Source: Alliance for Health Reform
Health Care Reform Glossary of TermsActivities of Daily Living (ADL) - An index or scale which measures a patient's degree of independence in bathing, dressing, using the toilet, eating and transferring (moving from a bed to a chair, for example). Used to determine need for long-term care and eligibility for payments for care by insurers.
Administrative Services Only (ASO) Agreement - A contract typically between an insurance company and a self-funded plan or group of providers in which the insurance or management company performs only administrative services (billing, plan design, claim processing, marketing, for example) and does not assume any risk. Also see Self-Insurance.
Advanceable Tax Credit - A subsidy to help pay for health insurance that is available when the insurance premium is due, without having to wait until a year-end tax return is filed. Also see Tax Credit.
Ancillary Charge - The fee associated with additional services performed before, or secondary to, a significant procedure such as surgery. Ancillary charges are for services such as lab work, X-ray or anesthesia. Also, an additional patient charge above the copayment and deductible amount which the covered person is required to pay by the insurer.
Any Willing Provider - A requirement - typically a state law - that a managed care organization must accept any properly licensed provider willing to meet the terms of a plan's contract, whether the organization wants or needs that provider. Often described by managed care groups as "anti-managed care" legislation.
Appeal - A request for review of a denial of coverage of a particular medical service or inadequate payment for services already received. Medicare beneficiaries have the right to appeal in either of these circumstances, whether they are enrolled in traditional Medicare or in a Medicare health maintenance organization. Also see Grievance.
Assisted Living Facility (ALF) - A group residence offering 24-hour assistance to those who may need some help with activities of daily living (see glossary), but who do not need the level of medical and nursing care offered by skilled nursing facilities (see glossary).
Balance Billing - A provider's bill to a covered person for charges above the amount paid by the health plan or insurer.
Behavioral Health Services - Medical services encompassing mental health care and substance abuse treatment.
Biosurveillance - Automated monitoring of health data sources of potential value in identifying trends that may indicate an emerging epidemic, whether naturally occurring or the result of bioterrorism.
Block Grant - A lump sum of money given to a state or local government to be spent for certain purposes. Normally, it is based on a formula, the objectives are broadly defined and the grant's source places relatively few limits on the money's use.
Bundling - The use of a single comprehensive charge for a group of related health services. Contrast with Unbundling.
Carve-Outs - A payer strategy in which an HMO or insurance company isolates ("carves out") a benefit and hires another organization to provide this service. Common carve-outs include behavioral health and prescription drugs. The technique is intended to allow the insurer to better control its costs.
Case Management - A process where a health plan identifies covered persons with specific health care needs, then devises and carries out for them a plan to achieve the best patient outcome in the most cost-effective manner.
Case Mix - The mix of patients treated within a particular institutional setting such as a hospital or under a particular health plan. Case mix may be measured by the severity of patients' illnesses or the prospective use of care resources.
Case Mix Adjustment - Change in payment to a health plan or provider to avoid overpaying or underpaying where health status or likely use of services varies from average.
Cash and Counseling- A Medicaid long-term care waiver demonstration program that allows certain Medicaid beneficiaries to purchase their own personal care and related services. Medicaid provides a monthly allowance, the amount of which is determined after assessing the beneficiary's need for community-based long-term care services. Since 2007, states can implement similar capped programs covering costs of self-directed personal care services without a waiver.
Catastrophic Health Insurance - Health insurance which provides protection against the high cost of treating severe or lengthy illnesses. Such policies cover all or most of medical expenses above a relatively high specified amount.
Catastrophic Illness - A very serious and costly condition that could be life threatening or cause life-long disability and which often involves severe financial hardship.
Categorical Eligibility- Medicaid's eligibility pathway for individuals who can be covered. The program's 25+ categories can be organized into five broad groups - children, pregnant women, adults in families with dependent children, individuals with disabilities and the elderly. Certain individuals, notably single adults without children, cannot qualify for Medicaid, even if their incomes are low enough to meet financial eligibility standards.
Centers of Excellence - Health care facilities selected to deliver specific services, often exclusively, based on criteria such as experience, outcomes, efficiency and effectiveness.
