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Terminology

General Terms

Accreditation
Formal process of evaluation by which an agency or organization recognizes an institution or program of study as meeting certain predetermined criteria or standards.

Admission, Inpatient
Hospital’s formal acceptance of a patient who is to receive health care services while in the hospital.

Advance Beneficiary Notice
Notice a health care provider should give a Medicare beneficiary to sign when providing a service the provider believes will not be paid for by Medicare.

Advance Directive
Written document that says how an individual wants medical decisions to be made if he or she should lose the ability to make their own decisions. A health care advance directive may include a Living Will and a Durable Power of Attorney for health care.

Allied Health Personnel
Licensed health care providers other than physicians, dentists, optometrists, chiropractors, podiatrists, and nurses. Allied health personnel do not usually engage in independent practice.

ALLKids
Free or low-cost, comprehensive health insurance program for children under age 19, who meet certain income and other eligibility guidelines. ALLKids is administered by the Alabama Department of Public Health, Children's Health Insurance Program.

Alternative Delivery and Financing System
Health delivery mechanism, such as a health maintenance organization or preferred provider arrangement, that serves as an alternative to traditional fee-for-service by combining financing with patient care services.

Ambulatory Care
Health services rendered to patients who are not confined to a hospital bed as inpatients when services are rendered.

Ambulatory Care Center, Freestanding
Facility, not located within a hospital, with an organized professional staff that provides medical treatments on an outpatient basis only.

Ambulatory Patient Classification
Medicare payment system for classifying outpatient services and procedures for purposes of payment. The ambulatory patient classification system classifies some 7,000 services and procedures into about 300 procedure groups.

Ancillary Services
Services other than room, board, medical, and nursing services provided to hospital patients in the course of care. Examples include laboratory, radiology, pharmacy and therapy services.

Assignment
Agreement in which a patient assigns to a hospital the right to receive payment from a third party (insurance company) for the service the patient has received; acceptance by a physician of Medicare payment as full payment for services rendered.

Assisted Living
Type of living arrangement in which personal care services such as meals, housekeeping, transportation, and assistance with daily activities are available as needed to people who still live on their own in a residential facility.

Auxilian
Member of a hospital auxiliary who may or may not be an in-service volunteer within the affiliated hospital.

Balanced Budget Act
1997 bill enacted for the purpose of balancing the federal budget, which included cuts in hospital Medicare reimbursement.

Beds, Complement of
Number of beds at a hospital available at any one time.

Beds, Licensed
Number of beds that a hospital is licensed or certified by the state to maintain.

Bed, Swing
Hospital bed used for both short-term and long-term use, depending on need.

Behavioral Health Care
Treatment of mental health and/or substance abuse disorders.

Board-Certified
Physician or other health professional who has passed an examination given by a medical specialty board and has been certified by that board as a specialist in that subject.

Capital Expenditure
Outlay for capital assets such as facilities and equipment, excluding outlay for operation or maintenance.

Capital Financing
Institutional funding for facilities and equipment that becomes part of the capital assets of the institution.

Capitation
Method of payment for health services in which an individual or institutional provider is paid a fixed, per-capita amount for each person served without regard to the actual number or nature of services provided.

Case Management
System of assessment, treatment planning, referral, and follow-up that ensures the provision of comprehensive and continuous service and the coordination of payment and reimbursement for care.

Case Mix
Distribution of patients into categories reflecting differences in severity of illness or resource consumption.

Catastrophic Illness
Any acute or prolonged illness that is usually considered to be life threatening or with the threat of serious residual disability.

Census
Average number of inpatients, excluding newborns, receiving care each day during a specific period of time.

Certificate of Need
Certificate of approval issued by the State Health Planning and Development Agency to health care facilities that propose to construct or modify a health care facility, incur a major capital expenditure, or offer a new or different health service.

Children’s Health Insurance Program
Program jointly funded by states and the federal government, which provides medical insurance coverage for uninsured children.

Co-Insurance
Requirement of an insurance policy or prepayment plan that a predetermined portion or percentage of the provider’s charges be paid by the beneficiary.

Community Mental Health Center
Facility that provides outpatient services (including specialized outpatient services for patients who have been discharged from inpatient treatment at a mental health facility) emergency care services, day treatment, and consultation and education services. Community mental health centers also provide screening for patients considered for admission to state mental health facilities.

