GLOSSARY

Adjusted Average Per Capita Cost (AAPCC)—Prior to the establishment of the M+C program
beginning 1998, the basis of payment for Medicare-risk HMOs was the AAPCC, a yearly
projection of program expenditures in FFS Medicare (i.e., beneficiaries not enrolled in HMOs).
Medicare paid risk HMOs 95 percent of the AAPCC for each enrolled Medicare beneficiary, based
on the beneficiary’s county of residence, age, sex, Medicaid status, institutional status, and
supplemental insurance status (refer to M+C).

Administration Costs—The costs incurred for marketing, enrollment, customer services,

overhead, claims processing, and profits of for-profit entities.

Adults—Under Medicaid, parents or caretaker relatives of dependent children are eligible as

adults based on one of several criteria: (1) they qualify as parents or caretaker relatives under
section 1931 provisions, which relate to prior AFDC cash assistance standards (including
unemployed parents), (2) they are medically needy, (3) they qualify under poverty-related
eligibility criteria (including pregnant women), (4) they are eligible under a section 1115
demonstration, or (5) they qualify under other adult eligibility provisions. Adults who have been
granted Medicaid eligibility under disability provisions are usually identified as disabled
beneficiaries. Some persons under age 21, who are parents, or caretaker relatives of dependent
children or who are pregnant, may be identified as adults. In some States, childless adults (non-
disabled adults who are not parents or caretaker relatives of dependent children or pregnant
women) may qualify for Medicaid as adults under section 1115 rules. By Federal law, all States
have to extend Medicaid to pregnant women with income less than 133 percent of the FPL.

Aged—One of the categories used for classifying Medicare enrollees and Medicaid eligibles.
Under Medicare, persons age 65 or over are included in this category if they are: entitled to
monthly SSA benefits or payments from the RRB, uninsured for SSA or RRB benefits, but
transitionally insured for Medicare, or not included in the previously mentioned groups, but based
on meeting certain criteria, elect to purchase HI and/or SMI coverage by paying the appropriate
monthly premium. Persons age 65 or over identified as having ESRD are included. Under
Medicaid, persons age 65 or over are included if, in addition to initially being age 65 or over met
certain means (income and resources) criteria or incur medical expenses for health care that when
deducted from income qualifies the individual for Medicaid. Not all persons age 65 or over are
included in this group. For example, persons initially enrolled and classified as disabled may
remain so classified even when they reach age 65.

Aid to Families with Dependent Children (AFDC)—Cash assistance program which covered
single-parent and two-parent families with an unemployed principal earner. All recipients of
AFDC received Medicaid automatically. Each State set its own income limits for AFDC. The
Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PRWORA) ended
Federal entitlement for cash welfare benefits under AFDC. Thus, PRWORA severed the link
between cash welfare benefits under AFDC and eligibility for Medicaid. Subject to specific

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limitations, States must continue to offer Medicaid eligibility to former AFDC cash recipients
under provisions outlined in section 1931. PRWORA established a new block grant program to
States, called TANF. Under TANF, States may impose time limits on the receipt of welfare
benefits and work requirements. There is no direct link between eligibility for TANF benefits and
Medicaid (refer to PRWORA and TANF).

Allowed Charge—An individual charge determination (approved amount) made by a carrier on a

covered Part B medical service or supply.

Ambulatory Surgical Center (ASC)—A facility that provides surgical services that do not
require a hospital stay. Medicare pays an institutional fee for use of an ASC for certain approved
surgical procedures. Medicare will also pay for physician and anesthesia services that are
provided for these procedures.

Amount, Duration, and Scope—Criteria used to determine the Medicaid benefits and limitations
in a State’s Medicaid plan. Each State defines these parameters; therefore, State Medicaid plans
vary in what is actually covered.

Amount—The number of visits, prescriptions, treatments, etc. allowed for Medicaid

reimbursement.

Duration—The number of days in a hospital, nursing facility, or ICF covered for reimbursement.

Scope—The package of mandatory and optional health care services covered by Medicaid for
specific subgroups of Medicaid beneficiaries.

Assigned Claim—A claim for which the physician or supplier agrees to accept the amount
approved by Medicare as the total payment. Medicare pays the physician or supplier 80 percent
of the Medicare approved fee schedule (less any unmet deductible). The doctor or supplier can
charge the beneficiary only for the coinsurance, which is the remaining 20 percent of the
approved amount. A participating physician or supplier agrees to accept assignment on all
claims.

Average Annual Rate of Change (AARC)—The constant annual percent of change which,
when compounded over a period of years, gives the same result as a given set of annual percent
changes over the same period. Also referred to as average annual rate of growth.

Balance Billing—A type of cost sharing under Medicare in which a beneficiary is responsible
for the difference between the physician’s submitted charge and the Medicare allowed charge on
unassigned claims. Currently, a non-participating physician cannot charge a Medicare
beneficiary more than 115 percent of the amount listed in the Medicare fee schedule for
unassigned physician claims.

Basis of Eligibility—The programmatic authority under which a person receives Medicaid

eligibility (e.g., adults, aged, blind, children, disabled, etc.).

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 Beneficiary—As used in this Supplement, a Medicare beneficiary is an enrollee who used a
covered medical service during a specified period of time (e.g., CY), whether or not the service
was reimbursable. The term is often used generically, however, to refer to a person who is
enrolled in one or both parts of the Medicare program, whether actual services are used or not.
Under Medicaid, a beneficiary is an enrollee who receives a Medicaid-covered service or
(beginning 1998) has a managed care or private health insurance premium paid on his/her behalf
(an alternate reference to recipient).

Beneficiary Identification Code (BIC)—The code that identifies the relationship between an
individual and a primary Social Security or RRB beneficiary.

Benefit Package—Services an insurer, government agency, or health plan offers to a group or

individuals, subject to premiums, cost sharing, and other requirements or limitations.

Benefit Payments—Benefit payments under Medicare comprise all withdrawals from the HI
and SMI trust funds to directly pay providers for services rendered for covered services to
Medicare enrollees under the FFS payment system and monthly premiums to managed care and
other M+C organizations under capitated payment systems. Under FFS, payments recorded on
bills (referred to as program payments) and payments made independently of the billing system
(e.g., lump-sum adjustments to interim rates and end-of-year adjustments from cost settlements)
are included. Estimates of benefit payments by Federal FY or CY are prepared by the CMS’
Office of the Actuary both on a paid and on an incurred basis.

