HIT232 – Chapter 1

Accountable care organization (ACO)
Primary-care led physician and hospital organization that has voluntarily formed a network to provide coordinated care and to receive a share of the savings it produces while meeting quality and costs targets.
Affordable Care Act (ACA)
Part of the healthcare reform legislation passed by US Congress and signed by President Obama in 2010. Its purpose is to decelerate the rate of increase in healthcare costs and improve population health, healthcare access, and healthcare quality. It is composes of two acts called the Patient Protection and Affordable Care Act of 2010 and Health Care and Education Reconciliation Act of 2010.
Allowable fee
Average or maximum amount the third party payer will reimburse providers for services.
Bad Debt
Services for which healthcare organizations expected, but did not receive payment.
Block grant
Fixed amount of money given or allocated for a specific purpose, such as transferring of government funds to cover health services.
Bundling
Combination of supply and pharmaceutical cost or medical visits with associated procedures or services for one lump sum payment.
Capitated payment method/ Capitation
Method of payment for health services in which the individual or the provider is paid a fixed, per capita amount for each person enrolled without regard to the actual number or nature of services provided or number of persons served.
Case
is a patient, resident, or client with a given condition or disease.
Case-based payment
Prospective payment method in which the third-party payer reimburses the provider a fix, pre-established payment for each case.
Charge
is the price assigned to a unit of medical or health services (visit to the doctor) and may be unrelated to actual cost of providing the service.
Charity care
Services for which healthcare organizations did not expect payment because they had previously determined the patients’ or clients’ inability to pay.
Claim
is the request for payment their costs for healthcare services provided by a hospital, physician’s office, or other healthcare provider submitted for reimbursement to third party payers.
Connector
Independent state agency that regulates the policies for healthcare insurance coverage offered by small group and individual healthcare insurance companies.
Co-payment
Cost sharing measure in which the policy or certificate holder pays a fixed dollar amount (flat fee) per service, supply, or procedure that is owed to the healthcare facility by the patient, pays may vary by type of service.
Customary
prevailing and reasonable (CPR),Retrospective fee-for-service payment method in which the third-party payer pays for fees that are customary, prevailing, and reasonable.
Deductible
Annual amount of the money that the policy holder must incur and pay before the health insurance will assume liability for the remaining chargers or covered expenses.
Dependent (family) coverage
health insurance benefits for spouses, children or both; coverage is dependent on relationship with member.
Discounted fee-for-service
Fee-for-service reimbursement in which the third-party payer has negotiated a reduced fee for its covered insureds.
Episode-of-care reimbursement
Healthcare payment method in which providers receive one lump sum for all the care they provide related to a condition or disease.
Fee
a set amount or a set price assigned to a health service, such as a visit a doctor’s or visit hospital. (same as charge)
Fee schedule
Third-party payer’s predetermined list of maximum allowable fees for each healthcare service.
Fee-for-service reimbursement
Healthcare payment method in which providers retrospectively receive payment for each service rendered.
First mover
Initial innovators; other organizations follow trying to obtain success similar to first organization.
Fundamental healthcare reform
Implementation of policies that change key existing structures of healthcare delivery system, such as unlinking employment and healthcare insurance or mandating universal coverage.
Global payment method
Method of payment in which the third-party payer makes one/combined consolidated payment to cover the services of multiple providers who are treating a single episode of care.
Guarantor
person that is responsible for paying the bill or guarantees payment for healthcare services, such as parent guarantee payments for healthcare costs of their children.
Health disparity
Population-specific difference in the presence of disease, health outcomes, quality of healthcare, and access to healthcare services that exists across racial and ethnic groups.
Health Care and Education Reconciliation Act of 2010
Part of the healthcare reform legislation passed by US Congress and signed by President Obama in 2010. Its purpose is to decelerate the rate of increase in healthcare costs and improve population health, healthcare access, and healthcare quality. It is combined with the Patient Protection and Affordable Care Act of 2010 to form the Affordable Care Act.
Incremental healthcare reform
Implementation of policies that make changes to existing structures, such as changing fee structures.
Individual (single) coverage
health insurance benefits that covers only one individual, the employee/member.
Insurance
Reduction of a person’s (insured) exposure to risk or loss by having another party (insures) assume the risk.
