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Health Journalism Glossary

Insurance Glossary

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  • Accountable Care Organization (ACO) – The federal Centers for Medicare & Medicaid Services (CMS) defines an ACO as a group of doctors, hospitals, and other…
  • ACO investment model – A Medicare initiative for provider organizations in accountable care organizations (ACOs) that is designed to test the use of pre-paid…
  • ACO participants – Organizations that participate in Medicare’s accountable care organization (ACO) investment model program (called AIM ACOs) can be physician practices, federally…
  • ACO Transformation Track – This track is one of two under Medicare’s Community Health Access and Rural Transformation (CHART) Model for rural hospitals. Under…
  • Actual acquisition cost (AAC) – When a drug manufacturer sells a medication to a pharmacy, the AAC is the net cost the pharmacy pays. The…
  • Administrative costs – In health care, the term “administrative costs” refers to the back-office functions that are separate from delivering care, including medical…
  • Administrative services only (ASO) – Administrative services only (ASO) is an arrangement an employer makes with a third party to administer the employer’s health insurance…
  • Admissions per 1,000 – To measure and compare the disease burden of certain populations, health insurers use the admissions per 1,000 metric to show…
  • Advance Beneficiary Notice of Noncoverage (ABN) – An ABN is a notice that a hospital, physician or other provider gives to a Medicare beneficiary before delivering the…
  • Advance premium tax credits (APTCs) – APTCs help consumers lower their monthly health insurance premium payments when buying health insurance on the Affordable Care Act (ACA)…
  • Advanced alternative payment models (Advanced APMs) – Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Congress allowed physicians to earn incentive payments by participating…
  • Affordable Care Act (ACA) – Also known as Patient Protection and Affordable Care Act or “Obamacare,” the ACA became law on March 23, 2010. The…
  • Allowed amount – The allowed amount is the maximum that a health insurer will pay for covered health care service, leaving the insured…
  • Alternative payment models (APMs) – The federal Centers for Medicare & Medicaid Services says physicians participating in alternative payment models would be eligible for financial…
  • Ambulatory care sensitive condition – ACSCs are those for which good outpatient or primary care could prevent the need for hospitalization, or for which early…
  • Arbitration or independent dispute resolution – Under the federal No Surprises Act of 2020, the first step in resolving disputes over surprise bills is negotiations between…
  • Automatic retention – A policy a health insurance exchange uses to prevent coverage interruptions among low-income enrollees. Rather than disenroll people who fail…
  • Average manufacturer price (AMP) – When a drug retailer or wholesaler buys a medication directly from a manufacturer, the AMP is the average price paid.…
  • Average sales price (ASP) – The average sales price is what all purchasers pay to drug manufacturers. ASP includes practically all discounts but is available…
  • Average wholesale price (AWP) – The AWP is what pharmacies pay to buy drugs from wholesalers.
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  • Balance billing – This occurs when a hospital, physician or other health care provider sends a bill to a patient after the patient’s…
  • Behavioral hazard – When used in reference to health insurance, the concept of behavioral hazard defines the behavior that some insured individuals may…
  • Benchmark plan – The Affordable Care Act has two definitions for the benchmark plan. In one definition, a benchmark plan is the second-lowest-cost…
  • Bundled payment – Bundled payment is different from fee-for-service payment. Under bundled payment, physicians, hospitals, and other providers assume the financial risk for…
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  • Capitation or capitated payment – When a health care provider receives a fixed payment for each patient under care, such a payment is called capitation…
  • Case Mix Index (CMI) – Calculation that the federal Centers for Medicare and Medicaid Services uses to reflect the clinical complexity, diversity and resource needs…
  • Centers for Medicare & Medicaid Services (CMS) – Part of the Department of Health and Human Services, this federal agency runs Medicare, Medicaid and the Children’s Health Insurance…