Benefit Period—The unit of time for measuring the use of Part A benefits (spell of illness). A
benefit period begins the first day an enrollee is furnished inpatient hospital or extended care
services by a qualified provider, and it ends when the enrollee has not been an inpatient of a
hospital or other facility primarily providing skilled nursing or rehabilitation services for 60
consecutive days. There is no limit to the number of benefit periods an enrollee can have. The
enrollee must pay the hospital insurance deductible for each new benefit period.

Buy-In—A Medicare beneficiary who is also eligible for Medicaid, and for whom Medicare Part
B premiums and/or Part A premiums are paid by a State Medicaid program (refer to dual
eligible, dual entitlement, MN, QMB, QDWI, and SLMB).

Calendar Year (CY)—The 12-month period running from January 1-December 31 that is used
for establishing the payment of the voluntary Part A and the Part B premiums, deductibles, and
coinsurance requirements. It is used as the basis for tabulating the Medicare program utilization
and cost sharing, program payments, and PHCE.

Capitation—A prospective payment method that pays the provider of service a uniform amount
for each person served, usually on a monthly basis; rather than on a per service basis. Capitation
is used in managed care alternatives such as comprehensive plans (e.g., HMOs) or partial plans
(e.g., PHPs).

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 Carrier—An organization that has contracted with DHHS to process and pay approved
physician and supplier claims, and perform other services under Medicare Part B (SMI)
program.

Case Management—A process whereby covered persons with specific health care needs are
identified and a plan that efficiently utilizes health care resources is formulated and implemented
to achieve the optimum outcome in the most cost-effective manner (refer to PCCM).

Center for Beneficiary Choices (CBC)—This CMS component serves as the focal point for all
Agency interactions with beneficiaries, their families, caregivers, health care providers, and
others operating on their behalf concerning improving beneficiary ability to make informed
decisions about their health and program benefits. These activities include strategic and
implementation planning, execution, assessment, and communications. CBC is also responsible
for Medicare contractor management, including leading the development of a long-term
contractor strategy to ensure that future Medicare program contracts align with the mission and
needs of the agency.

Centers for Medicare & Medicaid Services (CMS)—The Federal Agency within DHHS that
runs Medicare. In addition, CMS works with the States to run the Medicaid and SCHIP
programs. CMS works to make sure that the beneficiaries in these programs are able to get high-
quality health care.

Center for Medicaid and State Operations (CMSO)—This CMS component focuses on
programs administered by States. This includes Medicaid and SCHIP, insurance regulation
functions, survey and certification, and the Clinical Laboratory Improvements Act (CLIA)
program.

Center for Medicare Management (CMM)—This CMS component is responsible for

management of the traditional Medicare FFS program. This includes development of payment
policy and management of the Medicare FFS contractors.

Children—Under Medicaid, children are eligible based on one of several criteria: (1) they are
dependent children who qualify under section 1931 provisions, which relate to prior AFDC cash
assistance standards (including children of unemployed parents), (2) they are medically needy,
(3) they qualify under poverty-related eligibility criteria, (4) they are foster care or adoptive
children, (5) they are eligible under a section 1115 demonstration, or (6) they qualify under other
child eligibility provisions. States may elect to define the age cutoff for children at 19, 20, or 21
years. Children who have been granted Medicaid eligibility under disability provisions are
usually identified as disabled beneficiaries. Some persons under age 21, who are pregnant, or
who are parents or caretaker relatives of dependent children, may be identified as adults. By
Federal law, all States have to extend Medicaid to children under age 6 with family income less
than 133 percent of the FPL and to children under age 19 with family income less than 100
percent of the FPL.

Claim—A request to a carrier, intermediary, a State by a beneficiary, or by a provider acting on

behalf of a beneficiary for payment of benefits under Medicare or Medicaid.

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 CMS-64 (Quarterly Medicaid Statement of Expenditures for the Medical Assistance
Program; formerly the HCFA-64)—A quarterly report of each state’s Medicaid expenditures
for which states are entitled to Federal matching payments. It includes categories of
expenditures not reported in the Medicaid Statistical Information System (the source of person-
level eligibility and utilization information), such as disproportionate share hospital payments,
drug rebates, and (prior to 1998) managed care and certain other premiums.

Coinsurance—The portion of reimbursable hospital and medical expenses, after subtraction of

any deductible, that Medicare does not cover and for which the beneficiary is responsible; or, for
which Medicaid may pay in the case of certain dually entitled beneficiaries. Under Part A HI,
there is no coinsurance for the first 60 days of inpatient hospital care; from the 61st-90th day of
inpatient care, the daily coinsurance amount is equal to one-fourth of the inpatient hospital
deductible. For each of the 60 lifetime reserve days used, the daily coinsurance amount is equal
to one-half of the inpatient hospital deductible. There is no coinsurance for the first 20 days of
SNF care; from the 21st-100th day of SNF care, the daily coinsurance amount is equal to one-
eighth of the inpatient hospital deductible. Under Part B SMI, after the annual deductible has
been met, Medicare pays 80 percent of reasonable charges for covered services and supplies; the
remaining 20 percent of reasonable charges are the coinsurance payable by the enrollee.
However, there is no coinsurance for home health services or for clinical laboratory services
under SMI.

Comparability—Under the Medicaid program, the State must ensure that the same Medicaid
benefits are available to all people who are eligible. Exceptions include benefits approved under
Medicaid waiver or demonstration programs for special subpopulations of Medicaid eligibles.

Competitive Medical Plan (CMP)—Legislation in the 1982 TEFRA created this type of MCO
to facilitate the enrollment of Medicare beneficiaries into MCPs. CMPs are organized and
financed similar to HMOs. The difference is that CMPs are not tied by all the regulatory
requirements of HMOs.

Coordinated Care Plan (CCP)—A plan that includes a CMS-approved network of providers
that are under contract or arrangement with the M+C organization to deliver the benefit package
approved by CMS. CCPs include plans offered by HMOs, PSOs, PPOs, as well as other types of
network plans (except network MSA plans).

Cost-Based HMO—A MCO paid by Medicare for the actual cost of providing care to Medicare
enrollees. The term includes cost HMOs, cost CMPs, and HCPPs.

Cost Sharing—The generic term that includes copayments, coinsurance, deductibles, and out-
of-pocket payments for balanced billing on unassigned claims. Excludes monthly premiums for
SMI coverage, voluntary HI coverage, and supplemental insurance.

Copayments—A specified dollar amount, typically modest, that insured persons must pay for a
particular unit of service, such as an office visit, emergency room visit, or the filling of a
prescription.

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 Coinsurance—A percentage share of medical bills which a beneficiary must pay.

Deductibles—Specified amounts of spending which an individual or a family must incur before

insurance begins to make payments.

