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Pohlys - Glossary of Health Care Terms
Category: Health and Medicine > Health Care
Date & country: 13/09/2007, USA
Words: 949

see Adjusted Average Per Capita Cost.

see Activity-Based Costing.

When used as a legal term in the business of healthcare, it normally refers to actions that do not involve intentional misrepresentations in billing but which, nevertheless, result in improper conduct. Consequences can result in civil liability and administrative sanctions. An example of abuse is the excessive use of medical supplies. (Also see Fraud, OIG, FBI, and Compliance)

The patient's ability to obtain medical care. The ease of access is determined by such components as the availability of medical services and their acceptability to the patient, the location of health care facilities, transportation, hours of operation and cost of care. An individual's ability to obtain appropriate health care services. Barriers to access can be financial (insufficient monetary resources), geographic (distance to providers), organizational (lack of available providers) and socio…

Accountable Health Partnership
An organization of doctors and hospitals that provides care for people organized into large groups of purchasers.

Accountable Health Plan (AHP)
AHPs can be IDSs, MCOs, Health Networks, partnerships or joint ventures between practitioners, providers or payers that would assume responsibility for delivering medical care and managing the funds required to pay for the services rendered. Physicians and other providers would work for, contract with or own these health plans. When an IDS or hospital group or IPA operates one or more health insurance benefit products, or a managed care organization acquires a large scale medical delivery compon…

The process by which an organization recognizes a provider, a program of study or an institution as meeting predetermined standards. Two organizations that accredit managed care plans are the National Committee for Quality Assurance (NCQA) and the Joint Commission on Accreditation of Health Care Organizations (JCAHO). JCAHO also accredits hospitals and clinics. CARF accredits rehabilitation providers.

The addition of new recipients to a health plan; a Medicare term.

The amount of money that is set aside to cover expenses. The accrual is the plan's best estimate of what those expenses are, and (for medical expenses) is based on a combination of data from the authorization system, the claims system, lag studies, and the plan's prior history.

see Adjusted Community Rate.

Describes insurer's policy requirement indicating that coverage will not go into effect until the employee's first day of work on or after the effective date of coverage. May also apply to dependents disabled on the effective date.

Activity-Based Costing (ABC)
Activity-based costing defines healthcare costs in terms of a healthcare organization's processes or activities. The costs are then associated with significant activities or events. It relies on the following 3 step process: 1) Activity mapping, which involves mapping activities in an illustrated sequence; 2) Activity analysis, which involves defining and assigning a time value to activities; and, 3) bill of activities, which involves generating a cost for each main activity.

Refers to the statistical calculations used to determine the managed care company's rates and premiums charged their customers based on projections of utilization and cost for a defined population.

Actuarial Equivalent
Relates to the statistical calculation of risk and used to describe a health plan that has an equivalent statistical calculation of risk as another plan. For example, under Medicare rules, A plan sponsor must offer a prescription drug plan that is actuarially (a term relating to the statistical calculation of risk) the same or better than the Medicare Part D prescription drug plan.

Actuarial Soundness
The requirement that the development of capitation rates meet common actuarial principles and rules.

In insurance, a person trained in statistics, accounting and mathematics who determines policy rates, reserves, and dividends by deciding what assumptions should be made with respect to each of the risk factors involved (such as the frequency of occurrence of the peril, the average benefit that will be payable, the rate of investment earnings, if any, expenses, and persistency rates), and who endeavors to secure as valid statistics as possible on which to base his assumptions. Professionally tra…

Acute Care
A pattern of health care in which a patient is treated for an acute (immediate and severe) episode of illness, for the subsequent treatment of injuries related to an accident or other trauma, or during recovery from surgery. Specialized personnel using complex and sophisticated technical equipment and materials usually give acute care in a hospital. Unlike chronic care, acute care is often necessary for only a short time.

Processing claims according to contract.

Adjusted Admissions
Adjusted admissions are equivalent to the sum of inpatient admissions and an estimate of the volume of outpatient services. This is a measure of all patient care activity undertaken in a hospital, both inpatient and outpatient. This estimate is calculated by multiplying outpatient visits by the ratio of outpatient charges per visit to inpatient charges per admission.