  • Cesarean section (C-section) – Obstetricians and other physicians will perform a Cesarean section to deliver one or more babies when the providers fear that…
  • Children’s Health Insurance Program (CHIP) – The federal CHIP program provides health coverage to children in families with incomes too high to qualify for Medicaid, but…
  • Clinical decision support (CDS) systems – Health insurers use CDS systems to give clinicians and other providers patient- and condition-specific information about the treatment protocols insurers…
  • Co-Ops – Under the Affordable Care Act, Congress called for the Consumer Operated and Oriented Plan Program (co-ops), that would serve as…
  • Commercial determinants of health (CDoH) – The World Health Organization defines commercial determinants of health as “factors that influence health which stem from the profit motive.”…
  • Complexity of care charges – Emergency rooms often charge fees based on the complexity of care needed for each patient. These fees usually are ranked…
  • Comprehensive risk-based plans – Comprehensive risk-based plans or managed care organizations (MCOs) are the most common type of Medicaid managed care arrangement. States using…
  • Concierge medicine – Concierge medicine is a method of care in which an individual physician or group practice of physicians give patients longer…
  • Consumer-directed health plan (CDHP) – The National Health Insurance Survey defines a CDHP as a high-deductible health plan linked to a special tax-advantaged account that…
  • Copay, co-insurance – A copay is a fixed fee that an individual pays for each health care service, such as $15 for primary…
  • Cost sharing – Most Americans who have health insurance have a cost-sharing arrangement with their health insurers because the insured individual pays a…
  • Cost shifting – This occurs when a hospital or other provider charges an insured patient more than it charges an uninsured or underinsured…
  • Critical access hospital – A critical access hospital has 25 or fewer acute inpatient beds, and is located in a rural area and is…
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  • Deductibles – An insurance deductible is an amount an insured individual or family owes for health care services before a health insurance…
  • Defined benefit vs. defined contribution – When a health plan promises specified guaranteed benefits, it’s called a defined benefit. A defined contribution plan pays only a…
  • Direct and indirect remuneration (DIR) – Direct and indirect remuneration (DIR) fees allow health insurers or pharmacy benefit managers to claw back fees paid to pharmacies…
  • Direct contracting – Direct contracting is an arrangement between a purchaser and a provider to deliver health care services for a select group…
  • Direct primary care – Direct primary care (DPC) is a form of a bundled capitation payment model in which a primary care doctor or…
  • Double burden of disease – The double burden of disease is a term researchers and public health officials use to describe the coexistence of undernutrition…
  • Downside risk – Hospitals, physicians, or other health care professionals have downside risk if they incur costs that are greater than the payments…
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  • Embedded deductible – Health insurers embed deductibles when providing family coverage so that each family member has an individual deductible that is lower…
  • Employee welfare benefit plan – The federal Department of Labor defines an employee welfare benefit plan as one that an employer or employee organization would…
  • Employer-group waiver plans (EGWPs) – EGWPs (pronounced egg-whips) are customized health plans under the Medicare Advantage program that are developed exclusively for employers and union…
  • Employment-based insurance – Many Americans who are employed full time get health insurance for themselves and their family members through their employers. The…
  • Episode payment for a procedure – Under this form of bundled payment, an insurer makes a single payment for all services associated with delivering a procedure…
  • ERISA pre-emption – The Employee Retirement Income Security Act of 1974 (ERISA) preempts state law, thwarting state efforts to regulate health insurance that…
  • Essential health benefits – Essential health benefits are a set of benefits established under the Affordable Care Act to ensure that all plans cover…
  • Evidence-based medicine – Using evidence-based medicine, physicians and other providers make medical decisions according to the best available scientific research and practices.