Certificate of Need - The requirement that a health care institution obtain permission from an oversight agency before making major changes to its facilities or facility-based services.
Cherry Picking - The practice of insurance companies taking only those businesses or individuals that are good health risks, and avoiding businesses or people that have higher health risks. Also called skimming.
Clawback - Popular term for "phased-down state contribution" that describes how the federal government is recovering (or "clawing" back, from the states' perspective) money spent on Medicare-covered drugs for persons dually eligible for Medicare and Medicaid. Since January 2006, states have made monthly payments to the federal Medicare program, reflecting the amount of money they spent on prescription drugs for Medicaid-eligible seniors (known as dual eligibles, see glossary) before the enactment of Medicare Part D. Payments were set at 90 percent of costs in FY 2006, decreasing to 75 percent by FY 2015.
Closed panel/Closed access - A term that describes health plans in which enrollees are permitted to receive non-emergency services only through specified providers. Group- and staff-model HMOs (see glossary) are examples of closed panel plans.
Community Health Center (CHC)- Organization providing comprehensive primary care to medically underserved populations, regardless of their ability to pay. These public and non-profit entities receive federal funding under Section 330 of the Public Health Service Act, as amended.
Community Rating - A method for setting premiums at the same price for everyone, based on the average cost of providing health services to all. The premium is not adjusted for the individual beneficiary's medical history or likelihood of using medical services. Contrast with Experience Rating.
Co-Morbidities - Medical conditions that exist at the same time as the primary condition in the same patient (e.g., hypertension is a co-morbidity of many conditions such as heart disease, end-stage renal disease and diabetes).
Consumer Price Index (CPI)- A statistical measure of the annual change in cost to workers of purchasing a market basket of goods and services. It is expressed as a percentage of the cost of these goods and services during a base period. CPI is also known as retail price index or cost-of-living index.
Continuing Care Retirement Community (CCRC) - Housing community designed to provide different levels of long-term care under contract. Services usually include home help, support in an assisted living facility and care in a nursing home.
Conversion Privilege - Right given to an insured person under a group insurance contract to change coverage, without evidence of medical insurability, to an individual policy upon termination of the group coverage. Conversion privileges are guaranteed to many workers under the Consolidated Omnibus Budget Reconciliation Act of 1985 and to others under the Health Insurance Portability and Accountability Act of 1996.
Critical Access Hospital (CAH) - Limited-service hospital located in rural areas and meeting certain size, location and other requirements. CAHs are subject to less rigorous staffing standards and receive reimbursement from Medicare based on their actual costs, rather than by the more common (and less favorable) payment tied to average costs for treating a particular diagnosis.
Cross-Subsidy - The concept of certain purchasers paying more for medical services than they otherwise would so that others can pay less (or nothing at all), or another activity can be funded. In the U.S. health system, this mechanism has been used to pay for medical services for the poor and uninsured, medical education and research.
Crowd-Out - A phenomenon whereby public programs or expansions of public programs designed to extend coverage to the uninsured encourage some employers to drop health coverage, urging their employees instead to take advantage of the expanded public subsidy.
Custodial Care - Long-term care services which do not seek to cure, provided during periods when the medical condition of the patient is not changing or does not require continued delivery by medical personnel.
Deductible - A fixed amount, usually expressed in dollars in the form of an annual fee, that the beneficiary of a health insurance plan must pay directly to the health care provider before a health insurance plan begins to pay for any costs associated with the insured medical service.
Defensive Medicine - The practice of health care providers ordering tests that may not be necessary to over-protect themselves from potential malpractice lawsuits. Said to be a major cause of high health care costs.
Deficit Reduction Act of 2005 (DRA) - The DRA made significant changes to the Medicaid program - for example, allowing states to increase premiums and cost-sharing for families and to base benefits on private plans. The law also tightened long-term care asset transfers and capped home equity at $500,000. A DRA provision effective July 1, 2006, requires Medicaid beneficiaries to show proof of citizenship upon applying for or renewing their benefits. For more information, see
www.kff.org/medicaid/7465.cfm.
