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You are here: Home . hmo . profiles . defintns

HMO Definitions

AFFILIATION - Insurers linked together through common stock ownership or through interlocking directorates.

AMBULATORY ENCOUNTERS - An encounter or occurrence for each ambulatory service as defined below.

Ambulatory Services - Health services provided to HMO members who are not confined to a healthcare institution. Ambulatory services are often referred to as "outpatient" services, as distinct from "inpatient" service.

Encounter - Contact between an HMO member and a provider of healthcare services who exercise independent judgment in the care of provision of health services to the member. The term "independent" is used synonymously with self-reliance, to distinguish between providers who assume major responsibility for the care of individual members and all other personnel who assist in providing that care.

CAPITATION - A provider payment method utilized by HMOs whereby the HMO pays a fixed, advanced negotiated amount to the providers within its network.

COMPLAINT(s) - A complaint is a written communication primarily expressing a grievance. A complaint is justified if: 1) there is an apparent violation of an insurance policy provision, contract provision, rule or statute, or 2) there is a valid concern that a prudent layperson would regard as a practice or service that is below customary business or medical practice.

DOING BUSINESS AS (Trademark, service mark or dba) - If a trademark, service mark, or dba is to be used it must first be filed with and approved by the commissioner. After the certificate of authority is issued, the name approved by the commissioner must be used by the HMO on all advertising and forms distributed to the public.

DRG (Diagnosis Related Group) - Groups of diagnosis similar in patterns of care received, length of stay, and overall use of services. The HMO pays the Provider a fixed amount based on the usual and customary cost of treating the diagnosis.

ENROLLEE - is an individual enrolled in a health care plan, including covered dependents.

ENROLLMENT AND UTILIZATION - Means the number of Enrollees subscribed in an HMO; Utilization is the number of times enrollees seek services.

FEE FOR SERVICE - A method of payment whereby the HMO will pay the provider its usual and customary full amount with no discounts included.

FINANCIAL INFORMATION - The financial information reflected in HMO Profiles is compiled based on consolidated data reported by the licensed HMO to the Texas Department of Insurance on a quarterly basis. This data may not reflect amendments filed by the HMO and therefore may be subject to change.

HMO - Means Health Maintenance Organization which is any person or entity who arranges for or provides a health care plan or a single health care service plan to enrollees on a prepaid basis.

HOSPITAL PATIENT DAYS INCURRED - Represent the number of inpatient days the HMO's members were actually hospitalized which includes admissions for day surgeries.

INCENTIVE WITHHOLD POOLS - A cost containment feature incorporated into physician contracts whereby the HMO withholds a portion of the agreed upon consideration and agrees to pay the amounts withheld back to the physician at the end of the year if the utilization of referral patterns have been favorable.

MEMBER MONTHS - A data term meaning the actual number of members the HMO had in a particular month; it is used on a cumulative basis as a divisor into summary of operations figures in order to derive a Per Member Per Month amount.

MINIMUM SURPLUS - Each HMO's minimum surplus is determined by netting accrued uncovered liabilities from total admitted assets. For a full service HMO, a limited service HMO, and a single service HMO, licensed on or after September 1, 1997, the minimum prescribed surplus under 20A.13 of the Texas Insurance code is $1,500,000, $1,000,000, and $500,000, respectively. HMOs licensed before September 1, 1997, and which do not already have the surplus amounts mentioned above, will be allowed a phase-in period of five (5) years in order to comply with the prescribed minimum surplus requirements. In addition, HMOs writing medicaid must comply with the provisions of TAC Sec. 11.1801 - 11.1805.

NCQA (NATIONAL COMMITTEE FOR QUALITY ASSURANCE) - is a not-for-profit organization offering accreditation and performance measures for managed care entities.

PMPM - Abbreviation for Per Member Per Month, derived by taking HMO member months and dividing into a summary of operations amount; the PMPM premium figure generally equates to the filed schedule of charges.

PER DIEM - a negotiated daily compensation arrangement between the HMO and the Provider. The HMO pays the Provider the per diem amount times the number of HMO enrollee admissions. They are generally entered into with non-physician providers (i.e. hospitals, and clinics).

PROVIDER - Means any practitioner other than physician, such as a licensed doctor or chiropractic, registered nurse, pharmacist, optometrist, pharmacy, hospital, or other institution or organization or person that furnishes healthcare services, who is licensed or otherwise authorized to practice in this state.

PROVIDER HMO - An HMO that contracts directly or indirectly, through contracts or subcontracts, with a primary HMO to provide or arrange to provide health care services on behalf of the primary HMO within an HMO delivery network.

PRIMARY HMO - An HMO that contracts directly with, and issues an evidence of coverage to, individuals or organizations for the primary HMO to arrange for or provide a health care plan or a single health care service plan to enrollees on a prepaid basis.

Service Area (by County) - also known as "Division", is an operation that meets one of the following conditions:

1. a distinct and separate operation of an HMO corporation as opposed to other operations of the corporation serving other distinct and separate geographical service areas;

2. a separate geographical area whereby the geographical location of an enrollee or a group contract holder is used in determining charges or rates; or

3. a service area that crosses state lines or international boundaries is considered to have a separate divisional operation in each state or country and requires separate cost centers and reports.

NOTE: The map represents the service area by counties, not in all instances will all the zips within a county be covered.

SPONSORING ORGANIZATION - Means a person who guarantees the uncovered expenses of the HMO and who is financially capable, as determined by the Commissioner, of meeting the obligations resulting from those guarantees.

STATUTORY DEPOSIT - Each HMO operating in Texas is required to post a deposit as mandated under Article 20A.13. For Full Service HMOs the initial deposit requirement is $100,000 and subject to annual increases thereafter depending upon the level of uncovered healthcare expenses as reported in the annual statement. The initial statutory deposit requirement for a single service HMO in Texas is $50,000. The initial statutory deposit requirement for HMOs offering Medicaid in Texas is also $50,000.

TYPE - Basic (Full) Service HMO - An HMO which provides health care services which an enrolled population might reasonably require in order to be maintained in good health, including, as a minimum, emergency care, inpatient hospital and medical services, and outpatient medical services.

Limited Service HMO - An HMO which undertakes to provide, arrange for, pay for, or reimburse any part of the cost of limited health care services. Limited health care services means services for mental health, chemical dependency, or mental retardation, or any combination. Also, includes an organized long-term care service delivery system that provides for diagnostic, preventive, therapeutic, rehabilitative, and personal care services required by an individual with a loss in functional capacity on a long-term basis.

Single Service HMO - An HMO which undertakes to provide, arrange for, pay for, or reimburse any part of the cost of a single health care service. A single healthcare service means a health care service that an enrolled population may reasonably require in order to be maintained in good health with respect to a particular health care need.

UNCOVERED EXPENSES - Means the estimated administrative expenses and the estimated cost of health care services that are not guaranteed, insured, or assumed by a person other than the HMO. Health care services may be considered "covered" if the physician or provider agrees in writing that enrollees shall in no way be liable, assessable, or in any way subject to payment for services except as described in the Evidence of Coverage issued to the enrollee under Section 9 of the HMO Act. The amount due on loans in the next calendar year will be considered uncovered expenses unless specifically subordinated to uncovered medical and health care expenses or unless guaranteed by the sponsoring organization.

UNCOVERED LIABILITIES - Means those obligations resulting from unpaid uncovered expenses, the outstanding indebtedness of loans that are not specifically subordinated to uncovered medical and healthcare expenses or guaranteed by the sponsoring organization, and all other monetary obligations that are not similarly subordinated or guaranteed.



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Last updated: 09/06/2014

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