ACRONYMS AND GLOSSARY
|NOTE: Charts and graphs for this chapter are listed in the right column of the page.|
Content Last Updated: 4/26/2011 3:49:05 PM
The following list is a guide to some of the more common acronyms and abbreviations for health care agencies, terms and programs. A number of these acronyms and abbreviations are defined in the glossary.
ACF - Administration for Children and Families
ACA – Affordable Care Act (Patient Protection and Affordable Care Act)
ACO – Accountable Care Organization
ADL - Activities of Daily Living
AF4Q – Aligning Forces for Quality
AHRQ - Agency for Healthcare Research and Quality
ALF - Assisted Living Facility
ASO - Administrative Services Only Agreement
CAH - Critical Access Hospital
CBO - Congressional Budget Office
CCIIO - Center for Consumer Information and Insurance Oversight
CCRC - Continuing Care Retirement Community
CDC - Centers for Disease Control and Prevention
CHC - Community Health Center
CHIP – Children’s Health Insurance Program (formerly State Children’s Health Insurance Program)
CHIPRA - Children’s Health Insurance Program Reauthorization Act
CLASS Act – Community Living Assistance Services and Support Act
CMS - Centers for Medicare and Medicaid Services
COBRA - Consolidated Omnibus Budget Reconciliation Act of 1985
CPI - Consumer Price Index
CRS - Congressional Research Service
DME - Durable Medical Equipment; Direct Medical Education Payment
DRA - Deficit Reduction Act of 2005
DRG - Diagnosis-Related Group
DSH - Disproportionate Share Hospital Adjustment
EHR – Electronic Health Record
EMR – Electronic Medical Record
EOL – End-of-life
EPSDT - Early and Periodic Screening, Diagnostic and Treatment Services
ERISA - Employee Retirement Income Security Act
ESI – Employer -Sponsored Insurance
ESRD - End-Stage Renal Disease
FDA - Food and Drug Administration
FEHBP - Federal Employees Health Benefits Program
FFS - Fee-for-Service
FMAP - Federal Medical Assistance Percentage
FPL - Federal Poverty Level or Line
FQHC - Federally Qualified Health Center
FSA – Flexible spending account/arrangement
GAO - Government Accountability Office
GME - Graduate Medical Education Payment
HCBS - Home and Community-Based Services
HCERA - Health Care and Education Reconciliation Act of 2010
HCFA - Health Care Financing Administration
HCTC - Health Coverage Tax Credits
HEDIS - Health Plan Employer Data and Information Set
HHA - Home Health Agency
HHS - Department of Health and Human Services
HI - Medicare Hospital Insurance Trust Fund (also known as Part A)
HIT - Health Information Technology
HIFA - Health Insurance Flexibility and Accountability Demonstration Initiative
HIPAA - Health Insurance Portability and Accountability Act
HMO - Health Maintenance Organization
HOA - Health Opportunity Account
HPSA - Health Professional Shortage Area
HRA - Health Reimbursement Arrangement/Account
HRSA - Health Resources and Services Administration
HSA - Health Savings Account
IADL - Instrumental Activities of Daily Living
ICF/MR - Intermediate Care Facility for the Mentally Retarded
IGT - Intergovernmental Transfer
IHS - Indian Health Service
IME - Indirect Medical Education Adjustment
IOM - Institute of Medicine
IPA - Independent Practice Association
JCAHO - former abbreviation for The Joint Commission
LTC - Long-Term Care
MA-PD - Medicare Advantage Prescription Drug
MCH - Maternal and Child Health
MCO - Managed Care Organization
MedPAC - Medicare Payment Advisory Commission
MEWA - Multiple Employer Welfare Association
MHPA - Mental Health Parity Act
MLR - Medical Loss Ratio
MMA - Medicare Prescription Drug, Improvement and Modernization Act of 2003
MRDD - Mental Retardation and/or Developmental Disability
MSA - Medical Savings Account
MSP - Medicare Savings Program
NAIC - National Association of Insurance Commissioners
NCQA - National Committee for Quality Assurance
NDEP - National Diabetes Education Program
NIH - National Institutes of Health
NP/RNP - Nurse Practitioner (Registered)
OCIIO - Office of Consumer Information and Insurance Oversight (now CCIIO - Center for Consumer Information and Insurance Oversight)
ONC - Office of the National Coordinator for Health Information Technology
OMB - Office of Management and Budget
P4P - Pay for Performance
PACE - Program of All-Inclusive Care for the Elderly
PBM - Pharmacy Benefit Manager
PCCM/PCI/PCC - Primary Care Case Management, Initiative, or Clinician
PCMH - Patient-Centered Medical Home
PCORI - Patient- Centered Outcomes Research Institute
PDP - Prescription Drug Program
PHS - U.S. Public Health Service
POS - Point-of-Service Plan
PPACA - Patient Protection and Affordable Care Act (also referred to as ACA)PPO - Preferred Provider Organization PPS - Prospective Payment System
PPS - Prospective Payment System
PSO - Patient Safety Organization
QALY - Quality-Adjusted Life Years
QIO - Quality Improvement Organization
QMB - Qualified Medicare Beneficiary
RBRVS - Resource-Based Relative Value Scale
RVS - Relative Value Scale
SAMHSA - Substance Abuse and Mental Health Services Administration
SBHP - Small Business Health Plan
SCHIP - State Children's Health Insurance Program (now CHIP—Children’s Health Insurance Program)
SGR - Sustainable Growth Rate
SHIP - State Health Insurance Assistance Program
SLMB - Specified Low-Income Medicare Beneficiary
SMI - Medicare Supplementary Medical Insurance (also known as Part B)
SNF - Skilled Nursing Facility
SSA - Social Security Administration
SSDI - Social Security Disability Income
SSI - Supplemental Security Income
TANF - Temporary Assistance for Needy Families
TMA - Transitional Medical Assistance
TPA - Third Party Administrator
UPL - Upper Payment Limit
UR - Utilization Review
- A -
ACCOUNTABLE CARE ORGANIZATION (ACO) – A health provider-led organization designed to manage a patient’s full continuum of care and be responsible for the overall costs and quality of care for a defined population. Multiple forms of ACOs are possible, including large integrated delivery systems, physician-hospital organizations, multi-specialty practice groups with or without hospital ownership, independent practice associations and virtual interdependent networks of physician practices. (See Chapter 3 – Quality for further information)
ACTIVITIES 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. (Contrast Instrumental Activities of Daily Living)
ACUTE CARE - Medical services provided to treat an illness or injury, usually for a short time. Contrast with Chronic Care.
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.
ADVERSE SELECTION - When a disproportionately high number of individuals in poorer than average health enroll in a health plan.
AGENCY FOR HEALTHCARE RESEARCH AND QUALITY (AHRQ) – The lead federal agency for research on health care quality, costs, outcomes and patient safety.
ANNUAL BENEFIT LIMIT – Limit on the amount of claims an insurer will pay in a given year for an individual.
AFFORDABLE CARE ACT (a shortening of Patient Protection and Affordable Care Act of 2010) - Law enacted in March 2010, phasing in major expansions in insurance coverage, changes in insurance rules and delivery system changes over the next several years.
ALIGNING FORCES FOR QUALITY (AF4Q) A national program of the Robert Wood Johnson Foundation designed to help communities across the country improve the quality of health care for patients with chronic conditions such as diabetes, asthma, depression and heart disease. (See Chapter 3 – Quality)
AMBULATORY CARE - Medical service provided on an outpatient basis (no overnight hospital stay). Services may include diagnosis, treatment, surgery and rehabilitation.
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 Advantage plan. Under the ACA, all consumers will have the right to appeal decisions, including coverage denials and rescissions, made by their health plans first through the plan’s internal process and then to an outside, independent decision-maker. 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, but who do not need the level of medical and nursing care offered by skilled nursing facilities.
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BALANCE BILLING - A provider's bill to a covered person for charges above the amount paid by the health plan or insurer.
BASIC HEALTH PLAN (BHP) – Beginning in 2014, states will have the option of creating a basic health plan to provide coverage to individuals with incomes between 133 and 200 percent of poverty, in lieu of having these individuals get coverage through the state’s health insurance exchange and receive premium subsidies. The plan would exist outside of the health insurance exchange and include the essential health benefits as defined under the ACA. Cost-sharing under this plan would also be limited. If states choose to offer this plan, the federal government will provide states 95 percent of what it would have paid to subsidize these enrollees in the health insurance exchange.
