Health Care Glossary Terms

Glossary Items

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

-A-

AB2450 CLINICS -

A group of licensed community health centers in designated rural areas of California which are funded through the State Department of Health Services, Primary Health Care Systems Branch, under the 1978 mandated AB2450 legislation.

ADJUSTED AVERAGE PER CAPITAL COST (AAPCC) -

Capitated rate paid to health plans by the Medicare program for each enrolled Medicare beneficiary. Rate differs by county depending on actual fee-for-service health care expenditures by Medicare beneficiaries residing in the county.

Agency for Health Care Policy Research, The eighth agency of the federal government, Department of Public Health. The mission of the AHCPR is to enhance the quality of patient care services through improved knowledge that can be used in meeting society's health care needs.

Access for Infants and Mothers. A health insurance program covering comprehensive prenatal and postpartum care, hospital delivery and infant coverage up to age 2. The program is subsidized by state taxes and covers mothers and infants of families with incomes between 200%-300% of the poverty level, who are U.S. citizens or documented U.S. residents and not eligible to receive other state health care services. Eligible families pay a premium for the insurance on a sliding fee scale basis. There are also copayments which apply at the time of visit.

Average Length of Stay. Refers to the number of hospital days a patient stayed in a hospital on the average, per unique admission to a hospital, over a given period of time.

AMBULATORY CARE -

Health care provided on an outpatient basis (i.e., the patient does not stay overnight at the health facility).

Any Willing Provider statutes which require MCOs to contract with any provider willing to abide by the terms that the MCOs impose.

-B-

Balanced Budget Act of 1997. Federal legislation enacted in August of 1997 that is important to the health care industry due to legislated changes in Medicare, Medicaid, welfare, and eligibility and reimbursement for subsidized health care financing programs such as FQHC and RHC.

Business Health Care Action Group. A Minneapolis, Minnesota based self-insured employer group which is experimenting with direct contracting with providers, bypassing managed care intermediaries.

Bureau of Primary Health Care. A federal agency located within the U.S. Department of Health and Human Services that is responsible for programs to provide primary health care to rural and inner city communities.

-C-

Critical Access Hospital. A new type of provider, created in BBA 97, that provides outpatient, emergency and limited inpatient services. A CAH must be a rural public or not-for-profit facility and be located more than a 35 mile drive (15 miles in mountainous terrain or on secondary roads) from a hospital or other CAH unless it is certified by the state as a "necessary provider" of services. A CAH is limited to a maximum of 15 acute care beds (or 25 beds if the facility participates in the swing bed program) and may provide inpatient acute care for up to 96 hours. CAH's are reimbursed on a reasonable cost basis for inpatient and outpatient services provided to Medicare beneficiaries when certified based upon a state plan.

A health insurance program covering preventive care, outpatient primary medical, dental and vision services. The program is subsidized by state taxes and covers children ages 2 through 18, of families with incomes between 200% and 300% of the poverty level who are U.S. citizens or documented U.S. residents and not eligible to receive other state health care services. Parents pay premiums of $5 to $35 dollars per month per child for the insurance on a sliding fee scale basis.

CAL-MORTGAGE -

State program which pools loan funds from a number of banking institutions and arranges through a banking partner to loan the funds at low interest rates to eligible tax exempt hospitals and clinics for capital building projects.

CAPITATION (CAP) -

The fixed amount of money paid on a monthly basis to a health plan, medical group, or an individual health provider for the medical care of an individual plan member.

CASE MANAGER -

A health professional (e.g. nurse, doctor, social worker) affiliated with a health plan who is responsible for coordinating the medical care of an individual enrolled in a managed care plan.

A health insurance benefit plan available to civilians working with or retired from the U.S. military which covers health care services provided by non-military medical facilities and professionals.

Community Health Center. A State licensed non-profit primary care clinic which has been organized for the charitable purpose of providing care to medically indigent and medically underserved populations which is governed by volunteer board members from the community.

Child Health and Disability Prevention Program of the State of California. California's expanded EPSDT service which provides periodic well-child physical and developmental examinations for children with incomes below 200% of poverty from birth up to age 19. The program also provides follow-up specialty and dental care for conditions identified in the CHDP examination. Children on Medi-Cal may also receive CHDP services.

