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Adjusted Average Per Capita Cost (AAPCC)--The basis of payment for Medicare risk HMOs, the AAPCC is a yearly projection of program expenditures in FFS Medicare (i.e. beneficiaries not enrolled in HMOs). Medicare pays risk HMOs 95 percent of the AAPCC for each enrolled Medicare beneficiary, based on the beneficiary's county of residence, age, sex, Medicaid status, institutional status, and supplemental insurance status.

Administration Costs--Includes costs for marketing, enrollment, customer services, claims processing, and profits for-profit entities.

Aged--Under Medicare, persons age 65 or over are included in this category if they are: entitled to monthly SSA benefits or payments from the Railroad Board (RRB), uninsured for SSA or RRB benefits but transitionally insured for Medicare, or not included in the previously mentioned groups but purchase hospital insurance coverage. Persons age 65 or over identified as having ESRD are included. Under Medicaid, persons age 65 or over are approved by SSA for the SSI program. While States are generally required to cover recipients of SSI, States may use more restrictive eligibility standards for Medicaid than those for SSI, as long as States used those standards on January 1, 1972, before the implementation of SSI. Eleven States have chosen to apply more restrictive standards; also known as 209(b) States. Aged Medicare beneficiaries whose income is below 100 percent of the FPL and whose resources do not exceed twice the allowable amount under SSI, also known as QMBs.

Aid to Families with Dependent Children (AFDC)--Cash assistance program which covers single-parent families and two-parent families with an unemployed principal earner. All recipients of AFDC receive Medicaid automatically. Each State sets its own income limits for AFDC; the median State's limit in 1992 was 38 percent of the FPL. Medicaid is also available to some persons whose cash assistance has been terminated or who fail to receive cash assistance for technical reasons.

Allowed Charge--An individual charge determination (approved amount) made by a carrier on a covered Part B medical service or supply.

Ambulatory Surgical Center (ASC)--Provides surgical services that do not require a hospital stay. Medicare pays an institutional fee for use of an ambulatory surgical center for certain approved surgical procedures. Medicare will also pay for physician and anesthesia services that are provided for these procedures.

Amount, Duration, and Scope--How a Medicaid benefit is defined and limited in a State's Medicaid plan. Each State defines these parameters, therefore, State Medicaid plans vary in what is actually covered.

Amount--The number of visits, prescriptions, treatments, etc. allowed for Medicaid reimbursement.

Duration--The number of days in a hospital, nursing facility, or intermediate care facility covered for reimbursement.

Scope--The package of mandatory and optional health care services covered by Medicaid for specific subgroups of Medicaid beneficiaries.

Assigned Claim--A claim for which the physician or supplier agrees to accept the amount approved by Medicare as the total payment. Medicare pays the physician or supplier 80 percent of the Medicare approved fee schedule (less any unmet deductible). The doctor or supplier can charge the beneficiary only for the coinsurance, which is the remaining 20 percent of the approved amount. A participating physician or supplier agrees to accept assignment on all claims.

Average Compound Rate of Change (AARC)--Also called the average annual rate of change, this is a geometric rate of change in which a variable increases or decreases at the same rate each year. For example, an average annual rate of change of 10 percent, starting with a base of 100, would increase to 110 in the first year, 121 in the second year, and so on.

Balance Billing--A type of cost sharing under Medicare whereby a beneficiary is responsible for the difference between the physician's submitted charge and the Medicare allowed charge on unassigned claims. Currently, a non-participating physician cannot charge a Medicare beneficiary more than 115 percent of the amount listed in the Medicare fee schedule for unassigned physician claims.

Beneficiary--Under Medicare, a beneficiary is a Medicare enrollee who used a covered medical service during a specified period of time (e.g., calendar year), whether or not the service was reimbursable. Under Medicaid, a person who meets the income, asset, and categorical requirements of Medicaid and receives a Medicaid-covered service (refer to Recipient).