BEHAVIORAL HEALTH - Medical services encompassing mental health care and substance abuse treatment.
BENCHMARKS – Goals set as a way for hospitals and doctors to analyze quality data, both internally, and against data from other hospitals and doctors to identify best practices of care and improve quality.
BEST PRACTICES - The most up-to-date patient care methods, which result in the best patient outcomes and minimize patient risk of death or complications.
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 – See Payment Bundling
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CAFETERIA PLAN (Section 125 Plan) – A cafeteria plan provides participants an opportunity to receive certain benefits, such as reimbursement for some out-of-pocket medical expenses, on a pretax basis. It is a separate written plan maintained by an employer for employees that meets the specific requirements of Section 125 of the Internal Revenue Code.
CAHPS (H-CAHPS or CAHPS Hospital Survey) - The Consumer Assessment of Healthcare Providers and Systems is a national, standardized survey instrument and data collection methodology for measuring patients' perspectives of hospital care, thus enabling valid comparisons to be made across all hospitals. CAHPS was developed by the Agency for Healthcare Research and Quality in partnership with numerous private organizations (www.cahps.ahrq.gov).
CAP - See Out-of-Pocket Cap
CAPITATION - Method of payment for health services in which a health care provider is paid a fixed amount for each person on the provider's patient roster, regardless of the actual number or nature of services provided to each person.
CARRIER - An entity which may underwrite or administer a range of health benefit programs. May refer to an insurer or a managed health plan.
CARVE-OUTS - A payer strategy in which a health maintenance organization (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 program that allows certain Medicaid beneficiaries, frail elders and adults with disabilities 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. As of October 2011, Cash and Counseling is to be replaced by the Community First Choice Option, a provision of the ACA that will be available in all states. For more information, see Chapter 9, Long-Term Care.
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 have been organized into five broad groups - children, pregnant women, adults in families with dependent children, individuals with disabilities and the elderly. The ACA expands Medicaid eligibility to all individuals under age 65 with incomes up to 133 percent of the federal poverty level and who are not eligible for Medicare, effective January 1, 2014. For more information, see Chapter 8, Medicaid.
CENTERS OF EXCELLENCE - Health care facilities selected to deliver specific services, often exclusively, based on criteria such as experience, outcomes, efficiency and effectiveness.
CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT - Created by the ACA to ensure compliance with the new insurance market rules, this agency of the U.S. Dept. of Health and Human Services oversees the new medical loss ratio rules and assists states in reviewing insurance rates. In addition, it oversees the state-based insurance exchanges, the temporary high-risk pool program and the early retiree reinsurance program. It also compiles and maintains data for an internet portal providing information on insurance options. Formally the Office of Consumer Information and Insurance Oversight.
CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS) (formerly: Health Care Financing Administration, HCFA)—The federal agency administering the Medicare, Medicaid and Children’s Health Insurance programs. CMS seeks to ensure effective, up-to-date health care coverage and to promote quality care for beneficiaries.
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, or before building new facilities.
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.”
CHILDREN'S HEALTH INSURANCE PROGRAM (CHIP) - A program enacted by Congress in 1997 that provides federal matching funds for states to spend on health coverage for uninsured kids. The program is designed to reach uninsured children whose families earn too much money to qualify for Medicaid but are too poor to afford private coverage. Congress initially authorized CHIP for a 10-year period that expired at the end of September 2007. CHIP was reauthorized and enlarged early in 2009. The bill increases CHIP funding by about $32 billion through 2013 to cover an additional 4 million children. The ACA requires states to maintain existing income eligibility levels for children in CHIP (and Medicaid) until 2019 and extends funding for CHIP through 2015. Beginning in 2015, states will receive a 23 percentage point increase in the share of CHIP funding paid by the federal government, up to a cap of 100 percent. For more information, see Chapter 6, Children's Coverage.
CHRONIC CARE - Medical services provided to those with chronic conditions. Contrast with Acute Care.
CHRONIC CONDITION - A condition that is not expected to improve, that lasts a year or longer or recurs, and may result in long-term care needs. Examples include Alzheimer's disease, arthritis, diabetes, epilepsy and some mental illnesses.
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) 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. However, because of the recession of 2007 – 2009, the federal government reduced the amount each state must pay from October 1, 2008 through the end of 2010. This provision was extended through June 30, 2011 by the Education, Jobs and Medicaid Assistance Act.
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 are examples of closed panel plans.
COINSURANCE- A portion of the bill for a medical service that is not covered by the patient's health insurance policy and therefore must be paid out of pocket by the patient. Coinsurance refers to a percentage, e.g., 10 percent of the total charge up to a specified maximum. Contrast with Copayment, which is stated as a flat amount, e.g., $5 per office visit.
COMMUNITY HEALTH CLINIC / 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 LIVING ASSISTANCE SERVICES and SUPPORTS (CLASS) Program: Enacted as part of the ACA, the CLASS program establishes a national voluntary insurance program for purchasing non-medical services and supports necessary for individuals with functional limitations to maintain community residence. HHS is to release details of the program by October 2012. Enrollment will target working adults who will be able to make voluntary premium contributions either through payroll deductions or directly. The first benefits are to be paid out to eligible beneficiaries no earlier than five years after enrollment begins.
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 and Modified Community Rating.
COMPARATIVE EFFECTIVENESS - Research that compares clinical outcomes, or the “clinical effectiveness,” of alternative therapies for the same condition. Many analysts believe that comparative effectiveness research evidence can lead to better health care decisions and thus to improved quality of care, improved efficiency, and ultimately, to the potential for cost savings throughout the health system.
CO-MORBIDITY – A medical condition that exists 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).
CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COBRA) - This law includes one part which entitles former employees of companies with 20 or more workers to continue to receive their employer-sponsored coverage under the group plan for up to 18 months. Under the original legislation, individuals were required to pay the full premium to continue their insurance through COBRA. The American Recovery and Reinvestment Act provided a temporary subsidy of 65 percent of the premium cost for the purchase of COBRA coverage to people who have lost their job between September 1, 2008 and May 31, 2010.
CONSUMER-DIRECTED OR CONSUMER-DRIVEN HEALTH PLAN - A form of health insurance that combines a high-deductible health plan with tax-favored health spending accounts into which employers or individuals contribute pre-tax dollars to be used for health care purchases. These mechanisms aim to change employees from receivers of health care into purchasers by having them participate more fully in health care and cost decisions. Also see Health Reimbursement Arrangement and Health Savings Account.
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 care, 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.
COORDINATION OF CARE - A set of mechanisms that ensure patients and clinicians have access to, and take into consideration, all required information on a patient's conditions and treatments to ensure that the patient receives appropriate health care services.
COPAYMENT – A flat amount paid out of pocket per medical service, e.g., $5 per office visit. Contrast Coinsurance.
Core measures—Specific clinical measures that, when viewed together, permit a robust assessment of the quality of care provided in a given focus area, such as acute myocardial infarction.
COST SHARING - Any out-of-pocket payment the patient makes for a portion of the costs of covered services. Deductibles, coinsurance, copayments and balance bills are types of cost sharing.
COST SHIFTING - The practice by which a seller of a health service, such as a hospital, increases charges for some payers to offset losses due to uncompensated or indigent care or lower payments from other payers.
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 health coverage programs encourage some employers to drop health coverage, urging their employees instead to take advantage of the subsidies available to them in the public program.
CUSTODIAL (LONG TERM) 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.
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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 by some to be a major cause of high health care costs.
DEFICIT REDUCTION ACT OF 2005 (DRA) - Act which 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 the exemption for home equity at $500,000. Another DRA provision 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 traditional 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.
DELIVERY SYSTEMS –Networks of providers and payers that provide care and compete with other systems for enrollees. Systems may include hospitals, physicians and other providers and sites offering a full range of preventive and treatment services. Also known as coordinated care networks, community care networks and integrated health systems.
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 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) 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. Also see Graduate Medical Education Payment and Indirect Medical Education Adjustment.