Community Health Information Networks. Information networks designed to link regional and state IDSs.

Community Health Management Information Systems. An effort funded by the Hartford Foundation which includes electronic transaction systems that link purchasers and payers to expedite benefits eligibility and claims payments. It also includes an information highway to disseminate clinical information and a data repository where employers, providers, insurers, consumers, and the government can access provider performance data. CHMIS is currently utilized in six states.

Community Health Organization. A community owned health entity whose purpose is to assure access to high quality, cost effective health services that can successfully operate in a managed care marketplace. A CHO may be established solely for advisory or advocacy purposes and may include provision of MSO services. It may act as an agent for bargaining and contracting for managed care contracts between members of a provider network.

County Medical Services Program of the California DHS, established under AB8 in 1981 which gives back tax dollars to Counties on a formula basis for the purpose of covering health care costs of medically indigent County residents who are not eligible for Medi-Cal and who receive County services.

CO-INSURANCE -

he amount of money paid out of pocket by plan members for medical services. CO-INSURANCE payments usually constitute a fixed percentage of the total cost of a medical service covered by the plan. If a health plan pays 80% of a physician's bill, the remaining 20% which the member pays is referred to as co-insurance.

CO-PAYMENT -

A flat fee paid by plan members for specific medical services. For example, a $5 or $10 "co-pay" is often required for prescriptions and office visits.

CREDENTIALING -

The process of enrolling providers in an institution or health plan, including verifying whether medical professional licenses are valid, and current, ascertaining eligible Board status for given specialties and performing background checks on performance and litigation. The process may include proctoring clinical practice to verify competency.

Consortium Research on Indicators of System Performance. One of the three largest HMO report card projects related to performance measures. CRISP links measurement standards to the qualitative themes expressed in an organization's mission statement. It is composed of 23 vertically integrated health care systems formed for the purpose of testing and refining a set of system level performance measures.

CROSS-SUBSIDIZE -

The use of revenue from insured patients to pay for the care of those that are uninsured or have limited ability to pay for health care services

-D-

DEDUCTIBLE -

The sum of money that an individual must pay out of pocket for medical expenses before a health plan reimburses a percentage of additional covered medical expenses.

Department of Health Services for the State of California. Director is a gubernatorial appointee. Among many of its health services responsibilities, DHS oversees the Primary and Rural Health Care Systems Branch under which fall the AB2450 rural health clinics, the Indian Clinics; Medi-Cal; Medi-Cal Managed Care; OSHPD; CHDP; MCH (Maternal Child Health); and MRMIB.

DISPROPORTIONATE SHARE HOSPITAL (DSH) -

Hospitals that treat a large proportion of Medicare and Medicaid patients and who are designated to receive enhanced reimbursement for doing so.

Department of Corporations for the State of California. Reviews and administrates Knox-Keene applications and licenses in the state for pre-paid health plans.

DOJ Antitrust Division -

Division within the Department of Justice of the U.S. which has the power to bring civil and criminal antitrust cases to court and to issue business review letters approving or disapproving health care integration proposals.

Diagnostic Related Group. DRG is a reimbursement mechanism which fixes the price of each service or procedure based on the patient's diagnosis.

Department of Shortage Designation. A component of the Bureau of Primary Health Care of the U.S. Department of Health and Human Services. Responsible for reviewing applications and issuing HPSA, MUA and MUP designations for health care service areas.

-E-

Early Periodic Screening, Diagnosis, and Treatment. Federally funded program which provides periodic well-child physical and developmental examinations for children with incomes below 200% of poverty from birth up to age 5.

Employee's Retirement Income Security Act of 1974. Federal law which allows employers to set up self-funded insurance to cover worker's compensation, employee benefit plans and their general liability insurance requirements.

ERISA health plan products -

Health plan benefit packages offered to ERISA eligible employers, for which employers pay the health plan administrator fees to administer the plan, in addition to paying for services delivered through a provider network at negotiated rates. Administering ERISA health plan products has traditionally not required a Knox-Keene License.