Beneficiary Identification Code (BIC)--Identifies the relationship between an individual and a primary beneficiary.

Benefit Package--Services an insurer, government agency, or health plan offers to a group or individuals under the terms of a contract.

Benefit Payments--These payments comprise all withdrawals from the Medicare hospital insurance and SMI trust funds for services rendered to Medicare enrollees. Payments include both reimbursements recorded on bills and payments made independently of the billing system (interim payments, end-of-year adjustments, and certain capitation payments). Benefit payments shown in this report also reflect projected complete Medicare benefit population estimates for a specified period of time (e.g., a CY or a FY).

Benefit Period--Is the unit of time for measuring the use of Part A benefits (spell of illness). A benefit period begins the first day an enrollee is furnished inpatient hospital or extended care services by a qualified provider, and it ends when the enrollee has not been an inpatient of a hospital or other facility primarily providing skilled nursing or rehabilitation services for 60 consecutive days. There is no limit to the number of benefit periods an enrollee can have. The enrollee must pay the hospital insurance deductible for each new benefit period.

Buy-In--Is a Medicare beneficiary who is also eligible for Medicaid, and for whom Medicare Part B premiums are paid by a State Medicaid program.

Capitation--A prospective payment method pays the provider of service a uniform amount for each person served, usually on a monthly basis. Capitation is used in managed care alternatives such as HMOs.

Carrier--Is an organization that has contracted with DHHS to process and pay approved physician and supplier claims, and perform other services under Medicare Part B SMI program.

Case Management--A process whereby covered persons with specific health care needs are identified and a plan which efficiently utilizes health care resources is formulated and implemented to achieve the optimum outcome in the most cost-effective manner.

Claim--A request to a carrier or intermediary by a beneficiary or a provider acting on behalf of a beneficiary for payment of benefits under Medicare.

Coinsurance--Is the portion of reimbursable hospital and medical expenses, after subtraction of any deductible, that Medicare does not cover and for which the beneficiary is responsible. Under Part A (hospital insurance), there is no coinsurance for the first 60 days of inpatient hospital care; from the 61st-90th day of inpatient care, the daily coinsurance amount is equal to one-fourth of the inpatient hospital deductible. For each of the 60 lifetime reserve days used, the daily coinsurance amount is equal to one-half of the inpatient hospital deductible. There is no coinsurance for the first 20 days of SNF care; from the 21st-100th day of SNF care, the daily coinsurance amount is equal to one-eighth of the inpatient hospital deductible. Under SMI, after the annual deductible has been met, Medicare pays 80 percent of reasonable charges for covered services and supplies; the remaining 20 percent of reasonable charges are the coinsurance payable by the enrollee. However, there is no coinsurance for home health services or for clinical laboratory services under SMI.

Comparability--In general, the State must ensure that the same Medicaid benefits are available to all people who are eligible. Exceptions include benefits approved under Medicaid waiver programs for special subpopulations of Medicaid eligibles; prenatal, delivery, and limited postnatal care for low income pregnant women; and benefits available to children through EPSDT which may not be available to adult beneficiaries.

Competitive Medical Plan (CMP)--Is not a federally-qualified HMO but which meets Medicare statutory requirements for entering into a Medicare risk contract.

Cost-Based HMO--Is paid by Medicare for the actual cost of providing care to Medicare enrollees. The term includes cost HMOs, cost CMPs, and HCPPs.

Cost Sharing--The generic term that includes copayments, coinsurance, and deductibles; also, out-of-pocket payments.

Copayments--Flat fees, typically modest, that insured persons must pay for a particular unit of service, such as an office visit, emergency room visit, or the filling of a prescription. Coinsurance--A percentage share of medical bills which a beneficiary must pay. Deductibles--Specified amounts of spending which an individual or a family must incur before insurance begins to make payments.

Covered Services--Services and supplies for which Medicare will reimburse. (Examples of covered services are given in this glossary under specific headings, such as SNF.)

