Healthcare Glossary
Every term. Plain English.
Pricing
90-Day Supply
A 90-day supply is a prescription fill that provides three months of medication at once, rather than the stand…
Alternative Funding Program (AFP)
An Alternative Funding Program (AFP) is a third-party service that helps self-funded employers move specialty …
Bundled Price
A bundled price is a single all-inclusive fee for a defined episode of care — surgeon, anesthesia, facility, i…
Cash Price
A cash price is what a facility charges when a patient pays directly at the time of service, with no insurance…
Chargemaster
A chargemaster is the master price list a hospital keeps for every single item and service it can bill for — f…
Discounted Cash Price
The discounted cash price is the amount a hospital will accept from a patient who pays directly, without runni…
Drug Tiers (Tier 1 through Tier 5)
Drug tiers are the pricing levels a health plan or PBM assigns to prescription drugs on the formulary. The tie…
Episode of Care
An episode of care is a defined bundle of services related to a single medical event — from initial diagnosis …
Excess Capacity Model
The excess capacity model is what happens when a facility sells time on equipment it already owns and already …
Fail First
"Fail first" is the informal name for a step-therapy protocol, where a health plan or PBM requires a patient t…
Fee-for-Service
Fee-for-service is the payment model where a provider bills separately for each service performed: each visit,…
Generic Substitution
Generic substitution is the practice of a pharmacy dispensing an FDA-approved generic version of a drug instea…
List Price
The list price of a prescription drug is the manufacturer's publicly stated price before any negotiated discou…
Maintenance Medication
A maintenance medication is a prescription drug taken on an ongoing basis to manage a chronic condition — typi…
Manufacturer Rebate
A manufacturer rebate is a payment a pharmaceutical company sends to a PBM (and often further downstream to a …
Medical Tourism
Medical tourism is the practice of traveling — domestically or internationally — to receive planned medical ca…
Negotiated Rate
A negotiated rate is the price a health plan and a provider have agreed to in a written contract. It sits betw…
Non-Medical Switching
Non-medical switching is when a PBM or health plan changes the drug that a patient is required to take for a s…
Payer-Specific Negotiated Charge
The payer-specific negotiated charge is the dollar amount a hospital has agreed to accept from one named insur…
Pharmacy Carve-Out
A pharmacy carve-out is when a self-funded employer separates the pharmacy benefit from the medical benefit an…
Prompt Pay Discount
A prompt pay discount (also called a self-pay or cash discount) is a reduction a provider offers when a patien…
RBP (Reference-Based Pricing)
Reference-based pricing is a self-funded plan design that pays providers a defined multiple of Medicare rates …
Self-Pay Discount
A self-pay discount is the reduction a provider gives a patient who is paying the bill themselves rather than …
Spread Pricing
Spread pricing is a PBM revenue model where the pharmacy benefit manager charges the plan sponsor one price fo…
Standard Charges
Standard charges is the legal term for the five prices a hospital must publish for each item and service under…
Therapeutic Alternative
A therapeutic alternative is a different drug in the same drug class that produces a similar clinical effect f…
Transparent-Pricing PBM
A transparent-pricing PBM is a pharmacy benefit manager that charges a defined per-script or per-member admini…
Why Care Costs Less Abroad
The same operation, done by a surgeon with the same training in an accredited hospital, costs a fraction abroa…
Insurance
ACA Marketplace
The ACA Marketplace (also called the Health Insurance Marketplace, the Exchange, or by state-specific names li…
Advance Premium Tax Credit (APTC)
The Advance Premium Tax Credit (APTC) is a federal subsidy that reduces the monthly premium a household pays f…
Advance Premium Tax Credit (APTC)
The Advance Premium Tax Credit (APTC) is a federal subsidy that reduces monthly health insurance premiums for …
Aggregate Attachment Point
The aggregate attachment point is the total dollar amount of claims a self-funded plan must pay in a year befo…
Aggregate Deductible (Family Plan)
An aggregate family deductible (also called a non-embedded deductible) is a family plan design where no single…
ASO (Administrative Services Only)
An ASO arrangement is a self-funded plan where a major carrier (Aetna, BCBS, Cigna, UHC) provides the administ…
Clinical Trial Coverage
