Glossary (A)

A  B  C  D  E  F  G  H  I  J  L  M  N  O  P  Q  R  S  T  U  V  W


A patient’s ability to obtain appropriate health care services as needed.

Accident Fund Company

An independent, for-profit subsidiary of BCBSM that offers workers’ compensation and administrative services to employers.

accidental injury

Any physical damage caused by an action, object or substance outside the body. This includes: strains, sprains, cuts and bruises; allergic reactions caused by an outside force such as a bee sting or another insect bite; burns, frostbite, sunburn, sunstroke; swallowing poisons; drug overdosing; inhaling smoke, carbon monoxide or fumes; attempted suicide.


The formal evaluation of an organization or a program by an external body according to certain predetermined standards. The process is often carried out by a private organization created for the purpose of assuring the public of the quality of an institution or program. For example, the National Committee for Quality Assurance, a nationally recognized independent organization, evaluates managed care plans using objective, scientific measures. See also NCQA.

activities of daily living

An index or scale that measures an individual’s degree of independence in bathing, dressing, using the toilet, eating and moving across a small room.

actual acquisition cost

Amount pharmacies actually pay for drugs, less any discounts, rebates and price or trade concessions.

actual charge

The amount a health care provider would bill a patient for a particular medical service or procedure if there were no participation arrangement with a health care plan.

acute care facility

A facility that offers a wide range of medical, surgical, obstetric and pediatric services. These facilities primarily treat patients with conditions that require a hospital stay of fewer than 30 days. The facility is not used primarily for custodial, convalescent, tuberculosis or rest care; care of the aged or substance abusers; skilled nursing or other nursing care.


The Blues’ process — automated or manual — of determining the allowable payments on a particular claim. This process examines factors such as eligibility, medical necessity, coverage, etc.

administrative costs

Blues’ costs for such services as claims processing, billing and overhead.

administrative services contract

An agreement under which the Blues, for a fee, handle claims and other administrative services for a self-funded group plan.


Entry to a facility as an inpatient to treat a medical condition.

admission certification

Process to determine whether an admission is medically necessary for the type of services to be received by a member. This determination can be granted before admission (preadmission) or shortly after (concurrent). It also includes the number of days the member would be eligible for benefits during the admission. See also preauthorization. See also precertification. See also predetermination.

advance directive

A written statement, recognized by state law, of a patient’s wishes for health care should the individual not be able to make such decisions. The two types of advance directives include Durable Power of Attorney for Health Care, used in Michigan, and living wills, which are not authorized by Michigan law. See also Durable Power of Attorney for Health Care.

adverse selection

A health plan’s tendency to have a larger proportion of individuals who are more likely to file claims and use services because of their poor health risk, while persons with better health enroll in other plans.

age or sex rating

A method of structuring capitation payments based on member age and gender.

allowable amount, allowable charge

The maximum dollar amount that the Blues will pay a provider for a given service or procedure as negotiated.

alternative delivery system

Any type of health care delivery system other than traditional fee-for-service health care. Most managed care organizations are called alternative delivery systems.

alternative funding arrangement

Any funding arrangement other than one that is fully underwritten, such as are self-insured and partially self-insured groups. Also called flexible funding.

alternative medicine

Therapeutic practices and medical interventions that do not follow conventional biomedical explanations. Alternative therapies include, but are not limited to, the following disciplines: folk medicine, herbal medicine, homeopathy, faith healing, new age healing, acupuncture, naturopathy, massage and music therapy.

ambulatory care

Medical services provided on an outpatient basis, including in an office, where no overnight stay in a health care facility is required. Although this term may be used as if synonymous with outpatient, some outpatient services may be excluded.

ambulatory surgery

Elective surgery that is performed in a hospital rather than in a doctor’s office but does not require an overnight stay.

ambulatory surgery facility

A freestanding outpatient surgery facility — not a physician’s office or other private practice office — offering surgery and related care that can be safely performed without the need for overnight, inpatient hospitalization.

ancillary services

Services exclusive of room, board and nursing care that supplement the primary care the patient receives, such as drugs, dressings, laboratory services or physical therapy.

anniversary date

The first effective day of a 12-month period of coverage for members of a group, which may not conform to a calendar year that starts Jan. 1 and ends Dec. 31.


The ability of a professional provider, facility or member to have a previous decision reviewed.

approved amount

The lesser amount between the billed charge and our maximum payment for the covered service. Any required copayments and deductibles are subtracted from this amount before payment is made.

approved facility

A specialized facility (outpatient psychiatric, hospice, skilled nursing) approved by the Blues to provide services to members.

area rating

See community rating.


An agreement between a provider of services and a health care payer (Medicare or BCN) by which the provider, in accepting a member for treatment also accepts the payment arrangement of the payer.

attending physician

The doctor who accepts treatment or billing responsibility for a patient’s care.


Programs developed to approve the care given to Blues members. Care that is not authorized can result in payment reductions or denials. Also referred to as precertification. See also preauthorization. See also precertification. See also predetermination.