Current Procedural Technology Codes (CPT)--Are used for reporting medical services and procedures performed by physicians.

Deductible--The amounts paid by enrollees for covered services before Medicare makes reimbursements. The HI deductible applies to each new benefit period, is determined each year by a formula specified by law, and approximates the current cost of a 1-day inpatient hospital stay. The SMI deductible is, by law, the first $100 of covered charges per calendar year, effective January 1, 1991.

Diagnosis-Related Groups (DRGs)--A patient classification system that categorizes patients into groups that are clinically coherent and homogeneous with respect to inpatient short-stay hospital resource use. The Medicare PPS uses approximately 500 DRGs as the basis for paying participating short-stay hospitals under Medicare.

Disabled--As used here, disabled individuals under age 65. Disabled persons become eligible for Medicare when they have been receiving Social Security Disability Insurance benefits for 24 months. Individuals under age 65 diagnosed with ESRD are also eligible to receive Medicare benefits. Under Medicaid, refers to SSI recipients; also, Medicaid covers services for persons who, at a minimum, meet the definition of disability for SSI, who are enrolled in Medicaid, but are not eligible for SSI.

Discharge--Is a formal release from a hospital or SNF. Discharges include persons who died during their stay or were transferred to another facility.

Disproportionate Share Hospitals (DSHs)--Serve a relatively large volume of low-income persons.

Durable Medical Equipment (DME)--Under Medicare, DME includes certain medical supplies and such items as hospital beds and wheel chairs used in a patient's home.

Dual Entitlement--Indicates that an individual is entitled for both Medicare and Medicaid coverage.

Elderly--Those persons age 65 or over.

Eligibility--Under the Medicare and Medicaid programs eligibility is determined by whether an individual meets the legal requirements for coverage.

End Stage Renal Disease (ESRD)--Irreversible kidney failure. To survive, the patient must either receive a kidney transplant or periodic kidney dialysis. Individuals with ESRD are eligible for Medicare benefits.

ESRD Enrollees--Individuals who have chronic kidney disease requiring renal dialysis or a kidney transplant are considered to have ESRD. To qualify for Medicare coverage, such individuals must be fully or currently insured under Social Security or the Railroad Retirement System or be the dependent of an insured person. Eligibility for Medicare coverage begins the third month after the month in which a course of renal dialysis begins; coverage may begin sooner if the patient participates in a self-care dialysis training program provided by an approved facility. Also, coverage may begin on admittance to a hospital to receive a kidney transplant or to receive dialysis before the transplant.

Enrollee--Is a person who is eligible for coverage and is enrolled in the Medicare program (refer to Aged and Disabled).

Expenditure--Under Medicare, expenditures for covered services represent the Medicare program payment amount plus any beneficiary cost-sharing amount.

Federal Hospital Insurance Trust Fund--Is a trust fund of the Treasury of the United States in which are deposited monies collected from taxes on annual earnings of employees, employers, and self-employed persons covered by Social Security. Disbursements from the fund are made to help pay for benefit payments and administrative expenses incurred by the hospital insurance program.

Federal Medical Assistance Percentage (FMAP)--The percentage of Federal dollars available to a State to provide Medicaid services. FMAP is calculated annually based on a formula designed to provide a higher Federal matching rate to States with lower per capita income. In 1994 the FMAP for Texas is approximately 64 percent for most services. The Federal share of Medicaid administrative costs is not based on a per capita income formula. It is a flat 50 percent for most activities.

Federal Supplementary Medical Insurance Trust Fund--Is a trust fund of the Treasury of the United States consisting of amounts deposited in or appropriated to the fund as provided by Title XVIII of the Social Security Act, including premiums paid by enrollees under SMI and contributions by the Federal Government from general revenues. Disbursements from the fund are made for benefit payments and administrative expenses incurred by the SMI program.

Federally Qualified Health Center (FQHC)--A center receiving a grant under the Public Health Services Act or an entity receiving funds through a contract with a grantee. These include community health centers, migrant health centers, and health care for the homeless. These services are mandated Medicaid services and may include comprehensive primary and primary and preventive services, health education, and mental health services.