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, as originally enacted, where beneficiaries enrolled in Part D paid 100 percent of their prescription drug costs after their total drug spending exceeded an initial coverage limit until they qualified for catastrophic coverage. Beginning January 1, 2011, ACA shrinks the doughnut hole by reducing beneficiary copayments each year, until the doughnut hole is essentially eliminated by 2020. See Chapter 7, Medicare, for details.
DRUG REIMPORTATION - The process by which individuals or groups purchase from other countries pharmaceuticals that were originally produced in the U.S. and exported for consumption abroad. Because many other countries have lower drug prices than the U.S., this process can save consumers money on drugs for personal use. Reimportation can occur either by traveling to another country to purchase drugs (e.g., driving to Canada), or by purchasing drugs over the Internet or by mail from foreign pharmacies. Though traditionally not the subject of law enforcement, most reimportation violates U.S. federal drug safety laws.
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, usually through Medicaid. Also see Medicare Savings Programs, Qualified Medicare Beneficiary and Specified Low-Income Medicare Beneficiary. To promote better coordination of Medicare and Medicaid services for dual eligibles, the ACA creates a new Federal Coordinated Health Care Office – an “Office of Duals” -- within the Centers for Medicare & Medicaid Services.
DURABLE MEDICAL EQUIPMENT (DME) - Medical devices such as wheelchairs, oxygen tanks and apnea monitors.
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EARLY AND PERIODIC SCREENING, DIAGNOSTIC AND TREATMENT SERVICES (EPSDT) A range of services that states are required to include in their basic benefits package for all Medicaid-eligible children under age 21. EPSDT services include periodic screenings to identify physical and mental conditions, as well as vision, hearing, and dental problems. Services also include follow-up diagnostic and treatment services to correct conditions identified during a screening, whether or not the state Medicaid plan covers those services for adult beneficiaries.
ELECTRONIC HEALTH RECORD (EHR) – Some in the health care field consider the term “electronic health record” to be virtually identical to “electronic medical record” (see below). Others consider an electronic health record to be a more patient-oriented Web-based set of information about the patient and his or her care, easily accessible by the patient and owned by the patient.
ELECTRONIC MEDICAL RECORD - A computer-based record containing details about a patient’s encounter with a health care provider or facility, such as the patient’s chief complaint, vital signs, medical history, medical orders, plans and prescriptions. An EMR is a legal document and must meet all of the statutory and regulatory requirements for paper medical records. It is owned by a professional practice, hospital or other health care facility. Also known as a computerized patient record. Contrast with Electronic Health 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 visit: http://www.dol.gov/dol/topic/health-plans/erisa.htm.
EMPLOYER HEALTH CARE TAX CREDIT: An incentive mechanism designed to encourage employers, usually small employers, to offer health insurance to their employees. The tax credit enables employers to deduct an amount, usually a percentage of the contribution they make toward their employees’ premiums, from their federal taxes. These tax credits are typically “refundable,” so they are available to organizations with no federal tax liability. The ACA includes a tax credit for small employers that provide health coverage to their employees. The tax credit is available to employers with 25 or fewer employees and average annual wages of less than $50,000.
EMPLOYER MANDATE – An approach that requires all employers to provide health care benefits to their workers or pay a fee (see “Pay or Play” Below) that contributes to the cost of covering them. The ACA creates a type of employer mandate, in that employers with 50 or more employees who don’t offer coverage as of January 1, 2014 will have to pay a fee per full-time employee. The ACA creates a type of employer mandate, in that employers with 50 or more employees who don’t offer coverage as of January 1, 2014 will have to pay a fee per full-time employee.
EMPLOYER PAY-OR-PLAY An approach requiring employers to offer and pay for health benefits on behalf of their employees, or to pay a specified dollar amount or percentage of payroll into a designated public fund. The fund would provide a source of financing for coverage for those who do not have employment-based coverage. Currently, two states, Massachusetts and Vermont, and the City of San Francisco impose pay-or-play requirements on employers .
EMPLOYER-SPONSORED INSURANCE (ESI) - A voluntary system in which employers choose to provide health insurance for employees.
END-STAGE RENAL DISEASE (ESRD)- Kidney disease that is severe enough to require lifetime dialysis or a kidney transplant. People of all ages who have ESRD are eligible for Medicare.
ENTITLEMENT PROGRAM: A program, such as Medicare and Medicaid, for which people who meet eligibility criteria have a right to benefits. Changes to eligibility criteria and benefits require legislation. For Medicare and Medicaid, the federal government is required to spend the funds necessary to provide benefits for individuals in these programs, unlike discretionary programs for which spending is set by Congress through the appropriations process. Enrollment in these programs cannot be capped and neither states nor the federal government may establish waiting lists.
ENTERPRISE LIABILITY - Proposal to hold hospitals or health maintenance organizations liable for negligent harm in medical malpractice cases, rather than holding individual physicians liable.
ESSENTIAL HEALTH BENEFITS - A benchmark level of benefits created by the ACA that is meant to ensure a health plan provides a comprehensive set of services. Plans both within and outside of the health insurance exchanges will be required to offer at least this level of coverage. Cost-sharing will be limited to the current HSA limits ($5,950 for individuals and $11,900 for families in 2011.) The Secretary of Health and Human Services is required to define and annually update the benefit package.
EVIDENCE-BASED MEDICINE - The use of current best clinical research evidence in making decisions about the care of individual patients, often with the assistance of information technology.
EXPERIENCE RATING - Process of determining insurance premiums for a group that is based wholly or partially on that particular group's past use of services and expenses incurred. Contrast with Community Rating and Modified Community Rating.
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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 caregiver."
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 paid on the employee's behalf—go to http://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. Before the recession of 2008 – 2009, the FMAP was not less than 50 percent or more than 80 percent. Congress increased the federal match in the American Recovery and Reinvestment Act of 2009 to help states during the recession, and later extended increased FMAP payments through June 2011. For more information go to http://aspe.hhs.gov/health/fmap.htm.
FEDERAL POVERTY GUIDELINE – The federal government’s working definition of poverty that is used as the reference point to determine eligibility for certain public programs, including Medicaid and the 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.).
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.
FEE SCHEDULE - A complete listing of fees used by health plans to pay doctors or other providers.
FEE-FOR-SERVICE (FFS) - A method of paying health care providers a fee for each medical service rendered, rather than paying them salaries or capitated payments.
FIRST-DOLLAR COVERAGE - Insurance plans that provide benefits without first requiring payment of a deductible.
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 and state Medicaid programs, 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.
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GATEKEEPER/CARE MANAGER - A Health Care professional, usually a primary care physician, who coordinates, manages, and authorizes all health services provided to a person covered by certain types of health plans. Unless an emergency exists, the gatekeeper generally must pre-authorize referrals to specialists, hospitalizations and lab and radiology tests.
GLOBAL BUDGETING – a fixed maximum expenditure for a defined set of health care services for a covered population. Global budgets are intended to constrain both the level and rate of increase in health care costs by limiting them directly.
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, which pays for the direct costs of training residents, and the Indirect Medical Education Adjustment, which pays for the increased operating costs of a teaching hospital. 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 – In a health policy sense, a complaint filed because of dissatisfaction with the quality of care by a provider or with customer service or some other action by a health plan. Medicare fee-for-service, Medicare health maintenance organizations 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 will review the case and guarantee the patient's stay, possibly free-of-charge, until the review has been completed. Under the ACA, all consumers will have the right to appeal decisions, including coverage denials and rescissions, made by their health plans. Also see Appeal.
GROUP INSURANCE - Health insurance offered through business, union trusts or other groups and associations. The policy holder is generally the employer or other entity. This system of health insurance is the most common in the United States.
GROUP-MODEL HMO - A health maintenance organization (HMO) that contracts with a single multi-specialty medical group to provide care for HMO members. The HMO compensates the group for contracted services at a negotiated rate, and that group is responsible for compensating its physicians and contracting with hospitals for care of their patients. Also see HMO, Staff-Model HMO and Network-Model HMO.
GUARANTEED ISSUE/RENEWAL- A requirement that health plans cannot reject coverage for an applicant based on the person’s medical history. Under the ACA, guaranteed issue for new coverage and guaranteed renewability for existing coverage is the law of the land as of January 1, 2014. For those under age 19, the provision went into effect September 23, 2010.
