to each CPT code for services on the basis of the resources related to the procedure rather than simply on the basis of historical trends. The practical effect has been to lower reimbursement for procedural services (e.g., cardiac surgery) and to raise reimbursement for cognitive services (e.g., office visits).

Self-Funded or Self-Insured Plan: A group health care plan funding arrangement in which the organization sponsoring the plan takes complete financial responsibility for making all claims payments and paying all related expenses.

Staff-Model HMO: A type of closed-panel HMO in which the physicians are salaried employees of the HMO. Medical services in staff models are delivered at HMO-owned health centers.

Stop-Loss Insurance: Insurance coverage that enables sponsors of self-insured group health care plans to place a dollar limit on their liability for paying claims.

Tertiary Care: Tertiary care is administered at a highly specialized medical center. It is associated with the utilization of high-cost technology resources.

Third Party Payer: A public or private organization that pays for or underwrites coverage for health care expenses.

TPA (Third Party Administrator): An administrative organization, other than the employee benefit plan or health care provider, that collects premiums, pays claims and/or provides administrative services.

Utilization: The frequency with which a benefit is used.

Utilization Review: A utilization management method intended to reduce the occurrence of unnecessary or inappropriate hospitalizations of patients.

Virtual Integration: A pattern of strategic alliances designed to win the cost advantages of affiliation without the overhead disadvantages of ownership.

Withhold: When a percentage of payment to the provider is held back by the HMO or PSN until the cost of referral or hospital services has been determined. Physicians exceeding the amount determined as appropriate lose the amount held back.

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