Health Care Terms

Academic Health Center: The health care education programs of the University of Minnesota. Includes the medical school as well as the schools of nursing, pharmacy, public health, dentistry and veterinary medicine.

Accreditation: The process of evaluation in which an agency or organization recognizes a health care facility or program for having met certain predetermined criteria or standards; e.g., accreditation by the Joint Commission on Accreditation of Health Care Organizations.

Acute care: The provision of care to a person who is in the acute phase of an illness or injury and who will probably have a hospital stay of less than 30 days.

Admitting privileges: The authorization given by a health care organization’s governing body to medical practitioners who request the privilege of admitting and/or treating patients. Privileges are based on a provider’s license, training, experience and education.

Advance directive: Written ahead of time, a health care advance directive is a written document that says how you want medical decisions to be made if you lose the ability to make decisions for yourself. A health care advance directive may include a living will and a durable power of attorney for health care.

Adjusted average per capita cost (AAPCC): This is the federal calculation that determines how much Medicare pays managed care companies each month to cover Medicare beneficiaries living in a certain area.

Ambulatory care: Health care services provided on an outpatient basis to people who are able to move about and don’t need to be confined to a hospital bed.

Ambulatory patient classification (APC): A method used by CMS to classify episodes of outpatient care. Hospitals are then reimbursed based on the APC.

American Hospital Association (AHA): A national organization that represents and serves all types of hospitals, healthcare networks and their patients and communities. Approximately 5,000 providers of care and 37,000 individual members come together to form AHA.

Ancillary services: Support services used in a hospital or other inpatient health program. These may include x-ray, drug, laboratory, etc.

Area Agency on Aging (AAA): State and local programs that help older people plan and care for their life-long needs. These needs include adult day care, skilled nursing care/therapy, transportation, personal care, respite care, and meals.

Assignment: An agreement by a physician that s/he will bill Medicare directly and will accept the government payment as the total payment. The physician cannot bill the patient for the balance.

Average daily census (ADC): The average number of inpatients per day. Calculated by dividing the total number of days patients stayed in the hospital during a certain period by the total number of calendar days in that same period.

Average length of stay: How long, on average, patients stay in a hospital. Calculated by dividing the total number of hospital bed days in a certain period by the admissions or discharges during the same period

Beds, licensed: The number of beds a hospital has a license to operate.

Beds, complement or staffed: The number of beds a hospital actually operates.

Board of Medical Examiners: The group of physicians that investigate complaints against physicians.

Board certified: Term for physicians who have passed a national certifying exam for a specific medical specialty.

Bundled billing: The practice of combining all of the medical expenses for a certain procedure into one charge (e.g., hospitalization for maternity care).

Buyers Health Care Action Group: A coalition of the state’s largest self-insured employers.

Capitation: The practice in which a provider is paid a set amount (usually monthly) for each person enrolled in a plan to provide health care to the group. No additional money is paid to the provider based on the actual services received by the patient.

Case management: A system of assessment, treatment planning, referral and follow-up that ensures the provision of services according to a patient’s needs.  It can also include the coordination of payment and reimbursement for care.

Case mix: A calculation that reveals the average acuity level of patients in a hospital.  For example, a high case mix refers to a patient population that is more ill than the average.

Census: The number of patients, excluding newborns, receiving care each day during a reporting period.

Centers for Medicare and Medicaid Services (CMS): formerly the Health Care Financing Administration, or HCFA, this organization administers the Medicaid, Medicare and State Children’s Health Insurance Program.

Certificate of need (CON): The application a provider must complete and present to the state health planning agency to justify the need for a new service, the replacement of expensive equipment or a new building project.

Certified nurse practitioner (CNP): A registered nurse who has received advanced training and is able to provide primary care, including writing prescriptions under the supervision of a physician. Caps are recognized and regulated by the State Board of Nursing.

Children’s Health Insurance Program (CHIP): A national program that provides matching federal money to states that expand health insurance coverage to children.  

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS): The health plan that serves the dependents of active-duty and retired military personnel.

Clinical pathway, also called critical pathway: A treatment regimen agreed to by a group of providers as the best means of treating a specific illness.

Closed staff: A hospital medical staff that will accept no new applicants or a physician group that exclusively provides, under contract, all the administrative and clinical services required for operation of a hospital department.

