Healthcare Glossary

 

A

 

Advance Premium Tax Credit (APTC):
Tax credits to help reduce the cost of health care premiums. The premium tax credits assist middle-class Americans to make it easier for them to purchase affordable health insurance.

 

Adverse Selection:
Adverse selection occurs when insurers must cover high-risk members, who tend to use their insurance benefits more. Health insurance is most efficient when risk is shared among large numbers of members. In large, diverse populations, healthy members offset the costs of unhealthy members.

 

Affordable Care Act (ACA or Obamacare):
A shortened term for the Patient Protection and Affordable Care Act (PPACA). “Obamacare” is another term people use when they talk about this law. The Affordable Care Act includes changes that expand access to coverage, control health care costs, and strive to improve health care delivery for U.S. citizens and legal residents. By 2014 most U.S. citizens and legal residents are required to have health insurance coverage or pay a penalty. The ACA includes multiple provisions that will take effect over a period of years, the establishment of a Health Insurance Marketplace (also called an “exchange”) and the prohibition of health insurers from denying coverage due to pre-existing conditions.

 

Allowed amount:

The fee on which payment is based for a covered health care service. If your provider charges more than this amount, you may have to pay the difference. For example, if the allowed amount is $100 and the doctor charges $150, you may be responsible for the $50 difference. Allowed amount may also be called “eligible expense,” “payment allowance,” or “negotiated rate.”

 

Ambulatory Care:

A general term for care that doesn’t involve admission to a hospital as an inpatient. Visits to a doctor’s office are a type of ambulatory care.

 

Ancillary Provider:

A physician, hospital, clinic or lab that provides diagnostic and/or supportive services such as radiology, physical therapy, pharmacy or laboratory work.

 

Authorization:

Required approval from the health plan before a non-emergency hospital stay or outpatient procedure. Also referred to as prior authorization and pre-certification.

 

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B

 

Balance billing:

When a provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred (“in-network”) provider may not balance bill you for covered services.

 

Benefits:

The services or procedures covered by your health insurance plan.

 

Benefit Limit:
The maximum amount that the Health Plan will pay for a Covered Service. The Benefit Limit may be expressed in many ways, such as a dollar amount, number of days, or number of services.

 

Benefit Period:
The period during which benefits will be paid under a health insurance plan.

 

Brand-name drug:
A medication sold by a pharmaceutical company under a trademarked name. Brand-name medications can only be produced and sold by the company that holds the patent for the drug. When patents run out, generic versions of many popular drugs become available at a lower cost.

 

Broker: Licensed insurance salesperson

 

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C

 

Catastrophic (Major Events) Insurance:

A type of coverage designed to protect you financially in the event of a major health event or emergency, such as a heart attack or accident. This type of insurance usually has a low monthly premium with a high deductible. You take on more out-of-pocket expenses in exchange for lower premiums.

 

Children’s Health Insurance Program (CHIP):

A federal program that provides health coverage to families with incomes too high to qualify for Medicaid, but without the resources to afford private coverage. Signed into law in 1997, CHIP provides federal matching funds to states to provide this coverage.

 

Chronic Care Management:

The coordinated efforts of health care professionals to help patients with chronic diseases such as diabetes, high blood pressure, lupus and asthma to understand their condition and live with it successfully.

 

Claim:
A bill for health care services that a provider submits to an insurance company for payment.

 

Consolidated Omnibus Budget Reconciliation Act (COBRA):

A federal law that requires employers to offer continuous health care coverage on a temporary basis to employees and their dependents who would otherwise lose coverage due to termination of employment or other factors. Under the Affordable Coverage Act, individuals will be required to find replacement coverage or risk incurring a tax penalty once their COBRA coverage ends.

 

Coinsurance:
The specific percentage of the provider’s charge that you are responsible for paying. For example, if your coinsurance is 20%, you pay 20% of the charge and the Health Plan pays 80% of the allowed amount. Coinsurance requirements are specified in the plan documents.

 

Community Rating:
A rule that prevents health insurers from creating various premiums within a geographic area based on age, gender, health status or other factors.

 

Contract Year:

Time period that runs from the effective date to the expiration date of the health insurance contract. Used primarily to measure and calculate when a member has met deductibles, out-of-pocket limits, etc.

 

Copayment:
A specific dollar amount you are required to pay providers. Copayments may vary by type of service, for example, a PCP visit, specialist visit, or emergency department visit.