Adjusted Drug Benefit List
A small number of medications often prescribed to long-term patient. Also called a drug maintenance list. A health plan, CMS or 3rd party administrator can modify it from time to time. See also Drug Formulary, Formulary.

Adjusted Payment Rate (APR)
The Medicare capitated payment to risk-contract HMOs. For a given health plan, the APR is determined by adjusting county-level AAPCCs to reflect the relative risks of the plan's enrollees.

Adjusted Per Capita Cost (APCC)
Medicare benefits estimation for a person in a given county using sex, age, institutional status, Medicaid disability, and end stage renal disease status as a basis.

see Activities of Daily Living.

Administrative Code Sets
Code sets that characterize a general business situation, rather than a medical condition or service. Under HIPAA, these are sometimes referred to as non-clinical or non-medical code sets. Compare to medical code sets.

Administrative Costs
Costs related to utilization review, insurance marketing, medical underwriting, agents' commissions, premium collection, claims processing, insurer profit, quality assurance programs, and risk management. Administrative costs also refer to certain allowable costs on hospital CMS cost reports, usually considered overhead. Rules exist which disallow certain expenses, such as marketing. Costs not linked directly to the provision of medical care. Includes marketing, claims processing, billing, and m…

Administrative Services Only (ASO)
A relationship between an insurance company or other management entity and a self-funded plan or group of providers in which the insurance company or management entity performs administrative services only, such as billing, practice management, marketing, etc., and does not assume any risk. The client bears the financial risk for the claims. Clients contracting for ASO can include health plans, hospitals, delivery networks, IPAs, etc. A provider system wishing to capitate might contract with a T…

Administrative Simplification
Title II, Subtitle F, of HIPAA which authorizes HHS to: (1) adopt standards for transactions and code sets that are used to exchange health data; (2) adopt standard identifiers for health plans, health care providers, employers, and individuals for use on standard transactions; and (3) adopt standards to protect the security and privacy of personally identifiable health information.

Administrative Supervision
A situation in which a health plan's operations are placed under the direction and control of the state commissioner of insurance or a person appointed by the commissioner.

Admission Certification
Methods of assuring that only those patients who need hospital care are admitted. Certification can be granted before admission (preadmission) or shortly after (concurrent). Length-of-stay for the patient's diagnosed problem is usually assigned upon admission under a certification program.

Admissions Per 1,000
Number of patients admitted to a hospital or hospitals per 1,000 health plan members. An indicator calculated by taking the total number of inpatient and/or outpatient admissions from a specific group, e.g., employer group, HMO population at risk, for a specific period of time (usually one year), dividing it by the average number of covered members in that group during the same period, and multiplying the result by 1,000. This indicator can be calculated for behavioral health or any disease in t…

Adverse Event
An injury to a patient resulting from a medical intervention.

Adverse Selection
The problem of attracting members who are sicker than the general population, specifically, members who are sicker than was anticipated when developing the budget for medical costs. A tendency for utilization of health services in a population group to be higher than average or the tendency for a person who is in poor health to be enrolled in a health plan where he or she is below the average risk of the group. From an insurance perspective, adverse selection occurs when persons with poorer-than…

Affiliated Provider
A health care provider or facility that is part of the HMO's network usually having formal arrangements to provide services to the HMO member.

An agreement between two or more otherwise independent entities or individuals that defines how they will relate to one another. Agreements between hospitals may specify procedures for referring or transferring patients. Agreements between providers may include joint managed care contracting.

Age-at-Issuance Rating
A method for establishing health insurance premiums whereby an insurer's premium is based on the age of individuals when they first purchased health insurance coverage. This is an older form of actuarial assessment.

Age-Attained Rating
Similar to the above, this method for establishing health insurance premiums whereby an insurer's premium is based on the current age of the beneficiary. Age-attained-rated premiums increase in price, as the purchasers grow older.

Age-Sex Factor
Underwriting measurement representing the medical risk costs of one population compared to another based on age and sex factors.