Clinical trial coverage refers to whether and how a health plan pays for the routine medical costs of a member…
COBRA Continuation Coverage
COBRA — the Consolidated Omnibus Budget Reconciliation Act — requires employers with 20 or more employees to o…
Coinsurance
Coinsurance is the percentage of the allowed amount you pay after your deductible is met, up until you hit you…
Community Rating
Community rating is a way of setting premiums where everyone in a market pays the same rate for the same plan,…
Contribution Limit (HSA / FSA)
The contribution limit is the maximum annual amount the IRS allows a taxpayer to deposit into a specific tax-a…
Copay
A copay is a flat dollar amount you pay for a specific service, usually collected at the time of care. A $30 p…
Cost Sharing Reduction
A Cost Sharing Reduction (CSR) is an ACA subsidy that lowers the deductibles, copays, coinsurance, and out-of-…
Deductible
A deductible is the dollar amount you pay out of pocket for covered services each plan year before your health…
Deductible Waiver
A deductible waiver is a plan design feature where specific services are covered by the plan without requiring…
Dependent Coverage
Dependent coverage is health coverage for an employee's family members, most commonly a spouse and children. U…
Eligibility
Eligibility is the set of rules that decide who can be on a health plan. For employees it usually turns on hou…
Embedded Deductible
An embedded deductible is a family plan design where each individual family member has their own deductible th…
EPO (Exclusive Provider Organization)
An EPO is a plan design that sits between an HMO and a PPO. Like a PPO, you generally don't need a referral to…
Experience Rating
Experience rating is when an insurer sets a group's premium based on that group's own claims history. Larger e…
Federal Poverty Level (FPL)
The Federal Poverty Level (FPL) is an income threshold updated annually by the U.S. Department of Health and H…
Guaranteed Issue
Guaranteed issue means an insurer must sell you a policy regardless of your health, and cannot decline the app…
HDHP (High-Deductible Health Plan)
An HDHP is a health plan with a deductible above IRS-set minimums ($1,600 individual / $3,200 family for 2024)…
HMO (Health Maintenance Organization)
An HMO is a health plan built around a primary care physician (PCP) who acts as the coordinator for all care. …
In-Network
In-network means a provider or facility has a written contract with your health plan's network. That contract …
Individual Stop-Loss (ISL)
Individual Stop-Loss (ISL) is the self-funded plan protection that reimburses the plan sponsor for any single …
Integrated HRA
An integrated Health Reimbursement Arrangement (HRA) is a traditional HRA that's paired with — and can only be…
Laser (Stop-Loss Laser)
A laser is a stop-loss provision that carves out a specific individual — usually a known high-claimant — with …
Level-Funded Plan
Level-Funded Plans: A hybrid of self-funding and traditional insurance. You pay a fixed monthly amount for adm…
Medical Loss Ratio (MLR)
The Medical Loss Ratio (MLR) is the percentage of premium dollars an insurance company spends on medical claim…
Membership primary care (how it pairs with a plan)
Membership primary care is a primary-care delivery model where the patient (or the employer) pays the practice…
Open Enrollment
Open enrollment is the annual window during which employees can elect, change, or waive their employer-sponsor…
Out-of-Network
Out-of-network means a provider has no contract with your health plan. The plan will typically pay something t…
Out-of-Pocket Maximum
The out-of-pocket maximum is the most you'll pay for covered, in-network care in a plan year. Once you hit it,…
Plan Year
The plan year is the 12-month period during which a health plan's benefits, deductibles, and out-of-pocket max…
PPO (Preferred Provider Organization)
A PPO is a health plan design that gives members access to a broad network of contracted providers without req…
Pre-Existing Condition
A pre-existing condition is a health problem you had before a new insurance policy started: diabetes, asthma, …
Premium
A premium is the amount paid to an insurance carrier, usually monthly, to keep a health plan in force. On an e…
Preventive Care
Preventive care is a defined list of services that ACA-qualified health plans must cover at 100 percent, with …
Qualifying Life Event
A qualifying life event (QLE) is a change in life circumstances that allows someone to enroll in or change the…
Special Enrollment Period
A special enrollment period is a window, usually 30 or 60 days, that lets you enroll in or change health cover…
Specific Attachment Point