EXCLUSIVE CONTRACTING -

Process by which a managed care organization enters into agreements with certain health care providers to obtain assurances that; they will serve only that managed care organization's enrollees and no other; and/or the managed care organization will contract with no other like provider or like provider network.

-F-

FEDERALLY QUALIFIED HEALTH CENTER (FQHC) -

A community-licensed health center that provides a comprehensive set of health care and social services, and treats the uninsured, and meets federal guidelines, and is therefore designated to receive enhanced reimbursement to the Medicaid and Medicare beneficiaries.

FEE-FOR-SERVICE INSURANCE -

Health insurance plans which reimburse providers for each individual service they provide.

FORMULARY -

A health plan's list of approved prescription medications for which it will reimburse members or pay for directly. Additional medications are usually not available to plan members without prior authorization.

Federal Poverty Level. Level of income by family size which the U.S. government determines annually to be equal to or less than an amount sufficient to support the needs of the family members without additional public assistance.

Federal Trade Commission. Federal agency which has the power to bring civil antitrust and trade regulation cases to agency administrative proceedings as well as to court. FTC also issues advisory opinions concerning proposed health care integration projects, sharing this responsibility with the DOJ.

-G-

GATEKEEPER PHYSICIAN -

The primary care physician who directs the medical care of HMO members. The primary care physician determines if patients should be referred for specialty care.

GLOBAL CAPITATION -

The assumption of full risk prepaid reimbursement per member per month for all beneficiary services, primary care, hospitalization, ancillary care, specialty care, emergency room, and provision of tertiary services. (Typical carve-outs are long term care, mental health, substance abuse, dental care and in some instances abortion services)

GROUP MODEL HMOs -

contract with independent groups of physicians that provide coordinated care for large numbers of HMO patients for a fixed, per-member fee. These groups will often care for the members of several HMOs.

-H-

Health Care Quality Improvement Program. Medicare's quality assurance program which emphasizes professional review rather than performance improvement by focusing on processes of care instead of negative outcomes.

HEALTH CARE FINANCING ADMINISTRATION (HCFA) -

Federal agency responsible for administering the Medicare and Medicaid programs.

HEALTH MAINTENANCE ORGANIZATIONS (HMO) -

Health plans that contract with hospitals, medical groups, and other providers to provide a full range of health services for their enrollees for a fixed pre-paid, per-member fee. There are three different kind of HMOs: GROUP MODEL HMOs, STAFF MODEL HMOs and IPA MODEL HMOs.

HEALTH PLAN -

An HMO, preferred provider organization, traditional health insurance plan, or other state licensed structure that covers a set range of health services.

HEALTHY FAMILIES Program (AB1126) -

California legislation to implement a five year expansion of health care coverage to eligible low-income children, allotted to states on a matching basis as authorized by BBA 97. California has decided to use its estimated share of funds to provide a health, dental and vision care insurance program beginning 7/1/98 to benefit children ages 1 through 18, of families with incomes below 200% of poverty who are not eligible for no cost Medi-Cal. The insurance program will be offered on a prepayment, sliding fee scale basis to eligible families with children who are U.S. citizens or documented residents of the U.S. Families will also be responsible to make modest copayments for non-prevention services at the time of service. The insurance program will be delivered on a County basis through competing health insurance plans that must meet a host of State eligibility requirements including permission to operate in the County and an established provider network. The legislation also enacts Medi-Cal eligibility expansions and eligibility streamlining provisions including increasing the income threshold for children ages fourteen to eighteen to 100% of the FLP, eliminating the application of an "asset test" from eligibility determinations for children.

HEDIS 2.0 -

Health Plan Employer Data and Information Set, Version 2.0. Document which outlines a core set of health plan performance measures based on three criteria: 1. relevance and value to the employer community, 2. reasonable ability of health plans to develop and provide the requested data in the specified manner, 3. potential impact on improving patient care and reducing morbidity and mortality. HEDIS enables health plans and employers to trend health plan performance and use them comparatively.

The U.S. Department of Health and Human Services. The federal agency responsible for health and welfare programs and funding, including Medicare, Medicaid, Aid to Families with Dependent Children, etc.

Health Insurance Portability and Accountability Act of 1996. Health Insurance reform bill which contains extensive anti-fraud provisions.