Federally-Qualified HMO--An HMO which meets Federal requirements for certification as a prepaid health plan that is able to offer a comprehensive range of services through a specified network of providers.

Federal Poverty Level (FPL)--Income guidelines established annually by the Federal Government. Public assistance programs usually define income limits in relation to FPL.

Fee-for-Service Reimbursement--The traditional health care payment system, under which physicians and other providers receive a payment for each of unit of service they provide.

Fiscal Year (FY)--1972-1976 extended from July 1-June 30. Beginning with October 1, 1977, FYs extend from October 1-September 30.

Freedom of Choice--A State must ensure that Medicaid beneficiaries are free to obtain services from any qualified provider. Exceptions are possible through waivers of Medicaid and special contract options.

General Hospital--Is a hospital maintained primarily for inpatient care of acute illness or injury and for obstetrics.

Geographic Classifications:

All Areas--The United States, Guam, Puerto Rico, Virgin Islands, other outlying areas, and foreign countries are included.

All Other Areas--American Samoa, Canton Island, Caroline Islands, Guam, Mariana Islands, Marshall Islands, Midway Islands, Virgin Islands, and Wake Islands comprise this category.

Place of Residence--The beneficiary's place of residence classification is a mailing address, not necessarily an actual place of residence. Some beneficiaries have their checks mailed to a post office or to a representative payee in a State or county that may differ from their own residence.

SMSA, Metropolitan SEA--Refer to urban and rural metropolitan and non-metropolitan counties. Only areas in the United States are listed.

Urban and Rural Metropolitan and Non-Metropolitan Counties--The division of counties into metropolitan groups is based on the list of SMSAs defined by the Office of Management and Budget. Except in New England, each SMSA included a county that contains a central city of at least 50,000 inhabitants, based on the 1980 census. In addition, contiguous counties are included in the SMSA if they meet certain criteria of economic and social integration with the central city. In New England, an SMSA consists of towns and cities rather than counties. However, the mailing address in the master enrollment record files is coded only for State and county. Therefore, for New England, the SMSA was replaced by the metropolitan State economic area (SEA), which is defined in terms of whole counties. Metropolitan counties are those counties that are included in an SMSA or a metropolitan SEA. These counties are further divided into those with a central city and those without a central city. Non-metropolitan counties are those that fall into neither an SMSA nor a metropolitan SEA.

Health Care Financing Administration (HCFA)--A Federal agency within the U.S. Department of Health and Human Services that administers the Medicare and Medicaid programs.

HCFA Common Procedure Coding System (HCPCS)--A Medicare coding system for all services performed by a physician or supplier. It is based on the American Medical Association Physicians' Current Procedural Terminology (CPT) codes and is augmented with codes for physician and non-physician services (such as ambulance and DME) which are not included in CPTs.

Health Care Prepayment Plan (HCPP)--A managed care organization that contracts with HCFA to enroll Medicare beneficiaries for coverage of some or all Medicare-covered physician and supplier services (Part B). HCPPs are paid on a reasonable cost basis.

Health Care Financing Review (HCFR)--A quarterly journal published by HCFA's Office of Strategic Planning.

Health Insurance Claim Number (HIC)--Is a unique identifier of each Medicare beneficiary. It consists of a Social Security or Railroad Retirement Board account number plus a beneficiary identification code (BIC).

Health Maintenance Organization (HMO)--An organization that delivers and manages health services under a risk-based arrangement. The HMO usually receives a monthly premium or capitation payment for each enrolled which is based on a projection of what the typical patient will cost. If enrollees cost more, the HMO may suffer loses. If the enrollees cost less, the HMO profits, thus providing incentive for cost control (refer to Managed Care).

Home and Community Care for the Functionally Disabled--An optional State plan benefit that ended in FY 1995, which allowed States to provide home and community-based services to functionally disabled individuals.