The specific attachment point is the dollar amount any single covered member must accrue in claims before spec…
Stop-Loss Insurance
Stop-loss insurance is what makes self-funded health plans safe for employers below a few thousand employees. …
Telemedicine
Telemedicine is the delivery of clinical care through video visits, phone consultations, secure messaging, or …
Tobacco Surcharge
A tobacco surcharge is a premium differential that employers and insurers charge tobacco users on their health…
TPA (Third-Party Administrator)
A TPA is a company that administers a self-funded health plan on behalf of the employer. The employer is the p…
Waiting Period
A waiting period is the time between when an employee is hired and when their health coverage starts. The Affo…
Wellness Program
A wellness program is a set of employer-sponsored activities and incentives designed to encourage healthier em…
Billing
Advanced EOB
An Advanced EOB is a predictive Explanation of Benefits that health plans are supposed to send to insured memb…
Air Ambulance
An air ambulance is a helicopter or fixed-wing aircraft that carries a patient to a hospital when time or dist…
Allowed Amount
The allowed amount is the maximum dollar figure your health plan will recognize for a covered service. It's th…
Anesthesia Units
Anesthesia is not priced like the rest of medicine. Instead of a flat fee per procedure, the anesthesia bill i…
APC (Ambulatory Payment Classification)
An APC is the outpatient cousin of a DRG. When a hospital provides a service that does not involve an overnigh…
Balance Billing
Balance billing is when a provider bills you for the difference between what they charged and what your plan a…
Claim Adjudication
Adjudication is the process by which a health plan or PBM decides how a claim is paid — reviewing the submitte…
Coordination of Benefits (COB)
Coordination of Benefits (COB) is the process that determines how two or more health plans split payment when …
CPT Code
CPT stands for Current Procedural Terminology. It's the five-digit code system, maintained by the American Med…
DRG (Diagnosis-Related Group)
A DRG is the way hospitals get paid for an inpatient stay. Instead of billing every aspirin and every hour of …
Duplicate Charges
Duplicate charges are billing errors where the same service, medication, or supply appears more than once on a…
EOB (Explanation of Benefits)
An EOB is the statement your health plan sends after a claim is processed. It shows what the provider billed, …
Evaluation and Management (E&M) Codes
Evaluation and Management (E&M) codes are the CPT codes used to bill for a physician's or other qualified heal…
Explanation of Benefits (EOB)
An Explanation of Benefits (EOB) is a document your health plan sends after a claim is processed. It is not a …
Facility Fee
A facility fee is the charge a hospital or surgery center bills for the building, the room, the nursing staff,…
Global Surgical Package
The global surgical package is the set of services a surgeon's fee already covers when they bill a surgical CP…
Good Faith Estimate
A Good Faith Estimate is a written cost estimate that providers are required to give uninsured and self-pay pa…
Ground Ambulance Billing
Ground ambulance billing is the one large piece of emergency care the No Surprises Act left out. When Congress…
HCPCS Codes
HCPCS, pronounced "hick-picks," is the coding system that covers what CPT codes do not. CPT codes describe wha…
ICD-10
ICD-10 is the diagnosis coding system used on every medical claim. Where CPT codes describe what the provider …
Independent Dispute Resolution (IDR)
Independent Dispute Resolution (IDR) is the federal arbitration process created by the No Surprises Act to res…
Itemized Bill
An itemized bill is the detailed, line-by-line breakdown of every charge on a medical bill — every medication …
Modifier 26 and TC
Some services have two halves. An MRI is a machine, a technologist and a room, and it is also a radiologist si…
Observation Status
Observation status is a hospital classification that says you are in a bed, in a gown, being monitored and tre…
Place of Service
Place of service is a two-digit code on every medical claim that says where the care happened. Code 11 is a do…
Professional Fee
The professional fee is the doctor's own bill for the work they did: the surgeon who operated, the anesthesiol…
Provider Write-Off
A provider write-off (or contractual adjustment) is the difference between a provider's billed charge and the …
Revenue Code
A revenue code is a four-digit number a hospital puts on each line of its bill to say which department the cha…
Subrogation
Subrogation is the legal right of a health plan to recover medical expenses it paid from a third party who was…