Health Insurance Plan of California. Created by law and administered by MRMIB to increase access to employee health insurance for small employers. HIPC plans must offer the standard PERS benefit package which is quite rich in benefits. MRMIB contracts for HIPC with many different insurance companies throughout the state on a county by county basis.

HORIZONTAL INTEGRATION -

Arrangements/agreements between providers of similar services to cooperate in the delivery and/or financing of these services (e.g., hospital-hospital, physician-physician). Also see "Vertical Integration."

Health Professional Shortage Area. A census tract or group of census tracts may be designated as a health professional shortage area if they meet U.S. BPHC/DSD criteria. Criteria is based on the ratio of PCPs to the population, level of poverty and geographical factors. It may also be applied to a population of individuals who on the basis of their income, insurance, language, cultural and health status have measurable barriers to obtaining primary care from existing professionals in their community. Any provider or community organization may apply for HPSA designation to the BPHC/DSD. Having a HPSA designation is required to retain RHC (Rural Health Clinic) reimbursement status and must be renewed every three years.

Department of Health Resource Services Administration. Oversees technical assistance grants to health care networks serving the underserved. Resides within the U.S. Department of HHS, PHS.

-I-

Integrated Delivery Systems

Independent Medical Examination

Indicator Measurement System. JCAHO's IMSystem is a performance measurement system that attempts to integrate standards and performance measures into a substantive evaluation process. This system is designed to be an integral part of the JCAHO's accreditation process.

INDEMNITY PLAN -

Traditional health insurance plan which reimburses providers on a fee-for-service basis.

INDEPENDENT PRACTICE ASSOCIATIONS (IPA) MODEL HMOs -

contract HMOs on behalf of groups of independent physicians who work in their own offices. These independent practitioners receive a per-member payment or capitation from the HMO to provide a full range of health services for HMO members. These providers often care for members of many HMOs.

-J-

Joint Commission for Accreditation of Healthcare Organizations. National Commission responsible for accrediting hospitals and other licensed health care facilities. The principle focus of the JCAHO is tri-annual accreditation review of health care organizations in order to measure quality through the examination of the efficacy of the performance management system.

-K-

KNOX-KEENE LICENSE -

State of California requirement for entities operating an HMO, prepaid health plan or other vehicle which assumes financial risk for persons in need of health care services. Under Knox-Keene, these entities must put aside risk pool reserves on a formula basis against potential adverse claims payment experience. These reserves typically begin at one million dollars.

-L-

-M-

MANAGED CARE -

refers to a broad and constantly changing array of health plans which attempt to control the cost, quality and access to care by coordinating medical and other health-related services. The vast majority of Americans with private health insurance are currently enrolled in managed care plans.

Managed Care Organization. Generic acronym for the proliferation of intermediary organizations which act as administrative liaisons between integrated provider networks and health plans involved in managed care.

The federal-state health insurance program for low income Americans. Medicaid also foots the bill for nursing-home care for the indigent elderly. In California, the Medicaid program is known as Medi-Cal.

The federal health insurance program for older Americans and the disabled.

Medical Treatment Effectiveness Program. The research arm of the AHCPR which works on setting professional practice standards, clinical practice guidelines and researching medical effectiveness.

The Managed Health Care Association. A nationwide collaborative of major employers and managed care companies who are working together on an outcome based performance measurement system for managed care.

MIDLEVEL PRACTITIONER -

A non-physician health care provider that is trained and licensed to deliver a range of primary care and other services to patients. Midlevels are often used by HMOs and other health plans to deliver services at a lower cost than if these services are provided by physicians. Nurse Practitioners (NP), Clinical Nurse Specialists (CNS), and Physician Assistants (PA) are examples of midlevel practitioners.

Maryland Quality Indicator Project - Inpatient and ambulatory performance outcome measurement program. Begun in 1985 in Maryland, it has grown to include almost 1000 hospitals in the US and internationally.

Managed Risk Medical Insurance Board. Established to administer the HIPC program, now administers other state programs which interface with commercial health plans such as AIM, Cal Kids and Healthy Families.

Management Services Organization. An entity which provides managed care administrative support services such as contracting, QA, UM, credentialing, case management and other such services for health care providers and or provider networks.