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HEALTH CARE COOPERATIVE (CO-OP): A non-profit, member-run health insurance organization, governed by a board of directors elected by its members. Co-ops provide insurance coverage to individuals and small businesses and can operate at state, regional, and national levels. The ACA contains loans and grants for the development of new nonprofit health cooperatives to be sold as qualified health plans through state insurance exchanges in the individual and small group insurance markets.
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. Under the ACA, certain small businesses are eligible for tax credits to offset part of the cost of covering their workers.
HEALTH INFORMATION TECHNOLOGY - An umbrella term (which encompasses electronic health records and personal health records) to indicate the use of computers, software programs, electronic devices and the Internet to store, retrieve, update and share information about patients' health electronically.
HEALTH INSURANCE EXCHANGE/CONNECTOR – A mechanism that creates a single marketplace facilitating the buying and selling of private health insurance. Similar to a stock exchange or a farmers market where buyers and sellers are brought together, the system is intended for individuals, small businesses, and their employees, while maintaining existing employer-based access to health insurance. The Affordable Care Act calls for the creation in every state of exchanges through which individuals who are U.S. citizens, legal residents, and businesses can buy coverage.
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. See Group-Model HMO, Network-Model HMO and Staff-Model HMO.
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 – acronym not referenced in text) - 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.
HEALTH RESOURCES and SERVICES ADMINISTRATION (HRSA) - an agency of the U.S. Department of Health and Human Services that works to improve access to health care services for people who are uninsured, isolated or medically vulnerable. Its goals, pursued through more than 100 programs, are to improve access, strengthen the health workforce, build healthy communities and improve health equity.
HEALTH REFORM LAW (formally known as the Patient Protection and Affordable Care Act or simply the Affordable Care Act, ACA) -- Law enacted in March 2010, phasing in major expansions in insurance coverage, changes in insurance rules, and delivery system changes, over the next several years.
HEALTH REIMBURSEMENT ARRANGEMENT (HRA) - A type of health insurance plan also known as "health reimbursement account" or "personal care account," HRAs are tax-preferred accounts with funds established by employers to reimburse employees for qualified medical expenses; often HRAs are paired with a high-deductible health plan. An HRA may be used by an employee to pay for medical coverage until funds are exhausted. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year, but do not follow the employee once he or she changes jobs. Compare to Health Savings Account.
HEALTH SAVINGS ACCOUNT (HSA) - A type of health insurance plan similar to HRAs (see above), but which is owned by workers. An HSA is a tax-preferred savings account and is paired with a high-deductible health plan. Any employer can offer an HSA (or a self-employed individual can set one up on his or her own), and both employers and employees can contribute to it. The worker must pay for all services until the amount of the deductible is reached (in 2011, a minimum of $1,200 for an individual and $2,400 for family coverage). The worker can withdraw money from the HSA to pay for medical services under the deductible. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year. Unlike HRAs, HSAs follow an employee when he or she changes jobs. Also see Health Reimbursement Arrangement and Medical Savings Account.
HIGH-DEDUCTIBLE HEALTH PLAN - Health insurance plans that have higher deductibles (see Glossary) but lower premiums than traditional plans. Qualified high-deductible plans that may be combined with a health savings account must have a deductible of at least $1,200 for single coverage and $2,400 for family coverage in 2011.
HIGH-RISK POOL - A health insurance pool organized as a source of coverage for individuals who have been denied health insurance because of a medical condition, or whose premiums are significantly higher than the average due to health status or claims experience. The ACA calls for the establishment of a temporary high-risk pool in every state – run by the state or by the federal government – with premiums on a par with those in the individual market for persons without pre-existing medical problems. These pools, which exist alongside high-risk pools already in operation in many states, went into effect June 21, 2010 and will end on January 1, 2014. On the later date, coverage will be available to high-risk individuals through state health insurance exchanges.
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 capped HCBS option that allows states to offer these services without having to obtain administrative waiver approval. See Programs for All Inclusive Care of the Elderly and Medicaid and Medicaid. Provisions in the ACA give states incentives to expand their HCBS programs to balance spending between institutional care and HCBS.
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.
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 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 on covered services and payment rates, go to http://www.cms.gov/hospice to see an HHS fact sheet.
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. Also see Trust Fund.
HOSPITAL QUALITY ALLIANCE (HQA)— a public-private collaboration seeking to improve the quality of care provided by the nation's hospitals by measuring and publicly reporting on that care. Geographic regions used by the Dartmouth Atlas of Health Care to define regional health care markets. These regions are defined by where patients in surrounding areas are most often referred to for tertiary care. Each HRR contains at least one hospital that performs major cardiovascular procedures and neurosurgery. HRRs can cross state lines.
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.
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INCOME-RELATED PREMIUM - Premiums for Medicare Part B and Part D that apply to higher-income Medicare beneficiaries. The Medicare Modernization Act of 2003 established an income-related Part B premium requiring higher-income Medicare beneficiaries to pay a greater share of average Part B costs (35 percent to 80 percent, depending on their income). Beneficiaries are required to pay the income-related Part B premium if their income is equal to or greater than $85,000 for an individual and $170,000 for a couple in 2010. The ACA freezes the threshold for the income-related Part B premium at 2010 levels through 2019. The ACA also creates an income-related Part D premium, effective in 2011, using the same surcharge percentages and income thresholds as for Part B. Similar to the Part B premium provision, the income thresholds for the Part D income-related premium are not indexed to increase annually, thus making more beneficiaries subject to the higher premiums each year.
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 PAYMENT ADVISORY BOARD – Created in the ACA, a board of 15 members appointed by the president and confirmed by the Senate for six-year terms. The board is tasked with submitting proposals to Congress to reduce Medicare spending by specified amounts if the projected per beneficiary spending exceeds the target growth rate. If the board fails to submit a proposal, the secretary of the Department of Health and Human Services is required to develop a detailed proposal to achieve the required level of Medicare savings. The secretary is required to implement the board’s (or his or her own) proposals, unless Congress adopts alternative proposals that result in the same amount of savings. The board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income subsidies under Part D.
INDEPENDENT PRACTICE ASSOCIATION (IPA) - A physician organization which typically contracts with a health maintenance organization 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.
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 MANDATE - A law requiring individuals to obtain health care coverage, and in some cases, forcing individuals to pay a penalty if they choose not to participate. The individual mandate of the ACA goes into effect January 1, 2014. Exemptions will granted for certain people, including American Indians, those with religious objections and those facing financial hardships.
INPATIENT- A person who is admitted to a hospital, usually for 24 hours or more.
INSTITUTE OF MEDICINE (IOM) - A nonprofit organization that works outside the framework of government to ensure scientifically informed analysis and independent guidance on matters of biomedical science, medicine and health. The institute provides unbiased, evidence-based and authoritative information and advice concerning health and science policy to policy-makers, professionals, leaders in every sector of society and the public at large.
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.
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.
INTEGRATED PROVIDER – A group of providers that offer comprehensive and coordinated care, and usually provide a range of medical care facilities and service plans including hospitals, physician group practices, a health plan and other related healthcare services.
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.
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JOINT COMMISION – A national private, nonprofit organization that accredits health care organizations and agencies and sets guidelines for these facilities.
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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 qualified individuals 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 – See Medical Loss Ratio
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MANAGED CARE – A health care delivery system that seeks to control access to and utilization of health care services both to limit health care costs and to improve the quality of the care provided. Managed care arrangements typically rely on primary care physicians to act as “gatekeepers” and manage the care their patients receive.
MANDATE - Used in two senses in health policy discussions. (1) Employer or individual mandate, in which a government body imposes a requirement on some employers to help pay for insurance coverage for their workers (and perhaps their families), and/or on certain individuals to obtain coverage. (2) State mandate, a requirement imposed by states on insurance companies to include, as part of any health insurance policy they sell, coverage for a specific service, such as well baby care, or a specific provider, such as a psychologist or optometrist.
MARKET BASKET INDEX - An index of the annual change in the prices of a selection of goods and services providers used to produce health services. Also referred to as an input price index.
MEANS TEST(ING) - Determining eligibility for government benefits based on an individual's lack of means, as measured by income and/or assets. Under current Medicaid eligibility guidelines, means-testing may differ for different eligibility groups. The Medicare Prescription Drug Improvement and Modernization Act of 2003 introduced a form of means-testing in Medicare, which now sets higher premiums for higher-income seniors and provides more generous drug benefits to lower-income beneficiaries.