Complication
Condition that arises during the hospital stay that prolongs the length of stay.

Contractual Adjustment
Bookkeeping adjustment to reflect uncollectible differences between established charges for services rendered to insured individuals and rates payable for those services under contracts with third party payers.

Co-Payment
Specified share of total liability for example, a specific amount per hospital day or a percentage of the total bill for which the insured is responsible.

Cost, Allowable
Cost incurred by a provider in the course of providing service that is recognized as payable by a third party payer.

Credentialing
Generic term referring to the processes of certification and licensure of health care personnel and the formal recognition of professional or technical competence.

Critical Access Hospital
Rural hospital that meets federally mandated criteria that enables the hospital to receive cost-based reimbursement for Medicare services.

Days, Patient
Total number of inpatient days of care given in a specified time period.

Deductible
Expense the insured must incur before an insurer will assume any liability for all or part of the remaining cost of covered services.

Diagnosis, Admitting
Diagnosis provided on admission, explaining the reason for admission.

Diagnosis, Secondary
Condition that exists at the time of admission or develops subsequently that affects the treatment received and/or length of stay.

Diagnosis-Related Group
Patient classification system that relates demographic, diagnostic and therapeutic characteristics of patients to length of inpatient stay and amount of resources consumed, provides a framework for specifying hospital case mix, and identifies 468 classifications of illnesses and injuries for which Medicare payment is made under the prospective payment system.

Discharge Planning
Centralized, coordinated program developed by a hospital to ensure that each patient has a planned program for follow-up care.

Disproportionate Share Adjustment
Payment adjustment under Medicare's prospective payment system or under Medicaid for hospitals that serve a relatively large volume of low-income patients.

Do-Not-Resuscitate Order
Order placed on a patient’s chart by the attending physician, with patient or surrogate consent, that directs hospital personnel not to revive the patient if respiratory or cardiac activity ceases.

Durable Medical Equipment
Medical equipment, such as a respirator, wheelchair, home dialysis system, or monitoring system, that is prescribed by a physician for a patient’s home use.

Eligibility Determination
Method of verifying eligibility of patients for medical services under particular programs or insurance plans.

Emergency Medical Treatment and Active Labor Act
Requires any Medicare-participating hospital that operates a hospital emergency department to provide an appropriate medical screening examination to any patient that requests such an examination. If the hospital determines the patient has an emergency medical condition, it must either stabilize the patient's condition or arrange for a transfer.

Fiscal Intermediary
Private company, sometimes called “intermediary,” that has a contract with Medicare to pay Part A and some Part B bills. In Alabama, the fiscal intermediary is Cahaba Government Benefits Administrator (GBA), a division of Blue Cross and Blue Shield of Alabama.

Gatekeeper or Patient Care Manager
Term used in managed care to refer to the primary care physician responsible for determining the quantity and mix of services a patient needs. The gatekeeper also controls the patient’s access to and use of services through the continuum of medical care services.

Group Practice
Combined practice of three or more physicians and/or dentists who share office space, equipment, records, office personnel, expenses, and/or income.

Health Care Authority
Public corporation organized on a local or regional basis by or with the consent of any county or municipality and having the power to own or operate any health care facilities.

Health Insurance Portability and Accountability Act
Regulates health insurance portability, electronic health care transactions including electronic claims submission and the privacy of patients’ medical information.

Health Maintenance Organization
Organization that has management responsibility for providing comprehensive health care services on a prepayment basis to voluntarily enrolled individuals within a designated population.

Health Professional Shortage Area
Federally designated area that may have shortages of primary medical care, dental and/or mental health providers and may be urban or rural areas, population groups or medical or other public facilities.

Health Service Area
Geographic area designated by the federal government based on such factors as geography, political boundaries, population, and health resources for the purpose of effective planning and development of health services.

Home Health Care
Provision of health services such as nursing, therapy and health-related homemaker or social services in the patient’s home.

Hospice Care
Care that addresses the physical, spiritual, emotional, psychological, social, and financial needs of the dying patient and his or her family.