 

Cost-sharing:
The share of costs for covered services that you must pay out of your own pocket. This term usually includes deductibles, copayments, and co-insurance.

 

Cost Sharing Reduction (CSR):
Effective in 2014, the Affordable Care Act includes two kinds of cost savings to help make health insurance more affordable for working families and people with modest incomes. (These are sometimes referred to as “subsidies.”) One kind of savings is called a cost-sharing reduction (CSR). These help lower the amount you might pay for out-of-pocket costs at the time you receive care. Many working families and individuals with modest incomes may be eligible for cost-sharing reductions. The government determines eligibility for CSRs based on household income and family size. (Also refer to Advanced Premium Tax Credits)

 

Coverage Gap:

The time period between the expiration of one policy and the commencement of another.

 

Coverage Period:

The time period during which you have health care coverage.

 

Covered service:
A health care service that is eligible under your plan.

 

Creditable Coverage:

Health insurance coverage that a beneficiary had before enrolling in the current health plan. Generally includes a period of coverage not interrupted by 63 or more days. Coverage must be at a certain level to be creditable.

 

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D

 

Deductible:
The annual dollar amount that you may be required to pay before your health insurance plan will begin to pay any portion of your medical claims. For example, if your deductible is $1000, your health insurance plan will not pay anything until you’ve met your $1000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.

 

Denied:

When services are not covered under your plan, the claim is denied. The plan explains why it did not pay the claim on the Explanation of Benefits (EOB).

 

Dependent:
A person covered under a health plan who is not the primary enrollee or policyholder, usually a spouse or child.

 

Diagnostic Services:

Laboratory tests (such as blood work and urine tests) and imaging tests (such as x-ray, ultrasound, CT scan and MRI) used to identify a disease or other medical problem.

 

Durable medical equipment (DME):
Equipment and supplies ordered by a health care provider for everyday or extended use. Coverage for DME may include oxygen equipment, wheelchairs, crutches, or blood testing strips for diabetes.

 

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E

 

Effective date:
The date on which your coverage begins. The effective date is found in your acceptance letter and on your plan documents.

 

Eligibility:

Details contained in each health insurance plan that specify who qualifies for coverage under that plan.

 

Eligible Procedure:

Medical service that qualifies for coverage under a specified health insurance plan.

 

Emergency medical condition:
An illness, injury, symptom, or condition so serious that a reasonable person would seek care right away to avoid severe harm.

 

Employer-Sponsored Insurance:

Insurance coverage provided to employees and, in some cases, their spouses and children, through an employer.

 

Essential Health Benefits (EHB):
A specific set of health benefits, items, and services that must be covered by health plans in the individual and small group markets beginning in 2014. The 10 categories of essential health benefits (EHBs) include:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

 

Exchange:
See Health Insurance Marketplace.

 

Excluded services:
Health care services that your plan doesn’t cover.

 

Exclusive Provider Organization (EPO):
With this plan, you are not required to select a PCP as a “gatekeeper” in making referrals to specialists. But an EPO does require you to receive care from a defined network of physicians and facilities to be covered.

 

Explanation of Benefits (EOB):
After a claim has been submitted, you will receive a written (or electronic) statement (not a bill) from the Health Plan that shows covered and non-covered benefits and payments as well as charges that may be your responsibility.

 

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F

 

Federally-Facilitated Exchange (FFE):
A Health Insurance Marketplace operated primarily by the Federal government for consumers who live in a particular state.

 

Flexible Spending Account (FSA):
An arrangement you set up through your employer to pay for many of your out-of-pocket medical expenses – such as copayments — with tax-free dollars. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money.

 

Formulary:
A list of prescription drugs covered by your plan. Drugs can fall into different categories, or tiers, that are covered at different payment levels. These different categories are determined based on the drug’s cost, efficacy, or other considerations. Also known as drug lists, formularies are reviewed and modified on a regular basis.

 

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G

 

Generic medication:
A medication that has the same active ingredients as a brand-name drug. Inactive ingredients can vary, such as dyes used to color the drug or powders used to shape the tablets. These differences do not affect how generic medications work in the body. Generics are cost-effective alternatives that offer the same level of safety and quality as their brand-name equivalents.

 

Grace Period:

A specified period of time allowed after a premium payment is due during which payment will still be accepted without loss of coverage.