Superbill
A superbill is an itemized receipt from a provider that a patient can submit to their insurance plan themselve…
Surprise Billing
A surprise bill is a medical bill a patient receives from an out-of-network provider for care they received at…
Unbundling
Unbundling is billing separately for components of a procedure that should be included in a single bundled cod…
Upcoding
Upcoding is billing a higher-paying code than the service actually delivered — coding a 15-minute office visit…
Usual and Customary
Usual and Customary (sometimes UCR — Usual, Customary, and Reasonable) is a methodology some health plans use …
Year-to-Date (YTD)
Year-to-date, in a health plan context, is the running total of covered expenses a member has accumulated duri…
Rx
340B Drug Pricing Program
340B is a federal program, named for a section of the Public Health Service Act, that lets certain hospitals a…
AWP (Average Wholesale Price)
AWP, the Average Wholesale Price, is a published benchmark price for a prescription drug. Despite the name, it…
Biologic
A biologic is a medication made from living cells or biological systems — cultured proteins, monoclonal antibo…
Biosimilar
A biosimilar is the biologic equivalent of a generic drug — a near-identical version of an original biologic m…
Brand-Name Drug
A brand-name drug is the version of a medication sold by the company that originally developed it, under a tra…
Copay Accumulator
A copay accumulator is a plan design that prevents manufacturer copay card assistance from counting toward the…
Copay Maximizer
A copay maximizer is a cousin of the accumulator — a plan design that also prevents manufacturer copay card as…
Days' Supply
Days' supply is the number of days a prescription is meant to last, based on the quantity dispensed and the di…
Drug Shortage
A drug shortage is a period when the supply of a medication cannot meet demand, so pharmacies and hospitals ca…
Formulary
A formulary is your plan's list of covered prescription drugs, usually organized into tiers that determine wha…
Gene Therapy
Gene therapy is a category of treatments that work by modifying, replacing, or adding genes to a patient's cel…
Generic Drug
A generic drug is the chemically identical version of a brand-name drug, made and sold after the brand-name ma…
MAC Pricing (Maximum Allowable Cost)
MAC pricing, Maximum Allowable Cost, is the ceiling a PBM will pay a pharmacy for a generic drug, no matter wh…
Mail-Order Pharmacy
A mail-order pharmacy dispenses maintenance medications in 90-day supplies and ships them directly to the pati…
Manufacturer Copay Card
A manufacturer copay card is a discount program run by a drug company that reduces the member's out-of-pocket …
Manufacturer Drug Rebate
A drug rebate is a payment from a pharmaceutical manufacturer to a PBM or health plan, made after the drug is …
Medication Adherence (PDC)
Medication adherence is whether a patient takes a medicine the way it was prescribed, and the standard way to …
Medication Therapy Management (MTM)
Medication therapy management is a service where a pharmacist sits down with a patient, usually by phone or in…
NADAC (National Average Drug Acquisition Cost)
NADAC is the closest thing the country has to a true cost for a prescription drug. It is a survey run by CMS, …
Pass-Through Pricing
Pass-through pricing is a PBM contract model where the plan pays exactly what the pharmacy was paid for the dr…
Patient Assistance Program
A Patient Assistance Program (PAP) is a manufacturer program that provides prescription drugs at little or no …
PBM (Pharmacy Benefit Manager)
A PBM is the middleman that administers the prescription drug portion of a health plan. PBMs build formularies…
Rebate Aggregator
A rebate aggregator is a company that sits between drug manufacturers and PBMs to negotiate and collect rebate…
Refill Too Soon
"Refill too soon" is a rejection message the pharmacy gets when a claim is submitted before enough of the prev…
Specialty Drug
Specialty drugs are high-cost medications used to treat complex, chronic, or rare conditions — rheumatoid arth…
Specialty Pharmacy
A specialty pharmacy is a pharmacy that dispenses high-cost, high-complexity medications requiring special han…
Therapeutic Class
A therapeutic class is a group of drugs that treat the same condition in a similar way. Statins are a class (a…
WAC (Wholesale Acquisition Cost)
WAC stands for Wholesale Acquisition Cost — the manufacturer's published list price for a drug sold to wholesa…
Facility
ASC (Ambulatory Surgery Center)
An ASC is a freestanding facility that performs same-day outpatient surgical procedures — colonoscopies, catar…
