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Fail First Requirements - Drug plans may need an enrollee to try one drug before the plan will pay for another drug. Step therapy aims to control costs by requiring that enrollees use more ordinary drugs which are usually less expensive. The process of beginning drug therapy for a medical condition with the most cost-effective and safest drug therapy and succeeding to other more costly or risky therapy is called Step Therapy or Fail First Requirement.

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Favorable Selection - Choice of subscribers or covered lives based on data that shows a propensity for utilization of health services in that population group to be lower than expect or estimated.

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Federal Bureau of Investigation (FBI) - As an organization under the DOJ, the FBI investigates violations of federal criminal law and provides law enforcement assistance to federal, state, local and international agencies. The FBI has investigated hospitals for deception and abuse.

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Federal Employee Health Benefits Program (FEHBP) - A charitable health insurance program for federal employees, retirees, and their dependents and survivors.

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Federal Medicaid Managed Care Waiver Program - The process used by States to obtain permission to implement managed care programs for their Medicaid or other categorically eligible beneficiaries.

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Federally Qualified Health Center (FQHC) - A federal payment option that enables capable providers in medically underserved areas to receive cost-based Medicare and Medicaid reimbursement and allows for the direct payment of nurse practitioners, physician assistants and certified nurse midwives. Many outpatient clinics and subject outreach services are qualified under this provision that was enacted in 1989.

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Federally Qualified HMO - A prepaid health plan that has met strict central standards and has been granted qualification status. A federally qualified HMO is qualified for loans and loan guarantees not available to non-qualified plans. Employers of 25 or more workers were, until recently, required to offer a federally practiced HMO if the plan requested to be included in the company's health benefits program.

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Federal Qualification - A status selected by CMS after conducting an extensive evaluation of an HMO's organization and operations. An organization must be federally capable or be designated as a competitive medical plan (CMP) to be eligible to participate in Medicare and cost and risk contracts.

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Fee Disclosure - Physicians and caregivers discussing their charges with patients preceding to treatment.

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Fee-For-Service (FFS) - Traditional technique of payment for health care services where specific payment is made for specific services rendered. Usually people talk of this in contrast to capitation, DRG or per diem discounted rates, none of which are similar to the traditional fee for service method of reimbursement. Under a fee-for-service payment system, expenditures increase if the fees themselves increase, if more units of service are provided, or if more expensive services are substituted for fewer expensive ones.

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Fee Schedule - A listing of conventional fees or established allowances for specified medical procedures. As used in medical care plans, it usually represents the maximum amounts the program will pay for the particular procedures. The fee resolute by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full.

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Fiduciary - Concerning to, or founded upon, a trust or confidence. A fiduciary relationship exists where an individual or organization has an explicit or implicit responsibility to act in behalf of another person's or organization's interests in matters which affect the other person or organization.

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Financial Services Modernization Act - Legislation that allows meeting among the traditionally separate components of the financial services industry banks, securities firms, and insurance companies.

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First Dollar coverage - Insurance coverage with no front-end deductible where exposure begins with the first dollar of expense incurred by the insured for any covered benefit.

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Fiscal Intermediary - The agent that has contracted with providers of service to procedure claims for reimbursement under health care coverage. In addition to treatment for financial matters, it may perform other functions such as providing consultative services or serving as a center for communication with providers and making audits of providers' needs.

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Fiscal Soundness - The condition that managed care organizations have sufficient operating funds, on hand or available in reserve, to cover all expenses associated with services for which they have assumed financial risk.

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Fixed Costs - Costs that do not change with fluctuations in census or in use of services.

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Flat Fee-Per-Case - Flat fee paid for a client's treatment based on their analysis and/or presenting problem. For this fee the providers cover all of the services the client requires for a specific period of time. Often characterizes "second generation" managed care systems. After the MCOs press out costs by discounting fees, they often come to this method.

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Flexible Benefit Plan - Program accessible by some employers in which employees may choose among a number of health care benefit options.

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Flexible Spending Account (FSA) - A plan that provides employees an option between taxable cash and non-taxable benefits for unreimbursed health care expenses or dependent care expenses. This plan qualifies below Section 125 of the IRS Code.

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Formatting and Protocol Standards - Data exchange principles which are needed between CPR systems, as well as CPT and other provider systems, to ensure consistency in methods for data collection, data storage and data presentation. Proactive providers are present in their knowledge of these standards and work to ensure their information systems conform to the standards.

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Formulary - An accepted list of prescription drugs; a list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost efficient for patient care. Organizations often enlarge a formulary under the aegis of a pharmacy and therapeutics committee. When used by hospitals or clinics, a formulary is planned as a recommendation usually and not considered a requirement.

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Formulation Substitution - As patients and prescription benefit plans request to lower their healthcare costs, they may substitute a less exclusive therapeutically equivalent drug for a more costly drug. Formulation replacement can include switching from a brand-name drug to a generic drug, switching from one generic drug to another generic drug, or switching from a generic drug to a brand-name drug.

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Fully Funded Plan - A health plan under which an insurer or MCO bears the financial liability of guaranteeing claim payments and paying for all incurred covered benefits and administration costs.

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Functional Health Status - Refers to a patient's capacity to execute typical daily physical and social or role functions, plus other events of self-perceived health position such as well-being, vitality and mental health.

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Funding Level - Amount of income required to finance a medical care program.

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Funding Method - System for employers to pay for a health income plan. Most frequent methods are prospective and / or display premium payment, shared risk collection, self-funded, or refunding products.

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Funding Vehicle - In a self-funded plan, the account into which the money that an employer and employees would have salaried in premiums to an insurer or MCO is deposited until the money is paid out.

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Fraud - Intentional misrepresentations that can effect in criminal prosecution, civil liability and administrative sanctions. This is a broad description and can be applied in many different circumstances.

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Freedom of Choice - A principle of Medicaid that allows a receiver the freedom to choose among participating Medicaid providers. This term is also used by insurance plans to indicate that subscribers may use the providers of their choice.

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