Hospitalist
Doctor who primarily takes care of patients when they are in the hospital. He or she assumes care from the patient’s primary doctor when the patient is hospitalized, communicates frequently with the primary doctor and returns the patient to the care of primary doctor when the patient leaves the hospital.

Indigence, Medical
Condition of having insufficient resources to pay for adequate medical care without depriving oneself or dependents of food, clothing, shelter, and other essentials of living.

Infection, Nosocomial
Infection acquired during hospitalization that is neither present nor incubating at the time of hospital admission.

Infection Control Committee
Hospital committee composed of infection control personnel and medical, nursing, laboratory, and administrative staff members (and occasionally others, such as dietary or housekeeping staff members) whose purpose is to oversee infection control activities.

Informed Consent
Legal concept requiring a patient or a patient’s guardian to be advised of and to understand the risks associated with a proposed procedure or treatment prior to approving such procedure or treatment, usually indicated by a signed written statement.

Inpatient
Person who receives medical, dental or other health-related services while lodged in a hospital or other health care institution for at least one night.

Insurance, Catastrophic
Insurance that protects the insured against all or a percentage of loss that is not covered by other insurance or prepayment plan or that is incurred under specified circumstances or insurance in excess of specified amounts or other dollar or benefit limits.

Insurance, Major Medical
Catastrophic insurance that protects the insured against all or a percentage of loss incurred as the result of severe or prolonged illness or disability in which costs exceed a specified dollar amount.

Integrated Health Care Delivery System
Health care facilities and professionals organized and coordinated to provide comprehensive health care to a defined population group.

Joint Commission
Private, not-for-profit organization composed of representatives of the American College of Surgeons, American College of Physicians and American Hospital Association, which establishes standards for the operation of health facilities and surveys facilities to ensure compliance with standards.

Joint Venture
Arrangement involving risk- and benefit-sharing between a hospital and one or more other entities, with rights and obligations specified in contractual terms, for a specific purpose.

Length of Stay
Number of calendar days that elapse between an inpatient’s admission and discharge.

Licensure
Formal process by which a government agency grants an individual the legal right to practice an occupation and grants an organization the legal right to engage in an activity, such as operation of a hospital.

Long-Term Care
Provision of health, social and/or personal care services on a recurring or continuous basis to individuals with chronic physical or mental conditions who live in environments ranging from institutions to their own homes.

Malpractice
Failure in providing health care services to the degree of skill and care generally exercised by like professionals under similar circumstances.

Managed Care
A system of providing health care through which access, cost and quality are controlled by direct interventions before, during or after service delivery. Managed care organizations use a variety of techniques, such as utilization review, quality assurance programs, and preadmission certification to manage the care delivered.

Market Basket Index
Index of the annual change in the prices of goods and services providers used to produce health services.

Medicaid
Federal program administered by states that provides health care benefits to indigent and medically indigent individuals.

Medical Staff
Organized body of licensed physicians and other licensed individuals permitted by law and by the hospital to provide patient care services independently in the hospital.

Medical Staff, Active
Physicians and other licensed individuals on the medical staff who regularly provide medical services within the hospital and who participate in all medical staff activities.

Medical Staff, Courtesy
Physicians and other licensed individuals who meet qualifications for appointment to the medical staff but who admit patients to the hospital only occasionally or act only as consultants and who are ineligible to participate in medical staff activities.

Medically Underserved Area
Federally designated area that may be a whole county or a group of contiguous counties, a group of county or civil divisions or a group of urban census tracts in which residents have a shortage of personal health services.

Medically Underserved Population
Federally designated area that may include groups of people who face economic, cultural or linguistic barriers to health care.

Medicare
Federal program that provides health insurance benefits primarily to individuals over the age of 65 and others eligible for Social Security benefits. (See Medicare, Part A; Medicare, Part B.)

Medicare & Medicaid Services, Centers for
Division of the U.S. Department of Health and Human Services that administers the Medicare and Medicaid programs. Formerly called Health Care Financing Administration.

Medicare, Part A
Compulsory portion of Medicare that covers inpatient hospitalization.

Medicare, Part B
Voluntary portion of Medicare that covers things like physicians’ services and hospital outpatient services. Participants may enroll on a monthly premium basis.