 

Group Coverage/Group Health Insurance:

Health insurance that is offered to a group of people, such as employees of a company. The majority of Americans have group health insurance through their employer or their spouse’s employer.

 

Guaranteed Issue:
Refers to insurance coverage that must be issued, without regard to health status, use of services or pre-existing conditions. This requirement ensures that no one will be denied coverage for any reason.

 

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H

 

Health incentive account (HIA):
An account administered by the Health Plan. Funds accumulate as you complete healthy activities, selected by you from a list of more than 150 approved activities. To be eligible, you must be a member of our Goals Plan.

 

Health Insurance Marketplace (the Exchange):
A system through which insurers offer health insurance to smaller employers and individuals. Qualified health plans (QHPs) offered in the Health Insurance Marketplace (also called the “exchange”) will be sold and administered by private companies that meet standards established by the U.S. government. These insurers will offer a choice of different health plans that are required to provide the same essential health benefits. Insurers must provide clear information that helps consumers understand their options.

 

Health Maintenance Organization (HMO):

An organization that provides managed care through a network of doctors, hospitals and other providers on a prepaid basis. Unlike traditional health insurance, an HMO offers care through doctors and other health care professionals and organizations that have contracted to treat patients according to the HMO’s guidelines in exchange for a steady stream of customers.

 

Health savings account (HSA):
A tax-advantaged savings account that allows you to set aside money to pay for current health care costs or save for anticipated future expenses. To be eligible, you must be covered by a qualified high-deductible health plan, such as the Savings Plan.

 

High-Deductible Health Plan (HDHP):

Health insurance plans that have higher deductibles but lower premiums than traditional plans. A deductible is the amount of health care costs that must be paid for by a consumer before his/her health insurance plan begins to pay for services. A qualified high-deductible plan that may be combined with a health savings account (HSA) must have a deductible of at least $1,250 for an individual and $2,500 for a family in 2013.

 

HIPAA (Health Insurance Portability and Accountability Act):
A federal law enacted in 1996, designed to improve availability, portability, and efficiency of health coverage. HIPAA also protects your personal health information (PHI) whether in oral, written, or electronic format. We will not use or disclose your PHI without your consent.

 

Home health care:
Health care services a person receives at home.

 

Hospice services:
Services to provide comfort and support to people in the last stages of a terminal illness.

 

Hospitalization:
When you receive care in a hospital that requires admission as an inpatient — usually requires an overnight stay.

 

Household income:
Modified adjusted gross income of the employee and any members of the employee’s family (including spouse and dependents) who are required to file an income tax return.

 

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I

 

Immunization:

A vaccination that induces immunity. A recommended schedule of immunizations for infants and young children include vaccines against diseases and conditions such as polio, tetanus, measles, mumps, rubella, etc.

 

Individual Mandate:
A key part of the Affordable Care Act which goes into effect January 1, 2014, includes the “individual mandate.” This mandate is another way of saying that most people living in the U.S. will be legally required to have “minimum essential” health insurance coverage by January 1, 2014, or possibly pay a tax penalty to the government.

 

Individual Insurance Market:

The market where individuals who do not have group (usually employer-based) coverage purchase private health insurance. This market is also referred to as the “non-group” market.

 

Individual policy:
Health coverage for individuals or families who are either self-employed, or who do not have health coverage through an employer or other group plan.

 

In-network:
Refers to care received from providers who participate in the Health Plan’s provider and/or hospital network. It’s important to know if your doctor is in the network, since the Health Plan provides a higher level of coverage for in-network providers.

 

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J

 

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K

 

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L

 

Liability:

An obligation for a specified amount or action.

 

Long-Term Care:

Services that include those needed by people to live independently in the community, such as home health and personal care, as well as services provided in institutional settings such as nursing homes. Medicaid is the primary payer for long-term care. Many of these services are not always covered by Medicare or private insurance.

 

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M

 

Maintenance Prescription:

Medicine prescribed for a chronic condition that must be taken on a regular, recurring basis—usually six months or longer. Often received at the discount via mail order.

 

Mandatory Benefits:

Benefits or services that a health insurer is required to cover in their insurance plans, per state and federal laws, such as mental health services, substance abuse treatment and breast reconstruction following a mastectomy. The number and types of these mandatory benefits vary across states. In 2014, under the Affordable Care Act, all new health insurance plans will have to cover 10 essential health benefits (EHBs) that have been standardized by the government.