Home Health Agency (HHA)--A public or private organization that provides skilled nursing services and other therapeutic services in the patient's home and that meets certain conditions to ensure the health and safety of the individual.

Home Health Services--Items furnished in a patients' home under the care of physicians. These services are furnished under a plan established and periodically reviewed by a physician. They include part-time or intermittent skilled nursing care; physical, occupational, or speech therapy; medical social services; medical supplies and appliances (other than drugs and biological); home health aide services; and services of interns and residents.

Hospice--A public agency or private organization that is primarily engaged in providing pain relief, symptom management, and supportive services to patients that are certified to be terminally ill. Medicare beneficiaries may elect to receive hospice care instead of standard Medicare benefits for terminal illnesses.

Hospital Insurance (HI)--Medicare HI (also known as Medicare Part A) is an insurance program providing basic protection against the costs of hospital and related post-hospital services for individuals who are age 65 or over and are eligible for retirement benefits under the Social Security or Railroad Retirement Systems, for individuals under age 65 who have been entitled for at least 24 months to disability benefits under the Social Security or Railroad Retirement Systems, and for certain other individuals who are medically determined to have ESRD and are covered by the Social Security or Railroad Retirement Systems.

Inpatient Hospital Services--Items and services furnished to an inpatient of a hospital by the hospital, including room and board, nursing and related services, diagnostic and therapeutic services, and medical or surgical services.

Institutional Services--Those services provided by hospitals (outpatient and inpatient), HHAs, hospices, comprehensive outpatient rehabilitation facilities, ESRD facilities, local health clinics, and SNFs.

Intermediary--An organization selected by providers of health care that has an agreement with DHHS to process and pay institutional claims and perform other functions under Medicare's health insurance program.

Intermediate Care Facility for Mentally Retarded Persons (ICF/MR)--Optional Medicaid service which provides residential care and services for individuals with developmental disabilities.

International Classification of Diseases - 9th Revision - Clinical Modification (ICD-9-CM)--Is a diagnosis and procedure classification system. ICD-9-CM codes are the basis for grouping patients into DRGs.

Laboratory and Radiological Services--These services are professional and technical laboratory and radiological services ordered by a licensed practitioner and provided in an office or similar facility (other than a hospital outpatient department or clinic) or by a qualified laboratory.

Lifetime Reserve--A Medicare hospital insurance enrollee has a non-renewable lifetime reserve of 60 days of inpatient hospital care to draw on if the 90 covered days per benefit period are exhausted. Patients are required to pay a daily coinsurance amount equal to one-half of the inpatient hospital deductible for each lifetime reserve day.

Managed Care--A system in which the overall care of a patient is overseen by a single provider or organization. Many State Medicaid programs include managed care components as a method of ensuing quality in a cost-efficient manner.

Managed Care Organization (MCO)--Entities which provide or contract for managed care. These include entities such as HMOs and PHPs.

Managed Care Plan (MCP)--A general term applied to a wide range of insurance plans, including HMOs, where choice of providers is limited and administrative measures control utilization of services. The types of Medicare managed care plans include HMOs, CMPs, and HCPPs.

Mandated Services--In which a State is required to offer to categorically needy clients under a State Medicaid plan. (Mentally needy clients may be offered a more restrictive service package.) Services are: dental (medical/surgical); EPSDT (under age 21); family planning; home health care; hospital, inpatient and outpatient; laboratory and X-ray; nurse practitioners, certified pediatric and family; nurse midwife; nursing facility care (age 21 or over); physician; rural health clinic and federally qualified health center; transportation, and medical.

Medicare Current Beneficiary Survey (MCBS)--A sample of Medicare beneficiaries are interviewed to collect information on demographic characteristics, health status and functioning, insurance coverage, financial resources, and family supports. The beneficiaries are re-interviewed periodically to form a continuous profile of their health care experience.