  • Exchanges or health insurance exchanges – The exchanges are marketplaces under the Affordable Care Act in which individuals and small businesses can purchase health insurance. Some…
  • Excluded services – Excluded services are those that a health insurer deems not to cover under the terms of its contract with an…
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  • Family income level – Under the Affordable Care Act, the federal government uses family income levels to set subsidies for health insurance bought on…
  • Federal poverty level – The federal Department of Health and Human Services says the term federal poverty level (or FPL) is ambiguous and should…
  • Flexible spending accounts (FSAs) – Some employers offer FSAs to allow employees to set aside pretax dollars of their own money for their use throughout…
  • Formulary – A formulary (also called a drug list) is a list of prescription drugs that a health insurer or pharmacy benefit…
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  • Global payment – Global payment is a form of capitated payment in which health insurers pay physicians, hospitals and other providers a set…
  • Group model HMO – A group model health maintenance organization (HMO) is one that contracts with a single multispecialty medical group to provide care…
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  • Health care common procedure coding (HCPC) – Is a five-digit numbering system that physicians, hospitals and other health care providers use to standardize professional and outpatient billing…
  • Health care tax deductions – The IRS allows taxpayers to deduct medical expenses, such as copayments, deductibles, coinsurance, hospital and physician bills and medical care-related…
  • Health maintenance organizations (HMOs) – An entity that offers prepaid, comprehensive health coverage for both hospital and physician services. HMOs typically have a closed network…
  • Health savings accounts (HSAs) – An HSA has tax advantages because the funds contributed (usually by an employer) are not subject to federal income tax…
  • High out-of-pocket costs – When evaluating employer-sponsored insurance coverage, a household’s spending on out-of-pocket costs includes expenditures for deductibles, copayments and coinsurance for prescription…
  • High premium contributions – When evaluating employer-sponsored coverage, a household’s contributions to the employer’s health insurance premium costs are defined as low or high…
  • High-risk pools – Before the Affordable Care Act (ACA) became effective in January 2014, states offered health insurance coverage to individuals through high-risk…
  • Horizontal integration – Occurs in health care when companies acquire or merge with other similar companies such as when a health system acquires…
  • Hospital referral regions (HRRs) – A hospital referral region is a regional health care market for specialized medical care. Each of the nation’s 305 HRRs…
  • Hospital service areas (HSAs) – A hospital service area is a local health care market where residents get most of their hospital care. In the…
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  • Inpatient Prospective Payment System – The federal Centers for Medicare & Medicaid Services uses the Inpatient Prospective Payment System (IPPS) to pay for health care…
  • IRS Form 8962 – Some consumers buying health insurance on the Affordable Care Act marketplaces are offered advance premium tax credits (APTCs) to lower…
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  • Lab-developed tests (LDTs) – The FDA defines a laboratory developed test as an in vitro diagnostic test (meaning a test of human blood or…
  • Limited benefit plans – These are a type of health insurance coverage that limits coverage to certain specified health care services or treatments or…
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  • MACPAC – The Medicaid and CHIP Payment and Access Commission (MACPAC) is an advisory committee established in 2009 to review state and…
  • Mandated benefits – These are benefits state or federal laws require of all health insurance policies to provide to insured individuals. The Marketplace…
  • Maternal mortality ratio – Maternal mortality ratio is reported as the number of maternal mortality deaths per 100,000 live births when such a death…
  • Medicaid best-price rule – Medicaid’s best-price rule requires that state Medicaid programs pay the lowest price at which a drug is sold, meaning the…
  • Medicare/Medicaid Disproportionate Share Hospitals (DSH) – The Medicare and Medicaid programs make payments under the DSH program to boost payment for hospitals serving a significantly disproportionate…
  • Medication therapy management – Health insurers and health systems use medication therapy management (MTM) to ensure that patients, particularly the elderly, take appropriate medications.…
  • Merit-based incentive payment system (MIPS) – Under MIPS, Medicare will give participating physicians, physician assistants, nurse practitioners, clinical nurse specialists, and other eligible clinicians a composite…
  • Minimal essential coverage – To meet the individual mandate requirement under the Affordable Care Act, a health insurance plan must meet the minimum of…
  • Moral hazard – When used in reference to health insurance, the term moral hazard describes how a person’s behavior changes once that person…
  • Mortality ratio – When assessing a hospital’s mortality rate, researchers will evaluate the number of patient deaths (mortality) as a ratio that compares…
  • Multiple-employer welfare arrangement (MEWA) – Also known as a multiple employer trust (MET), a MEWA allows a group of employers to combine their contributions to…
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  • National Drug Code – Prescription drugs sold in the United States are identified using a three-segment number called the National Drug Code (NDC) that…
  • Network adequacy – Insurers, consumer advocates and insurance regulators evaluate the adequacy of a physician or hospital network based on the ability of…
  • Networks – Health plans make a distinction between in-network coverage and out-of network coverage. When health plans contract with doctors, hospitals, clinical…
  • Non-claims costs – Non-claims costs are what health insurers pay for cost containment strategies, claims adjustment, sales department salaries and benefits, fees and…
  • Non-communicable diseases (NCDs) – NCDs are often called lifestyle diseases because their origins stem from behaviors humans may be able to control such as…
  • Non-embedded deductible – Health insurers offer non-embedded deductibles when providing family coverage. A non-embedded deductible means the total family deductible must be paid…
  • Non-participating provider – A non-participating provider is an out-of-network physician, hospital, or other health care provider that can charge whatever the market will…
  • Non-preferred drugs – Non-preferred drugs are usually brand-name medications (although in rare instances, there are non-preferred generic drugs). As a result of not…
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  • Participating provider – A participating provider is a physician, hospital, or other health care provider that a health insurer designates as in-network in…
  • Patient dumping – A statutorily imposed liability that occurs when a hospital capable of providing the necessary medical care transfers a patient to…
  • Pharmacy benefit rebates – To control the cost of prescription drugs, pharmacy benefit managers negotiate rebates with drug manufacturers and say they pass these…
  • Pharmacy gag orders – Under the contracts pharmacies have with pharmacy benefit managers, neither side can disclose the actual amounts pharmacies pay or how…
  • Physician Quality Reporting System (PQRS) – This is a reporting program from the federal Centers for Medicare & Medicaid Services (CMS) for physicians and other providers.