Age-Sex Rates (ASR)
Also called table rates, they are given group products' set of rates where each grouping, by age and sex, has its own rates. Rates are used to calculate premiums for group billing and demographic changes are adjusted automatically in the group.

A person who is authorized by an MCO or an insurer to act on its behalf to negotiate, sell, and service managed care contracts.

Aggregate Margin
This is computed by subtracting the sum of expenses for all hospitals in the group from the sum of revenues and dividing by the sum of revenues. The aggregate margin compares revenues to expenses for a group of hospitals, rather than one single hospital.

Aggregate Stop Loss Coverage
The form of excess risk coverage that provides protection for the employer against accumulation of claims exceeding a certain level. A type of stop-loss insurance that provides benefits when a group's total claims during a specified period exceed a stated amount. This is protection against abnormal frequency of claims in total, rather than abnormal severity of a single claim.

see Agency for Health Care Policy and Research.

see Accountable Health Plan.

All Inclusive Visit Rate
Aggregate costs for any one patient visit based upon annual operating costs divided by patient visits per year. This rate incorporates costs for all services at the visit.

All-Payer System
A system in which prices for health services and payment methods are the same, regardless of who is paying. For instance, in an all-payer system, federal or state government, a private insurer, a self-insured employer plan, an individual, or any other payer could pay the same rates. The uniform fee bars health care providers from shifting costs from one payer to another. See cost shifting.

Allowable Charge
The maximum charge for which a third party will reimburse a provider for a given service. An allowable charge is not necessarily the same as either a reasonable, customary, maximum, actual, or prevailing charge.

Allowable Costs
Covered expenses within a given health plan. Items or elements of an institution's costs, which are reimbursable under a payment formula. Both Medicare and Medicaid reimburse hospitals on the basis of only certain costs. Allowable costs may exclude, for example, luxury travel or marketing. CMS publishes an extensive list of rules governing these costs and provides software for determining costs. Normally the costs which are not reasonable expenditures, which are unnecessary, which are for the ef…

Allowed Amount
Maximum dollar amount assigned for a procedure based on various pricing mechanisms. Also known as a maximum allowable.

Allowed Charge
This is the amount Medicare approves for payment to a physician, but may not match the amount the physician gets paid by Medicare (due to co-pay or deductibles) and usually does not match what the physician charges patients. Medicare normally pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. The allowed charge for a nonparticipating physician is 95 percent of that for a participating physician. Non-participating physicians may bill beneficiaries for an add…

Alternate Delivery Systems
Health services provided in other than an inpatient, acute-care hospital or private practice. A phrase used to describe all forms of health care delivery except traditional fee-for-service, private practice. The term includes HMOs, PPOs, IPAs, and other systems of providing health care. Examples within general health services include skilled and intermediary nursing facilities, hospice programs, and home health care. Alternate delivery systems are designed to provide needed services in a more co…

Ambulatory Care
Health services provided without the patient being admitted. Also called outpatient care. The services of ambulatory care centers, hospital outpatient departments, physicians' offices and home health care services fall under this heading provided that the patient remains at the facility less than 24 hours. No overnight stay in a hospital is required.

Anniversary Date
The beginning of an employer group's benefit year. The first day of effective coverage as contained in the policy Group Application and subsequent annual anniversaries of that date. An insured has the option to transfer from an indemnity plan (which may have maximum benefit levels) to an HMO.

Anonymized Data
Previously identifiable data that have been deidentified and for which a code or other link no longer exists. A provider, third party or investigator would not be able to link anonymized information back to a specific individual.

Anonymous Data
Under HIPAA, this refers to data that were collected without identifiers and that were never linked to an individual. Coded data are not anonymous.

The American National Standards Institute. A national organization founded to develop voluntary business standards in the United States.

The tendency of people who have a greater-than-average likelihood of loss to seek healthcare coverage to a greater extent than individuals who have an average or less-than-average likelihood of loss. Also known as Adverse Selection.

A legal term encompassing a variety of efforts on the part of government to assure that sellers do not conspire to restrain trade or fix prices for their goods or services in the market.