Covered Charges—Services or benefits for which a health plan makes either partial or full
payment (refer to total charges).

Covered Day of Care—A day of care which was covered in full or in part by HI Medicare
benefits. This excludes days of care prior to the start of the program on July 1, 1966, days of
care prior to the person’s entitlement to HI benefits, and days of care after exhaustion of benefits
(refer to total days of care).

Covered Services—Services and supplies for which Medicare, Medicaid, or SCHIP will
reimburse. (Examples of covered services are given in this glossary under specific headings,
such as SNF.)

Current Procedural Terminology (CPT) Codes—A medical code set used for reporting
medical services and procedures performed by physicians or other qualified providers. CPT
codes, descriptions, and other data only are copyright 2001 American Medical Association. All
Rights Reserved (or such other date of publication of CPT). CPT is a trademark of the American
Medical Association (AMA).

Deductible—The amounts paid by enrollees or by a third party for covered services before
Medicare or Medicaid makes reimbursements. The Medicare HI deductible applies to each new
benefit period, is determined each year by a formula specified by law, and approximates the
current cost of a 1-day inpatient hospital stay. The Medicare SMI deductible is, by law, the first
$100 of covered charges per CY, effective January 1, 1991.

Deficit Reduction Act of 1984 (DEFRA)—Required States to provide Medicaid coverage to the
following groups meeting AFDC income and resources requirements: (1) first-time pregnant
women who would be eligible for AFDC if the child were born; (2) pregnant women in two-
parent families with an unemployed principal breadwinner; and (3) children born after
September 30, 1983, up to age 5, in two-parent families. Extends one year of automatic
Medicaid eligibility (e.g., without separate application) to infants born to women who were
eligible for and receiving Medicaid at the time of the child’s birth. Child remains eligible so
long as the mother remains eligible.

Department of Health and Human Services (DHHS)—Administers many of the social

programs of the Federal Government dealing with the health and welfare of the citizens of the
U.S.

Diagnosis Related Groups (DRGs)—A patient classification system that categorizes patients
into groups that are clinically coherent and homogeneous with respect to inpatient SSH resource

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 use. The Medicare PPS uses approximately 500 DRGs as the basis for paying participating SSHs
under Medicare.

Disabled—One of the categories used for classifying Medicare enrollees and Medicaid eligibles.
Under Medicare, disabled under age 65 receiving Social Security or RRB disability insurance
benefits for 24 months are eligible for coverage. Individuals under age 65 who are diagnosed
with ESRD are also eligible to receive Medicare benefits and are included with the disabled
unless otherwise noted. Under Medicaid, refers to low-income individuals of any age who are
eligible as persons meeting SSA’s programmatic definition of disability. This includes
individuals receiving SSI as well as those whose incomes are too high for SSI, but qualify under
separate Medicaid income standards.

Discharge—A formal release from a hospital (under Medicare or Medicaid), a SNF (under
Medicare), or a NF (under Medicaid). Discharges include persons who died during their stay or
were transferred to another facility.

Disproportionate Share Hospitals (DSHs)—Hospitals that serve a disproportionately large

volume of low-income persons. Hospitals that meet DSH criteria may receive supplemental
payments from Medicare and Medicaid.

Dual Eligible—A person having entitlement to more than one program or plan. The term is
sometimes limited to an individual who is eligible both for Medicare and Medicaid coverage,
depending on the services and limitations placed by the State, as well as payment of Medicare
monthly premium, deductibles, and coinsurance. More broadly used to include Medicare
beneficiaries eligible for some or all of the Medicare cost sharing, but not full Medicaid benefits
(refer to buy-in, dual entitlement, MN, QMB, QDWI, and SLMB).

Dual Entitlement—Indicates that an individual is entitled to both Medicare and some or all
Medicaid coverage (refer to buy-in, dual eligible, MN, QMB, QDWI, and SLMB).

Durable Medical Equipment (DME)—Under Medicare, Medicaid, and SCHIP DME includes
certain medical supplies and such items as hospital beds, wheelchairs, assistive devices, and
oxygen, etc., used in a patient’s home.

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT)—A screening and
diagnostic and treatment program under Medicaid with the specific focus toward recipients
under age 21, which reviews any physical or mental problems and the associated medical
requirements to address these problems.

Eligibility—Meeting the requirements for coverage under Medicare, Medicaid, or SCHIP. In

Medicaid data, the term eligible is often used to refer to individuals who qualify and have
actually enrolled in the program.

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 End Stage Renal Disease (ESRD)—Irreversible kidney failure. To survive, the patient must
either receive a kidney transplant or periodic kidney dialysis. Individuals with ESRD are
eligible for Medicare benefits under a special entitlement.

Enrollee—A person who is eligible for coverage and is enrolled in the Medicare, Medicaid, or
SCHIP programs.

ESRD Enrollees—Individuals who have chronic kidney disease requiring renal dialysis or a
kidney transplant are considered to have ESRD. To qualify for Medicare coverage, such
individuals must be fully or currently insured under Social Security or the Railroad Retirement
System or be the dependent of an insured person. Eligibility for Medicare coverage begins the
third month after the month in which a course of renal dialysis begins; coverage may begin
sooner if the patient participates in a self-care dialysis training program provided by an approved
facility. Also, coverage may begin on admittance to a hospital to receive a kidney transplant or
to receive dialysis before the transplant.

Federal HI Trust Fund—A trust fund of the U.S. Treasury in which monies collected from
taxes on annual earnings of employees, employers, and self-employed persons covered by Social
Security are deposited. Disbursements from the fund are made to help pay for benefit payments
and administrative expenses incurred by the HI program.

Federal Medical Assistance Percentage (FMAP)—The percentage of Medicaid benefit

payments reimbursed by the Federal Government. FMAP is calculated annually based on a
formula designed to provide a higher Federal matching rate to States with lower per capita
income and by law may range from a minimum of 50 percent and to a maximum of 83 percent.

Federal SMI Trust Fund—A trust fund of the Treasury of the United States consisting of
amounts deposited in or appropriated to the fund as provided by Title XVIII of the Social
Security Act, including premiums paid by enrollees under SMI and contributions by the Federal
Government from general revenues. Disbursements from the fund are made for benefit
payments and administrative expenses incurred by the SMI program.

Federally Qualified Health Center (FQHC)—Health centers that have been approved by the
Federal Government for a program to give low cost health care. Medicare pays for some health
services in FQHCs that are not usually covered, like preventive care. FQHCs include
community health centers, tribal health clinics, migrant health services, and health centers for the
homeless. Typically, Medicaid provides higher payment rates for outpatient facilities designated
as FQHCs compared to facilities not so designated.