Centers of Excellence
A Center of Excellence is a facility a health plan designates as preferred for a specific high-cost, high-comp…
Freestanding Emergency Room
A freestanding emergency room is an emergency department that is not attached to a hospital. It looks like an …
HOPD (Hospital Outpatient Department)
An HOPD is an outpatient service department owned by and physically or administratively attached to a hospital…
Membership primary care
Membership primary care is a practice model where the patient (or employer) pays the physician a flat monthly …
Financial
Charity Care
Charity care is medical care a hospital provides free or at a reduced cost to patients who cannot afford to pa…
Claims Run-Out
Claims run-out is the period after a self-funded plan ends or changes administrators during which claims for s…
DCFSA (Dependent Care FSA)
A Dependent Care FSA is a pre-tax account that lets employees set aside money to pay for qualifying childcare …
Employer Contribution
The employer contribution is the portion of the health plan premium (or, on a self-funded plan, the funding ra…
FSA (Flexible Spending Account)
An FSA is an employer-sponsored account that lets you set aside pre-tax dollars for qualified medical expenses…
HRA (Health Reimbursement Arrangement)
An HRA is an account funded entirely by the employer that reimburses employees for qualified medical expenses.…
HSA (Health Savings Account)
An HSA is a tax-advantaged savings account you can only contribute to if you're enrolled in a qualified high-d…
HSA Rollover
HSA rollover refers to the fact that unused funds in a Health Savings Account carry over indefinitely from yea…
IBNR (Incurred But Not Reported)
IBNR stands for incurred but not reported. It is the estimated cost of medical care that has already happened …
ICHRA (Individual Coverage HRA)
An ICHRA is a type of Health Reimbursement Arrangement that lets an employer reimburse employees for individua…
Medical Debt
Medical debt is money owed for healthcare that has not been paid, whether it sits on a hospital's books, with …
Medical Debt Credit Reporting
Medical debt credit reporting is the practice of collection agencies reporting unpaid medical bills to the cre…
Medical Trend
Medical trend is the expected annual increase in the cost of healthcare for a plan, before anything specific t…
Network Access Fee
A network access fee is what a self-funded plan pays to use a provider network's contracted rates. It's charge…
PEPM (Per Employee Per Month)
PEPM stands for per employee per month, and it's the standard unit for pricing administrative services on a he…
QSEHRA (Qualified Small Employer HRA)
A QSEHRA is a Qualified Small Employer HRA — a specific type of HRA available only to employers with fewer tha…
Renewal Increase
A renewal increase is the change in premium a carrier proposes when a group health plan comes up for its annua…
Compliance
21st Century Cures Act
The 21st Century Cures Act is federal legislation enacted in December 2016 that mandated significant changes i…
ACA (Affordable Care Act)
The Affordable Care Act is the 2010 federal health reform law that reshaped US health insurance. Its major pro…
CAA Gag Clause Prohibition
The Consolidated Appropriations Act of 2021 (CAA) included a prohibition on gag clauses in health plan contrac…
Cash-Pay Deductible Credit
Cash-pay deductible credit is a state law that requires a health insurer to count what you paid in cash to a p…
Consolidated Appropriations Act, 2021 (CAA)
The Consolidated Appropriations Act, 2021 is the federal spending law, signed in December 2020, that carried t…
Continuity of Care
Continuity of care is the legal and contractual protection that lets a patient continue to see their current p…
Cross-Plan Offsetting
Cross-plan offsetting is a practice where a health insurer or TPA that overpays a provider on one member's cla…
ERISA
ERISA is the Employee Retirement Income Security Act of 1974 — the federal law that governs private-sector emp…
ERISA
ERISA — the Employee Retirement Income Security Act of 1974 — is the federal law that governs employer-sponsor…
Expedited Review
An expedited review is an accelerated appeal process available when a health plan's standard review timeframes…
External Review
External review is the appeal step that comes after a health plan's internal appeals process has been exhauste…
Fiduciary Duty (Health Plan)
Under ERISA, a fiduciary is any person or entity that exercises discretionary authority or control over the ma…
Financial Assistance Policy (FAP)
A financial assistance policy is the written document every nonprofit hospital must publish explaining who qua…
Form 5500
