1. Practice of a provider to charge a higher fee to patients with private health insurance plans to make up for underpayment of fees for patients under Medicare, Medicaid, or managed care plans. 2. Practice of a provider charging a group of one managed care plan more than another for the same procedure. One reason this may occur is that one group may have large discounts from the provider or not adequately reimburse the provider for expenses. To make up for the shortage in revenue, the provider may charge another managed care group more.

Method in which a hospital facility is paid for outpatient services by Medicare based on the hospital’s last audited cost report.

Type of managed care organization (MCO) that will pay for all of the enrollees’ (members’) medical care costs in return for a monthly premium, plus any applicable deductible or copayment. The HMO will pay for all hospital costs (generally referred to as Part A ) and physician costs (generally referred to as Part B ) that it has arranged for and ordered. Like a health care prepayment plan (HCPP), except for out-of-area emergency services, if a Medicare member (enrollee) chooses to obtain services that have not been arranged by the HMO, he or she is liable for any applicable deductible and coinsurance amounts, with the balance to be paid by the regional Medicare fiscal intermediary and/or carrier.

Insurance payment that is based on the cost of health care services in which allowable costs are determined by the insurer. This method is used by some insurance plans or programs but is being replaced by prospective payment. Also called cost-related reimbursement.

Evaluation method that measures the insurance program’s economic benefits to the program’s medical care over a period of time expressed in dollar amounts. This is done to see if future health care costs can be reduced and earnings increased because of improved health of the members of a health plan.
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Procedure for comparing the costs of any proposal with the benefits of that proposal, in order to determine the proposal’s relative value.

To increase monthly benefits in disability income benefit, pension benefit, or life income benefit to make up for a change in the cost of living. Also known as cost of living rider.