Medicaid--A joint Federal/State entitlement program that pays for medical care on behalf of certain groups of low-income persons, enacted in 1965 under Title XIX of the Social Security Act.

Medicare Supplemental Insurance (MSI) or Medigap--Private insurance which supplements Medicare by paying Medicare deductibles and coinsurance. There are 10 nationally standardized policies (plans A to J). Some policies offer coverage not provided by Medicare, such as coverage for outpatient prescription drugs and care outside the U.S.

Midpoint Enrollment--July 1 has been chosen as the denominator for Medicare utilization rates. The choice was based on the similarity of the July 1 enrollment to a 12-month average enrollment. A comparison of aged HI enrollment by age, race, and sex on July 1, 1983, with an average of 12 monthly enrollment figures in 1983 showed remarkable similarity.

National Center for Health Statistics--The component of the U.S. Public Health Service which collects and maintains statistics on various aspects of public health.

Non-Institutionalized--Individuals not living in facilities such as nursing homes.

Office of the Actuary (OACT)--This HCFA component provides estimates of expenditures for the Medicare and Medicaid programs and of health expenditures in the United States.

Omnibus Budget and Reconciliation Act (OBRA)--of a given year. Federal laws which direct how Federal monies are to be expended. Amendments to Medicaid eligibility and benefit rules are frequently made in such acts. Legislative changes may also be enacted directly (refer to Tax Equity and Fiscal Responsibility Act, Deficit Reduction Act, Medicare Catastrophic Coverage Act).

Office of Managed Care (OMC)--This HCFA component administers the Medicare and Medicaid managed care programs.

Optional Services or Benefits--Thirty-four different services which a State may elect to cover under a State Medicaid plan. The optional services are: prescribed drugs, transportation, prosthetic devices, nursing facility services for under age 21, optometrists, dental, clinic, eyeglasses, rehabilitation, ICF/MR, podiatrist, physical therapy, case management, emergency hospital, speech, hearing, and language disorders, inpatient psychiatric services for under age 21, dentures, inpatient hospital services for age 65 or over or in institutions for mental diseases, occupational therapy, hospice care, diagnostic, personal care, screening nursing facility services for age 65 or over in institutions for mental disease, preventive, chiropractors', psychologists', private duty nursing, nurse anesthetist, Christian Science sanatoriums and nurses, respiratory care, tuberculosis related, medical social worker, and telemedicine.

Office of Strategic Planning--This HCFA component conducts or sponsors research on health policy issues and conducts demonstrations of new health care delivery and payment mechanisms.

Outpatient Hospital Services--Are services furnished to outpatients by a participating hospital for diagnosis or treatment of an illness or injury.

Outpatient Services--Are medical and other services provided by a hospital or other qualified facility or supplier, such as mental health clinic, rural health clinic, X-ray mobile unit, or freestanding dialysis unit. Such services include: outpatient physical therapy, diagnostic X-ray and laboratory tests, and X-ray and other radiation therapy.

Participating Physician or Supplier--Who agrees to accept assignment on all Medicare physician/supplier claims under the Medicare SMI program.

Personal Health Care Expenditures (PHCE)--Health care goods and services purchased directly by or for individuals. They exclude: public program administration costs, the net cost of private health insurance, research by non-profit groups and government entities, and the value of new construction put in place for hospitals and nursing homes.

Persons Served--Under Medicare, a person served is a Medicare enrollee who used a covered medical service, who incurred expenses greater than the deductible amount, and for whom Medicare paid benefits. Persons are counted once for each type of covered service used but are not double counted in aggregate totals. Thus, a person who receives inpatient hospital services and SNF services in a year is counted as receiving both of these services but is counted only once in calculating all persons served under HI. A person receiving the same service two or more times in a year is counted as one person served. For example, persons having two or more hospitalizations during a year are counted as one person served for inpatient hospital services. In a like manner, persons served under both HI and SMI are counted only once in the overall total.

