Sanction

Reprimand of a provider by a health plan.

Secondary care

Services provided by medical specialists who generally do not have first contact with patients (e.g., cardiologist, urologists, dermatologists). In the U.S. , however, there has been a trend toward self-referral by patients for these services, rather than referral by primary care providers. This is quite different from the practice in England , for example, where all patients must first seek care from primary care providers and are then referred to secondary and/or tertiary providers, as needed.

Secondary Coverage

Health plan that pays costs not covered by primary coverage under coordination of benefits rules. Any insurance that supplements Medicare coverage. The three main sources for secondary insurance are employers, privately purchased Medigap plans, and Medicaid.

Self-Funding

Employer or organization assume complete responsibility for health care losses of its covered employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization. In this case, the employer does not pay premiums to an insurance carrier, but, rather pays administrative costs to the insurance company or health plan, and, in essence, treats them as a third party administrator (TPA) only. However, the employee may not be able to detect any difference because the plan description and membership card may carry the name of the insurance company not the employer. Same as self-insured, see below.

Self-Insurance or Self-Insured

This term is usually used to describe the type of insurance which an employer provides. When an employer is self-insured, this means that the payer or managed care company manages the employer's funds whether than requiring the employer to pay premiums. Many employers choose to self-insure because they are then exempted from certain insurance laws and also think that they will spend less money in the short run. Employers assume the risks involved and also have full rights to all insurance claim information. Typically, the self-insured employer is a large employer. The employees or patients will not be able to discern if their employer is self-insured easily since all paperwork or benefits cards usually contain the name of the insurance company.

Sentinel Event

An adverse health event that may have been avoided through appropriate care or alternate interventions. Providers are required to alert JCAHO and often state licensing authorities of all sentinel events, including a review of risk factors, preventative measures and case analysis.  

Site-of-Service Differential

The difference in the monies paid when the same service is performed in different practice setting or by a different provider. One example would be an examination in an ER versus in a family doctor's office.

Skilled Nursing Facility (SNF)

A licensed institution, as defined by Medicare, which is primarily engaged in the provision of skilled nursing care. SNFs are usually DRG or PPS exempt and are located within hospitals, but, sometimes are located in rehab facilities or nursing homes.

Small-group market

The insurance market for products sold to groups that are smaller than a specified size, typically employer groups. The size of groups included usually depends on state insurance laws and thus varies from state to state, with 50 employees the most common size.

Solo Practice

A physician who practices alone or with others but does not pool income or expenses. This form of practice is becoming increasingly less common as physicians band together for contracting, overhead costs and risk sharing.

Specific Stop Loss

The form of excess risk coverage that provides protection for the employer against high claim on any one individual. This is protection against abnormal severity of a single claim rather than abnormal frequency of claims in total. Also see Reinsurance and Stop Loss.

Spend down

A term used in Medicaid for persons whose income and assets are above the threshold for the state's designated medically needy criteria, but are below this threshold when medical expenses are factored in. The amount of expenditures for health care services, relative to income, that qualifies an individual for Medicaid in States that cover categorically eligible, medically indigent individuals. Eligibility is determined on a case-by-case basis.

Subrogation

Procedure where insurance company recovers from a third party when the action resulting in medical expense (e.g. auto accident) was the fault of another person. The recovery of the cost of services and benefits provided to the insured of one health plan when other parties are liable.

Subscriber

Person responsible for payment of premiums, or person whose employment is the basis for membership in a health plan.

Subscriber contract

A written agreement that describes the individual's health care policy. Also called subscribe certificate or member certificate.

Summary Plan Description (SPD)

In self-funded plans, a written explanation of the eligibility for and benefits available to employees required by ERISA.

Supplemental Security Income (SSI)

A federal cash assistance program for low-income aged, blind and disabled individuals established by Title XVI of the Social Security Act. States may use SSI income limits to establish Medicaid eligibility.

Supplemental Services

Optional services a health plan covers or provides.

Supplemental Insurance

Any private health insurance plan held by a Medicare beneficiary or commercial beneficiary, including Medigap policies and post-retirement health benefits. Supplemental usually pays the deductible or co-pay and sometimes will pay the entire bill when the primary carrier's benefits are exhausted.

Supplemental Medical Insurance (SMI)

Part B of the Medicare program. Part B normally covers the outpatient services, as opposed to Part A which covers inpatient. This voluntary program requires payment of a monthly premium, which covers 25 percent of pro-ram costs. Beneficiaries are responsible for a deductible and coinsurance payments for most covered services. See also Part B.

Surplus Lines Tax

A tax imposed by state law when coverage is placed with an insurer not licensed or admitted to transact business in the state where the risk is located. Unlike premium tax for admitted insurers, the surplus lines tax is not included in the premium and must be collected from the policy holder and remitted to the state.

Stop Loss Insurance

Insurance purchased by an insurance company or health plan from another insurance company to protect itself against losses.  Reinsurance purchased to protect against the single overly large claim or the excessively high aggregated claim during a set period. Also see Reinsurance and Specific Stop Loss.