Defined Benefit - A health insurance model used by an employer or government program where specified health services covered under the plan are standardized and guaranteed. The cost of providing the standard benefits may fluctuate. One example of a defined benefit plan is Medicare. Contrast with Defined Contribution.
Defined Contribution - A health benefit model used by employers or government programs where health services covered may fluctuate based on choice of plan, but the employer or government contributes a set amount (percentage or dollar amount) towards the purchase of the selected health plan. A defined contribution plan limits the financial liability of employers or the government, because the contribution is defined, or fixed. Contrast with Defined Benefit.
Diagnosis-Related Group (DRG) - A way of determining payments to hospitals, used under Medicare's prospective payment system (PPS) and by some other public and private payers. The DRG system classifies patients into groups based on the principal diagnosis, treatments and other relevant criteria. Hospitals are paid the same for each case classified in the same DRG, regardless of the actual cost of treatment.
Direct Contracting - A method for providing health services to covered employees and their families, by group providers who contract directly with an employer, thereby cutting out "the middleman" or insurance carrier.
Direct Graduate Medical Education Payment - Medicare payment to approved teaching hospitals to help cover the direct costs of training residents to become board-eligible in their field. Hospitals receive full payments to help cover resident salaries, fringe benefits and compensation for attending physicians, for residents in their initial residency period (the minimum number of years required to qualify for board certification in that specialty for 5 years) and half payments for residents who have completed their initial training and are sub-specializing. Direct GME payments vary significantly among hospitals and depend on the number of residents at the hospital, the hospital specific per resident amount and the size of the hospital's inpatient Medicare population. For more information, see
www.cogme.gov.
Direct-to-Consumer (DTC) Advertising - The use of mass media (television, newspapers, magazines, etc.) and other forms of reaching the general public. DTC advertising is often used by the pharmaceutical industry to promote their products. These advertisements must meet certain standards under federal regulations.
Disproportionate Share Hospital (DSH) Adjustment - An increased payment under Medicare's prospective payment system or under Medicaid for hospitals that serve a relatively large number of low-income uninsured patients.
Doughnut Hole - Coverage gap in Medicare Part D prescription drug coverage. Medicare pays 75 percent of the beneficiary's yearly drug expenses up to $2,405, after which there is a gap in coverage - the doughnut hole. The coverage resumes when total prescription drug expenses reach $5,916.25 (in 2009), after which Medicare pays for 95 percent of the beneficiary's prescription drug costs through the end of the year.
Dual Eligible - A Medicare beneficiary who also receives either a full range of Medicaid benefits offered in his or her state, or help with Medicare out-of-pocket expenses. For more information, see
www.cms.hhs.gov/DualEligible.
Durable Medical Equipment (DME) - Medical devices such as wheelchairs, oxygen tanks and apnea monitors.
Early and Periodic Screening, Diagnostic and Treatment Services (EPSDT) - Comprehensive services states are required to provide to Medicaid-enrolled children who need them, including extensive services for children with disabilities. The Deficit Reduction Act allows states to restructure children's benefits to provide a narrower array of services for healthy children; however, states must continue to provide wrap-around EPSDT benefits. For more information, see
www.cms.hhs.gov/MedicaidEarlyPeriodicScrn.
Electronic Medical Record/Electronic Health Record - A computer-based record containing health care information. EMRs may include clinical, demographic and/or administrative data. Also known as a computerized patient record.
Employee Retirement Income Security Act (ERISA) - Enacted in 1974, ERISA was primarily designed to secure workers' pension rights. The law established federal reporting and disclosure requirements for most private employee health plans. Under ERISA, companies that pay for their workers' health benefits directly (e.g. by self-insuring and assuming all or most financial risk) are exempt from state insurance regulations and taxes. ERISA also limits workers' ability to sue their insurer. For more information, see
www.dol.gov/dol/topic/health-plans/erisa.htm.
Employer Mandate - A state or federal mandate that requires specified employers to provide health insurance benefits to their employees. A related alternative approach is to require employers to either “play” by providing health benefits to their employees or “pay” to the state or federal government so that these entities can pay for benefits.
Employer-Sponsored Insurance (ESI) - A voluntary system in which employers choose to provide health insurance for employees.