Physician Payment Reform (PPR)--Was implemented by OBRA 1989. Under OBRA 1989, a Medicare fee schedule payment system for physician services replaced the previous reasonable charge payment system.

Physician Services--Under Medicare, physicians' services are services provided by an individual licensed under State law to practice medicine or osteopathy. Services covered by hospital bills are not included.

Preferred Provider Organization (PPO)--An arrangement between a provider network and a health insurance or a self-insured employer. Providers generally accept payments less than traditional FFS payments in return for a potentially greater share of the patient market. PPO enrollees are not required to use the preferred providers, but are given financial incentives to do so, such as reduced coinsurance and deductibles. Providers do not accept financial risk for the management of care.

Premium--A monthly fee paid by Medicare enrollees. HI enrollees who are Social Security or Railroad Retirement beneficiaries and who qualify for coverage through age or disability are not required to pay premiums. Aged persons who are not eligible for automatic HI enrollment may pay a monthly premium to obtain HI coverage. SMI enrollees pay a monthly premium that is updated annually to reflect changes in program costs.

Prepaid Health Plan (PHP)--A partially capitated managed care arrangement in which managed care company is at risk for certain outpatient services.

Primary Care--Basic or general health care, traditionally provided by family practice, pediatrics, and internal medicine.

Primary Care Case Management--Managed care option allowed under Section 1915(b) of the Social Security Act in which each participant is assigned to a single primary care provider who must authorize most other services, such as care by specialty physicians, before the other providers can be reimbursed by Medicaid.

Principal Diagnosis--The medical condition that is chiefly responsible for the admission of a patient to a hospital or for services provided by a physician or other provider.

Program Payment--The Medicare program payment amount includes only the amount shown in bills received and processed (as of a specific cut-off date) by the Medicare program in the HCFA central office fries. Not included in program payments are interim payments to institutional providers, payments to institutional providers resulting from adjustments to the end of FY cost reports, capitation payments for prepaid group health plans, beneficiary cost-sharing amounts, and administrative costs.

Prospective Payment System (PPS)--Is a reimbursement system whereby Medicare payment for inpatient operating costs is made at a predetermined specific rate for each discharge rather than on a reasonable-cost basis. Discharges are classified according to a list of DRGs. The prospective payment rate excludes direct medical education costs, the cost of bad debts for deductibles and coinsurance incurred by beneficiaries, and kidney acquisition costs, which continue to be reimbursed under a reasonable-cost based system.

Provider--A Medicare provider is a facility, supplier, or physician who furnishes medical services. Under Medicaid, a provider is a person, group, or agency who provides a covered Medicaid service to a Medicaid enrollee.

Railroad Retirement System--Was mandated by the Railroad Retirement Act of 1937 as a retirement system for railroad employees.

Reasonable Cost--In processing claims for HI benefits, intermediaries use HCFA guidelines to determine the reasonable cost incurred by individual providers in furnishing covered services to enrollees. The reasonable cost is based on the actual cost of providing such services, including direct and indirect costs of providers and excluding any costs that are unnecessary in the efficient delivery of services covered by the HI program.

Recipient--A Medicaid enrollee who receives a Medicaid-covered service.

Reduction Amount--The difference between the physician's submitted charge and the Medicare allowed charge.

Revenue Center--A facility cost center for which a separate charge is billed on an institutional claim.

Risk Contract--An agreement with an MCO to furnish services for enrollees for a determined, fixed payment. The MCO is then liable for services regardless of their extent, expense, or degree.

Risk HMO--Is paid a predetermined per-member payment from Medicare to provide all necessary covered services to its Medicare enrollees.

Resource Utilization Group Version III (RUG-III)--Is a patient classification system used to classify nursing home residents into homogeneous patient groups according to common health characteristics and the amount and type of resources they use.

Secondary Diagnosis--A medical condition other than the principal diagnosis that affected the treatment received, or length of stay in a hospital, or services rendered by a physician or other provider.

Short-Stay Hospital (SSH)--In which the average length of a stay is less than 30 days. General and special hospitals are included in this category.