 

Maternity Care:

Covers physician and hospital services for mother and baby from time of pregnancy through post-partum care.

 

Maximum:

The greatest amount of benefits that the health plan will provide for covered services within a prescribed period of time. This could be expressed in number of days or number of services. Note: Lifetime and annual dollar amount limits no longer apply on essential health benefits covered in 2014.

 

Maximum Benefit:

The maximum amount a plan will pay to a health care professional for billed services.

 

Medicaid:

A federal entitlement program that provides health and long-term care coverage to certain categories of low-income Americans. States design their own Medicaid programs within broad federal guidelines. Medicaid fills gaps in the health insurance system, finances long-term care coverage and helps sustain providers who serve the uninsured.

 

Medical Loss Ratio (MLR):
The percentage of your premium dollars that an insurance company spends on providing you with health care and improving the quality of your care, versus how much is spent on administrative and overhead costs.

 

Medically Necessary (or Medical Necessity):
Medical services or supplies that are appropriate and effective for the treatment of an illness or injury in accordance with clinical research findings or accepted medical standards, as described in the Covered Benefits section of individual plan documents.

 

Medicare:

A federal entitlement program that provides health insurance coverage to 45 million people including people age 65 and older, and younger people with permanent disabilities, end-stage renal disease and Lou Gehrig’s disease.

 

Minimum Creditable Coverage:

Minimal creditable coverage is the minimum level of benefits that must be included in a health insurance plan in order for you to be considered insured and avoid paying a tax penalty. In order to meet these standards, all qualified health plans (QHPs) must include the same essential health benefits (EHBs). For questions about your specific coverage and whether it meets minimal creditable coverage standards, contact your health insurance company.

 

Minimum essential coverage (MEC):
The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.

 

Minimum Value:
Coverage in which the plan’s share of the total allowed costs of benefits provided under the plan is at least 60 percent of such costs.

 

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N

 

Network:
Also called “provider network.” Physicians, hospitals, and other health care professionals who contract with your plan to provide services, typically at a negotiated rate of payment.

 

Non-Participating Provider:
This term is generally used to mean physicians, hospitals, and other health care professionals who have not contracted with a health plan to provide services. They may also be called “out-of-network providers.”

 

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O

 

Obamacare:

See Affordable Care Act

 

Open Enrollment Period:
The period of time when individuals are allowed to choose a new health plan. This usually occurs once a year.

 

Out-of-pocket Costs:
Costs not covered by the health insurance plan, such as co-payments, coinsurance, deductibles and fees, that the covered person pays personally when receiving health services or prescriptions.

 

Out-of-Pocket Limit or Maximum:
This is the maximum amount you could have to pay during a policy period (usually a year) before your health insurance plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges or health care that your health insurance plan does not cover.

 

Outpatient Care or Procedure:

Any health care service provided to a patient who is not admitted to a hospital. An outpatient procedure can take place in a doctor’s office, clinic, the home or a hospital outpatient department.

 

Over-the-counter medication:
Medication that may be obtained without a prescription.

 

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P

 

Palliative Care:

Medical care that focuses on providing patients with relief from the symptoms, pain and stress of a serious illness.

 

Participating Provider:
A physician, hospital, nursing facility, or other health care provider that has contracted with your plan to provide covered service for a negotiated charge. Also known as an “in-network provider.”

 

Patient Protection and Affordable Care Act (PPACA):

On March 23, 2010, President Obama signed comprehensive health reform legislation into law known as the Patient Protection and Affordable Care Act (PPACA). “Obamacare” is another term people use when they talk about this law. The PPACA includes changes that will expand access to coverage, control health care costs, and strive to improve health care delivery for U.S. citizens and legal residents. By 2014 most U.S. citizens and legal residents are required to have health insurance coverage or pay a penalty to the government. The PPACA includes multiple provisions that will take effect over a period of years, including the expansion of Medicaid eligibility, the establishment of health insurance exchanges and the prohibition of health insurers from denying coverage due to pre-existing conditions.

 

Plan Maximum:

The maximum dollar amount that an insurance company will pay under a given plan during a specific benefit period.

 

Preauthorization:

A decision by your health insurer or plan that a health care service, treatment plan, prescription or durable medical equipment is medically necessary. Also referred to as “prior authorization,” “prior approval” or “precertification.” Your health insurance plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization is not a promise that your health insurance plan will cover the cost.