Enterprise Liability - Proposal to hold hospitals or health maintenance organizations liable for negligent harm in medical malpractice cases, rather than holding individual physicians liable.
Evidence-Based Medicine - The use of current best clinical evidence in making decisions about the care of individual patients, often with the assistance of information technology. Patient preferences are considered along with clinical expertise.
Family Caregiver - Spouses, daughters and daughters-in-law, sons and other relatives and friends who volunteer to help with personal care, medication management and a range of household and financial matters. Sometimes referred to as "informal caregivers," they provide long-term care worth an estimated $77 billion each year.
Federal Employees Health Benefits Program (FEHBP) - Health care plans offered to federal civilian employees who can annually choose among a number of approved, community-rated private health insurance plans. The federal government pays a major portion of the cost of the coverage. For more information, including eligibility requirements and premiums for each health plan --in total and amounts paidon the employee's behalf --go to
www.opm.gov/Insure/health/index.asp.
Federal Medical Assistance Percentage (FMAP) - Percentage used to determine the amount of federal matching funds for state Medicaid expenditures. By law, FMAP cannot be less than 50 percent or exceed 80 percent. Slightly higher Enhanced Federal Medical Assistance Percentages are used to determine matching payments for CHIP (see glossary). These payments cannot exceed 85 percent of the state's CHIP expenditures. For more information, see
http://aspe.hhs.gov/health/fmap.htm.
FEDERAL POVERTY GUIDELINES - Income amounts set each February by the U.S. Department of Health and Human Services used to determine an individual's or family's eligibility for various public programs, including Medicaid and the State Children's Health Insurance Program. Sometimes called Federal Poverty Level/Line (FPL). (The poverty guidelines are different from the U.S. Census Bureau's "poverty thresholds," which are used for Census statistical purposes.) For the 2009 poverty guidelines, see
http://aspe.hhs.gov/poverty/09poverty.shtml.
Federally Qualified Health Center (FQHC) - Facilities that have been approved by the government for a program to provide low cost health care. They include community health centers, tribal health clinics, migrant health centers, rural health centers and health centers for the homeless.
First-Dollar Coverage - Insurance plans that provide benefits without first requiring payment of a deductible.
First Responders - Firefighters, police officers, ambulance crews, doctors and other local emergency officials who are the first to respond to an emergency situation.
Fiscal Intermediary - A private contractor that pays hospital bills on behalf of Medicare.
Fiscal Year (FY) - The 12-month period used for calculating annual fiscal spending, which parallels the federal government's annual budget cycle. The U.S. government fiscal year runs from October 1 of the previous year to September 30 of the calendar year for which the fiscal year is numbered. States' fiscal years do not always correspond to the federal fiscal year.
Flexible Spending Account/Arrangement (FSA) - An employee benefit program that enables the employee to set aside pre-tax money to be used for certain health care and dependent care expenses.
Formulary - A list of selected pharmaceuticals and their appropriate dosages created by health insurance plans, which are usually intended to include a broad array of prescription drugs that are also cost-effective for patient care. Physicians are often required or urged to prescribe from the formulary developed by the insurance plans, pharmacy benefit managers or health maintenance organizations with which they are affiliated.
Gatekeeper/Care Manager - A healthcare professional, usually a primary care physician, who coordinates, manages, and authorizes all health services provided to a person covered by a health plan. Unless an emergency exists, the gatekeeper generally must pre-authorize referrals to specialists, hospitalizations and lab and radiology tests.
Graduate Medical Education (GME) Payment - Medicare payment to approved teaching hospitals to cover the costs of training residents. The GME payment comprises both the direct GME payment (see glossary), which pays for the direct costs of training residents, and the Indirect Medical Education Adjustment (IME, see glossary), which pays for the increased operating costs of a teaching hospital. Although IME and direct GME refer to Medicare payments, Medicaid is also a major funder of graduate medical education. For more information about GME, see
www.cogme.gov.
Green House® - Small communities of elders and staff set in a home-like environment that function as long-term care facilities. The centers provide the assistance and support necessary for each patient, but focus on social living, rather than on medical care.