Form 5500 is the annual report an employer benefit plan files with the Department of Labor and the IRS. It dis…
Gold Carding
Gold carding is a health plan program that exempts high-performing physicians from prior-authorization require…
HIPAA
HIPAA is the Health Insurance Portability and Accountability Act of 1996. It has two main pieces: portability …
Hospital Price Transparency Rule
The Hospital Price Transparency rule is a federal regulation, 45 CFR Part 180, in force since January 1, 2021,…
IDR (Independent Dispute Resolution)
Independent Dispute Resolution (IDR) is the federal arbitration process created by the No Surprises Act to res…
Independent Review Organization (IRO)
An Independent Review Organization (IRO) is an accredited third-party entity that conducts external appeal rev…
Individual Mandate
The individual mandate was the Affordable Care Act rule that required most Americans to carry health coverage …
Medical Exception
A medical exception (also called a medical-necessity exception or formulary exception) is a formal request to …
Medical Necessity
Medical necessity is the standard a health plan uses to decide whether a service is covered. Generally, a serv…
Mental Health Parity
The Mental Health Parity and Addiction Equity Act (MHPAEA) requires that health plans offering mental health a…
Mini-COBRA (State Continuation)
Mini-COBRA is the name for state laws that give employees of small employers the right to keep their group hea…
Minimum Essential Coverage (MEC)
Minimum Essential Coverage (MEC) is the ACA's threshold for what counts as "real" health insurance for the pur…
MRF (Machine-Readable File)
Machine-Readable Files are the negotiated-rate and out-of-network-payment data files that health plans are req…
Network Adequacy
Network adequacy is the regulatory standard that requires health plans to have enough contracted providers, in…
No Surprises Act
The No Surprises Act is federal legislation that took effect January 2022 to protect patients from balance bil…
Plan Administrator
The plan administrator is the person or entity legally responsible for running an ERISA health plan: filing th…
Plan Assets
Plan assets are the money and property that belong to an employee benefit plan rather than to the employer. Un…
Plan Document
The plan document is the legal instrument that creates an employer health plan and states its terms: who is el…
Plan Sponsor
The plan sponsor is the employer (or union, or association) that establishes and maintains a group health plan…
Prior Authorization
Prior authorization is a requirement from your health plan that the provider get approval before performing ce…
Prior Authorization Appeal
A prior authorization (PA) appeal is the formal process for challenging a health plan's denial of a prior-auth…
Prior Authorization Reform
Prior authorization reform refers to a wave of state and federal legislative changes aimed at reducing the adm…
Prudent Layperson Standard
The prudent layperson standard is the legal test used to decide whether an emergency room visit qualifies as a…
RxDC Reporting (Prescription Drug Data Collection)
RxDC is the annual report every employer health plan and insurer must file with the federal government about p…
Site-Neutral Payment
Site-neutral payment is the policy idea that a medical service should be paid the same amount regardless of wh…
Step Therapy
Step therapy is a plan requirement that a member try one or more lower-cost medications (and document that the…
Summary of Benefits and Coverage (SBC)
The Summary of Benefits and Coverage (SBC) is a standardized, plain-language document that health plans are re…
Summary Plan Description (SPD)
The Summary Plan Description (SPD) is the ERISA-required document that spells out the full terms of an employe…
Transparency in Coverage Rule
The Transparency in Coverage rule is a federal regulation that took effect July 2022 requiring health plans to…
Accounts
Flexible Spending Account (FSA)
A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows employees to set aside pre-tax …
FSA Carryover
An FSA carryover is the amount of unused money in a health flexible spending account that an employer may let …
FSA Grace Period
An FSA grace period is an extra two and a half months after the plan year ends during which you can still incu…
Health Reimbursement Arrangement (HRA)
A Health Reimbursement Arrangement (HRA) is an employer-funded account that reimburses employees for qualified…
Health Savings Account (HSA)
A Health Savings Account (HSA) is a tax-advantaged savings account available to people enrolled in a qualifyin…
HSA Catch-Up Contribution
The HSA catch-up contribution is an extra $1,000 a year that anyone 55 or older may put into a health savings …