Federally-Qualified HMO—An HMO which meets Federal requirements for certification as a

prepaid health plan that is able to offer a comprehensive range of services through a specified
network of providers.

Federal Poverty Level (FPL)—Low-income guidelines established annually by the Federal

Government. Public assistance programs, including Medicaid and SCHIP, often define income
limits in relation to FPL.

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 Fee-for-Service (FFS) Reimbursement—The traditional health care payment system, under
which physicians and other providers receive a payment for each unit of service they provide.

Fiscal Year (FY)—The 12-month period under which the Federal Government operates. Until
1976, the FY extended from July 1 of each year-June 30 of the following year. Beginning in
1976, the FY was changed to October 1-September 30. (The 3-month period July-September
1976—the so-called transition quarter—does not belong to any FY.) FY’s are labeled by the
year in which they end, e.g., October 1, 2000-September 30, 2001 is called FY 2001.

Freedom of Choice—Under Medicaid, the principle that a State must ensure that Medicaid
beneficiaries are free to obtain services from any qualified provider. Exceptions are possible
through waivers of Medicaid and special contract options.

General Hospital—A hospital maintained primarily for short-term inpatient care of acute illness
or injury and for obstetrics.

Geographic Classifications:
All Areas—The United States, Guam, Puerto Rico, Virgin Islands, other outlying areas, and
foreign countries are included.

All Other Areas—American Samoa, Canton Island, Caroline Islands, Guam, Puerto Rico,
Mariana Islands, Marshall Islands, Midway Islands, Virgin Islands, and Wake Islands comprise
this category.

Place of Residence—The beneficiary’s place of residence classification is a mailing address, not

necessarily an actual place of residence. Some beneficiaries have their checks mailed to a post
office or to a representative payee in a State or county that may differ from their own residence.

Metropolitan Areas (MAs)—The general concept of a MA is one of a core area containing a

large population nucleus, together with adjacent communities that have a high degree of social
and economic integration with that core. Metropolitan Statistical Areas (MSAs), Consolidated
Metropolitan Statistical Areas (CMSAs), and Primary Metropolitan Statistical Areas (PMSAs)
are defined by the Office of Management and Budget (OMB) as a standard for Federal agencies
in the preparation and publication of statistics relating to metropolitan areas. The entire territory
of the United States is classified as metropolitan (inside MSAs or CMSAs) (PMSAs are
components of CMSAs) or non-metropolitan (outside MSAs or CMSAs). MSAs, CMSAs, and
PMSAs are defined in terms of entire counties except in New England, where the definitions are
in terms of cities and towns. OMB also defines New England County Metropolitan Areas
(NECMAs) which are county-based alternatives to the MSAs and CMSAs in the six New
England States. Over time, new MAs are created and the boundaries of others change. The
analysis of historical trends, therefore, must be made cautiously (refer to urban and rural).

Urban and Rural—The urban population comprises all persons living in (a) places of 2,500 or
more inhabitants incorporated as cities, villages, boroughs (except in Alaska and New York), and
towns (except in the New England States, New York, and Wisconsin), but excluding those

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 persons living in the rural portions of extended cities (places with low population density in one
or more large parts of their area); (b) census designated places (previously termed
unincorporated) of 2,500 or more inhabitants; and (c) other territory, incorporated or
unincorporated, included in urbanized areas. An urbanized area comprises one or more places
and the adjacent densely settled surrounding territory that together have a minimum population
of 50,000 persons. In all definitions, the population not classified as urban constitutes the rural
population.

HCFA-2082 (Statistical Report on Medical Care: Eligibles, Recipients, Payments, and

Services)—An annual statistical report designed to collect State-reported data on Medicaid
eligibles, beneficiaries, and expenditures by basis of eligibility, maintenance assistance status,
type of service and characteristics of the beneficiary. The reporting system continued through
FY 1998 and was replaced in 1999 by tables produced from the Medicaid Statistical Information
System (MSIS). The HCFA-2082 differed from the HCFA-64 (now the CMS-64) in that not all
actual expenditures are reported, the biggest differences being the absence of disproportionate
share hospital payments, drug rebates, and prior to 1998 managed care and certain other
premiums. Internal to the report itself, certain lump-sum, aggregate payments could not be
associated with individual Medicaid beneficiaries, and their characteristics, which is the basis of
reporting in the HCFA-2082 and from MSIS.

Healthcare Common Procedure Coding System (HCPCS)—A Medicare coding system for
all services performed by a physician or supplier. It is based on the American Medical
Association physicians’ CPT codes and is augmented with codes for physician and non-
physician services and supplies (such as ambulance and DME) which are not included in CPTs.
State Medicaid agencies, with local modifications, use this system as a basis for reimbursement
for ambulatory services.

Health Care Financing Review (HCFR)—The Health Care Financing Review is published
quarterly by CMS’ Office of Research, Development, and Information. The Review seeks to
contribute to an improved understanding of the Medicare and Medicaid Programs and the U.S.
health care system by presenting information and analyses on a broad range of health care
financing and delivery issues. The Review highlights the results of policy-relevant research and
provides a forum for a broad range of diverse viewpoints to stimulate discussions among a
diverse audience that includes policymakers, planners, administrators, insurers, researchers, and
health care providers.

Health Care Prepayment Plan (HCPP)—A MCO that contracts with CMS to enroll Medicare
beneficiaries for coverage of some or all Medicare-covered physician and supplier services (Part
B). HCPPs are paid on a reasonable-cost basis.

Health Insurance Claim Number (HICN)—A unique identifier of each Medicare beneficiary.
It consists of a Social Security or RRB account number plus a BIC.

Health Insurance Flexibility and Accountability (HIFA)—Demonstration initiative which

encourages new comprehensive State approaches that will increase the number of individuals
with health insurance coverage within current-level Medicaid and SCHIP resources. Emphasis is

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 on broad statewide approaches that maximize private health insurance coverage options and
target Medicaid and SCHIP resources to populations with income below 200 percent of the FPL.

Health Maintenance Organization (HMO)—An organization that manages and delivers a

comprehensive package of health services under a risk-based arrangement. The HMO usually
receives a monthly premium or capitation payment for each enrollee. The dollar amount is based
on a projection of what the typical patient will cost. If enrollees cost more, the HMO may suffer
loses. If the enrollees cost less, the HMO profits, thus providing incentive for cost control (refer
to managed care).