MEDICAID - Public health insurance program that provides coverage for low-income persons for acute and long-term care. It is financed jointly by state and federal funds (the federal government pays at least 50 percent of the total cost in each state) and is administered by states within broad federal guidelines. See Chapter 8, Medicaid, for more information.
MEDICAID WAIVER - Authority granted by the secretary of Health and Human Services to allow a state to continue receiving federal Medicaid matching funds even though it is no longer in compliance with certain requirements of the Medicaid statute. States can use waivers to implement home and community-based services programs or managed care, and to expand coverage to populations who are not otherwise eligible for Medicaid.
MEDICAL HOME – see Patient-Centered Medical Home
MEDICAL IRA - See Medical Savings Account
MEDICAL 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 for benefits. The ACA sets minimum medical loss ratios for health plans effective Jan. 1, 2011.
MEDICAL SAVINGS ACCOUNT (MSA) - A health insurance option consisting of a high-deductible insurance policy coupled with a tax-preferred savings account. MSA policies, enacted in 1996, have been largely replaced by health savings accounts.
MEDICAL UNDERWRITING - See Underwriting
MEDICALLY NEEDY - An optional Medicaid category in which states can cover individuals and families who qualify for coverage because of high medical expenses, usually hospital or nursing home care. To qualify, individuals must be categorically eligible and their monthly incomes minus accumulated medical bills must be below state income limits for the Medicaid program. This allows Medicaid coverage for people who have extensive health care needs but too much income to be eligible for Medicaid. Also see Spend-Down.
MEDICARE - Federal health insurance program for virtually all persons age 65 and older, and permanently disabled persons under age 65, who qualify by receiving Social Security Disability Insurance. See Chapter 7, Medicare, for more.
MEDICARE ADVANTAGE - A part of Medicare designed to offer beneficiaries a choice of managed care and other private plan options. Also called Part C of Medicare, Medicare Advantage encompasses health maintenance organizations (HMOs), preferred provider organizations (PPOs), Medicare HSAs, regional PPOs, and other options. Not all options are available in all areas.
MEDICARE ADVANTAGE PRESCRIPTION DRUG PLAN (MA-PD) - Medicare Part D prescription drug coverage that is sponsored by a Medicare Advantage plan.
MEDICARE PART A - Also known as the Hospital Insurance (or HI) program, Part A of the Medicare program covers inpatient hospital care, skilled nursing care for up to 100 days after a hospitalization, home health and hospice care. It is funded by a portion of the wage tax – 2.9 percent, with employers and employees each paying 1.45 percent.
MEDICARE PART B - Also known as Supplementary Medical Insurance (or SMI), Part B of Medicare covers physician services, outpatient care and home health care after 100 visits. It is funded partly by premiums paid by beneficiaries.1 The rest comes from the federal government’s general revenue.
MEDICARE PART D – See Medicare Prescription Drug, Improvement and Modernization Act of 2003 below.
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT & MODERNIZATION ACT OF 2003 (MMA) - Legislation signed into law in December 2003 that provides seniors and disabled individuals on Medicare with a prescription drug benefit, delivered through private stand-alone prescription drug plans or managed care plans integrating Part A and Part B benefits (Medicare Advantage). The law expanded the array of Medicare managed care plans and changed payment methodologies. For more information, see http://www.kff.org/medicare/med011604pkg.cfm.
MEDICARE SAVINGS PROGRAM (MSP) - The program provides assistance through Medicaid with Medicare premiums - and sometimes cost-sharing requirements - to Medicare beneficiaries of limited income and resources who do not qualify for full Medicaid benefits. The program encompasses qualified Medicare beneficiaries (QMBs), specified low-income Medicare beneficiaries (SLMBs) and other groups of beneficiaries who need help with cost-sharing to access services. For more information, visit http://www.cms.gov/DualEligible/.
MEDIGAP INSURANCE/MEDICARE SUPPLEMENTAL INSURANCE - Medigap policies are sold by private insurance companies to fill "gaps" in fee-for-service Medicare. Except in Minnesota, Massachusetts and Wisconsin, there are 10 standardized policy designs, known as Plans A through J. Plans H, I and J include limited drug coverage. No new Medigap policies that include drug coverage are now being be sold. Beneficiaries with existing Medigap policies that include drug coverage may maintain them if they wish. However, they may be subject to late enrollment penalties if they later want Part D drug benefits. For more information, visit http://www.cms.gov/Medigap/
MENTAL HEALTH PARITY ACT - An act requiring group health plans with more than 50 employees to ensure that financial requirements and treatment limitations applicable to mental health/substance use disorder benefits are no more restrictive than the predominant requirements and limitations placed on substantially all medical/surgical benefits. For more information, see text box in Chapter 11, Mental Health and Substance Abuse.
MISUSE - describes care that is provided poorly or erroneously, such as wrong-site surgery. For more information, see Chapter 3, Quality for more information.
MODIFIED COMMUNITY RATING – A method for setting health insurance premiums for everyone in a state taking into account demographic variables, but not the applicant’s medical history. Contrast with Community Rating and Experience Rating.
MORBIDITY - A determination of the incidence and severity of sicknesses and accidents in a well-defined class of persons.
MORTALITY - An actuarial determination of the death rate at each age as determined from prior experience.
MULTIPLE EMPLOYER WELFARE ASSOCIATION (MEWA) - A group of employers who band together for purposes of purchasing group health insurance, often through a self-funded approach. MEWAs are sometimes exempt from state benefit mandates, taxes and other regulations.
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NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) - A nonprofit association whose members comprise the insurance commissioners of the individual states and territories. NAIC members are elected or appointed state government officials who regulate the conduct of insurance agencies and agents. NAIC was delegated significant responsibilities under the ACA, including developing uniform definitions for calculating medical loss ratios and assisting HHS with establishing rate review procedures.
NATIONAL COMMITTEE on QUALITY ASSURANCE (NCQA) – An independent national organization that reviews and accredits managed care plans and measures the quality of care offered by managed care plans and other entities.
NATIONAL INSTITUTES OF HEALTH (NIH)—A part of the U.S. Department of Health and Human Services, the primary federal agency for conducting and supporting medical research. NIH scientists investigate ways to prevent disease as well as the causes, treatments, and even cures for common and rare diseases.
NETWORK-MODEL HMO - A health maintenance organization (HMO) that contracts with more than one independent physician group to provide health services. The providers may see patients who are not members of the HMO. Also see HMO, Group-Model HMO and Staff-Model HMO.
NEVER EVENT - 28 occurrences that the National Quality Forum has identified as events that should never happen in a hospital and can be prevented. These events include surgical events, product or device events, and criminal events. The Centers for Medicare and Medicaid Services (CMS) announced in January 2009 that Medicare would stop paying for three never events – wrong invasive procedures, invasive procedures performed on the wrong body part and invasive procedures performed on the wrong patient.
NURSE PRACTITIONER (NP/RNP) - A registered nurse with advanced academic and clinical experience who diagnoses and manages most common and many chronic illnesses, either independently or as part of a health care team. A nurse practitioner provides some care previously offered only by physicians and in most states has the ability to prescribe medications.
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OFFICE OF CONSUMER INFORMATION AND INSURANCE OVERSIGHT— See Center for Consumer Information and Insurance Oversight
ON LOK PROGRAM - A San Francisco project that uses an HMO model to provide all acute care and long-term care services needed by a frail elderly population at risk of nursing home placement. See Program of All-Inclusive Care for the Elderly.
OPEN ENROLLMENT - The period of time during which health insurance coverage options are offered to a specified population, regardless of health status and without medical screening. Open enrollment periods are characteristic of some Blue Cross-Blue Shield plans and health maintenance organizations, and all plans in the Federal Employees Health Benefits Program.
OPEN PANEL/OPEN ACCESS - A self-referral arrangement allowing health plan enrollees to see participating providers for specialty care without a referral from a primary care physician or other doctor.
OUT-OF-POCKET CAP/MAXIMUM – An annual limit on how much an individual has to pay in deductibles, coinsurance and copayments, excluding the premium. The ACA requires new plans offered beginning in 2014 to include an out-of-pocket maximum set at the current maximum level for contribution to health savings account, or $5,950 for an individual or $11,900 for a family policy in 2011.