Grievance - A complaint filed because of dissatisfaction with the quality of care or customer service of a health plan. Medicare fee-for-service, Medicare health maintenance organizations (see glossary) and Medicare Part D prescription drug plans, as well as Medicaid and most other health plans, have formal procedures for handling and responding to grievances. If a Medicare beneficiary files a grievance against a hospital, a Quality Improvement Organization (see glossary) will review the case and guarantee the patient's stay, possibly free-of-charge, until the review has been completed.
Health Coverage Tax Credits - A refundable tax credit that is paid on a monthly basis, or on a yearly basis when a person files their tax return, to help certain workers, retirees and their families pay for health insurance premiums.
Health Insurance Portability and Accountability Act (HIPAA) - A 1996 federal law that provides some protection for employed persons and their families against discrimination in health coverage based on past or present health. Generally, the law guarantees the right to renew health coverage, but does not restrict the premiums that insurers may charge. HIPAA does not replace the states' role as primary regulators of insurance. HIPAA also requires the collection of certain health care information by providers and sets rules designed to protect the privacy of that information. For more information, see
www.hhs.gov/ocr/hipaa/.
Health Maintenance Organization (HMO) - A managed care plan that combines the function of insurer and provider to give members comprehensive health care from a network of affiliated providers. Enrollees typically pay limited copayments and are usually required to select a primary care physician through whom all care must be coordinated. HMOs generally will not reimburse all costs for services obtained from a non-network provider or without a primary care physician's referral. HMOs often emphasize prevention and careful assessment of medical necessity.
Health Opportunity Account (HOA) - A type of health savings account for Medicaid beneficiaries created by the Deficit Reduction Act of 2005 (see glossary). States may deposit annual sums of up to $2,500 per adult and $1,000 per child into the account, to be used to pay for medical expenses not covered by the high deductible health plan with which the account is coupled. Compare to Health Savings Account and Health Reimbursement Arrangement.
Health Plan Employer Data and Information Set (HEDIS) - A set of standardized measures of health plan performance allowing comparisons on quality, access, patient satisfaction, membership, utilization, finance and health plan management. HEDIS was developed by employers, health maintenance organizations (see glossary) and the National Committee on Quality Assurance.
Health Professional Shortage Area (HPSA) - A geographic area determined by the U.S. Public Health Service to have a shortage of physicians and other health professionals. Physicians who provide services in HPSAs qualify for a Medicare bonus payment or student loan forgiveness.
Home and Community-Based Services (HCBS)- State-designed HCBS encompass case management, adult day care, home health aide assistance, personal care, assisted living services and respite care. Section 1915(c) of the Social Security Act permits the HHS Secretary to approve Medicaid waivers that allow for long-term care services to be delivered in the community instead of institutional settings. The Deficit Reduction Act also created a new capped HCBS option that allows states to offer these services without having to obtain administrative waiver approval.
Homebound - Condition required to receive home health care services under Medicare and generally interpreted to mean that the beneficiary cannot leave home without excessive effort and does so only infrequently, for no more than 16 hours per month for non-medical reasons. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (see glossary) authorizes a demonstration project involving as many as 15,000 beneficiaries in three states, that aims to clarify and standardize the definition of homebound. For more information, see
http://aspe.hhs.gov/MITS/text/titleVII/702.html.
Home Health Care - Health services rendered in the home, including skilled nursing care, speech therapy, physical therapy, occupational therapy, rehabilitation therapy and social services. Medicare covers some home health care services if the beneficiary is homebound (see glossary) but does not require more than 35 hours of services per week. Medicaid pays for home health care services in 12 states.
Home Health Agency (HHA)- Health care provider organization that renders skilled nursing and health care services in the home. See Home Health Care and Homebound.
Hospice - An organization providing medical, emotional, spiritual and social help, often in the patient's own home, for those expected to live less than six months.If a person qualifies for Medicare Part A and has a terminal illness, Medicare pays for hospice care, including payment of drugs for symptom control and pain relief, hospice aide and homemaker service, and spiritual counseling, among other services. For details oncovered services and payment rates, see the HHS fact sheet at
www.cms.hhs.gov/MLNProducts/downloads/hospice_pay_sys_fs.pdf.
