Major Medical Expense Insurance

Policies designed to help offset the heavy medical expenses resulting from catastrophic or prolonged illness or injury. They generally provide benefits payments for 75 to 80 percent of most types of medical expenses above a deductible paid by the insured.

Malpractice Insurance

Insurance against the risk of suffering financial damage due to professional misconduct or lack of ordinary skill. Malpractice requires that the patient prove some injury and that the injury was the result of negligence on the part of the professional. A practitioner is liable for damages or injuries caused by malpractice.

Managed Behavioral Health Program

A program of managed care specific to psychiatric or behavioral health care. This usually is a result of a "carve-out" by an insurance company or managed care organization (MCO). Reimbursement may be in the form of sub-capitation, fee for service or capitation. See also Carve-Out.

Managed Care

Systems and techniques used to control the use of health care services. Includes a review of medical necessity, incentives to use certain providers, and case management. The body of clinical, financial and organizational activities designed to ensure the provision of appropriate health care services in a cost-efficient manner. Managed care techniques are most often practiced by organizations and professionals which assume risk for a defined population (e.g., health maintenance organizations) but this is not always the case. Managed care is a broad term and encompasses many different types of organizations, payment mechanisms, review mechanisms and collaborations. Managed care is sometimes used as a general term for the activity of organizing doctors, hospitals, and other providers into groups in order to enhance the quality and cost-effectiveness of health care. Managed Care Organizations (MCO) include HMO, PPO, POS, EPO, PHO, IDS, AHP, IPA, etc. Usually when one speaks of a managed care organization, one is speaking of the entity which manages risk, contracts with providers, is paid by employers or patient groups, or handles claims processing. Managed care has effectively formed a "go-between", brokerage or 3rd party arrangement by existing as the gatekeeper between payers and providers and patients. The term managed care is often misunderstood, as it refers to numerous aspects of healthcare management, payment and organization. It is best to ask the speaker to clarify what he or she means when using the term "managed care". In the purest sense, all people working in healthcare and medical insurance can be thought of as "managing care." Any system of health payment or delivery arrangements where the plan attempts to control or coordinate use of health services by its enrolled members in order to contain health expenditures, improve quality, or both. Arrangements often involve a defined delivery system of providers with some form of contractual arrangement with the plan. See Health Maintenance Organization, Independent Practice Association, Preferred Provider Organization.

Managed competition

A health insurance system that bands together employers, labor groups and others to create insurance purchasing groups; employers and other collective purchasers would make a specified contribution toward insurance purchase for the individuals in their group; the employer's set contribution acts as an incentive for insurers and providers to compete. This term first surfaced as a result of Bill Clinton's health reform package in the early 90s.

Management Information System (MIS)

The common term for the computer hardware and software that provides the support of managing the plan.

Mandated Benefits

Benefits that health plans are required by law to provide.

Manual Rates

Rates based on a health plan's average claims data and adjusted for certain factors, such as group demographics or industry.

Market Basket Index

A common term in the field of economics. In healthcare business, this refers to a ratio or index of the annual change in the prices of goods and services providers used to produce health services.Different market baskets exist for PPS based hospital inputs and capital inputs, DRG exempt facility operating inputs (such as SNF, home health agency and renal dialysis facility). Also called input price index.

Maximum allowable actual charge (MAAC)

A limitation on billed charges for Medicare services provided by nonparticipating physicians. For physicians with charges exceeding 115 percent of the prevailing charge for nonparticipating physicians, MAACs limit increases in actual charges to 1 percent a year. For physicians whose charges are less than 115 percent of the prevailing, MAACs limit actual charge increases so they may not exceed 115 percent.

Maximum out-of-pocket expenses

Limit on total number of co-payments or limit on total cost of deductibles and co-insurance under a benefit plan.

McCarran-Ferguson Act

A 1945 Act of Congress exempting insurance businesses from federal commerce laws and delegating regulatory authority to the states.

Medicaid (Title XIX)

Government entitlement program for the poor who are blind, aged, disabled or members of families with dependent children (AFDC). Each state has its own standards for qualification. A Federally aided, state-operated and administered program which provides medical benefits for certain indigent or low-income persons in need of health and medical care. The program, authorized by Title XIX of the Social Security Act, is basically for the poor. It does not cover all of the poor, however, but only persons who meet specified eligibility criteria. Subject to broad Federal guidelines, states determine the benefits covered, program eligibility, rates of payment for providers, and methods of administering the program. All states but Arizona have Medicaid programs.

Medical Group Practice

The American Group Practice Association, the American Medical Association, and the Medical Group Management Association define medical group practice as: provision of health care services by a group of at least three licensed physicians engaged in a formally organized and legally recognized entity sharing equipment, facilities, common records and personnel involved in both patient care and business management.

