HDG #023: A tiny glossary of healthcare terms to know
Read time: 5 minutes
Mayday, my Gurus: someone recently asked me the difference between Medicare and Medicaid, and I realized how much we take healthcare lingo for granted.
So, I decided to memorialize the acronyms and concepts floating around in my head onto [digital] paper for other aspiring health and healthcare data or business practitioners.
This is an ongoing and evolving list. Unless cited otherwise, definitions are typically my own “plain-language” interpretation as I have grown to understand them through the lens of doing analytics over the last decade for this complex and tangled industry. Some of these concepts are much, much, much more complex and deep than the definition lets on, deserving their own articles or mini-series entirely.
Staying true to building an open community knowledge base, please comment any terms that you’ve heard and would like to see added to this list, or any tweaks to a definition that should be made.
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Admits/K (or Admits/1000) /admits-per-K/ or /admits-per-thousand/:
From a health plan perspective, the number of admissions per every 1000 member months, typically represented as an annualized value.
One quick formula I like because you can compute it on your calculator in this order, without worrying about order of functions or denominators, is:
# of admissions ÷ # of member months * 12000
Attribution:
When one patient’s care is linked or assigned to a provider or responsible care delivery party based on the patient’s previous history, selection, or other factors. This is particularly important in value-based arrangements, when providers accept financial and/or responsibility to manage the subset of patients who are “attributed to them.” No universally accepted definition of attribution yet exists, and may vary from payer to payer, making the agreement of responsibility cumbersome and challengeable.
BH or Behavioral Health:
An umbrella term for mental health and substance abuse diagnoses and treatments. Its counterpart, all non-mental health or substance-related health, may be colloquially referred to “physical health.”
CAHPS /kaps/:
The Consumer Assessment of Healthcare Providers and Systems administered by the AHRQ. A series of patient surveys designed to assess patient experience and satisfaction in a specific healthcare setting.
CMS:
Centers for Medicare & Medicaid Services or governing/administering Federal body and regulator for Medicare and Medicaid. Also basically the one supreme being, healthcare-ily-speaking.
Comorbidity:
Several definitions have been suggested for comorbidity based on different conceptualizations of a single core concept: the presence of more than 1 distinct condition in an individual. Comorbidity is associated with worse health outcomes, more complex clinical management, and increased healthcare costs. Read more here.
CPT /cee-pee-tee/:
A set of codes defined and maintained by the American Medical Association that identify a particular service or procedure. When a patient sees a provider and services are performed, each service is submitted as one line item on the claim that will be submitted to the health insurer for reimbursement. The CPT codes create a standardized definition for physician/providers to indicate what services were performed, to what degree, and are being billed for. CPTs are often referred to collectively as “procedure codes” or referred to in tandem with their more granular counterparts, HCPCS codes. While the CPT codes are primarily used to describe medical services performed, such as an office visit, HCPCs expands upon that to also include codes to separately report medical items or services, such as drugs, ambulance services, supplies, and more.
Diagnosis (primary, secondary, or tertiary):
Loosely speaking, a primary diagnoses code represents the main reason that your doctor documents for your visit, or the condition that they have determined you have, like diabetes. They can also capture additional (secondary or tertiary) diagnoses that impact the primary or factors that were also presented, like a noted comorbidity. There can be over 20 diagnoses recorded on any one claim, though having between 1–5 documented is more common. At a minimum, a claim will always have at least 1 diagnosis submitted. There are numerous diagnoses for similar conditions (like diabetes mellitus), so you may find the AHRQ CCS helpful to group various like-diagnoses into a more recognizable diagnosis label.
Fee Schedule:
As it relates to Reimbursement, the fee schedule lists the rates at which a provider is reimbursed for different services. CMS publishes a basic physician fee schedule for professional services, broken out by CPT/HCPCS. This is the rate that Medicare reimburses providers for the services performed and CPT/HCPCS billed. The base Medicare fee schedule and its rates vary by RVUs, region, where the service was performed (like in a hospital or not), and more. If a health plan pays a provider at the same rate as the CMS fee schedule states, it is colloquially referred to as “100% of Medicare” — but, for non-Medicare patients, a provider may also negotiate with a health plan to be reimbursed at 125% of Medicare, or some rate structure completely unrelated to the Medicare fee schedule.
You may hear that a “facility” fee schedule differs from the “professional” fee schedule, meaning the rate paid for a service is different when billed by a facility vs. a professional provider. Different reimbursement methodologies exist for different settings of care, such as inpatient/outpatient (aka “facility”) and professional services provided by a physician. Fee schedules are not standardized, carve-outs or exceptions may be applied, a provider may be on a value-based care arrangement rather than a fee schedule/fee-for-service, lump sum grouper or episode payments may apply rather than a provider being reimbursed by each individual service or CPT, and many more scenarios like this may impact how a provider is reimbursed for services performed, but the CMS/Medicare fee schedule is very commonly (but not always) referenced or used as a base of comparison.