Medigap Policy
Medicare supplemental insurance policy sold by private insurance companies to fill "gaps" in basic Medicare coverage.

Metropolitan Statistical Area
Geographic area that includes at least one city with 50,000 or more inhabitants, or a Census Bureau-defined urbanized area of at least 50,000 inhabitants and a total Metropolitan Statistical Area population of at least 100,000.

Mortality Rate, Hospital
Number of inpatient deaths in relation to total number of inpatients over a given period.

Mortality, Infant
Number of infant deaths in relation to all infants born in a given population over a given period, usually expressed as the number of neonatal deaths per 1,000 live births.

Multihospital System
Two or more hospitals that are owned, leased or managed by a central organization.

Nuclear Magnetic Resonance
Service providing diagnosis of disease typically through visualization of cross-sectional images of body tissue using strong static magnetic and radio-frequency fields to monitor body chemistry non-invasively, unimpeded by bone, and using no ionizing radiation or contrast agents.

Nurse, Licensed Practical
Person qualified by an approved program in practical or vocational nursing and licensed by the state who, under the direction of a head nurse or nursing team leader, performs a variety of assigned nursing activities.

Nurse, Registered
Person qualified by an approved postsecondary program or baccalaureate in nursing and licensed by the state to practice nursing.

Nurse Anesthetist, Registered
Registered nurse who has completed additional, specialized education and training in administering anesthetics to patients under the supervision of physicians, anesthesiologists or dentists.

Nurse Midwife
Registered nurse qualified by advanced training in obstetric and neonatal care and certified by the American College of Nurse Midwives who manages the perinatal care of women having normal pregnancy, labor and childbirth.

Nurse Practitioner
Registered nurse who has successfully completed an advanced formal program of study designed to prepare registered nurses to provide primary health care through diagnosis, clinical judgment and management abilities.

Nursing Facility
Facility which primarily provides to residents skilled nursing care and related services for the rehabilitation of injured, disabled, or sick people, or on a regular basis, health-related care services above the level of custodial care to other than mentally retarded individuals.

Nursing Home
Residence that provides a room, meals, and help with activities of daily living and recreation. Generally, nursing home residents have physical or mental problems that keep them from living on their own and usually require daily assistance.

Occupancy
Ratio of average daily census to the average number of beds maintained during the reporting period.

Operating Margin
Relationship between the amount of money a hospital receives for patient care versus the amount of money it spends on patient care.

Outlier
Patient having either an extremely long length of stay or extraordinarily high costs when compared with most patient discharges classified in the same diagnosis-related group.

Outpatient
Person who receives medical, dental or other health-related services in a hospital or other health care institution but who is not lodged there.

Peer Review Organization
Medical review organization that contracts with the Centers for Medicare & Medicaid Services.

Physical Therapist
Person who treats disease and injury by physical means, such as the application of light, heat, cold, water, electricity, massage, and exercise.

Physician, Hospital-Based
Physician, such as a director of medical education, pathologist, radiologist, or emergency department physician, who spends a predominant part of his or her practice time within one or more hospitals.

Physician-Hospital Organization
Entity formed by hospitals and physicians to negotiate contracts with third party payers to provide services under managed care. These organizations may also be involved in managing and overseeing the facility or facilities.

Physician, Primary Care
Physician who specializes in general internal medicine, general pediatrics, family practice, or obstetrics/gynecology.

Physician Resident
Graduate of an accredited medical school participating in an approved training program in a hospital setting.

Physician Assistant
Person who provides health care services customarily performed by a physician under responsible supervision of that qualified licensed physician.

Plan First
Family planning program for women ages 19-44, who meet certain eligibility requirements. Plan First is administered by the Alabama Department of Public Health.

Portability
Guarantees that an individual who changes jobs will have insurance coverage with the new employer, without a waiting period or having to meet additional deductible requirements. Also waives pre-existing condition exclusions.

Preferred Provider Organization
Type of managed care where the covered patient may use doctors, hospitals and other providers that belong to a network. Providers outside the network may be used at an additional cost.

Primary Care
Provision of basic or general health care by a primary care physician, emphasizing those medical services required to maintain health or to treat simpler and more common diseases.

Privileges, Clinical
Permission to provide medical or other patient care services in the granting institution, within well-defined limits, based on the individual’s professional license, experience, competence, ability, and judgment.