Any Willing Provider Laws
Laws that require managed care plans to contract with all health care providers that meet their terms and conditions.

see Adjusted Per Capita Cost.

see All Patient Diagnosis Related Groups.

This is a process that a patient and provider begin to demand that a payer or health plan actually pay for a service that has been denied payment. A special kind of complaint a patient or provider may make if they disagree with certain kinds of decisions made by Medicare, insurers or health plans. Patients can appeal if they request health care services, supplies or prescriptions that they think they should be able to get paid for by their health plans, or for requested payment for health care a…

Appeals Review Committee
The MCO committee that reviews member appeals related to medical management or coverage determinations.

Application Integrators
Software that transparently provides application-to-application functionality, primarily through data conversion and transmission, while eliminating the need for custom programming. Also referred to as application integration gateway, application interface gateway, integration engine, and intelligent gateway. This type of software is key to developing networks of information systems, making client-specific information available in real time to all members of an IHDS. Also see HIPAA.

Appropriate health care is care for which the expected health benefit exceeds the expected negative consequences by a wide enough margin to justify treatment. This term is not to be confused with 'usual and customary' or 'approved' service. The extent to which a particular procedure, treatment, test, or service is clearly indicated, not excessive, adequate in quantity, and provided in the setting best suited to a patient's or member's needs. See also Medically Necessary.

A term used extensively in managed care and, to many, implies the primary process of 'managing' managed care. Approval usually is used to describe treatments or procedures that have been certified by utilization review. Can also refer to the status of certain hospitals or doctors, as members of a plan. Can describe benefits or services, which will be covered under a plan. Generally, approval is either granted by the managed care organization (MCO), third party administrator (TPA) or by the prima…

Approved Charge
Limits of expenses paid by Medicare in a given area of covered service. Charges approved by payment by private health plans. Items that are likely to be reimbursed by the insurance company.

see Adjusted Payment Rate.

see Administrative Services.

see Age/Sex Rates.

Assignment of Benefits
Method used when a claimant directs that payment be made directly to the health care provider by the health plan. In the Medicare Plan, this means a doctor or supplier agrees to accept the Medicare-approved amount as full payment. It can save patients money if their doctor accepts assignment. Patients still pay their share of the cost of the doctor's visits.

Assisted Living
Broad range of residential care services, but does not include nursing services. Normally lower in cost than nursing homes.

Term used to describe a provider organization that bears the insurance risk associated with the healthcare it provides.

The requirement that the attending physician certify, in writing, the accuracy and completion of the clinical information used for DRG assignment. See also Physician Attestation.

Any document designating any permission. In health care, authorization may refer to 'authorization to disclose' private information, 'authorization to treat' or 'authorization to pay', as in 'pre-authorization' required by many insurance companies and health plans. In the case of pre-authorization, the managed care organization may require approval prior to the receipt of care. (Generally, this is different from a referral in that, an authorization can be a verbal or written approval from the MC…

The automatic assignment of a person to a health insurance plan, typically done under Medicaid plans.

A term used with Medicaid mandatory managed care enrollment plans. Medicaid recipients who do not specify their choice for a contracted plan within a specified time frame are assigned to a plan by the state.

Autoassignment or Auto Assignment
A term used with Medicaid mandatory managed care enrollment plans. Medicaid recipients who do not specify their choice for a contracted plan within a specified time frame are assigned to a plan by the state.

An ethical principle which, when applied to managed care, states that managed care organizations and their providers have a duty to respect the right of their members to make their own decisions about the course of their own lives.

Average Length of Stay (ALOS)
Refers to the average length of stay per inpatient hospital visit. Figure is typically calculated for both commercial and Medicare patient populations.

Average Wholesale Price (AWP)
Commonly used in pharmacy contracting, the AWP is generally determined through reference to a common source of information. Average cost of a non-discounted item to a pharmacy provider by wholesale providers. Drug manufacturers commonly publish suggested wholesale prices.

Avoidable Hospital Condition
Medical diagnosis for which hospitalization could have been avoided if ambulatory care had been provided in a timely and efficient manner.