Community benefits: Activities initiated by not-for-profit hospitals to benefit the community. More frequently being used by the Internal Revenue Service in reviewing tax-exempt status.

Community health needs assessment: The ongoing process of evaluating the health needs of a community.  Usually facilitates a prioritization of needs and a strategy to address them.

Community integrated service network (CISN): A smaller integrated service network with an enrollment limit of 50,000, plus several other restrictions.

Community rating: Method for calculating health insurance premiums based on the average cost of the actual or anticipated health services used by all subscribers in a specific geographic area or industry.

Comorbidity: A preexisting condition that, linked to a principal diagnosis, causes an increase in the length of stay by at least one day in approximately 75 percent of cases.

Contractual adjustment: This is a bookkeeping adjustment to reflect uncollectable differences between hospital charges and third-party payments.

Credentialing, also called privileging: The process by which a hospital determines the scope of practice a specific medical practitioner will have in the hospital.

Critical access hospital (CAH): A hospital that meets very specific CMS criteria and thus gets special payments for Medicare patients. Hospital can only provide short-term, limited care and must have a referral agreement. 

Diagnosis related groups (DRGs): Methodology developed by the CMS to group Medicare patients based on their clinical condition, age, other existing conditions, etc. into one of almost 500 DRGs.  Providers are then paid a set fee based on the DRG assigned.

Directors’ and officers’ liability coverage: Insurance designed to protect governing board members in lawsuits brought against them based on their service as a board member.

Disproportionate share (DSH) adjustment: A payment adjustment under both Medicare and Medicaid that provides additional money for hospitals that serve a large volume of low-income patients.

Electronic DataInterchange (EDI): The computer-to-computer electronic transfer of business transaction information in a public standard format between trading partners.

Emergency Medical Treatment and Active Labor Act (EMTALA): A federal law that mandates that all patients who come to a hospital’s emergency room must receive an appropriate medical screening regardless of their ability to pay. And, if they are to be transferred to another facility, they must be stabilized first.

Employee Retirement Income Security Act of 1974 (ERISA): Governs self-insured health plans.

Ethics committee: A multidisciplinary committee that develops hospital policy relative to the use and limitation of aggressive medical technology.  It can also serve as a resource for patients and their families regarding options for terminally ill patients.

Exclusions: Medical conditions specified in an insurance policy for which the insurer will provide no benefits.

False Claims Act: A federal law sometimes used to charge hospitals with fraud and abuse.

General Assistance Medical Care (GAMC): an entitlement program for low-income Minnesotans.

Global fee: A single fee that encompasses every procedure, test, etc. performed during a hospitalization.

Health Care Auxiliary of Minnesota (HCAM).

HCCIS: Health Care Cost Information System.

Health Care Access Fund: This is the pot of money used to fund MinnesotaCare’s subsidized insurance program. Money comes from a 2 percent tax collected on gross revenues of hospitals, physicians and other providers, as well as a 1 percent premium tax on health plans.

Health care cooperative: An arrangement that allows individual providers to act collectively for the purposes of providing health care services without having to merge assets.

Health Care Financing Administration: (see Centers for Medicare and Medicaid Services, above).

Health Insurance Portability and Accountability Act (HIPAA): The federal law that changed many insurance rules including giving people the right to change jobs without fear of losing coverage. It also contained some provisions regarding patient privacy.

Health maintenance organization (HMO): A prepaid health plan that acts as both an insurer and provider of comprehensive health services.

HMO Council: The association representing eight HMOs. Official name is the Minnesota Council of Health Plans.

Hospitalist: A term for a physician who is hired by the hospital to work with staff physicians to cover their patients while they are hospitalized.

Integrated delivery system (IDS): Health care facilities and professionals organized and coordinated to provide comprehensive health services to a defined population group.

Integrated service network (ISN): An organization that combines the insurance and health delivery aspects of health care in a single entity.

Intermediate care facility (ICF): A facility providing a level of care that is less than the degree of care and treatment that a hospital or skilled nursing facility is designed to provide, but greater than the level of room and board.

Joint Commission: The organization that provides a voluntary accreditation process for hospitals and other health care providers.