Prospective Payment
Method of third party payments by which rates of payment to providers for services to patients are established in advance for the coming fiscal year, and providers are paid these rates for services delivered regardless of the costs actually incurred in providing the services.

Quality Assurance Program
Organized set of activities designed to ensure ongoing assessment of important aspects of patient care, the correction of identified problems, and follow-up activities to verify that corrected problems have not reoccurred.

Rate, Per Diem
Established rate of payment determined by dividing the total cost of providing routine inpatient services for a given period by the total number of inpatient days of care provided during that period.

Reimbursement, Cost-Based
Payment by a third party payer to a hospital of all allowable costs incurred by the hospital in the provision of services to patients covered by the contract.

Respite Care
Patient care provided intermittently in the home or institution in order to provide temporary relief to the family home care giver.

Respiratory Therapist
Health care professional who, under the supervision of a physician, administers oxygen and other gases and provides assistance to patients with breathing difficulties.

Review, Peer
Concurrent or retrospective review by practicing physicians or other health professionals of the quality and efficiency of patient care practices or services ordered or performed by other physicians or other health professionals.

Review, Preadmission
Review of an elective hospitalization prior to a patient’s admission in order to ensure services are necessary and should be provided in an inpatient hospital setting.

Review, Rate
Prospective review by a government or private agency of a hospital’s budget and financial data, performed for the purpose of determining the reasonableness of the hospital rates and evaluating proposed rate increases.

Review, Utilization
Evaluation of an admission, the use of ancillary services, and/or length of a hospital stay, using objective medical criteria to ensure services are medically reasonable, necessary and provided in the most appropriate setting.

Risk Management
Function of planning, organizing and directing a comprehensive program of activities to identify, evaluate and take corrective action against risks that may lead to patient injury, employee injury and property loss or damage with resulting financial loss or legal liability.

Rural Referral Center
Rural hospital that is paid the appropriate urban rate by Medicare, adjusted by the rural area wage index, because it meets specified criteria.

Secondary Care
Provision of a specialized medical service by a physician specialist or a hospital, usually upon referral by a primary care physician.

Skilled Nursing Facility
Facility with an organized professional staff that provides medical, continuous nursing and various other health and social services to patients who are not in an acute phase of illness but who require primarily restorative or skilled nursing care on an inpatient basis.

Social Work Service
Service providing assistance and counseling to patients and their families in dealing with social, emotional and environmental problems associated with illness or disability, often in the context of discharge planning coordination.

Sole Community Provider
Hospital that, by reason of factors such as isolated location and absence of other hospitals, is the sole source of inpatient hospital services reasonably available to Part A Medicare beneficiaries in a geographic area.

Staffing Ratio
Total number of hospital employees (full-time equivalents) divided by the average daily census.

Standard of Care
Term used in medical malpractice action to mean degree of reasonable skill, care and diligence exercised by members of the same health profession practicing in the same or a similar locality in light of the present state of medical or surgical science.

Tertiary Care
Sophisticated treatment of complex or serious conditions provided by highly trained staff in specialized units, usually at a university-affiliated medical center.

Third Party Administrator
Organization that handles the administrative issues for a company that is self-insured.

Third Party Payer
Organization (private or public) that pays for or insures at least some of the health care expenses of its beneficiaries.

Transitional Beds
Portion of a hospital’s bed complement that is designated to provide transitional care.

Transitional Care
Level of skilled care provided to hospital patients after the acute phase of their illness. This care is usually short term and provided to patients waiting for an open nursing home bed or until other arrangements for their care can be made.

TRICARE
Health care program for active duty members of the military, military retirees and their eligible dependents, formerly called CHAMPUS.

Uncompensated Care
Medical care that is billed to the recipient of care but is not paid, including bad debts and charity care.

Urgent Care Center
Facility that provides care and treatment for problems that are not life-threatening but require attention over the short term. The unit functions like an emergency department but is separate from the hospital with which it may have backup arrangements.

Women, Infants and Children (WIC)
Federally funded supplemental nutrition program that serves low- and moderate- income pregnant and breastfeeding women, infants and children up to 5 years of age, who are at nutritional risk.