Hospital Insurance (HI) Trust Fund - The Part A Medicare trust fund that pays for inpatient hospital services; skilled nursing facility care for up to 100 days following hospitalization; and some care from home health providers, hospices and rehabilitation facilities for the elderly and permanently disabled. Financed with a dedicated payroll tax, HI trustees expected trust fund spending to exceed incoming revenues in 2008, and expected growing annual deficits to exhaust HI reserves in 2019.
Hyde Amendment - A federal law first enacted in 1980, and attached to appropriations bills every year since, that prohibits the use of federal Medicaid funds for abortion, except for reasons of life endangerment.
Indemnity Insurance - A health insurance plan that pays providers on a fee-for-service basis for delivering health care. Consumers face very few restrictions on provider selection, but may have greater financial liability in the form of deductibles and coinsurance than in many managed care plans.
Independent Practice Association (IPA) - A physician organization which typically contracts with a health maintenance organization (HMO, see glossary) to provide services to the HMO's enrollees. The HMO usually makes capitated payments to the IPA, but the IPA may choose to reimburse its physicians on a fee-for-service basis. Physicians can contract with other HMOs and see other fee-for-service patients.
Indirect Medical Education (IME) Adjustment - A Medicare payment supplemental to diagnosis-related group (DRG) payments for each beneficiary inpatient stay. It is intended to compensate teaching hospitals for the various costs associated with running an academic health center that trains and employs large numbers of medical residents. Many teaching hospitals tend to treat sicker patients with less insurance coverage, requiring a more costly mix of staff, and may use more expensive and complex interventions. For more information, see www.cogme.gov. Also see Graduate Medical Education Payment and Direct Medical Education Payment.
Inpatient - A person who is admitted to a hospital, usually for 24 hours or more.
Instrumental Activities of Daily Living (IADLs) - Activities relating to independent living, which include preparing meals, keeping a budget, purchasing groceries, performing housework and using a telephone. IADLs refer to skills beyond basic self care, or activities of daily living.
Insurance - A way of responding to the risk of an adverse event, such as having to pay large health care expenses, by spreading those risks among many people. Insurance provides a way to substitute a small, predictable payment (a premium) for the risk of having to make a large payment in the event of an uninsured accident or illness.
Intergovernmental Transfer (IGT) - Transfer of funds among or between different levels of government, including state-owned or operated health care providers, local governments, and non-state-owned or operated health care providers. The term is most often used in Medicaid, where transfers of governmental funds to the state Medicaid agency are used as the non-federal share to draw down federal matching funds for allowable Medicaid expenditures. States also use IGTs as the non-federal share to draw down federal matching funds for Medicaid Disproportionate Share Hospital payments.
Intermediate Care Facility for the Mentally Retarded (ICF/MR) - An institution providing diagnosis, treatment or rehabilitation of individuals with mental retardation or related conditions. ICF/MRs provide a protected residential setting, ongoing evaluations, 24-hour supervision and health services. Under Medicaid, states may cover ICF/MR services.
Lock-in - Lock-in refers to the period of time an individual is required to, or agrees to, remain registered with a particular provider or group of providers, or remain enrolled in a particular health care plan.
Long-Term Care (LTC) - Ongoing health and social services provided for individuals who need continuing assistance with activities of daily living and/or instrumental activities of daily living (see glossary). Services can be provided in an institution, the home or the community, and include informal services provided by family and friends as well as formal services provided by professionals or agencies. Medicaid is the primary payer of LTC services in nursing homes.
Long-Term Care Partnership Program - A program that combines private LTC insurance with special access to Medicaid. This program encourages citizens to purchase a limited, and therefore more affordable, amount of LTC insurance coverage, with the assurance that they could receive additional LTC services through the Medicaid program as needed after their insurance coverage is exhausted, without having to deplete their assets to the level typically required in order to be Medicaid eligible.
Loss Ratio - The ratio of money paid out by an insurer for claims divided by premiums collected for a particular type of insurance policy. Low loss ratios indicate that a small proportion of premium dollars was paid out for benefits, while a high loss ratio indicates that a high percentage of the premium dollars was paid out.