Legislative Oversight Commission on Health Care Access: The Joint House and Senate panel that oversees MinnesotaCare. Commonly referred to as the LOC.

Licensed practical nurse (LPN).

Licensure: The process hospitals and health professionals must go through in order to practice medicine, run a facility or provide a certain service. In Minnesota hospitals are licensed by the Minnesota Department of Health, and physicians are licensed by the Minnesota Board of Medical Practice.

Long-term care: Medical services provided to persons who have chronic physical and/or mental impairments. This care is provided in a variety of settings, including the home, specialty facilities and nursing homes.

Long-term care insurance: A private insurance policy to help pay for some long-term medical and non-medical care, like help with activities of daily living. Because Medicare generally does not pay for long-term care, this type of insurance policy may help provide coverage for long-term care that one may need in the future. Some long-term care insurance policies offer tax benefits; these are called “tax-qualified policies.”

Managed care: A system of providing health care through which access, cost and quality are controlled.

Market basket index: A measure of the annual change in the prices of goods and services providers use in producing health care services.

Medicaid – The joint federal and state program that provides health care coverage to low-income and disabled persons under 65 years of age. Minnesota’s program is called Medical Assistance (MA)..

Medicare: The federal program that provides health care services to all persons 65 years of age and older, regardless of income.

Medicare, Part A: The portion of Medicare that covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare, Part B: The portion of Medicare that covers outpatient services, physician visits and other medical services that are not covered by Part A. Must be purchased by enrollees (enrollees pay a monthly premium for Part B).

Medicare Medical Savings Account Plan (MSA): A Medicare health plan option made up of two parts. One part is a Medicare MSA Health Insurance Policy with a high deductible. The other part is a special savings account where Medicare deposits money to help you pay your medical bills.

Medical Payment Assessment Commission (Med PAC): A group of independent experts appointed by the federal government to give advice on issues related to Medicare payments to providers.

Medical staff, active: The physicians or other health care practitioners who have privileges at a hospital and regularly practice there.

Medical staff, courtesy: Physicians or other health care practitioners who are eligible for privileges, but may only admit patients occasionally or provide consultation as needed.

Medicare Cost Report: The lengthy form hospitals must submit to CMS each year showing the total costs and charges associated with providing care to all patients.In addition, it shows the portion of those costs allotted to Medicare patients and the payments made to the facility for Medicare patients.

Medigap coverage: The private insurance Medicare beneficiaries can purchase that covers the portion of the bill not paid by Medicare; e.g., deductibles and copays.

Midlevel practitioner (MLP): Nurses, physician assistants, midwives and other health professionals who can operate somewhat independently, as long as they are under the sponsorship of a practicing physician and are licensed to do so by their respective state licensing authority.

Minnesota Comprehensive Health Association (MCHA): a state-run fund for people who can’t get health insurance in the private market due to pre-existing conditions. Funded by assessment on hospitals and HMOs. 

Minnesota Health and Housing Alliance (MHHA): Represents the state’s nonprofit nursing homes and senior housing organizations. (Formerly the Minnesota Association of Homes for the Aging)

Minnesota Health Data Institute: Public/private partnership established under MinnesotaCare to collect health care data.

Minnesota Health Information Network: The data division of Minnesota Hospital Association. 

Minnesota Hospital Association (MHA): Represents the state’s hospitals and  health care systems.

MinnesotaCare: funded by enrollee premiums, the State of Minnesota, a tax on health care providers and some federal matching dollars, MinnesotaCare was created in 1992 by the Minnesota Legislature to subsidize a health care program for Minnesotans who do not have access to health insurance.

MIMS II: Medicaid Management Information System, the Department of Human Service’s Medicaid claims processing computer put online in 1994.

National Practitioner Data Bank (NPDB): A national database that contains claims and disciplinary actions filed against physicians and other medical practitioners.

Noridian: Minnesota’s Medicare fiscal intermediary.

Nosocomial infection: An infection acquired by a patient while hospitalized.

Occupancy: The number of inpatients at any given time, usually expressed as a percentage (patients divided by total beds).

Occupational Safety and Health Administration (OSHA): Federal agency responsible for reducing occupational injuries.

Ombudsman, Long-Term Care: An advocate (supporter) who works to solve problems between residents and nursing homes, as well as assisted living facilities. 