HAC or Health Acquired Condition /hack/:
“Hospital-acquired conditions” as defined by CMS for specific quality scoring, but also used informally
HCPCS /hicks-picks/:
An additional code set maintained by CMS that is similar to the CPT in purpose and function. HCPCS are often referred to collectively as “procedure codes” or referred to in tandem with their counterparts, CPT codes. While the CPT codes are primarily used to describe medical services performed, such as an office visit, HCPCS expands upon that to also include codes to separately report medical items or services, such as drugs, ambulance services, supplies, and more.
ICD-10 (or ICD-9):
The most common reference is typically referring to diagnoses (ICD-10-CM), a standardized code set of diagnoses developed by the World Health Organization (WHO) and now maintained by CDC’s National Center for Health Statistics under authorization by the WHO. 3–7 alphanumeric characters
Lesser known: when referring to an inpatient hospital setting, ICD-10-PCS is a code set maintained by CMS to denote specific inpatient procedures.
MCO or Managed Care Organization:
An organization (typically a health plan) contracted by a state Medicaid agency to manage the cost and quality care of Medicaid enrollees. An MCO receives a set per member per month (PMPM or capitation) payment to manage and pay for the total healthcare costs of its pool of enrollees. It is then up to the MCO to manage the healthcare costs and care of their group of enrollees. Ideally, if the MCO can do a good job of managing the health of enrollees, contracting a quality provider network, and keeping their administration expenses reasonable, the expenses of managing enrollees’ healthcare (in aggregate) won’t exceed the dollar amount the MCO received to manage their care in the first place. This is not always the case.
Medicaid:
Medicaid is an assistance program, providing health coverage for eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is a federal-state program and varies from state to state.
Medicare:
Medicare is a Federal health insurance program. Medical bills are paid from trust funds which those covered have paid into. It serves people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients who have paid into the Medicare fund.
Member Month:
From a health plan perspective, the number of months that a person is covered as a health plan member. If one person is covered for an entire year, that person represents 12 member months in the year. If the plan covers 50 people in the year, all enrolled for the entire year, they represent 600 member months. Member months are commonly looked at for a specific time period, such as annually, and are an important factor in “per 1000” or PMPM calculations. Read more.
NPI:
Per CMS, the NPI is a unique identification number for covered healthcare providers. Covered healthcare providers and all health plans and healthcare clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA. The NPI is a 10-position, intelligence-free numeric identifier (10-digit number). This means any provider (physician, hospital, pharmacy, etc.) must have an NPI to conduct the service and especially to submit a claim for them. You can read more about NPIs here, or find a provider’s NPI/lookup NPIs and which provider they belong to on the NPPES NPI Registry’s site, here.
PCP:
An individual Primary Care Physician or Primary Care Provider who has the responsibility for supervising, coordinating and providing primary health care to Members, initiating referrals for specialist care and maintaining the continuity of the Member’s care.
PMPM or per member per month:
From a health plan perspective, the total $ expended on healthcare services put into a per capita, per month basis. One formula is:
$ expended on healthcare services
÷
# of member months in time period
Reimbursement:
A common term used to describe the payment that a provider receives (or is “reimbursed”) from the health plan/health insurance carrier to compensate them for the care they provided to the health plan’s member. From a provider perspective, this is one major source of revenue, but may not be the only source of revenue.
Different reimbursement methodologies exist for different settings of care, such as inpatient/outpatient (aka “facility”) and professional services provided by a physician. Reimbursement is not standardized: negotiations happen, carve-outs or exceptions may be applied, a provider may be on a value-based care arrangement rather than a fee schedule/fee-for-service, lump sum grouper or episode payments may apply rather than a provider being reimbursed by each individual service or CPT, providers may be paid simply as a % of the charged amount that they bill, and many more scenarios like this may impact how a provider is reimbursed for services performed.
RVU or Relative Value Unit:
A value associated with a procedure that indicates the relative complexity, level of expertise required, time, and cost to administer compared to other procedures. Procedures with a higher RVU value are considered more complex and time-intensive, and are reimbursed accordingly. The RVU is also used as a measure of physician output or “productivity.”
Service Line:
From a hospital or provider perspective, a group of services, service offerings, or specialties that provide certain types of like-services or care, such as: Surgery, Orthopedics, GI, etc.
Telehealth:
Using digital technologies to deliver healthcare, education, public health, support services, or other health-related services (a broader definition that includes telemedicine).
Telemedicine:
Using digital technologies to deliver healthcare.
UM or Utilization Management:
From a health plan perspective, reviewing a service that were rendered for appropriateness and/or medical necessity based on a combination of clinical judgment, documentation in the record, and health circumstance. This may impact if a claim for a service is approved or denied. Some services may always require this form of approval, and others may not.
VBP/VBR/VBC or Value-Based Purchasing/Reimbursement/Care:
Reimbursement arrangements that compensate providers based on “value” rather than the traditional fee-for-service payments (which is Volume × Fee Schedule Rate). “Value” may be defined differently by each health plan, but typically includes measures concerning quality, outcomes, and other key performance indicators important to the plan and agreed upon between the plan and the contracting provider.
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This list could go on and on, and we’ll continue adding to it over time!
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Actionable Idea of the Week:
For now, let’s stay short and sweet: learn these in and out if you’d like to become a stronger healthcare professional and analyst.
And send me any more complex terms or concepts that you’d like to see covered in a future issue.
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See you next week!
-Stefany
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