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Glossary

 

The Glossary below is a quick reference for some of the most commonly used terms in healthcare.

  • Affordable Care Act (ACA) exchanges: State entities through which health insurance can be purchased; also known as health exchanges or health insurance marketplaces.

  • Access: Ability to pay for needed health-related goods and services, such as treatments and prescription medications.

  • Accumulator adjustor programs: Programs adopted by some health insurance plans, in which co-pay assistance such as manufacturer coupons for specialty drugs is not applied to deductible and OOP maximums. See Co-pay accumulator.

  • Adjusted Gross Income (AGI): Gross income minus specific deductions. See Modified Adjusted Gross Income (MAGI).

  • Advocate: A person who acts on behalf of another person in the interest of protecting the rights of the latter. See Patient advocate.

  • Affiliated provider: A healthcare provider or facility that is part of a health plan’s network. See In-network care, In-network provider.

  • Affordable Care Act (ACA): Comprehensive health insurance reform put in place by President Obama in 2010 that aims to make affordable health insurance available to more people, expand Medicaid and lower healthcare costs. See Obamacare, Patient Protection and Affordable Care Act.

  • Allowed charge: The maximum amount a health insurance plan will pay for a covered service.

  • Annual election period (AEP): The period in which an individual can sign up for, change, or cancel enrollment in Medicare Part C and Part D. See Medicare Part C, Medicare Part D.

  • Beneficiary: A person who is eligible to receive benefits (e.g., being enrolled in Medicare makes one a Medicare beneficiary).

  • Benefits: The items or services covered under an insurance policy (e.g., office visits, prescription drugs).

  • Biosimilar: A biologic medical product which is almost identical to, and has no clinically meaningful differences from another product.

  • Brand-name drug: Drug approved by the U.S. Food and Drug Administration (FDA) that is marketed with a specific brand name.

  • Catastrophic Coverage Phase: The final phase in the Medicare Part D plan, in which OOP medication costs are typically ~5% of retail. This phase kicks in after a patient reaches the OOP maximum in the Coverage Gap Phase.

  • Case manager: A healthcare professional who helps coordinate patient care.

  • Catastrophic limit: In Medicare Part D drug plans, the maximum OOP drug costs paid by a beneficiary before the beneficiary is required to pay 5% co-insurance for the rest of the calendar year.

  • Centers for Medicare and Medicaid Services (CMS): The federal agency that administers Medicare and works with states to administer Medicaid, CHIP and HIPAA.

  • Charitable foundation patient assistance program: A program run by an independent nonprofit organization that helps patients meet their co-pay and/or other medical expenses based on financial need.

  • Children’s Health Insurance Program (CHIP): A U.S. Department of Health and Human Services program that provides matching funds to states for uninsured low-income children not covered by Medicaid.

  • Claim: An invoice sent by a healthcare provider to a health insurance company detailing the services received.

  • Clinical nuance: A tenet of value-based insurance design (VBID), which recognizes that different medical services provide different benefits and that clinical benefit is dependent on patient, disease/stage, provider/ facility and type of service. See Value-Based Insurance Design.

  • Coinsurance: Requirement for patients to pay a percentage of costs of covered services.

  • Coordination of benefit: A process used by insurers to determine which plan has responsibility for which charges; used when a patient has more than one policy or type of coverage.

  • Commercial insurance: Health insurance provided by a private (non-government) company (not Medicare). See Exchange/Marketplace/Commercial insurance.

  • Community pharmacy: See Retail pharmacy.

  • Comprehensive Score for financial Toxicity (COST): A tool used to quantify financial toxicity.

  • Co-payment (co-pay): See Accumulator adjustment programs.

  • Co-pay coupon: A discount coupon issued by a drug manufacturer that can be used to offset the cost of the drug. See Drug coupon program.

  • Co-pay foundation: A program run by an independent nonprofit organization that helps patients meet their co-pay expenses based on financial need.

  • Cost sharing: Expenses that are not covered by health insurance and must be paid by patients; these OOP costs can include deductibles, coinsurance and/or co-pays.

  • Coverage: The benefits included as part of a health insurance plan.

  • Coverage Gap: When Medicare Part D beneficiaries hit the Initial Coverage Phase limit (~$3700), they enter the Coverage Gap Phase, where they remain until they have spent ~$5000 and can enter the Catastrophic Coverage phase (during which they pay 5% coinsurance for their drugs until the end of the calendar year). See Donut hole.

  • Creditable coverage: Insurance that is comparable to that provided by Medicare Part D (e.g., TRICARE).

  • Deductible / Initial deductible: OOP payments before a health insurer covers any costs.

  • Donut hole: A nickname for the Medicare Part D Coverage Gap. See Coverage Gap.