 

Pre-existing Condition Exclusions:

An illness or medical condition for which a person received a diagnosis or treatment within a specified period of time prior to becoming insured. Health care providers can exclude benefits for a defined period of time for the treatment of medical conditions that they determine to have existed within a specific period prior to the beginning of coverage. Beginning in 2014, health insurers will be prohibited from denying coverage due to a pre-existing condition.

 

Preferred Drug List:

(Also known as a “formulary.”) A list of drugs your insurance plan covers. A drug’s formulary status may impact how much you pay for each drug.

 

Preferred Provider Organization (PPO):

A type of health insurance plan that provides medical services through a contract network of health care providers. A PPO also offers out-of-network coverage that is usually subject to either a higher deductible or lower coinsurance than in-network. In general, a PPO allows you to go to a specialist without having to obtain a referral from a primary care physician.

 

Premium:
The dollar amount you and/or your employer pay to your health insurance company each month to maintain your coverage.

 

Prescription drug:
A medication that cannot be dispensed without an order from a medical professional.

 

Preventive care:
Programs or services that can help maintain good health (such as annual physical exams or immunizations) or are meant to detect early signs of disease (such as mammograms and colon cancer screenings).

 

Preventive service:
A recommended routine health care service or screening that may be covered at no cost to you by your health plan.

 

Primary Care Provider/Primary Care Physician (PCP):
A physician who is part of your plan’s network and serves as your main point of contact for medical care. A PCP is usually a general or family care practitioner, or in some cases, an internist, pediatrician, or obstetrician-gynecologist.

 

Prior Authorization:
Some medical services/treatments and medications require Health Plan approval before they can be covered. The Health Plan requires prior authorization for medical services to determine whether the treatment or services are Medically Necessary and will be obtained in the appropriate setting. Prior Authorization is required before receiving the service/treatment. If a drug requires Prior Authorization, your doctor must consult with the Health Plan for approval for the medication to be covered. Prior Authorizations are set on a drug-by-drug basis and require specific criteria for approval based upon FDA and manufacturers’ guidelines, medical literature, safety concerns, and appropriate use.

 

Producer:
Licensed insurance salesperson.

 

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Q

 

Qualified Health Plan (QHP):
Under the Affordable Care Act, starting in 2014, an insurance plan that is certified by an Exchange, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each Exchange in which it is sold. It will offer coverage at a Bronze, Silver, Gold, or Platinum level.

 

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R

 

Rate:
Often referred to as insurance “premium,” it is the price you pay to acquire a certain amount of insurance protection.

Required contribution:
Portion of annual premium paid by an employee for employer-sponsored coverage.

 

Rider:
A provision or added feature in an insurance policy allowing for amendments to its terms and/or coverage.

 

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S

 

Self-Insured Plan:

A health benefit in which an employer funds the cost of claims. To protect the company again excessive claims, the employer may buy what is known as stop-loss coverage. A growing number of firms consider such plans to be low-cost alternatives to conventional coverage.

 

Small Business Health Options Program (SHOP):

Federal and state Health Insurance Marketplace programs (“exchanges”) that are open to small businesses. For 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time-equivalent employees (FTEs).

 

Small Group Market:

Firms with 2-50 employees can purchase health insurance for their employees through this market, which is regulated by states.

 

Specialist:
A physician who provides medical care in a medical or surgical specialty (e.g., a dermatologist, cardiologist, oncologist, etc.).

 

Summary of Benefits and Coverage (SBC):
A concise document detailing, in plain language, simple and consistent information about insurance coverage. The SBC helps a consumer better understand the coverage they have and allows them to easily compare different coverage options. It summarizes the key features of the plan.

 

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T

 

Tax credits for families:
Tax credits to help the middle class afford insurance will become available for those with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage.

 

Termination date:

(Also known as the “expiration date.”) The date on which an insurance policy expires or the date that an individual ceases to be eligible for plan benefits.

 

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U

 

Uncovered Services:

A medical service that a health insurance plan does not cover.

 

Urgent Care:

Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.

 

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V

 

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W

 

Waiting Period:

A specified period of time during which a health plan does not cover a member’s pre-existing condition(s). Beginning in 2014, health insurers will be prohibited from denying coverage due to a pre-existing condition.

 

Wellness Office Visit:

A physician’s office visit which is not prompted by sickness or injury.

 

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X

 

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Y

 

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Z

 

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