System of establishing rates in which the current year’s insurance premium is calculated to give the actual current year’s loss experience (usage of health care). Gains may be returned by rate credits or increase of benefits or cash, and deficiencies are obtained through a recovery factor in the rates or cash. Also called retrospective rate derivation .

Payment made to a provider by the insurance company for actual costs or charges incurred by the insured during the previous time period. Also called retroactive reimbursement .

Method that sets the payment rate for hospital services after services have been provided.

1. In external auditing, process of going over financial documents after billing an insurance carrier to determine documentation deficiencies and errors. Also called retrospective payment audit . 2. In utilization review, evaluation of medical services given to a patient to make sure the insurance claims are paid for appropriate care (i.e., medical necessity, quality of care, physicians’ practice patterns, hospitals’ average length of stay, and reasonableness of services given).