  • Political determinants of health – Some health policy experts say politics has such a strong influence on social conditions that affect health outcomes that the…
  • Polygenic risk score – Polygenic risk score is a mathematical formula based on genetic test results that reflect the cumulative effect of many different…
  • Pre-authorization or prior approval – Health insurers often require physicians or patients to get prior approval pre-authorization for expensive diagnostic tests or procedures. Failing to…
  • Preadmission certification – An authorization from a health insurer to a patient for a hospital admission before the patient is admitted. Failing to…
  • Preadmission testing – Health insurers often require patients to get any necessary diagnostic testing done before a non-emergency hospital admission.
  • Preferred drugs – A preferred drug is usually a brand-name medication that a health insurer has clinically reviewed and approved for use based…
  • Pregnancy-associated mortality – Pregnancy-associated mortality is a death while pregnant or within one year of the end of pregnancy, regardless of cause.The pregnancy-related…
  • Pregnancy-related mortality – Pregnancy-related mortality is a death during pregnancy or within a year of the end of pregnancy from a pregnancy complication,…
  • Premium deficiency reserve (PDR) – This is the amount an insurer would need if the expected premiums to be collected would not cover future claims…
  • Premium rate review – State insurance departments use the premium rate review to review and accept, revise or reject health insurers’ rate requests.
  • Premium surplus – Premium surplus is the amount insurers report as profit or reserved capital and calculated by subtracting costs for paying medical…
  • Price transparency – Price transparency refers to a movement to provide consumers with the cost of the individual services of health care, such…
  • Private equity – Private equity companies invest in businesses that turn a profit or have strong cash flow or both. Often, these investors…
  • Private health insurance – The federal government defines private health insurance as that which an individual would get through a comprehensive private insurance plan,…
  • Prospective payment – Used in some payment models when an insurer pays a provider before care is delivered. The amount of payment does…
  • Public option – Early versions of the Affordable Care Act included a public option, in which a government-run health insurer would serve to…
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  • Readmission rates – Beginning in 2012, the federal Medicare program reduced what it pays hospitals with high readmission rates for patients discharged (and…
  • Reference pricing – Employers and health plans sometimes set a certain price limit (the reference price) when reimbursing employees or plan members for…
  • Reinsurance – During the first three years under the Affordable Care Act (2014 through 2016), the law called for a temporary reinsurance…
  • Relative value units (RVUs) – The federal Medicare program makes payments to physicians based on their relative value units (RVUs), which reflect a relative level…
  • Resource based relative value scale (RBRVS) – In 1992, the federal Medicare program introduced the Resource-based Relative Value Scale (RBRVS) system to quantify physicians’ work and to…
  • Retrospective payment – A common form of payment used for fee-for-service payment is retrospective, meaning a provider delivers care, totals the costs for…
  • Risk adjustment – The risk adjustment program under the ACA is permanent and designed to reinforce rules that prohibit risk selection. Under the…
  • Risk pool – The risk pool is a group of individuals who get health insurance from one source, for example those who get…
  • Risk score – Health insurers assign a numeric value to patients when adjusting payment to providers based on the level of illness in…
  • Risk stratification – Health insurers use risk stratification to adjust payments based on differences in patient characteristics. Health plans assign patients to two…
  • Ryan White HIV/AIDS Program – Enacted in 1990, this program is the largest federal program specifically for people with HIV/AIDS and serves more than half…
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  • Second surgical opinion – Health insurers often require patients to get the opinion of a second doctor after one physician has recommended a non-emergency…
  • Section 1115A – Section 1115A of the Social Security Act was added to the Affordable Care Act to establish the Center for Medicare…