Medically Underserved Area is a federal designation performed by the Federal DSD which is part of the Bureau of Primary Health Care. MUAs are used primarily for the placement of community health centers, rural health clinics, and participation in federally funded programs. To determine if an area can be designated as an MUA, its index of medical underservice (IMU) score must be computed. The IMU score is based on four factors: the ratio of primary care physicians per 1000 population, the infant mortality rate, the percent of the population age 65 and older, and the percentage of the population below the poverty level. These numbers are checked against weighted values and summed to give the IMU score. If this score is 62 or less, an area can qualify as an MUA.

Medically Underserved Population. Populations may be designated as medically underserved on the basis of their income, insurance, language, cultural and health status, or if they have measurable barriers to obtaining primary care from existing professionals in their community. Any provider or community organization may apply for MUP designation to the BPHC/DSD. Having a MUP designation at one time met the requirement for funding under certain federal health care programs.

-N-

National Association of Health Data Organizations. Established to support state data organizations and used to promote the development and enhancement of publicly accessible databases at the state level.

National Association of Quality Assurance Professionals

National Business Coalition on Health. Founded in 1989 to serve as a coalition of coalitions with the mission of facilitating communication and sharing among coalitions on issues related to specific managed care related projects, public policy and management.

National Committee for Quality Assurance.

A group of providers that is organized to deliver services to a particular population or region.

National Health Service Corps is a medical professional education loan repayment program of the PHS. NHSC financial aid recipients are assigned upon graduation to work off their loan payments through their employment in federal programs operating in MUAs or HPSAs.

-O-

Office of the Inspector General. Part of the Department of Justice which has responsibility for enforcing fraud cases in the health care industry.

Office of Management of Budgets for the United States. Administrative office which is responsible for writing the budget drafts and producing copies of the final budget approved by the U.S. Congress.

Office of Statewide Health Planning and Development for the State of California. OSHPD is responsible for the collection of health care data from State licensed facilities, oversees facility permits as they pertain to new construction, handles minority professional recruitment and education programs, manages loan forgiveness programs for health professionals and administers the Area Health Education Center (AHEC).

-P-

Primary Care Provider. Under managed care these providers offer a full range of basic health services to their patients. General practitioners, family practitioners, internists or pediatricians are most often recognized by health plans as PCPs. Some managed care plans include obstetricians for woman. Managed care plans usually require that each enrollee be assigned to a PCP who functions as a gatekeeper.

Public Employees Retirement System. The State of California fringe benefit system which covers State employees while working through retirement.

Physician Hospital Organization. A joint venture or network involving hospitals and physicians which cooperatively provides administrative or health care services in a managed care environment while retaining ownership of their individual assets.

Public Health Service, resides within the U.S. Department of HHS. PHS provides public health related functions in all U.S. territories and also administers a number of health care funding programs including PL329 (migrant health initiative clinics), PL330 (urban and rural health initiative clinics), PL340 (homeless health services), and the NHSC.

Performance Management. Systems for managing quality in health care which constantly look at new ways to improve service delivery, practice of health workers and governance of health care institutions.

POINT OF SERVICE (POS) -

A growing number of HMOs now offer a Point of Service (POS) option. These "escape hatch" plans allow HMO members to seek care from non-HMO physicians, but the premiums for POS plans are more costly than those for traditional HMOs which restrict choice of physician. Moreover, when an HMO member receives care from a non-participating physician or hospital, the HMO pays less than its usual 100% coverage of necessary medical services.

Patient Outcome Research Teams. Multi-disciplinary task forces that define and evaluate patient outcomes for specific disorders that result from variations in practice patterns.

PREFERRED PROVIDER ORGANIZATION (PP0) -

A health plan that encourages savings by establishing a network of preferred providers -- health professionals who agree to provide medical services to plan members for discounted rates. Plan members may go "out of network" to seek medical services from non-affiliated medical professionals. Members are charged higher co-payments for this option.

PREVENTIVE CARE -

An approach to health care which emphasizes preventive measures such as routine physical exams, diagnostic tests (e.g. PAP tests), immunizations, etc.

