Health / Health Insurance Glossary

Executive Director: In a managed care plan, individual responsible for all operational aspects of the plan. All other officers and key managers report to this person, who in turn reports to the board of directors.

Experience: The actual cost of providing healthcare to a group during a given period of coverage.

Experience Rating: A rating method under which an MCO analyzes a group's recorded healthcare costs by type and calculates the group's premium partly or completely according to the group's experience.

Expert System: Software that attempts to replicate the process an expert uses to solve a problem in order to arrive at the same decision that an expert would reach.

Explanation Of Benefits: The insurance company's written explanation to a claim, showing what they paid and what the client must pay. Sometimes accompanied by a benefits check.

Federal Employee Health Benefits Program (FEHBP): A voluntary health insurance program administered by the Office of Personnel Management (OPM) for federal employees, retirees, and their dependents and survivors.

Federal Trade Commission Act: A federal act which established the Federal Trade Commission (FTC) and gave the FTC power to work with the Department of Justice to enforce the Clayton Act. The primary function of the FTC i . . . View Full Definition

Fee Schedule: The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.

Fee-For-Service (FFS) Payment System: A system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.

Finance Committee: Committee of the board of directors whose duty it is to review financial results, approve budgets, set and approve spending authorities, review the annual audit, and review and approve outsi . . . View Full Definition

Finance Director: Chief financial officer responsible for the oversight of all financial and accounting operations, such as billing, management information services, enrollment, and underwriting as well as ac . . . View Full Definition

Formulary: A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in . . . View Full Definition

Fully Funded Plan: A health plan under which an insurer or MCO bears the financial responsibility of guaranteeing claim payments and paying for all incurred covered benefits and administration costs.

Functional Status: A patient's ability to perform the activities of daily living.

Funding Vehicle: In a self-funded plan, the account into which the money that an employer and employees would have paid in premiums to an insurer or MCO is deposited until the money is paid out.

Generic Drug: A 'twin' to a 'brand name drug' once the brand name company's patent has run out and other drug companies are allowed to sell a duplicate of the original. Generic drugs are cheaper, and most . . . View Full Definition

Generic Substitution: The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physi . . . View Full Definition

Geographic Accessibility: Health plan accessibility, generally determined by drive time or number of primary care providers in a service area.

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