Home and Community-Based Services (HCBS) Waiver—An enabling Section, 1915(c), in

the Social Security Act that authorizes the Secretary of HHS to alter a State Medicaid program.
This waiver offers special services to beneficiaries who are at risk of being placed in a nursing
facility or facility for the mentally retarded. HCBS include case management, homemaker/home
health aide services, personal case services, adult day health services, rehabilitation services, and
respite care.

Home and Community Care for the Functionally Disabled Elderly—An optional Medicaid
State plan benefit which allows States to provide home and community-based services to
functionally disabled elderly individuals.

Home Health Agency (HHA)—A public or private organization that provides skilled nursing
services and other therapeutic services in the patient’s home and that meets certain conditions to
ensure the health and safety of the individual.

Home Health Services—Services furnished in a patient’s home under the care of physicians.
These services are furnished under an established plan and periodically reviewed by a physician.
They include part-time or intermittent skilled nursing care; physical, occupational, or speech
therapy; medical social services; medical supplies and appliances (other than drugs and
biological); home health aide services; and services of interns and residents.

Hospice—A public agency or private organization that is primarily engaged in providing pain
relief, symptom management, and supportive services to patients that are certified to be
terminally ill. Medicare beneficiaries may elect to receive hospice care instead of standard
Medicare benefits for terminal illnesses. Under Medicaid, beneficiaries electing hospice no
longer receive Medicaid covered therapeutic services.

Hospital Insurance (HI)—Medicare HI (also known as Medicare Part A) is an insurance

program providing basic protection against the costs of hospital and related post-hospital
services for individuals who are age 65 or over and are eligible for retirement benefits under the
Social Security or the RRB system, for individuals under age 65 who have been entitled for at
least 24 months to disability benefits under the Social Security or RRB system, and for certain
other individuals who are medically determined to have ESRD and are covered by the Social
Security or RRB system.

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 Hospital Insurance (Part A)—The part of Medicare that pays for inpatient hospital stays, care
in a SNF, hospice care, and some home health care.

Independence Plus—An initiative which expedites the ability of States to offer many Medicaid
program participants greater opportunities to take charge of their own health and direct their own
services through a self-directed option. Families and individuals exercise greater choice, control,
and responsibility for their services within cost neutral standards. Statutory authority for this
initiative is found at §1115 and §1915(c) of the Social Security Act. Independence Plus allows
eligible families and individuals to use a cash allowance or individual budget to obtain personal
assistant services and related supports. In the 1115 demonstration, the participant may or may
not manage the cash directly. In the 1915(c) waiver, the participant uses fiscal/employer agent
and does not manage cash directly.

Inpatient Hospital Services—Items and services furnished to an inpatient of a hospital by the

hospital, including room and board, nursing and related services, diagnostic and therapeutic
services, and medical or surgical services.

Institutional Services—For Medicare, includes those services provided by hospitals (outpatient

and inpatient), HHAs, hospices, comprehensive outpatient rehabilitation facilities, ESRD
facilities, local health clinics, and SNFs. For Medicaid, also includes NFs and ICFs/MR.

Intermediary—An organization selected by providers of health care that has an agreement with
DHHS to process and pay institutional claims and perform other functions under Medicare’s
health insurance program.

Intermediate Care Facilities for the Mentally Retarded (ICF/MR)—Optional Medicaid

service that provides residential care and services for individuals with mental retardation.

International Classification of Diseases - 9th Revision, Clinical Modification (ICD-9-CM)—A

diagnosis and procedure classification system. ICD-9-CM codes are the basis for grouping
patients into DRGs.

Laboratory and Radiological Services—Professional and technical laboratory and radiological

services which may be ordered and provided by or under the direction of a physician or other
licensed practitioner, or ordered by a physician and provided by a referral laboratory. These
services must meet requirements of the Clinical Laboratory Improvement Amendment of 1988.

Lifetime Reserve—A Medicare HI enrollee has a non-renewable lifetime reserve of 60 days of

inpatient hospital care to draw on if the 90 covered days per benefit period are exhausted.
Patients are required to pay a daily coinsurance amount equal to one-half of the inpatient hospital
deductible for each lifetime reserve day.

Managed Care—A system in which the overall care of a patient is overseen by a single provider
or organization. Many State Medicaid programs include managed care components as a method
of ensuring quality in a cost-efficient manner.

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 Managed Care Organization (MCO)—Entities that serve Medicare or Medicaid beneficiaries
on a risk basis through a network of employed or affiliated providers. These include entities
such as HMOs, PPOs, and point of service plans. In the Medicaid world, other organizations
may set up programs to provide Medicaid managed care. These organizations include FQHCs,
integrated delivery systems, and public health clinics.

Managed Care Plan (MCP)—A general term applied to a wide range of insurance plans,
including HMOs, where choice of providers is limited and administrative measures control
utilization of services. The types of Medicare and Medicaid MCPs include HMOs, CMPs, and
HCPPs.

Mandatory versus Optional Services—Mandatory services are a specific set of services that
must be covered by any State participating in the Medicaid Program (unless waived under
section 1115 of the Social Security Act) as opposed to those which a State may elect to include
under its Medicaid plan or waivers.

Medicaid—The joint Federal/State entitlement program, enacted in 1965 as Title XIX of the
Social Security Act, that pays for medical care on behalf of certain groups of low-income
persons.

Medicaid Drug Rebate Program—Created by the Omnibus Budget Reconciliation Act of 1990
(OBRA1990), the Medicaid Drug Rebate Program requires a drug manufacturer to enter into and
have in effect a national rebate agreement with the Secretary of the Department of Health and
Human Services for States to receive Federal funding for outpatient drugs dispensed to Medicaid
patients. The drug rebate program is administered by the CMS’ CMSO.

Medicaid Statistical Information System (MSIS)—As a result of legislation enacted from the
Balanced Budget Act of 1997, States are required to submit all their eligibility and claims data
on a quarterly basis, beginning in FY 1999, through the MSIS. MSIS is the basic source of
State-reported eligibility and claims data on the Medicaid population, their characteristics,
utilization, and payments. This system replaced the HCFA-2082.

Medical Savings Account (MSA)—A plan for the purpose of paying the qualified expenses of
the account holder from a custodial account or trust.

Medically Needy (MN) Eligibles—An optional Medicaid eligibility group consisting of

individuals who qualify under an income standard—the MN income level—that is separate from
the standards used for categorically needy coverage. MN enrollees must meet Medicaid’s
categorical requirements (aged, disabled, adults with children, children) and may meet the MN
income level by incurring high medical expenses—usually from hospital or nursing home care—
which are deducted from their incomes in the process known as “spend-down”.