  • Self-insured employer – A self-insured employer or purchaser (also called a self-funded employer or purchaser) sets funds aside to pay claims for health…
  • Self-pay patients – A self-pay patient pays a provider for his or her entire charge for a service from the patient’s own funds,…
  • Shared decision making (SDM) – SDM is a process some health plans and provider groups use to help patients and physicians make health care decisions…
  • Shared risk – Under a shared-risk program, the providers would have some loss of funds when spending exceeds an established target. Capitated payment,…
  • Shared savings – In a shared savings program, an insurer will share the savings with a provider or a group of providers if…
  • Shared-savings ACO – A shared-savings accountable care organization (ACO) is a Medicare initiative for physicians, hospitals, and other health care providers seeking to…
  • SHOP Exchanges – The Small Business Health Options Program (SHOP) is designed to help small businesses in every state provide health insurance coverage…
  • Single-payer health care – Single-payer national health insurance is a system in which a single public agency would organize health care financing and replace…
  • Social determinants of health (SDoH) – The federal Office of Disease Prevention and Health Promotion defines SDoH as conditions in the environment where people are born,…
  • Specialty drugs – Specialty pharmaceuticals include bioengineered proteins, complex molecules and can be derived from blood.
  • Specialty pharmacies – These state-licensed pharmacies focus on providing medications for patients with serious health conditions such as bleeding disorders, cancer, cystic fibrosis,…
  • Spontaneous vaginal delivery – A spontaneous vaginal delivery is a natural process that usually does not require significant medical intervention. Such a delivery at…
  • Staff model HMO – A staff model health maintenance organization (HMO) is a type of closed-panel HMO, meaning patients can receive services only through…
  • State-based marketplaces (SBMs) – Outside of the 33 states that use the federal marketplace at www.healthcare.gov, consumers in 17 states and the District of…
  • Surprise medical bills – Surprise medical bills are those that arise when a patient who has health insurance receives care from an out-of-network provider…
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  • Third-party administrator – A third-party administrator (TPA) is an organization that pays claims for a self-insured (or self-funded) employer or other purchaser, but…
  • Tiered network – In a tiered network, health insurers offer financial incentives to encourage health plan members to choose providers in the lowest-cost…
  • Traditional health plan – A traditional health plan is defined as a private health plan that has an annual deductible that is less than…
  • Two-sided risk – The term “two-sided risk” refers to arrangements that physicians, hospitals and other providers have with health insurers in which the…
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  • Universal coverage – Universal health insurance coverage is a goal of the most ambitious health insurance reform plans, particularly single-payer initiatives.
  • Upside risk – Hospitals, physicians or other health care providers have upside risk if they are paid more for services they deliver than…
  • Usual, customary and reasonable (UCR) – This rate is the amount an insurer pays for a certain medical service, and it often varies geographically. It is…
  • Utilization review – Health insurers conduct utilization review (UR) to evaluate the appropriateness of care that physicians or other providers recommend for patients.…
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  • Value-based insurance or value-based insurance design (V-BID) – VBID is a methodology for identifying clinically beneficial screenings, lifestyle interventions, medications, immunizations, diagnostic tests and procedures, and treatments for…
  • Value-based purchasing – Value-based purchasing (VBP) is distinct from value-based insurance design (V-BID) in that VBP is designed to reward health care providers…
  • Vertical integration – Occurs in health care when one company in the supply chain acquires or merges with another company along the chain.…
  • Virtual primary care – Virtual primary care is a term used to describe telemedicine-enabled visits with primary care physicians.

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