OUTCOMES RESEARCH - Research that attempts to evaluate particular health services by tracking and analyzing clinical results (e.g., death, illness, ability to function) of various treatments. See also Patient Centered Outcomes Research Institute
OUTPATIENT - A person receiving medical services who has not been admitted to a hospital.
OUTPATIENT HOSPITAL SERVICES- Services provided to a hospital outpatient. They are covered by Part B for Medicare beneficiaries. For more information, see Chapter 7, Medicare.
OVERUSE – A term used when patients receive care that is not medically indicated. Typical examples are use of antibiotics to treat a cold or the use of imaging devices for someone with the first signs of lower back pain. For additional information, see Chapter 3, Quality.
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PARTIAL CAPITATION - An insurance arrangement where the payment made to a health plan is a combination of a capitated premium and a payment based on actual use of services. The proportions specified for these components determine the insurance risk faced by the plan.
PATIENT-CENTERED CARE – An approach that takes into consideration the patients' cultural traditions, personal preferences and values, family situations and lifestyles. Responsibility for important aspects of self-care and monitoring is put in patients' hands—along with the tools and support they need.
PATIENT-CENTERED MEDICAL HOME -- An approach to providing comprehensive primary care for individuals through creating a setting that facilitates partnerships between individual patients and their personal physicians. This approach to care is aided by registries, information technology, health information exchanges and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner. For additional information, visit http://www.ncqa.org/tabid/631/Default.aspx.
PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE - A private, nonprofit institute created in the ACA to set an agenda for, and oversee the conduct of, comparative effectiveness research in the U.S.
PATIENT PROTECTION AND AFFORDABLE CARE ACT (ACA) - Law enacted in March 2010, phasing in major expansions in insurance coverage, changes in insurance rules, and delivery system changes. Known informally as the Affordable Care Act or ACA.
PAY FOR PERFORMANCE - A method of paying health care providers differing amounts based on their performance on measures of quality and efficiency. Payment incentives can be in the form of bonuses or financial penalties.
PAYMENT BUNDLING - A form of provider payment where providers or hospitals receive a single payment for all of the care provided for an episode of illness, rather than per service rendered. Total care provided for an episode of illness may include both acute and post-acute care. The ACA establishes pilot programs in Medicare and Medicaid to pay a bundled payment for episodes of care involving hospitalizations.
PAYMENT REFORM – Payment reform seeks to improve current mechanisms for reimbursing providers by including rewards for provider quality in the reimbursement mechanisms. For additional information, see Chapter 1, Health Reform.
PAY OR PLAY - See Employer Pay-or-Play
PAYROLL TAX - A flat percentage tax collected on salaries and wages. A payroll tax of 7.65 percent on both employers and employees finances Social Security cash benefits and Medicare Part A hospital services. Of that 7.65 percent, 1.45 percent each, or a total of 2.9 percent of payroll with both employer and employee contributions, is allocated for Medicare. Funding of the ACA will come in part from higher Medicare payroll taxes on families making more than $250,000, starting in 2013.
PHARMACY BENEFIT MANAGER (PBM) - A company that contracts with insurers and employers to manage the prescription drug benefit for enrollees or employees. The vast majority of managed care plans use PBMs.
PHYSICIAN QUALITY REPORTING INITIATIVE (PQRI) - Authorized through the Medicare, Medicaid, and SCHIP Extension Act of 2007, it offers a financial incentive for health care professionals to report on the quality of care that they provide.
POINT-OF-SERVICE PLAN (POS) - A managed care plan that combines features of both prepaid and fee-for-service insurance. POS plan enrollees decide whether to use network or non-network providers at the time care is needed, but usually are subject to reduced coverage and larger copayments for using non-network providers.
POVERTY LEVEL - See Federal Poverty Guidelines
PRACTICE GUIDELINES/PARAMETERS - A statement of the known benefits, risks and costs of particular courses of medical action, developed to give physicians information about treatment alternatives.
PRE-EXISTING CONDITION - A physical or mental condition of an individual which is known to the individual before an insurance policy is issued. Insurers may choose not to cover treatment for such a condition, at least for a period, may raise rates because of it, or may deny coverage altogether. Pre-existing condition exclusions are prohibited by the ACA now for children and in 2014 for adults.
PREFERRED PROVIDER ORGANIZATION (PPO) - A health care delivery system through which a number of providers contract to serve health plan enrollees on a fee-for-service basis at discounted fees. Providers agree to PPO discounts in the hope of gaining more patients. Patients may use any provider without a referral, in network or out, but have a financial incentive for example, lower coinsurance payments - to use doctors on the preferred list.
PREMIUM - The cost of health plan coverage, not including any required deductibles or copayments. The cost of the premium may be shared between employers or government purchasers and individuals .
PREMIUM ASSISTANCE - The use of federal funds available through public health coverage programs especially Medicaid and CHIP - to purchase or help purchase private insurance.
PREMIUM SUBSIDIES - A fixed amount of money or a designated percentage of the premium cost that is provided to help people purchase health coverage. Premium subsidies are usually provided on a sliding scale based on an individual’s or family’s income. The ACA provides premium subsidies through refundable pre-tax credits to individuals with incomes between 133 percent and 400 percent of the federal poverty level who purchase policies through the health insurance exchanges beginning in 2014.
PREMIUM SUPPORT - A health benefit model that is considered by its designers to be a hybrid of the defined contribution and defined benefit approaches. This model requires general categories of health services to be covered, but benefits could be added or deleted within limits. The employer or government then contributes a set amount of the premium for the purchased plan. Plans could set premiums at whatever dollar level they choose, with beneficiaries liable for any costs above the employer or government contribution. A Medicare demonstration designed to test a model similar to premium support began in 2010.
PREVENTIVE HEALTH SERVICES - Services aimed at preventing a disease from occurring, or preventing or minimizing its consequences. This includes care aimed at warding off illnesses (immunizations), at early detection of disease (Pap smears), and at stopping further deterioration (cholesterol-lowering medication).
PRIMARY CARE - Care at "first contact" with the health care system, including an array of non-specialist services provided by physicians, nurse practitioners, or physician's assistants more simply, the care that most people receive for most of their problems that bother them most of the time.
PRIMARY CARE CASE MANAGEMENT, INITIATIVE, OR CLINICIAN - (PCCM/PCI/PCC) - A Medicaid managed care program in which an eligible individual may use services only with authorization from his or her assigned primary care provider. That provider is responsible for locating, coordinating, and monitoring all primary and other medical services for enrollees. Those services are usually paid on a fee-for-service basis.
PRIMARY CARE PROVIDER – A provider, usually a physician, specializing in internal medicine, family practice, or pediatrics (but can also be a nurse practioner, physician assistant or health care clinic), who serves as the patient's first point of contact with the health care system and coordinates the patient's medical care.
PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE) - Originally a Medicare demonstration project that replicated the model of managed care developed by On Lok Senior Health Services in San Francisco. Now a national, permanent program. PACE targets frail community-dwelling elderly, most of whom are dually eligible for Medicare and Medicaid. Core services include adult day care, social support, home health, hospital care, nursing home care, and case management that integrates acute and long-term care services. PACE is financed through capitated Medicare and Medicaid payments to the provider. For more information, visit http://www.cms.gov/PACE/.
PROSPECTIVE PAYMENT SYSTEM (PPS) - A method used by Medicare to pay for many services, including inpatient and outpatient hospital services as well as services provided at skilled nursing and rehabilitation facilities. Payment rates are linked to diagnosis and determined before services are rendered, rather than being based on actual costs or charges of a specific facility. Rates are intended to cover treatment costs for a typical patient with a given diagnosis and are adjusted for factors like wages and indigent care.
PROVIDER - Any health care professional or institution that renders a health service or provides a health care product. Major providers are hospitals, nursing homes, physicians and nurses.
PUBLIC HEALTH - The protection and improvement of population health by organized community effort. Public health activities are very broad and include immunization, sanitation, preventive medicine, disease control, education about reducing personal risks, occupational health and safety, pollution control, water safety, food safety, epidemiology, etc. See Chapter 12, Public Health, for more information.