HSA-Eligible Expense
An HSA-eligible expense is any cost the IRS counts as medical care under Section 213(d) of the tax code, which…
Pharmacy
Compounding Pharmacy
A compounding pharmacy makes medications to order rather than dispensing a factory-made product. A pharmacist …
Cost-Plus Pharmacy
A cost-plus pharmacy sells a drug for what it paid for the drug, plus a fixed markup, plus a stated fee, and s…
DIR Fees (Direct and Indirect Remuneration)
DIR fees are payments a pharmacy has to send back to a PBM after a prescription has already been filled and pa…
Dispensing Fee
A dispensing fee is the flat amount a pharmacy is paid for the work of filling a prescription: checking the or…
Formulary Exception
A formulary exception is a formal request to a health plan to cover a drug that is either not on the plan's fo…
Pharmacy Benefit Manager (PBM)
A Pharmacy Benefit Manager (PBM) is a third-party company that administers prescription drug benefits on behal…
Pharmacy Clawback
A pharmacy clawback happens when a patient's copay at the counter is higher than the total the plan and PBM ag…
Plan Design
Capitation
Capitation is a payment model where a provider is paid a fixed amount per enrolled member per month (PMPM), re…
Care Navigation
Care navigation is a service that helps a plan member find the right care: which doctor, which facility, what …
Centers of Excellence
A Center of Excellence (COE) designation identifies a hospital or surgical facility that has demonstrated supe…
Fully-Insured Health Plan
A fully-insured health plan is the traditional arrangement: the employer pays a fixed premium to an insurance …
Health Equity
Health equity refers to the state in which every person has a fair opportunity to attain their highest level o…
Incentive Program
An incentive program is any plan feature that pays or rewards members for a specific behavior: completing a he…
Narrow Network
A narrow network is a health plan that contracts with a deliberately limited set of providers — typically the …
Network Loss
Network loss is when plan members use out-of-network providers when in-network alternatives are available — ei…
Reference-Based Pricing
Reference-based pricing (RBP) is a payment strategy where a self-funded health plan sets a fixed benchmark — t…
Reinsurance
Reinsurance is insurance for insurance companies and self-funded plans — it transfers risk above a threshold f…
Reward Program
A reward program is a plan feature that pays members for shopping: when a member compares prices for a schedul…
Self-Funded Health Plan
A self-funded health plan is one where the employer pays its employees' medical claims out of its own money in…
Shared Savings
Shared savings is an arrangement where, when a member chooses a lower-cost option for care, part of what the p…
Site of Care
Site of care means where a medical service is performed: a hospital, a hospital-owned outpatient department, a…
Steerage
Steerage is the practice of guiding a plan member toward a specific facility or provider before care happens, …
Virtual Primary Care
Virtual primary care is an ongoing relationship with a primary care doctor or nurse practitioner conducted mos…
Quality
CMS Hospital Star Rating
The CMS Hospital Star Rating is a one-to-five-star score Medicare assigns to about 4,500 hospitals each year a…
HCAHPS (Patient Experience Survey)
HCAHPS, said "H-caps," is the national survey Medicare requires hospitals to send to a random sample of discha…
Hospital Accreditation
Hospital accreditation is a formal certification process by which an independent organization evaluates a hosp…
JCI (Joint Commission International)
JCI, Joint Commission International, is the overseas arm of the organization that accredits American hospitals…
JCI Accreditation
JCI accreditation is the overseas arm of The Joint Commission, which accredits American hospitals. A hospital …
Leapfrog Hospital Safety Grade
The Leapfrog Hospital Safety Grade is a letter grade, A through F, given twice a year to about 3,000 general h…
Never Event
A never event is a medical error so serious and so preventable that it should never happen: surgery on the wro…
Readmission
A readmission is a return to the hospital as an inpatient within 30 days of being discharged. It is one of the…
Second Opinion
A second opinion is a review of your diagnosis and recommended treatment by a different doctor, usually a spec…
Surgical Volume
Surgical volume is how many times a surgeon or a facility performs one specific operation in a year. It is the…
The Joint Commission
The Joint Commission is the independent nonprofit that accredits most hospitals in the United States, along wi…