Medical Loss Ratio (MLR)

Cost ratio of total benefits used compared to revenues received. Usually referred to by a ratio, such as 0.96--which means that 96% of premiums were spent on purchasing medical services. The goal is to keep this ratio below 1.00--preferably in the 0.80 range, since the MCO's or insurance company's profit comes from premiums. Currently, successful HMOs do have MLRs in the 0.70-0.80 range.  The ratio between the cost to deliver medical care and the amount of money that was taken in by a plan. Insurance companies often have a medical loss ratio of 96 percent or more: tightly managed HMOs may have medical loss ratios of 75 percent to 85 percent, although the overhead (or administrative cost ratio) is concomitantly higher. See also Loss Ratio and Incurred Claims Loss Ratio.

Medically Necessary - Medical Necessity

Services or supplies which meet the following tests: They are appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition; They are provided for the diagnosis or direct care and treatment of the medical condition; They meet the standards of good medical practice within the medical community in the service area; They are not primarily for the convenience of the plan member or a plan provider; and They are the most appropriate level or supply of service which can safely be provided.

Medically needy

Persons who are categorically eligible for Medicaid and whose income, less accumulated medical bills, is below state income limits for the Medicaid program. Often seen as a problem among the "working poor" or among the senior population. See spend down.

Medical management information system (MMIS)

A data system that allows payers and purchasers to track health care expenditure and utilization patterns.

Medical savings account (MSA)

An account in which individuals can accumulate contributions to pay for medical care or insurance. Some states give tax-preferred status to MSA contributions, but such contributions are still subject to federal income taxation. MSAs differ from Medical reimbursement accounts, sometimes called flexible benefits or Section 115 accounts, in that they need not be associated with an employer. MSAs are not currently recognized in federal statute.

Medical Underwriting

The federal health benefit program for the elderly and disabled that covers over 35,000,000 beneficiaries or over 14% of the US with an annual cost of over $120 billion. Medicare pays for 25% of all hospital care and 23% of all physician services. This high cost is the source of constant debate in Congress. This refers to the Medicare program, the largest single payer in US.

Medicare (Title XVIII)

A federal program for the elderly and disabled, regardless of financial status. It is not necessary, as with Medicaid, for Medicare recipients to be poor. A U.S. health insurance program for people aged 65 and over, for persons eligible for social security disability payments for two years or longer, and for certain workers and their dependents who need kidney transplantation or dialysis. Monies from payroll taxes and premiums from beneficiaries are deposited in special trust funds for use in meeting the expenses incurred by the insured. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B). Medicare covers more than 34 million Americans (16% of population) at an annual estimated cost of more than $133 billion.

Medicare approved charge

The amount Medicare approves for payment to a physician. Typically, Medicare pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. Physicians may bill beneficiaries for an additional amount (the balance) not to exceed 15 percent of the Medicare approved charge. See balance billing.

Medicare Cost Report (MCR)

An annual report required of all institutions participating in the Medicare program. The MCR records each institution's total costs and charges associated with providing services to all patients, the portion of those costs and charges allocated to Medicare patients, and the Medicare payments received.

Medicare supplement policy

A policy that pays for the cost of services not covered by Medicare.

Medigap

Private health insurance plans that supplement Medicare benefits by covering some costs not paid for by Medicare.

Mental Health Provider

Psychiatrist, social worker, hospital or other facility licensed to provide mental health services.

Midlevel Practitioner

Nurse practitioners, certified nurse-midwives and physicians' assistants who have been trained to provide medical services that otherwise might be performed by a physician. Midlevel practitioners practice under the supervision of a doctor of medicine or osteopathy who takes responsibility for the care they provide. Physician extender is another term for these personnel.

Miscellaneous Expenses

Hospital charges, other than room and board, such as those for x-rays, drugs, laboratory fees, and other ancillary services.

Modified fee-for-service

System that pays providers fees for services provided, with certain maximum fees for each service. See also Fee for Service, Benefits, Preferred Providers.

Morbidity

The extent of illness, injury, or disability in a defined population. It is usually expressed in general or specific rates of incidence or prevalence.

Mortality

Death. Used to describe the relation of deaths to the population in which they occur. The mortality rate (death rate) expresses the number of deaths in a unit of population within a prescribed time and may be expressed as crude death rates (e.g., total deaths in relation to total population during a year) or as death rates specific for diseases and, sometimes, for age, sex, or other attributes (e.g., number of deaths from cancer in white males in relation to the white male population during a given year).

Multiple employer welfare arrangement (MEWA)

As defined in 1983 Erlenborn ERISA Amendment, an employee welfare benefit plan or any other arrangement providing any of the benefits of an employee welfare benefit plan to the employees of two or more employers. MEWAs that do not meet the ERISA definition of employee benefit plan and are not certified by the U.S. Department of Labor may be regulated by states. MEWAs that are fully insured and certified must only meet broad state insurance laws regulating reserves.

Multiple Option Plan

Health care plan that lets employees or members choose their own plan from a group of options, such as HMO, PPO or major medical plan. See also Cafeteria Plan or Flexible Benefits Plan.

Multi-specialty Group

A group of doctors who represent various medical specialties and who work together in a group practice.