Balance Billing
The practice of billing a patient for the fee amount remaining after insurer payment and co-payment have been made. Under Medicare, the excess amount cannot be more than 15 percent above the approved charge.

Base Capitation
Specified amount per person per month to cover healthcare cost, usually excluding pharmacy and administrative costs as well as optional coverages such as mental health/substance abuse services.

Base Year Costs
In Medicare, the amount a hospital actually spent to render care in a previous time period. Depending on the hospital's Medicare cost reporting period, the base year was the fiscal year ending on or after September 30, 1982 and before September 30, 1983 for hospitals in operation at that time. Recent legislation has made dramatic changes in cost reporting opportunities for healthcare providers, limiting these reimbursements.

Bed Days
Number of inpatient hospital days per 1,000 health plan members for a specified period, usually annual.

Behavioral Offset
This is the change in the number and type of services that is projected to occur in response to a change in fees. A 50 percent behavioral offset suggests that 50 percent of the savings from fee reductions will be offset by increased volume and intensity of services.

A goal to be attained. These goals are chosen by comparisons with other providers, by consulting statistical reports available or are drawn from the best practices within the organization or industry. Benchmarks are used in quality improvement programs to encourage improvement of care, efficiencies or services. Benchmarks are also used for length of stay comparisons, costs, utilization review, risk management and financial analysis. The benchmarking process identifies the best performance in the…

An ethical principle which, when applied to managed care, states that each member should be treated in a manner that respects his or her own goals and values and that managed care organizations and their providers have a duty to promote the good of the members as a group.

Beneficiary Liability
The amount beneficiaries must pay providers for Medicare-covered services. Liabilities include copayments, deductibles, and balance billing amounts. CMS has very strict rules about health providers billing patients for their liabilities. Cost based facilities are not allowed to charge non-payment by beneficiaries to bad debt unless a clear history of collection activity is recorded.

Benefit Design
The process an MCO uses to determine which benefits or the level of benefits that will be offered to its members, the degree to which members will be expected to share the costs of such benefits, and how a member can access medical care through the health plan.

Benefit Limitations
Any provision, other than an exclusion, which restricts coverage in the Evidence of Coverage, regardless of medical necessity. Limitations are often expressed in terms of dollar amounts, length of stay, diagnosis or treatment descriptions.

Benefit Package
Aggregate services specifically defined by an insurance policy or HMO that can be provided to patients. The services a payer offers to a group or individual. The package will specify include cost, limitation on the amounts of services, and annual or lifetime spending limits.

Benefit Payment Schedule
List of amounts an insurance plan will pay for covered health care services.

Benefit Period
Normally refers to the “benefit period� that begins the day the patient goes to a hospital or skilled nursing facility (SNF). According to Medicare, the benefit period ends when the patient haven`t received any hospital care (or skilled care in a SNF) for 60 days in a row and if the patient goes into a hospital or a SNF after one benefit period has ended, a new benefit period begins. Patients are normally expected to pay the inpatient hospital deductible for each benefit period.

Benefits are specific areas of Plan coverage's, i.e., outpatient visits, hospitalization and so forth, that make up the range of medical services that a payer markets to its subscribers. Also, a contractual agreement, specified in an Evidence of Coverage, determining covered services provided by insurers to members.

Billed Claims
Fees submitted by a health care provider for services rendered to a covered person. Fees billed and fees paid are rarely synonymous.

Biometric Identifier
Identifying information based on a physical characteristic (e.g., a fingerprint). Confidentiality laws and HIPAA privacy rules refer to biometric identifiers.

Bioterrorism or Biological Warfare
The unlawful use, wartime use, or threatened use, of microorganisms or toxins to produce death or disease in humans. Often viewed as the preferred choice of warfare of less powerful groups of people in attempt to wage war or protect themselves from more powerful groups or nations. However, biological agents could be used by individuals or by powerful nations as well.

Blended Rating
For groups with limited recorded claim experience, a method of forecasting a group's cost of benefits based partly on an MCO's manual rates and partly on the group's experience.

Block Grant
Federal funds made to a state for the delivery of a specific group of related services, such as drug abuse related services.