  • Drug coupon program: See Co-pay coupon.

  • Drug formulary: A list of specific prescription drugs that are covered by a health insurance plan, which includes drugs that are preferred because of efficacy and cost. See Formulary, Preferred drug list.

  • Dual eligible: Eligible for both Medicare and Medicaid.

  • Employer Sponsored Commercial Insurance: Health insurance that is provided through the workplace.

  • Exchange/Marketplace: See Commercial insurance.

  • Exclusion or limitation: A provision within a health insurance plan that denies coverage for certain conditions or services.

  • Explanation of Benefits (EOB): Health insurance company’s explanation of which costs were covered.

  • Fail first: Insurance policies that mandate that the cheapest drug must be tried first, regardless of which drug the physician prescribed. See Step therapy.

  • U.S. Food and Drug Administration (FDA): Federal agency that approves drugs before they can be marketed/sold in the United States.

  • Federal Poverty Level (FPL): An annual HHS-issued measure of income that is used to determine patient eligibility for programs and benefits.

  • Federally Qualified Health Centers (FQHCs): Primary care safety net providers for uninsured/underinsured patients.

  • Financial navigator: An individual who helps patients with health insurance coverage and with locating financial assistance when needed. See Patient navigator.

  • Financial toxicity: Unmanageable OOP costs related to medical treatment, that cause stress, may impact adherence with therapy and impact patient outcomes.

  • Formulary: An invoice sent by a healthcare provider to a health insurance company detailing the services received.

  • Formulary transparency: A clear and easily understood listing of all drugs in a health plan formulary, along with their costs.

  • Gatekeeper: The person in charge of a patient’s treatment, who decides which specialists and other medical resources a patient can utilize. See HMO, Managed Care.

  • Generic drug: An exact copy of a brand-name prescription drug, i.e., with the same active ingredients, which usually costs less than the brand-name version.

  • Health insurance marketplace (exchanges): Organizations in each state where health insurance meeting certain benefits and cost criteria can be purchased.

  • Health insurance network: See Affiliated provider, In-network care, In-network provider.

  • U.S. Department of Health and Human Services (HHS): The federal agency that regulates and administers health and human service programs, and promotes advances in medicine, public health and social services. The U.S. Food and Drug Administration, Office of the Inspector General, National Institutes of Health, the Centers for Disease Control and Prevention, and the Centers for Medicare & Medicaid Services are administered by the HHS.

  • Health Insurance Portability Accountability Act (HIPAA): A federal law that provides data privacy and security for individuals’ medical information.

  • Health-Related Quality of Life (HRQOL): A measurement used to quantify health status.

  • Health Maintenance Organization (HMO): A healthcare system comprising a network of providers and facilities, in which costs are managed centrally and gatekeepers are used. See Managed care, Gatekeeper.

  • Health savings account: A type of account for setting aside pre-tax income to pay for medical expenses.

  • High Deductible Health Plan (HDHP): A health insurance plan with higher deductibles and lower premiums than traditional plans.

  • In-network (preferred) care: Care provided by an HMO or PPO healthcare plan’s approved list of providers or facilities. See Affiliated provider, In-network provider.

  • In-network provider: A healthcare provider who is contracted with a health insurance plan to provide services to policy holders at pre-negotiated rates. See Affiliated Provider, In-network care.

  • Initial Coverage Phase: In Medicare Part D, the period after the deductible is met, in which the patient pays the prescribed share of cost for medications; when the maximum is reached, the patient enters the Coverage Gap Phase.

  • Initial deductible: See Deductible.

  • Insurance cap: The maximum amount a health insurance plan will pay in total benefits.

  • Legend drug: A drug approved by the U.S. Food and Drug Administration that can only be obtained with a prescription.

  • Low Income Subsidy (LIS): A program that provides assistance with drug costs for Medicare Part D beneficiaries who are below a certain income level.

  • Mail order pharmacy: A pharmacy that ships prescription medications to customers.

  • Managed care: See HMO.

  • Manufacturer-sponsored patient assistance programs (PAP): Programs in which drug companies provide low-income individuals with access to medications at reduced, or no cost.

  • Medicaid: A federal/state program for low-income individuals that helps with medical costs; eligibility and benefits vary by state.

  • Medicaid HMO: Managed care plan within Medicaid.

  • MediCal: California’s medical assistance program for low-income individuals.

  • Medical Expenditure Panel Survey (MEPS): An ongoing, HHS-administered database of healthcare costs, usage and insurance.

  • Medically necessary: Required to diagnose, prevent or treat a condition, illness or injury.

  • Medicare: Federal health insurance program for U.S. citizens > 65 years old, certain younger people with disabilities and individuals who have end-stage renal disease.

  • Medicare Advantage: See Medicare Part C.