Outcomes: The results of the provision of health care, usually measured in terms of patient function, cost, mortality, etc.

Outliers: Cases that are substantially different, either clinically or economically, from the average case in a particular area.

Patient days: Each calendar day of health care provided to a hospital inpatient under the terms of his insurance, usually beginning at midnight.

Peer review organization (PRO): An organization which contracts with CMMS to gather, analyze, and report data on the performance of health services, focusing on process and outcomes measurements. In Minnesota, Straits Health is the designated PRO.

Per diem payment: Fixed payment for each day a patient is in the hospital. Does not vary with the level of care provided.

Physician assistant: A specially trained and licensed health professional who performs certain medical procedures under the supervision of a physician.

Physician-hospital organization (PHO): When a hospital and physician group forms a joint venture to provide services.

Preadmission certification: The process by which a health professional, using pre-established guidelines, evaluates a physician’s request to hospitalize a patient.

Prepaid Medical Assistance Program (PMAP): A managed care program for Medical Assistance enrollees.

Preferred provider organization (PPO): A health plan that contracts with specific hospitals or physicians to provide care to a defined population using a negotiated fee schedule.

Primary care: Basic health care that usually involves preventive care or treatment for minor illnesses.

Prospective payment system (PPS): A payment method in which the amount of payment is set in advance, and the hospital is at least partially at risk for either the losses or gains made in treating the patient.

Public health care programs: Minnesota’s three public health care programs are Medical Assistance (Medicaid), General Assistance Medical Care and MinnesotaCare.

Qualified Medicare Beneficiary (MOB) – A Medicare beneficiary whose Part B premium and coinsurance is covered by Medicaid, because he is at or below the poverty level.

Quality assurance: The process of looking at how well a medical service is provided. The process may include formally reviewing health care given to a person, or group of persons, locating the problem, correcting the problem, and then checking to see if what you did worked.

Quality improvement program also called continuous quality improvement – Constant process of evaluating processes and procedures to try and improve quality by reducing waste and variables.

Quality indicator – A measure of the quality of health care provided. For example, length of stay, readmission rates and nosocomial infections are all quality indicators.

Registered nurse (R.N.)

Relative Value Scale (RVS) – An index CMS uses to designate the degree of complexity for medical services provided by physicians to Medicare beneficiaries. The weights represent the amount to be paid for each service.

Resource-Based Relative Value Scale – The fee schedule Medicare uses to pay physicians that reflects the value of one service relative to others in terms of the resources utilized.

Respite care: Relief care available for people who care for others on a 24-hour basis. Can either be provided in homes, assisted living facilities or hospitals. Gives the caregiver a break.

Risk management: The function of identifying and assessing problems that could occur and bring about losses … legally, clinically, or financially.

Sentinel event: An unexpected incident resulting in injury or death to a patient, or an event which poses such a risk.

Skilled nursing facility (SNF), also called extended care facility:  Facility, usually a nursing home, that provides 24-hour medical care to people who are not in the acute stages of illness, but need rehab, convalescent care, etc.

Staffing ratio: The total number of employees (FTEs) divided by the average daily census.

State Children’s Health Insurance Program (SCHIP): A program created by Congress in 1997 to help states cover more low-income children.

Stratis Health: The organization in Minnesota that contracts with CMS to oversee the provision of health care services to Medicare beneficiaries in the state.

Subacute care: Medical and skilled nursing services provided to people who are not in the acute phase of care, but who require a higher level of service than is found at a long-term care facility.

Swing beds: A hospital bed that can be used either for acute care or long-term care, depending on the needs of the community. These can only be used in smaller hospitals in rural areas where there is a shortage of long-term care beds.

Third party administrator: When an insurance company or HMO takes on the administrative functions for a self-insured health plan.

Tertiary care: High level care provided in teaching hospitals or medical centers for patients who have severe, complicated or unusual problems.

Triage: The assessment and categorization of patients to determine the level of care needed and to prioritize who should be treated first.

Uniform Billing Code (UB-92): A federal code that outlines the specific billing procedures hospitals must follow and list on each patient invoice.

Utilization review (UR): The concurrent or retrospective assessment of the care patients receive based on pre-established standards.

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