This area contains definitions of common words and phrases you may run across when reading MedBen forms, claims, EOBs and other documents. Most of the definitions are reprinted from materials published by the Health Insurance Association of America (HIAA).

Should you have questions regarding terms not defined here, please contact the MedBen customer service department at 1-800-686-8425 or e-mail medben@medben.com.

PARTIAL DISABILITY
Inability to perform one or more functions of one’s regular job.

PARTIAL DISABILITY BENEFITS
A disability income benefit payable when an insured is not totally disabled but is prevented from working full time and/or is prevented from performing one or more important daily occupational duties.

PARTICIPATION
The number of insureds covered under the group plan in relation to the total number eligible to be covered, usually expressed as a percentage.

PENDING CLAIM
A claim that has been reported but on which final action has not yet been taken.

PER DIEM
Literally, per day. Term that is applied to determining costs for a day of care and is an average that does not reflect true cost for each patient.

PER MEMBER PER MONTH (PMPM)
Computational designation for each enrollee in a managed care program. It is commonly abbreviated as PMPM.

PERIOD OF DISABILITY
The period during which an employee is prevented from performing usual occupational duties, or during which a dependent cannot perform the normal activities of a healthy person of the same age or sex.

PERMANENT AND TOTAL DISABILITY
A disability that will presumably last for the insured’s lifetime and prevent the insured from engaging in any occupation.

PERSISTENCY
The degree to which policies stay in force through the continued payment of renewal premiums.

POINT-OF-SERVICE (POS) PROGRAM
A health care delivery method offered as an option of an employer’s indemnity program.  Under such a program, employees coordinate their health care needs through a primary care physician.

POLICY
The document that sets forth the contract of insurance.

POLICY ANNIVERSARY
The manual date that separates the experience group policy for dividend and retroactive rate purposes. The period is normally 12 consecutive months.

POLICY FEE
An amount sometimes charged in addition to the first premium as a fee for issuance of the policy; for example, group health conversion policies.

POLICY ISSUE
The transmittal of a policy to an insured by an insurer.

POLICY NUMBER
That number assigned to a group contract that contains both the account number of the policy and the policy code number.

POLICY YEAR
The time that elapses between policy anniversaries, as specified in the policy.

POLICYHOLDER
The legal entity to whom an insurer issues a contract.

PREADMISSION TESTING
The practice of having a patient undergo laboratory, radiology, and other prescreening tests and examinations prior to being admitted to a medical facility as an inpatient.

PREAUTHORIZATION
Previous approval for non-emergency health care services or specialist referral.

PRECERTIFICATION
A utilization management program that requires the individual or provider to notify the insurer prior to a hospitalization or surgical procedure. The notification allows the insurer to authorize payment, as well as to recommend alternate courses of action.

PRE-EXISTING CONDITION
A mental or physical problem suffered by an insured prior to the effective date of insurance coverage.

PRE-EXISTING CONDITIONS PROVISION
A restriction on payments for those charges directly resulting from an accident or illness for which the insured received care or treatment within a specified period of time (e.g., three months) prior to the date of insurance.

PREFERRED PROVIDER ORGANIZATION (PPO)
A managed care arrangement consisting of a group of hospitals, physicians, and other providers who have contracts with an insurer, employer, third-party administrator, or other sponsoring group to provide health care services to covered persons.

PREMIUM
The amount paid to an insurer for specific insurance protection.

PREVENTIVE MEDICINE
Wellness and health promotion services that are part of the basic benefits package of a managed health care plan.

PRIMARY CARE
Nonspecialist, basic medical care. First-contact and continuing health care, including basic or initial diagnosis and treatment, health supervision, management of chronic conditions, preventive health services, and appropriate referral.

PRIMARY CARE PHYSICIAN (PCP)
The network physician designated by an employee (and each of his or her dependents) to serve as that employee’s entity into the health care system. This physician is sometimes referred to as the “gatekeeper.”

PROBATIONARY PERIOD
A period from the policy’s effective date to a specified time, usually 15 to 30 days thereafter, during which no sickness coverage is provided.

PROOF OF LOSS
Documentary evidence required by an insurer to prove a valid claim exists, usually consisting of a claim form completed by the insured and the insured’s attending physician. Medical expense insurance claims also require itemized bills.

PROSPECTIVE REVIEW
Data-gathering technique that uses projected figures or current data to determine future costs or services.

PROVIDER DISCOUNTS
An element of network-based managed care programs whereby financial arrangements are negotiated with providers to reduce fees for medical services rendered.

PROVIDERS
Term used to describe medical professionals and service organizations that provide health care services.

QUALIFICATION PERIOD
The period during which the insured must be totally disabled before becoming eligible for residual disability benefits.

QUALITY ASSURANCE
Set of activities that measures the characteristics of health care services and may include corrective measures.

REASONABLE AND CUSTOMARY CHARGE
A charge for health care that is consistent with the average rate or charge for identical or similar services in a certain geographic area.

REFERRAL
Primary care physician-directed transfer of a patient to a specialty physician or specialty care.

REHABILITATION
The process and goal of restoring disabled insureds to maximum physical, mental, and vocational independence and productivity (commensurate with their limitations). A rehabilitation provision appears in some long-term disability policies; this provides for continuation of benefits or other financial assistance during the rehabilitation period.

REIMBURSEMENT
An amount paid to an insured for expenses actually insured as a result of an accident or sickness.  Payment will not exceed the amount specified in the policy.

REINSURANCE
Acceptance by one insurer (the reinsurer) of all or part of the risk of loss underwritten by another insurer (the ceding insurer). 

RENEWAL
Continuance of coverage under a policy beyond its original term by the insurer’s acceptance of the premium for a new policy term.

REPRESENTATION
A statement by insurance applicants as to some past or existing fact or circumstance. Such statements must be true to the best of the applicant’s knowledge and belief, but are not warranted as exact in every detail.

RESERVE
A sum set aside by an insurance company as a liability to fulfill future obligations.

RETROSPECTIVE CLAIM REVIEW
Examination of claim data after completion of medical services to assess appropriateness of care or reimbursement for services.

RIDER
A document that modifies or amends the insurance contract.

RISK
The probable amount of loss foreseen by an insurer in issuing a contract. The term sometimes also applies to the person insured or to the hazard insured against.