PRIMARY CARE PHYSICIAN -

These physicians provide a full range of basic health services to their patients. General practitioners, pediatricians, family practice physicians and internists are recognized by health plans as primary care physicians, and a growing number of plans are including obstetrician/gynecologists in this category. HMOs usually require that each enrollee be assigned to a primary care physician who functions as a GATEKEEPER.

PROVIDER SERVICE ORGANIZATION (PSO) -

An at-risk entity (typically a closed network) that is owned/operated by providers (rather than an insurer).

-Q-

Quality Assurance, an obsolete form of quality management which counted the percentage of adverse incidents or omissions in relation to total work performed to determine if "quality" had been achieved. QA has been replaced by a number of performance measurement (PM) systems which constantly look at new ways to improve outcomes.

Quality Assurance, Utilization Management. The various methods used by health plans to measure the amount and appropriateness of health services used by its members. These checks can occur before, during, and after services have been sought or received from health professionals or institutions.

-R-

RISK CONTRACT -

An arrangement through which a health provider typically agrees to provide a full range of medical services to a set population of patients for a pre-paid sum of money. The provider is responsible for managing the care of these patients, and risks losing money if total expenses exceed the pre-determined amount of funds. Also, managed care plans that serve Medicare beneficiaries are often referred to as risk plans.

RURAL HEALTH CLINIC (RHC) -

A clinic that is located in a rural underserved area and meets federal guidelines and is designated to receive enhanced reimbursement for the treatment of Medicare and Medicaid beneficiaries.

-S-

SAFE HARBOR -

Under federal fraud and abuse and self referral laws, OIG issues "Safe Harbor" exemptions which define scenarios which will immunize certain health care transactions from federal fraud and abuse and anti-self referral prohibitions.

SAFETY NET -

Public and private services designed to assist indigent and other groups that may otherwise be unable to receive such services (e.g., health care, social services, housing assistance).

Federal law which requires non-profit hospitals, in order to maintain their tax exempt status, to perform a community needs assessment and to submit a community benefit report documenting their charitable contributions.

SELECTIVE CONTRACTING -

Process by which managed care organizations contract with a limited number of health care providers servicing managed care enrollees in order to ensure compliance with the health plan's terms and conditions, due to legal, cost, quality and and/or access issues.

SELF INSURANCE -

Method of providing insurance coverage in which an employer takes responsibility for directly covering the health care costs of its employees, rather than paying premiums to a health plan for this purpose. Self insured employers typically utilize "third party administrators" to provide administrative services (e.g., enrollment, claims payment).

SKILLED NURSING FACILITY (SNF) -

A facility that provides long-term inpatient care to patients requiring skilled nursing services (most "nursing homes" are SNFs).

Second Surgical Opinion.

STAFF MODEL HMOs -

employ salaried physicians and other health professionals who provide care solely for members of one HMO.

STATE ACTION IMMUNITY -

When not preempted by the federal government, specific activities will be immunized from federal prohibitions if a State clearly articulates a State policy immunizing the specific activities and actively supervises such private activities. This State power is based on the supremacy clause of the U.S. constitution.

SUB-CAPITATION -

The assigning of partial risk by a health plan or global capitated entity, to a health care provider for a contracted per member per month reimbursement for a defined set of services. For example: primary care physicians can be sub-capitated for just primary care outpatient and inpatient services; a laboratory or a pharmacy can be sub-capitated at "X" dollars per member per month for their respective services.

-T-

Third Party Administrator. Entity which acts as a vehicle for facilitating, processing and analyzing claims and utilization of insurance or health plan products.

UNINSURED -

Those that do not have health insurance. Estimated at 15-20 percent of the U.S. population, consisting primarily of the "working poor" (employed workers that do not receive health insurance benefits through their employer and cannot afford to purchase coverage on their own) and children.

-U-

UTILIZATION REVIEW -

The various methods used by health plans to measure the amount and appropriateness of health services used by its members. These checks can occur before, during, and after services have been sought or received from health professionals.

-V-

VERTICAL INTEGRATION -

Arrangements/agreements between providers of different levels of services to cooperate in the delivery and/or financing of these services (e.g., hospital-physician). Also see "Horizontal Integration."

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