PURCHASING POOL - A group of people, businesses or associations who come together to enhance their bargaining power and negotiate lower premiums from health insurance plans than they could on their own, while also pooling risks across sick and healthy individuals.
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QUALIFIED MEDICARE BENEFICIARY (QMB) - A person who is eligible for Medicare, has an income below 100 percent of the federal poverty level and has limited assets, who is therefore eligible to receive assistance with Medicare’s cost-sharing. Under the QMB program, state Medicaid agencies are required to pay the cost of Medicare Part A and B premiums, deductibles and coinsurance.
QUALITY-ADJUSTED LIFE YEARS (QALYs) - Years of life saved by a medical technology or service, adjusted to reflect the health quality of those years (as determined by some evaluative measure). QALYs are the most commonly used unit to express results in certain cost-effectiveness analyses. A year of perfect health is considered equal to 1.0 QALY.
QUALITY IMPROVEMENT ORGANIZATION (QIO) – One of 53 groups with which Medicare contracts to monitor hospital use and quality of care received by Medicare patients in a given state or other area. For additional information, visit http://www.cms.gov/QualityImprovementOrgs/
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RATING - The process of evaluating, or underwriting, a group or individual to determine a health insurance premium rate relative to the financial risk the person or group presents of needing healthcare. Key components of the rating formula include age, sex, location and plan design.
RATING BANDS - Amounts by which insurance rates for a specific class of insured individuals may vary. All states have laws regulating insurer rating practices, and many states periodically update these laws with small group market reform proposals to restrict or loosen allowable variations.
REFERRAL - A primary care doctor's written permission for a patient to see a certain specialist or to receive certain services. Required by some managed care health plans.
REFUNDABLE TAX CREDIT- A way of providing a tax subsidy to an individual or business, even if no taxes are owed (see Tax Credit). If a person owes no tax, the government sends the person (or a third party) a check for the amount of the refundable tax credit.
REINSURANCE/RISK CONTROL INSURANCE – A practice allowing an insurance company (the insurer) to transfer a portion of its risks to another insurer (the reinsurer). This practice does not affect policyholder rights in any way, and the original insurer remains liable to the policyholders for benefits and claims.
RELATIVE VALUE SCALE (RVS) - An index that assigns weights to each medical service; the weights represent the relative amount to be paid for each service. To calculate a fee for a particular service, the index for that service is multiplied by a constant dollar amount (known as the conversion factor). Medicare uses an RVS to calculate payments to physicians.
REPORT CARD - An assessment of the quality of care delivered by health plans, hospitals or other providers. Report cards provide information on how well a health plan treats its members, keeps them healthy and provides access to needed care. Report cards can be published by states, private health organizations, consumer groups or health plans.
RESOURCE-BASED RELATIVE VALUE SCALE (RBRVS) - The way Medicare determines how much it will pay physicians, based on the resource costs needed to provide a Medicare-covered service. The RBRVS is calculated using three components: physician work, practice expense and professional insurance. The Medicare payment to physicians is determined by multiplying the combined costs by a conversion factor set by the Centers for Medicare and Medicaid Services, adjusted for geographical differences in the cost of resources. Physician work typically accounts for 50 percent of the value while practice expense accounts for 45 percent.
RESPITE CARE - Short-term personal care given to a frail elder or person with disabilities, to substitute for assistance usually provided by a family caregiver.
RISK - The probability of financial loss, based on the probability of having to provide services to a patient or patient population at a cost that exceeds the payments received. Under capitation payment systems, providers share the risk that is borne by insurers.
RISK ADJUSTMENT - Increases or reductions in payment made to a health plan on behalf of a group of enrollees to compensate for health care expenditures that are expected to be higher or lower than average.
RISK SELECTION - Enrollment choices made by health plans - or by enrollees - on the basis of perceived risk relative to the premium to be paid.
RISK SHARING - A method by which the financial risk of covering a group of enrollees is shared by plan sponsors and purchasers, typically managed care organizations and states. In contrast, indemnity plans assume all risk of providing care paid for through insurance premiums which belong solely to the insurance company.
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SAFETY NET PROVIDERS - Health care providers who deliver health care services to patients regardless of their ability to pay. These providers may consist of public hospitals, community health centers, local health departments, and other providers who serve a disproportionate share of uninsured and low-income patients.
SECTION 125 PLAN -- A Section 125 plan provides participants an opportunity to receive certain benefits, such as reimbursement for some out-of-pocket medical expenses, on a pretax basis. It is a separate written plan, maintained by an employer for employees, that meets the specific requirements of Section 125 of the Internal Revenue Code.
SELF-EMPLOYED DEDUCTION FOR HEALTH INSURANCE - Self-employed taxpayers and their families can deduct all their payments for health insurance, including insurance premiums, when figuring their annual income for tax purposes, to the extent these payments exceed 7.5 percent of adjusted gross income.
SELF-INSURANCE - Large and medium-size companies often assume all or most financial risks of providing health insurance to their workers, as opposed to purchasing insurance coverage from commercial carriers (and having the carrier assume all risk). Claims processing is often handled through an administrative services contract with an independent organization, often an insurance company.
SINGLE PAYER SYSTEM - A health care system, either at the national or state level, which would designate one entity (usually the government) to function as the central purchaser of health care services. Canadian provinces operate health insurance coverage for residents under this system.
SKILLED NURSING FACILITY (SNF) - An institution that offers skilled services similar to those given in a hospital, such as intravenous injections and physical therapy given by professional staff, to aid rehabilitation following hospitalization of patients who have been discharged. SNFs differ from nursing homes or nursing facilities, which are intended primarily to support elderly and disabled individuals in the tasks of daily living (custodial care). Medicare does not cover custodial care in nursing homes; however, Medicare does cover skilled nursing care, rehabilitation and associated custodial care in SNFs. Medicaid covers care in all Medicaid-certified nursing facilities.
SMALL GROUP MARKET – A private insurance market, regulated by state government, where firms with two to 50 employees can purchase health insurance for their employees.
SOCIAL SECURITY DISABILITY INSURANCE (SSDI) - Financed with Social Security taxes, SSDI provides cash assistance to people who are permanently disabled and unable to work, and who previously worked and paid Social Security payroll taxes. Although the number of work credits required to qualify for SSDI depends on the age of disability onset, one must typically have 40 credits, of which 20 must be from the last 10 years (four work credits can be earned per year). The size of the monthly benefit depends on the beneficiary's earnings record. Widows, widowers and adults who are blind or disabled since childhood are also eligible for SSDI.
SOCIALIZED MEDICINE - A system of health care in which all health personnel and health facilities, including doctors and hospitals, work for the government and draw salaries from the government. Doctors in the U.S. Veterans Administration and the Armed Services are paid this way. Veterans and U.S. military hospitals are also supported this way. Examples also exist in Great Britain and Spain.
SPECIFIED LOW-INCOME MEDICARE BENEFICIARY (SLMB) - A person who is eligible for Medicare, has an income of between 100 to 120 percent of the federal poverty level and has limited assets and, is eligible to receive cost-sharing assistance if enrolled in the Specified Low-Income Medicare Beneficiary program. Under the SLMB program, state Medicaid agencies are required to pay the beneficiary's Part B premiums, but not deductibles or copayments. Also see Qualified Medicare Beneficiary. See http://www.cms.gov/DualEligible/ for more information.
SPEND-DOWN - Process by which individuals in many states can qualify for Medicaid because high medical expenses, usually hospital or nursing home care, reduce their monthly income to below state income limits for the Medicaid program. The amount that each individual must "spend down" is determined at the time eligibility is determined. Also see Medically Needy.
STAFF-MODEL HMO - A health maintenance organization (HMO) that delivers health services through salaried physicians who are employed by the HMO exclusively to care for HMO enrollees. Also see HMO, Group-Model HMO and Network-Model HMO.
STATE HEALTH INSURANCE ASSISTANCE PROGRAM (SHIP) - A federal program that provides funding to states to provide Medicare beneficiaries and other consumers with free health insurance counseling and assistance. See http://goo.gl/TIkrX for more information.
STATE MANDATE - State coverage laws requiring private insurers to cover specific services (such as well-baby care) or reimbursement for specific providers (such as psychologists). The Employee Retirement Income Security Act generally exempts self-insured companies from these requirements.