  • Medicare Low-Income Subsidy (LIS): See Low-Income Subsidy.

  • Medicare Part A (Medicare hospital insurance): Coverage for inpatient hospital/skilled nursing facility, hospice and some home healthcare.

  • Medicare Part B (Medicare medical insurance): Coverage for physician services, outpatient/preventative care, lab services, screenings, surgical supplies/feels and occupational/physical therapy.

  • Medicare Part C (Medicare Advantage): Insurance plans that combine Part A (hospital insurance) and Part B (medical insurance) into a single plan. Can also be combined with Part D prescription coverage.

  • Medicare Part D: Medicare prescription drug insurance.

  • Medicare Payment Advisory Commission (MedPAC): A Congressional agency established to advise Congress on Medicare-related issues.

  • Medicare Savings Program (MSP): A federal program that assists eligible low-income individuals with medical expenses such as premiums, deductibles, co-pays and coinsurance; administered by the states.

  • Medicare Supplemental Plan/ Insurance: An insurance policy that covers costs that Medicare does not cover. See Medigap policy.

  • Medigap policy: See Medicare Supplemental Plan/Insurance.

  • Modified Adjusted Gross Income (MAGI): Adjusted Gross Income plus tax-exempt interest income. See Adjusted Gross Income (AGI).

  • Narrow network: Health plans with lower premiums but a more limited choice of providers than typical plans.

  • Non-formulary drugs: Drugs that are not on a healthcare plan's approved list. See Drug formulary, Formulary, Preferred drug list.

  • Non-preferred medication: High-cost medications with higher co-pay amounts and co-insurance obligations; often not on a formulary, and require prior authorization.

  • Non-prescription drug: A drug that can be purchased without a prescription See Over-the-counter (OTC).

  • Obamacare: See Affordable Care Act, Patient Protection and Affordable Care Act.

  • Office of the Inspector General (OIG): One of 57 entities that provide independent oversight to federal agencies and departments; the Health and Human Services OIG oversees Medicare and Medicaid.

  • Ombudsman: A person who helps resolve problems between an individual and an institution.

  • Open Enrollment: A specific period of time during which people can add, drop or change their health insurance coverage.

  • Original Fee-for-Service Medicare (Parts A, B, or D): The traditional federal fee-for-service program in which the government pays directly for healthcare services; includes Part A (inpatient/hospital) and Part B (outpatient/medical services). Part D (prescription coverage) typically needs to be purchased separately. See Traditional Medicare.

  • Out-of-network care: Care that is provided by a provider or facility that is not on an insurance plan’s pre-approved provider list. See Out-of-network provider.

  • Out-of-network provider: A healthcare provider that is not contracted with the health insurance plan, and whose services are covered by the insurance plan minimally, if at all. See Out-of-network care.

  • Out-of-pocket (OOP) costs: Costs for medical care that are not covered by insurance.

  • Out-of-pocket maximum: A cap on OOP costs within a defined coverage period; when the OOP maximum is met, the health insurance plan begins paying for covered services.

  • Over-the-counter (OTC): See Non-prescription drug.

  • Patient advocate: An individual who acts in the patient’s best interest and helps direct patients to needed information and services. See Advocate.

  • Patient assistance program (PAP): A program offered by a drug manufacturer to help low-income patients obtain free or reduced-cost medication. See Pharmaceutical patient assistance program.

  • Patient consent: Patient permission for disclosure of personal information.

  • Patient navigator: An individual who helps guide patients through the healthcare system, often assisting with locating financial and logistical (e.g., transportation, childcare) assistance during treatment. See Financial navigator.

  • Patient Protection and Affordable Care Act: The formal name of the Affordable Care Act. See Affordable Care Act (ACA), Obamacare.

  • Payer of last resort: The insurer who is responsible for paying costs of care for Medicaid beneficiaries, either Medicaid or another insurer.

  • Pharmacy Benefit Manager (PBM): A third-party administrator of health insurance plans’ prescription drug programs.

  • Part D Plan (PDP): Prescription drug plans obtainable through private companies that provide Medicare Part D insurance. See Medicare Part D.

  • Pharmaceutical patient assistance program: See Patient assistance program.

  • Plan: Package of health insurance benefits.

  • Preauthorization: Determination by a health insurance plan that a medication or service is medically necessary prior to approving it for payment. See Prior authorization/approval, Reauthorization.

  • Precision medicine: Medical care that is tailored to genetic, environmental and lifestyle factors.

  • Preferred drug list/preferred medication: See Drug formulary, Formulary.

  • Premium: The amount paid to purchase health insurance coverage, typically in monthly installments.

  • Prescriber: A healthcare professional (e.g., physician, dentist, physician assistant, nurse practitioner) who is licensed to prescribe drugs.