Single State Agency--The Social Security Act requires that the State designate a single agency to administer or supervise administration of the State's Medicaid plan.

Skilled Nursing Facility (SNF)--An institution that has a transfer agreement with one or more participating hospitals, is primarily engaged in providing skilled nursing care and rehabilitative services to inpatients, and meets specific regulatory certification requirements.

SNF Services--Furnished to inpatients of a certified SNF that meets standards required by the Secretary of the DHHS and billed by the facility.

Social Security Act--The Titles of the 1965 Social Security Act include: Title II: Old Age, Survivors, and Disability Insurance Benefits (OASDI); also, Social Security; Title IV-A: Aid to Families with Dependent Children (AFDC); Title IV-B: Child Welfare; Title IV-D: Child Support; Title IV-E: Foster Care and Adoption; Title IV-F: Job Opportunities and Basic Skills Training; Title V: Maternal and Child Health Services; Title XVI: Supplemental Security Income (SSI); Title XVIII: Medicare; Title XIX: Medicaid; and Title XX: Social Services.

Social Security Administration (SSA)--The Federal agency responsible for determining eligibility for SSI benefits.

Statewideness--A State Medicaid program must offer the same benefits to everyone throughout the State, exceptions being possible through Medicaid waivers and special contracting options (refer to Waivers).

Supplementary Medical Insurance (SMI)--Also known as Medicare Part B, is a voluntary insurance program that provides insurance benefits for physicians, outpatient hospital services, ambulatory services, and other medical supplies and services to aged and disabled individuals who elect to enroll under the program in accordance with the provisions of Title XVIII of the Social Security Act. The SMI program is financed by enrollee premium payments and contributions from funds appropriated by the Federal Government.

Supplier--A firm that has been issued a Medicare supplier number, and which provides DME (such as wheelchairs and oxygen equipment), prosthetic and orthotic devices (artificial limbs and braces), or medical supplies (such as surgical dressings).

Supplier Services--The SMI program pays for covered supplier services. As defined in the HCFA Part B Medicare annual data users' manual, these services include those provided by medical supply companies DME, ambulance suppliers, independent laboratories (billing independently), pharmacies, portable X-ray suppliers (billing independently), and voluntary health or charitable agencies.

Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982--The Federal law which created the current risk and cost contract provisions under which health plans contract with HCFA and that define the primary and secondary coverage responsibilities of the Medicare program.

Total Personal Health Care Expenditures--The sum of all expenditures for health care by Medicare, Medicaid, private insurance, out-of-pocket, and all other public and private sources.

Uniform Bill 82 (UB82)--Is a Medicare claim form used by institutional providers from 1984 to 1993. In October 1993, the UB82 was replaced by the Uniform Bill 92 (UB92).

Unique Physician Identification Number (UPIN)--Is a number which uniquely identifies an individual physician.

Utilization--The extent to which the members of a covered group use a program or obtain a particular service, or category of procedures, over a given period of time. Usually expressed as the number of services used per year or per number of persons eligible for the services.

Waiver--An exception to the usual requirements of Medicaid granted to a State by HCFA, authorized through the following sections of the Social Security Act:

1115(a)--Allows States to waive provisions of Medicaid law to test new concepts which are congruent with the goals of the Medicaid program. Radical, systemwide changes are possible under this provision.

1915(b)--Allows States to waive freedom of choice. States may require that beneficiaries enroll in HMOs or other managed care programs, or select a physician to serve as their primary care case manager.

1915c--Allows States to waive various Medicaid requirements to establish alternative, community-based services for individuals who qualify for services in an ICF/MR, nursing facility, institution for mental disease, or inpatient hospital.

1929--Allows States to provide a broad range of home and community care to functionally disabled individuals as an optional State plan benefit. In all States except Texas, the option can serve only people age 65 or over.
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Publication:Health Care Financing Review
Geographic Code:1USA
Date:Mar 22, 2001
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