Manager’s amendment
Legislative mechanism in which a package of numerous individual amendments is added to a bill. The “managers” are the majority and minority members who led their respective legislative factions in the bill’s debate.
Meaningful use
Providers’ use of electronic health records to achieve significant improvement in health services. Included are activities such as entering basic patient data, using software applications to improve safety and quality, exchanging health information, and submitting clinical quality and other measures.
Medicare-severity diagnosis-related group (MS-DRG)
Medicare refinement to the diagnosis-related group (DRG) classification system, which allows for payment to be more closely aligned with resource intensity.
Minimal creditable coverage
Minimum level of healthcare insurance that includes coverage for preventive and primary care, hospitalization, mental health benefits, and prescription drugs.
Patient Protection and Affordable Care Act of 2010
Part of the healthcare reform legislation passed by US Congress and signed by President Obama in 2010. Its purpose is to decelerate the rate of increase in healthcare costs and improve population health, healthcare access, and healthcare quality. It is combined with Health Care and Education Reconciliation Act of 2010 to form Affordable Care Act.
Payer
An entity such as an individual, company, or agency that pays for health service costs, such as insurance company, individuals (self-pay) Medicare, or workers’ compensation.
Per diem (per day) payment
Prospective payment method in which the third-party payer reimburses the provider a fixed rate for each day a covered member is hospitalized.
Policy
Binding contract issued by the healthcare insurance company to an individual or group in which the company promises to pay for the healthcare to treat illness or injury; health plan agreement/evidence of coverage.
Premium
Amount of money that the policy holder or certificate holder must pay periodically to a healthcare insurance plan in return for healthcare coverage.
Prospective payment method
Episode-of-care reimbursement in which the third-party payer establishes the payments rates for healthcare services in advance for a specific time period.
Provider
Physician, clinic, hospital, nursing home, or other healthcare entity (second party) rendering the care.
Regional health information organization (RHIO)
A health information organization that brings together healthcare stakeholders within a defined geographic area and governs health information exchange among them for the purpose of improving health and care in that community.
Reimbursement
Compensation or repayment for healthcare services already rendered.
Resource-base relative value scale (RBRVS)
Retrospective fee-for-service payment method that classifies health services based on the cost of providing physician services in terms of effort, practice expense (overhead), and malpractice insurance.
Retrospective payment method
Fee-for-service reimbursement in which providers receive recompense after health services have been rendered.
Risk pool
Large group of people who is covered by a healthcare insurance plan with similar risks of loss.
Self-pay
Fee-for-service which the patient or their guarantors pay a specific amount for each service received.
Self-insured plan
Method of insurance in which the employer administers its own health insurance benefits, thus assumes the costs of healthcare for its employees or members and their dependents.
Single-payer health system
One method of financing of health services. One entity acts as an administrator of a single insurance pool. The entity collects all health fees (taxes or contributions) and pays all health costs for an entire population. The single entity can be an agency of the government or a government-run organization.
Sliding Scale
A method of billing in which the cost of healthcare services is based on the patient’s income and ability to pay.
Third-party payer
Insurance company or health agency that pays the physician, clinic, or other healthcare provider (second party) for the care or services to the patient (first party). An insurance company or healthcare benefits program that reimburses healthcare providers and/or patients for covered medical services.
Third-party payment
Payments for healthcare services made by an insurance company or health agency on behalf of the insured.
Uncompensated care
Overall measure of services provided for which no payments were received from the patient, client, or third-party payer.
Underserved area
Area or population designated by the federal Health Resources and Services Administration (HRSA) as having the following characteristics: (1) too few primary care providers, (2) high infant mortality, (3) high poverty, (4) high elderly population, or (5) a combination of these characteristics. Also commonly known as medically underserved (MUA) or medically underserved population (MUP).
Universal healthcare coverage
Minimum level of healthcare insurance that includes coverage for preventive and primary care, hospitalization, mental health benefits, and prescription drugs.
Usual
customary, and reasonable (UCR),Retrospective fee-for-service payment method in which the third-party payer pas for fees that are usual, customary, and reasonable, wherein usual means usual for the individual provider’s practice, customary means customary for the community, and reasonable is reasonable for the situation.

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