STATE PHARMACY ASSISTANCE PROGRAM (SPAP)- State-funded program providing pharmacy benefits to seniors and other low-income groups. Before the enactment of Medicare Part D, 22 states funded SPAPs while six states operated waiver programs funded jointly by state and federal governments through Medicaid (see Medicaid 1115 Waiver). With Part D in operation, most states have begun providing wrap-around benefits to coordinate and ease the enrollment of their Medicare beneficiaries by, for example, covering deductibles, co-insurance or the gap in Medicare Part D coverage. (Dead URL)
STOP-LOSS - See Out-of-Pocket Cap
SUBSTANCE ABUSE - A maladaptive pattern of using certain drugs, alcohol, medications, and toxins that leads to clinically significant impairment or distress.
SUBSTANCE DEPENDENCE – When a person continually uses a particular substance, resulting in compulsive substance-taking behavior, tolerance for the substance, and withdrawal symptoms if the person stops using the substance.
SUPPLEMENTAL MEDICAL INSURANCE - Any private health insurance plan held by a Medicare beneficiary that is purchased to fill in "gaps" in traditional Medicare coverage, or to finance cost-sharing requirements, e.g., Medicare's hospital deductible. Among the most common types of supplemental insurance are some employer-sponsored retiree coverage and Medigap insurance (see glossary).
SUPPLEMENTAL SECURITY INCOME (SSI)- A federal income support program for low-income disabled, aged and blind individuals. Eligibility for SSI monthly cash payments does not depend on previous employment or contributions to a trust fund. Eligibility for SSI usually confers eligibility for Medicaid.
SUPPLEMENTARY MEDICAL INSURANCE (SMI) TRUST FUND - The Medicare trust fund that pays for physician procedures and treatments delivered in hospital outpatient departments, ambulatory surgical centers, and other non-hospital facilities; most home health care services; durable medical equipment such as wheelchairs; and the new prescription drug benefit. The SMI account is financed with beneficiary premiums (25 percent) and general revenues (75 percent).
SUSTAINABLE GROWTH RATE (SGR) – The formula for determining annual targets for spending on physicians’ services under Medicare, established by the Balanced Budget Act of 1997. The SGR is intended to control growth in total Medicare expenditures for physician services. If expenditures exceed the SGR target, the fee schedule update is decreased. Four factors are used to calculate the SGR: (1) average percent change in physician fees; (2) change in the average number of fee-for-service beneficiaries; (3) 10-year average annual growth in GDP per capita; and (4) change in expenditures due to new laws or regulations.
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TAX CREDIT - A flat amount that can be subtracted from taxes owed. Under the 2010 health care reform law, tax credits are available to some small businesses to subsidize their workers’ health insurance premiums. A tax credit is more valuable than a tax deduction of the same amount, since the deduction reduces taxable income, not taxes owed, by the amount of the deduction.
TAX DEDUCTION - An amount that can be subtracted from taxable income if spent on a specific purpose. Currently, businesses and the self-employed can deduct the cost of health insurance provided to employees, but health expenses (including insurance) are a deduction for families with group health insurance only after they reach 7.5 percent of income.
TAX PREFERENCE (FOR HEALTH BENEFITS) - Employer-paid health benefits are treated under federal tax law as a deductible business expense for the employer, and excluded from taxable income for the worker. This creates incentives for some employers and workers to prefer extra compensation in the form of more health coverage rather than wages.
TERTIARY CARE - Health care services provided by highly specialized providers such as neurosurgeons, thoracic surgeons, and intensive care units. These services often require highly sophisticated technologies and facilities.
THERAPEUTIC SUBSTITUTION - Replacement of one drug with another drug from the same therapeutic class that the Food and Drug Administration has determined to be equivalent; the substitute has the same active ingredient with the same absorption rate as the original drug. Often, this results in prescribing the less costly compound.
THIRD PARTY ADMINISTRATOR (TPA) - A professional firm that provides administrative services to employers who want to self-insure their employees. The TPA does not underwrite the financial risk of providing coverage.
THIRD PARTY PAYER - Organization, public or private, that pays or insures medical expenses on behalf of enrollees. An individual pays a premium, and the payer organization pays providers' actual medical bills on the individual's behalf. Such payments are called third-party payments and are distinguished by the separation among the individual receiving the service (the first party), the individual or institution providing it (the second party), and the organization paying for it (third party).
TRADE ACT HEALTH INSURANCE SUBSIDY- Premium subsidy program that covers a portion of the cost of health insurance for early retirees, their families and other workers who have lost their employer-sponsored health coverage as a consequence of company failure due to trade practices or bankruptcy. The subsidy to former workers is provided in the form of a federal tax credit either to be claimed when the income tax return is filed, or sent directly to the beneficiary's health insurance provider each month.
TRANSITIONAL MEDICAL ASSISTANCE (TMA) - Medicaid coverage for up to one year for families leaving welfare to become self-supporting through work. During this transition period, states are required to continue Medicaid benefits even if earnings increase. See http://opencrs.com/document/RL31698/ for more information.
TRANSPARENCY—In health care, usually, the process of collecting and reporting health care cost, performance and quality data in a format that can be accessed by the public. It is intended to improve individual decision-making, or the delivery of services, or both, and ultimately to improve the health care system as a whole.
TRIAGE - The classification of sick or injured persons according to severity in order to direct care and ensure the efficient use of medical and nursing staff and facilities.
TRICARE - Program providing medical care to the dependents of active duty members of the military and to retired members of the military. Formerly known as the Civilian Health and Medical Program (CHAMPUS), the program is run by the Department of Defense. For more information, see www.health.mil/.
TRUST FUNDS - Federal trust funds are created in the U.S. Treasury to account for all program income, such as Social Security and Medicare taxes, and disbursements, such as benefit payments and program administrative costs. Revenues not needed in a particular year are invested in special non-marketable government securities; therefore, the trust funds represent the total value, including interest, of all prior program annual surpluses and deficits. There are two Medicare trust funds: the Hospital Insurance (HI) Trust Fund, which pays for inpatient hospital and related care, and the Supplementary Medical Insurance (SMI) Trust Fund, which pays for physician and outpatient services. Medicare Part D prescription drug expenditures are paid out of the SMI Trust Fund. See Hospital Insurance Trust Fund and Supplementary Medical Insurance Trust Fund.
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UNCOMPENSATED CARE - Care rendered by hospitals or other providers without payment from the patient or a government-sponsored or private insurance program. It includes both charity care, which is provided without the expectation of payment, and bad debt, for which the provider has made an unsuccessful effort to collect payment due from the patient.
UNDERINSURED - People with public or private insurance policies that do not cover all necessary health services, resulting in out-of-pocket expenses that often exceed their ability to pay.
UNDERUSE –The failure to provide a health care service when it would have produced a favorable outcome for a patient. Standard examples include failure to provide appropriate preventive services to eligible patients (e.g., Pap smears, flu shots for elderly patients, screening for hypertension) and proven medications for chronic illnesses (steroid inhalers for asthmatics; aspirin, beta-blockers and lipid-lowering agents for patients who have suffered a recent myocardial infarction).
UNDERWRITING - The process by which health insurers decide whether or not to accept an individual's application for insurance, and, if the applicant is accepted, what conditions and rate to apply. Underwriting is also applied to small employers. If the insurer decides that a particular individual or group poses greater than normal financial risks, it might charge higher premiums, offer more limited benefits, or refuse to pay for services relating to a particular "pre-existing" condition.
UNIVERSAL COVERAGE - Health insurance coverage for all people, through either public or privately funded programs.
UTILIZATION REVIEW (UR) - An insurer's review of health care services - particularly specialist referrals, emergency room use and hospitalizations - to evaluate their appropriateness, necessity, and quality. The review can be performed before, during, or after the delivery of care.
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VOUCHER - In various health reform proposals, a certificate or fixed dollar amount that is provided to persons, which is used to pay all or part of the cost of health insurance or services.
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WELLNESS PLAN/PROGRAM – Employment-based program to promote health and prevent chronic disease. Goals of these programs include: reducing health care costs, sustaining and improving employee health and productivity and reducing absenteeism due to illness.
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YOUNG ADULT HEALTH PLAN- Health plans designed to meet the needs of young adults. These plans tend to offer lower premiums in exchange for high deductibles and/or limited benefit packages.