Medicare Advantage (MA)—The Medicare health plan program established by the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which replaced the
Medicare+Choice program (refer to M+C). MA options for beneficiaries can include CCPs
(local HMOs, PPO plans, private FFS plans, and MSA plans, as well as regional PPO plans). In

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 addition to introducing the regional PPO option, the MMA also introduced special needs plans
(SNPs). While other MA plans are required to permit enrollment by any eligible beneficiary
residing in the plan’s service area, SNPs may limit their enrollment to certain categories of
individuals, such as dual-eligible beneficiaries (those eligible for Medicare and Medicaid) or
people with special health care needs (such as those with chronic illnesses, or those with ESRD).
The MMA continued the M+C requirement that in order to enroll, a beneficiary must be entitled
to Part A and enrolled in Part B. The prohibition on enrollment for beneficiaries with ESRD
continues in MA except in the case of ESRD special needs plans. The MMA also made changes
to the payment rules for plans by introducing a bidding system and a requirement that plans
return to the government 25 percent of the savings that they can achieve in providing Medicare
A and B services (in relation to a benchmark payment level).

Medicare Catastrophic Coverage Act (MCCA)—An amendment to Title XVIII of the Social
Security Act designed to provide protection against catastrophic medical expenses and for other
purposes. Many of its provisions were rescinded after being in effect for only CY 1989.

Medicare Current Beneficiary Survey (MCBS)—Survey in which a sample of Medicare

beneficiaries is interviewed to collect information on demographic characteristics, health status
and functioning, insurance coverage, financial resources, and family supports. The beneficiaries
are interviewed again periodically to form a continuous profile of their health care experience.

Medicare+Choice (M+C)—A Medicare Program established by the Balanced Budget Act of

1997 that is designed to provide Medicare enrollees more choices among health plans.
Beneficiaries entitled to Part A and enrolled in Part B are eligible to enroll in an M+C plan
(except those beneficiaries who already have ESRD). M+C also modified the methodology used
to determine capitation payments to covered plans (refer to AAPCC).

Medicare Supplemental Insurance (MSI) or Medigap—Private insurance which supplements

Medicare by paying Medicare deductibles and coinsurance. There are 10 nationally standardized
policies. Some policies offer coverage not provided by Medicare, such as coverage for
outpatient prescription drugs and care outside the U.S.

Midpoint Enrollment—Enrollment as of July 1 has been chosen as the denominator for

Medicare utilization rates. The choice was based on the similarity of the July 1 enrollment to a
12-month average enrollment.

National Center for Health Statistics (NCHS)—The component of the U.S. Public Health
Service which collects and maintains national and subpopulation statistics on various aspects of
public health.

Non-Institutionalized—Individuals not living in facilities such as nursing homes.

Nursing Facility (NF)—A facility licensed by the State and certified by Federal statute and
regulations that a NF meets applicable requirements, services are provided to beneficiaries age
21 or over.

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 Office of Clinical Standards and Quality (OCSQ)—This CMS component serves as the focal
point for all quality, clinical, and medical science issues and policies for the Agency’s programs.
OCSQ has overall responsibility for the End Stage Renal Disease (ESRD) Network, and for the
quality improvement organizations, formerly the peer review organization program.

Office of Financial Management (OFM)—This CMS component has overall responsibility for
the fiscal integrity of CMS’ programs.

Office of Information Services (OIS)—This CMS component is the organizational home to the
CMS Chief Information Officer and the maintainer of the CMS data infrastructure. OIS provides
connectivity, data maintenance, data dissemination, and technical assistance to the internal and
external CMS.

Office of Research, Development, and Information (ORDI)—This CMS component provides

the Agency with analytic support and information. ORDI is responsible for environmental
scanning activities, designing and conducting research and evaluations of health care programs,
designing and assessing potential improvements, and developing new measurement tools. ORDI
coordinates all Agency demonstration activities, and develops research, demonstration, and other
publications and papers related to health care issues.

Office of the Actuary (OACT)—This CMS component provides actuarial, economic and
statistical services to various CMS components, other Federal agencies, the Medicare Board of
Trustees, Congress, national advisory commissions, health research groups, and outside
organizations.

Omnibus Budget Reconciliation Act (OBRA)—Federal law of a given year which directs how
Federal monies are to be expended. Amendments to Medicaid eligibility and benefit rules are
frequently made in such acts. Legislative changes may also be enacted directly (refer to TEFRA,
DEFRA, MCCA).

Optional versus Mandatory Services—Optional services are those services which a State
elects to include under its plan or managed care waivers as opposed to those which are required.

Outpatient Hospital Services—Services furnished to outpatients by a participating hospital for

diagnosis or treatment of an illness or injury.

Outpatient Services—Medical and other services provided by a hospital or other qualified

facility or supplier, such as mental health clinic, rural health clinic, X-ray mobile unit, or
freestanding dialysis unit. Such services include: outpatient physical therapy, diagnostic X-ray
and laboratory tests, and X-ray and other radiation therapy.

Participating Physician or Supplier—A physician/supplier that agrees to accept assignment on

all Medicare claims under the Medicare SMI program. In Medicaid, participating providers
agree to accept Medicaid reimbursement as payment in full.

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 Personal Health Care Expenditures (PHCE)—Health care goods and services purchased
directly by or for individuals. They exclude: public program administration costs, the net cost
of private health insurance, research by non-profit groups and government entities, and the value
of new construction put in place for hospitals and nursing homes.

Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996—

Created the TANF program to replace the earlier AFDC program (refer to AFDC and TANF).

Persons Served—A concept used for measuring utilization of covered services and program
payments for these services. In general, under Medicare, a person served is considered to be a
Medicare enrollee who used a covered health care or medical service under fee-for-service and
incurred expenses greater than the deductible amount, resulting in the program making a
payment on the enrollee’s behalf. (When the term person served is used to describe a person
who used a covered service regardless of having met the deductible, it will be indicated by the
footnotes.)

Under Medicaid, a person served is considered to be a person for whom some sort of payment
has been made for selected categories of service or coverage within the categories reported in the
applicable Medicaid statistical reporting systems. Under the HCFA-2082 reporting system,
person served generally referred to persons for whom Medicaid made a payment to a provider
under fee-for-service. The concept was expanded in the Medicaid Statistical Information System
to include persons for whom managed care capitated premiums and certain private health
insurance premiums were made. Under Medicaid a person served is variously referred to as a
Medicaid recipient or beneficiary. (Note: For utilization reporting, the payment of the Medicare
Part B premium alone for a Medicare/Medicaid dual eligible beneficiary has never been
construed as qualifying the person to be considered a person served.)