  • Primary payer/primary insurance: When an individual has more than one insurance policy, the policy that is responsible for paying first on a medical claim.

  • Prior authorization/approval: See Preauthorization, Reauthorization.

  • Private insurance: See Exchange insurance, Marketplace insurance, Commercial insurance.

  • Provider: Any professional or facility that provides healthcare services.

  • Reauthorization: Renewal of prior authorization approval for delivery of healthcare services. See Preauthorization, Prior authorization/approval.

  • Refill: A new installment or cycle of a prescription medication. See Renewal.

  • Renewal: A new prescription for medication when all refills have been used. See Refill.

  • Retail pharmacy: A pharmacy (e.g., CVS, Walgreens) that sells drugs to patients. See Community pharmacy.

  • Safety net: A conglomeration of organizations and programs that assist patients with OOP healthcare costs.

  • Second opinion: An additional medical opinion on diagnosis or treatment options that may confirm or contradict the original opinion.

  • Secondary payer/secondary insurance: The area in which health insurance plan beneficiaries can utilize services.

  • Service area: An invoice sent by a healthcare provider to a health insurance company detailing the services received.

  • Social Security Disability Insurance (SSDI): A Social Security program that pays monthly benefits to people under the age of 65 if they become disabled and are unable to work.

  • Special enrollment period: A specific period of time during which people can add, drop or change their health insurance coverage if special circumstances caused them to miss the open enrollment period. See Open enrollment period.

  • Specialty medication: High-cost prescription drug used to treat complex, chronic or rare conditions.

  • Specialty pharmacy: Insurance plans’ categorization of drugs based on cost, with higher tiers having higher associated cost sharing.

  • Specialty tiers: An invoice sent by a healthcare provider to a health insurance company detailing the services received.

  • Spend down: Spending of excess income on medical bills to lower income to meet eligibility requirements for programs such as Medicaid.

  • Standard Medicare Prescription Drug Benefit: Dollar-amount thresholds for each phase of the Medicare Part D prescription drug benefit (e.g., the 2018 Part D standard benefit has a deductible of $405 and an initial coverage limit of $3750 in total drug costs).

  • State Health Insurance Assistance program (SHIP): A program that provides Medicare beneficiaries with Medicare-related support, including providing answers to questions about coverage, premiums, deductibles, etc.

  • Step therapy: See Fail first.

  • Stop loss: Agreed-upon point beyond which a managed care organization is no longer liable for costs.

  • Subscriber: The primary enrollee in a health insurance plan (e.g., the employee in an employer-provided plan).

  • Subsidy: Federal money used to help contain costs to individuals, such as the Medicare Part D Low Income Subsidy (LIS) for eligible Medicare beneficiaries. See Low Income Subsidy.

  • Supplemental Nutrition Assistance Program (SNAP): Federal nutrition assistance given to low-income individuals in the form of a debit card to use to purchase food.

  • Supplemental Security Income (SSI): Benefits paid monthly to people with low incomes who are age 65+, blind, or disabled; the program is administered by the U.S. Social Security Administration.

  • Temporary Assistance to Needy Families (TANF): A federal program for low-income families that replaces the Aid to Families with Dependent Children program.

  • Third-party payer: An entity that pays medical expenses on behalf of its beneficiaries.

  • Traditional Medicare: See Original Fee-for-Service Medicare (Parts A, B, or D).

  • TRICARE: U.S. Department of Defense Military Health System healthcare program for U.S. servicemembers, reservists and dependents.

  • True out-of-pocket costs (TrOOP): OOP costs (co-pays, deductibles, etc.) that count toward a Medicare beneficiary’s OOP threshold and determine when the beneficiary will enter the Catastrophic Coverage Phase.

  • Underinsured: Having health insurance that does not cover enough medical expenses, resulting in high OOP costs.

  • Uninsured: A person who does not have health insurance.

  • Value-Based Insurance Design (VBID): Insurance designed to align OOP costs with the value of services, encouraging use of high-value care and disincentivizing use of low-value care.

  • Veterans Administration (VA): U.S. Department of Veterans Affairs: A federal agency that provides healthcare and other services to U.S. veterans.

  • Voucher: A certificate, typically for those with low/moderate income, that assists with the cost of prescription drugs or services.

  • Waiting period: Period of time before coverage begins.

  • Workers’ Compensation: Mandatory employer-purchased insurance, which provides wage replacement and medical benefits to employees who get sick or injured on the job.

  • Yearly resets: Amounts paid toward annual deductibles reset back to zero.

  • 340B Drug Discount Program: A federal program administered by the U.S. Health Resources & Services Administration (HRSA) that requires pharmaceutical companies to provide discounted drugs to certain entities and organizations.