For both programs, persons are counted once for each type of covered service used, regardless of
the number of services used. That is, a person receiving the same service two or more times in a
year is counted as one person served. For example, persons having two or more hospitalizations
during a year are counted as one person served for inpatient hospital services. In addition
persons are counted once in aggregate or overall categories, regardless of the different categories
of services used. Thus a person who receives inpatient hospital services and nursing home care
(skilled nursing facility under Medicare, nursing facility under Medicaid) services in a year is
counted separately as receiving each of these services, but is counted only once in calculating all
persons served.

Physician Payment Reform (PPR)—Was implemented by OBRA 1989. Under OBRA 1989, a
Medicare fee schedule payment system for physician services replaced the previous reasonable
charge payment system.

Physician Services—Under Medicare, physicians’ services are services provided by an

individual licensed under State law to practice medicine or osteopathy. Services covered by
hospital bills are not included.

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 Poverty-Related Eligibles—These individuals are eligible for Medicaid without regard to cash
assistance or MN standards. They are eligible for Medicaid based on income below a stated
percentage of the FPL. They include pregnant women, newborns up to age 1, children up to age
18, aged, blind, and disabled individuals. At State option, certain aged, blind, and disabled
poverty-related eligibles may receive the full scope of Medicaid benefits.

Preferred Provider Organization (PPO)—An arrangement between a provider network and a

health insurance or a self-insured employer. Providers generally accept payments less than
traditional FFS payments in return for a potentially greater share of the patient market. PPO
enrollees are not required to use the preferred providers, but are given financial incentives to do
so, such as reduced coinsurance and deductibles. Providers do not accept financial risk for the
management of care.

Premium—A monthly fee that may be paid by Medicare, Medicaid, and SCHIP enrollees.
Medicare HI enrollees who are Social Security or RRB beneficiaries and who qualify for
coverage through age or disability are not required to pay premiums. Aged persons who are not
eligible for automatic HI enrollment may pay a monthly premium to obtain HI coverage. SMI
enrollees pay a monthly premium that is updated annually to reflect changes in program costs.

Prepaid Health Plan (PHP)—A partially capitated managed care arrangement in which a
managed care company is at risk for certain outpatient services.

Primary Care—Basic or general health care, traditionally provided by family practice,

pediatrics, and internal medicine.

Primary Care Case Management (PCCM)—Managed care option allowed under Section
1915(b) of the Social Security Act in which each participant is assigned to a single primary care
provider who must authorize most other services, such as care by specialty physicians, before the
other providers can be reimbursed by Medicaid. Usually, services for care other than the case
management fee are reimbursed on a FFS basis.

Principal Diagnosis—Under Medicare, the medical condition that is chiefly responsible for the
admission of a patient to a hospital or for services provided by a physician or other provider.
Under Medicaid, the diagnosis reported as the principal diagnosis on the last dated claim for a
hospital stay.

Program Payments—The Medicare program payment amount includes only the amount shown
in bills received and processed (as of a specific cutoff date) by the Medicare program in the
CMS central office files. Not included in program payments are interim payments to
institutional providers, payments to institutional providers resulting from adjustments to the end
of FY cost reports, capitation payments for prepaid group health plans, beneficiary cost-sharing
amounts, and administrative costs.

Programs of All-inclusive Care for the Elderly (PACE)—An optional Medicaid benefit that
combines medical, social, and long-term care services for frail people. To be eligible, a person
must:

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 • Be age 55 or over.
• Live in the service area of the PACE program.
• Be certified as eligible for nursing home care by the appropriate State agency.
• Be able to live safely in the community.

The goal of PACE is to help people stay independent and live in their community as long as
possible, while getting high quality care they need.

Prospective Payment System (PPS)—A method of reimbursement in which Medicare payment

is made based on a predetermined, fixed amount. The payment amount for a particular service is
derived based on the classification system of that service (for example, DRGs for inpatient
hospital services).

Provider—A Medicare provider is a facility, supplier, physician, or other individual or

organization that furnishes health care services. Under Medicaid, a provider is an individual,
group, or agency that provides a covered Medicaid service to a Medicaid enrollee.

Provider-Sponsored Organization (PSO)—Public or private entities established by or

organized by health care providers or a group of affiliated providers that provide a substantial
proportion of health care items and services directly through providers or affiliated groups of
providers and share substantial financial risk.

Qualified Disabled and Working Individuals (QDWI)—Medicaid is required to pay Medicare

Part A premiums for certain disabled individuals who lose Medicare coverage because of work.
These are individuals whose income is below 200 percent of the FPL and whose resources are
not more than twice the value allowed under SSI (refer to buy-in, dual eligible, dual entitlement,
MN, QMB, and SLMB).

Qualified Medicare Beneficiary (QMB)—A low-income Medicare beneficiary who qualifies

for certain assistance under Medicaid. The beneficiary must have Medicare Part A and income
less than or equal to 100 percent of the FPL and resources below twice the value allowed under
SSI. For those who qualify, the Medicaid program must pay Medicare Part A premiums (if
applicable), Part B premiums, and Medicare deductibles and coinsurance amounts for Medicare
covered services depending on the State’s fee schedule. Some of these individuals may qualify
for full Medicaid benefits and are sometimes referred to as “QMB pluses” (refer to buy-in, dual
eligible, dual entitlement, MN, QDWI, and SLMB).

Qualifying Individual (QI)—A low-income Medicare beneficiary for whom Medicaid pays all
or part of the Medicare Part B premium, depending on beneficiary income and resources. States
receive 100 percent matching from the Federal Government for this program. Congress
provided funding for the QI program through FY 2002.

Railroad Retirement Board (RRB)—Independent agency of the Federal Government charged

with administering the retirement-survivor and unemployment-sickness benefit program for
railroad workers and their families.

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 Railroad Retirement System—Was legislated by the Railroad Retirement and Railroad
Unemployment Insurance Acts as a comprehensive retirement-survivors and unemployment-
sickness benefits programs for railroad workers and their families.

Reasonable Cost—In processing claims for HI benefits, intermediaries use CMS guidelines to
determine the reasonable cost incurred by individual providers in furnishing covered services to
enrollees. The reasonable cost is based on the actual cost of providing such services, including
direct and indirect costs of providers and excluding any costs that are unnecessary in the efficient
delivery of services covered by the HI program.

Recipient—A Medicaid enrollee who receives a Medicaid-covered service (an alternate

reference to beneficiary).

Reduction Amount—The difference between the physician’s submitted charge and the
Medicare allowed charge.

Revenue Center—A facility cost center for which a separate charge is billed on an institutional
claim.

Risk Contract—An agreement with an MCO to furnish services for enrollees for a determined,
fixed payment. The MCO is then liable for services regardless of their extent, expense, or
degree.

Risk HMO—An organization that is paid a predetermined per-member payment by Medicare or

Medicaid to provide all necessary covered services to its enrollees.

Resource Utilization Group Version III (RUG-III)—A patient classification system used to
classify nursing home residents into homogeneous patient groups according to common health
characteristics and the amount and type of resources they use.

Secondary Diagnosis—A medical condition other than the principal diagnosis that affected the
treatment received, or length of stay in a hospital, or services rendered by a physician or other
provider.

Short-Stay Hospital (SSH)—A hospital in which the average length of a stay is less than 30
days. General and special hospitals are included in this category.

Single State Agency—The Social Security Act requires that the State designate a single agency
to administer or supervise administration of the State’s Medicaid plan.

Skilled Nursing Facility (SNF)—In Medicare, an institution that has a transfer agreement with
one or more participating hospitals, is primarily engaged in providing skilled nursing care and
rehabilitative services to inpatients, and meets specific regulatory certification requirements.

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 SNF Services—In Medicare, services furnished to inpatients of a certified SNF that meets
standards required by the Secretary of the DHHS and billed by the facility.

Social Security Act—The Titles of the 1965 Social Security Act include: Title II—Old Age,
Survivors, and Disability Insurance Benefits (OASDI); also, Social Security; Title IV-A AFDC;
Title IV-B—Child Welfare; Title IV-D—Child Support; Title IV-E—Foster Care and Adoption;
Title IV-F—Job Opportunities and Basic Skills Training; Title V—Maternal and Child Health
Services; Title XVI—SSI; Title XVIII—Medicare; Title XIX—Medicaid; Title XX—Social
Services; and Title XXI—SCHIP.

Social Security Administration (SSA)—The Federal agency responsible for administering the
Old Age, Survivors, and Disability Insurance (OASDI) program as well as the Supplemental
Security Income (SSI) program of the Social Security Act.

Specified Low Income Medicare Beneficiary (SLMB)—A low-income Medicare beneficiary

who qualifies for certain assistance under Medicaid. The beneficiary must have income above
100 percent, but not in excess of 120 percent of the FPL and limited resources. For those who
qualify, the Medicaid program pays the Medicare Part B premium. Some of these individuals
may qualify for full Medicaid benefits and are sometimes referred to as “SLMB pluses” (refer to
buy-in, dual eligible, dual entitlement, MN, QMB, and QDWI).

State Children’s Health Insurance Program (SCHIP)—A program designed to provide health
coverage to uninsured children with incomes too high to qualify for Medicaid, but too low to
afford private health insurance. SCHIP is funded through a Federal/State partnership and was
enacted as part of the Balanced Budget Act of 1997.

Statewideness—A State Medicaid program must offer the same benefits to everyone throughout
the State, exceptions being possible through Medicaid waivers and special contracting options
(refer to waivers).

Supplemental Security Income (SSI)—A program of income support for low-income, aged,
blind, and disabled persons established in Title XVI of the Social Security Act.

Supplementary Medical Insurance (SMI)—Also known as Medicare Part B, this is a

voluntary insurance program that provides insurance benefits for physicians, outpatient hospital
services, ambulatory services, and other medical supplies and services to aged and disabled
individuals who elect to enroll under the program in accordance with the provisions of Title
XVIII of the Social Security Act. The SMI program is financed by enrollee premium payments
and contributions from funds appropriated by the Federal Government.

Supplier—An organization that has been issued a Medicare supplier number, and which
provides DME (such as wheelchair, walker, and oxygen equipment), medical devices (such as
artificial limbs and braces), or medical supplies (such as surgical dressings).

Supplier Services—The SMI program pays for covered supplier services. As defined in the
CMS Part B Medicare annual data users’ manual, these services include those provided by

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 medical supply companies (for example, supplies and DME), ambulance suppliers, independent
laboratories (billing independently), pharmacies, portable X-ray suppliers (billing
independently), and voluntary health or charitable agencies.

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)—Permits States to cover under
Medicaid disabled children under age 19 who live at home who would have been eligible if in an
institution. States must determine that institutional care would have been required, that home
care is appropriate, and that the estimated cost of home care is no more than institutional care.

Temporary Assistance for Needy Families (TANF)—Created by the Personal Responsibility

and Work Opportunity Reconciliation Act (PRWORA) of 1996, TANF provides assistance and
work opportunities to needy families. This program replaced the earlier AFDC program (refer to
AFDC and PRWORA).

Total Charges—The hospital’s charges for room, board, and ancillary services as recorded on
the billing form (refer to covered charges).

Total Days of Care—Any day during which inpatient hospital services were furnished to a
person eligible for HI benefits under Medicare including covered and non-covered days of care.

Total Personal Health Care Expenditures (PHCE)—The sum of all expenditures for health
care by Medicare, Medicaid, private insurance, out-of-pocket, and all other public and private
sources.

Uniform Bill 82 (UB82)—A Medicare claim form used by institutional providers from 1984 to
1993. In October 1993, the UB82 was replaced by the UB92.

Unique Physician Identification Number (UPIN)—A number which uniquely identifies an

individual physician.

Utilization—A measure of the extent to which the members of a covered group use a program or
obtain a particular service, or category of procedures, over a given period of time. Usually
expressed as the number of services used per year or per number of persons eligible for the
services.

Waiver—An exception to the usual requirements of Medicare or the usual requirements of

Medicaid granted to a State by CMS, authorized through the following sections of the Social
Security Act or Social Security Amendments:

402 of the Social Security Amendments of 1967—Provides Medicare demonstration authority to

test alternative methods of Medicare payment and changes to the Medicare benefit package.

1115 of the Social Security Act—Allows States to waive provisions of Medicaid law to test new
concepts which are congruent with the goals of the Medicaid Program. Radical, systemwide
changes are possible under this provision.

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 1915(b) of the Social Security Act—Allows States to waive freedom of choice. States may
require that beneficiaries enroll in HMOs or other managed care programs, or select a physician
to serve as their primary care case manager.

1915(c) of the Social Security Act—Allows States to waive various Medicaid requirements to
establish alternative, community-based services for individuals who qualify for services in an
ICF/MR, nursing facility, institution for mental disease, or inpatient hospital.

1929 of the Social Security Act—Allows States to provide a broad range of home and
community-based services to functionally disabled individuals as an optional State plan benefit.
In all States except Texas, the option can serve only people age 65 or over.

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