Reimbursement Terminology Glossary Devices

Affordable Care Act (ACA): A federal statute and comprehensive healthcare reform, commonly known as Obamacare, that was enacted by Congress and signed into law by President Barack Obama in 2010 to make affordable health insurance available to more people, expand the Medicaid program and support innovative medical care delivery methods designed to lower the costs of health care.

Alternative Payment Models (APMs): Payment models that reimburse health care providers based on cost-efficiency, coordination, value, and quality, rather than simply the number of services provided.

Ambulatory Payment Classifications (APCs): Payment groups which cluster together items and services that are similar in clinical characteristics and cost.

Centers for Medicare and Medicaid Services (CMS): A federal agency within the Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children''s Health Insurance Program (CHIP), and health insurance portability standards. CMS is also responsible for the Health Insurance Portability and Accountability Act (HIPAA) administrative simplification standards, quality standards in long-term care facilities, clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments, and the Children’s Health Insurance Program (CHIP).

Code on Dental Procedures and Nomenclature (CDT Codes): A set of codes and descriptions for dental procedures that cover oral health and dentistry that provide uniformity, consistency, and specificity in documenting dental treatment. CDT Codes are the HIPAA standard dental procedures.

Cost of Goods Sold (COGS): The direct costs of producing a product that is sold by a company. This includes materials and labor directly associated with creating the product.

Covered Benefit: The items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan''s coverage documents.

Current Procedural Terminology (CPT®) Code: A numeric coding system maintained by the American Medical Association (AMA). This national standard is used for electronic transaction of health care information by federal programs, commercial insurers, and providers for describing health care services.

Coverage with Evidence Development (CED): A paradigm whereby Medicare develops a National Coverage Determination (NCD) to cover items and services on the condition that they are furnished in the context of approved clinical studies or with the collection of additional clinical data (e.g., in a registry).

Diagnosis Related Group (DRGs): A classification system that standardizes prospective payment for inpatient hospital services and encourages cost containment initiatives. DRG payments cover all charges associated with an inpatient stay from the time of admission to discharge.

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT): Preventive and treatment and services states must cover for children enrolled in Medicaid.

Fee-for-service (FFS): A payment model where each medical service and procedure is paid for separately.

Health Care Common Procedure Coding System (HCPCS): A coding system used by physicians and other healthcare providers to classify all diagnoses, symptoms and procedures recorded in conjunction with care in the United States. HCPCS is divided into two principal subsystems: Level I is comprised of Current Procedural Terminology (CPT), Level II codes are used to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

Humanitarian use device (HUD): A designation given by FDA for devices that are developed to address diseases and conditions that affect 8,000 or fewer patients per year nationwide.

Humanitarian Device Exemption (HDE): The marketing application for Humanitarian Use Device (HUD) designation.

Inpatient Prospective Payment System (IPPS): Medicare’s inpatient hospital payment system. Payments are based on set rates under Medicare Part A. CMS updates the IPPS annually, with comment periods open prior to implementation of the final rule.

Investigational Device Exemption (IDE): An FDA determination that allows the investigational device to be used in a clinical study to collect safety and effectiveness data.

International Classification of Diseases (ICD): The global health information standard for mortality and morbidity classification and statistics developed and maintained by the World Health Organization.

ICD-CM (clinical modification): A coding system used by physicians and other healthcare providers to classify diagnoses, symptoms, and procedures in the United States; based upon the International Classification of Diseases.

ICD-PCS (procedure coding system): A coding system for procedures associated with hospital utilization in the United States.

Local Coverage Determinations (LCD): A determination by a Medicare Administrative Contractor (MAC) under Part A or Part B, as applicable, regarding whether a particular item or service is covered on a contractor-wide basis.

Long-term services and supports (LTSS): A variety of health, health-related, and social services that assist individuals with functional limitations due to physical, cognitive, or mental conditions or disabilities. LTSS includes assistance with activities of daily living (ADLs, such as eating, bathing, and dressing) and instrumental activities of daily living (IADLs, such as housekeeping and managing money) over an extended period.

Managed care organizations (MCOs): A health care provider, group or organization of medical service providers who offers managed care health plans. MCOs contract with insurers or self-insured employers and finances and delivers health care using a specific provider network and specific services and products. MCOs provide preventative medicine, patient education, quality, and managed services to reduce medical cost.

Medicaid and CHIP Payment and Access Commission (MACPAC): A non-partisan agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program (CHIP).

Medicare Administrative Contractor (MAC): A MAC is a private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries.  MACs are the primary operational contact between the Medicare FFS program and the health care providers enrolled in the program.  MACs are multi-state, regional contractors responsible for administering both Medicare Part A and Medicare Part B claims.  

Medicare Severity-Diagnosis Related Group (MS-DRG): A system used by Medicare to group and categorize a patient’s hospital stay (products and services).

National Center for Health Statistics (NCHS): The nation’s principal health statistics agency. NCHS is a public resource that compiles statistical information to guide actions and policies to improve the health of the population.

National Coverage Analyses (NCA): An evidence-based review of peer reviewed literature, and clinical guidelines, public comment, and other expert opinion to evaluate if the item or service reviewed improves net health outcomes.

National Coverage Determination (NCD): An evidenced based process, with opportunity for public participation to determine if a proposed service, device, diagnostic, or drug is reasonable and necessary for the diagnosis or treatment of an illness or injury, and within the scope of a Medicare benefit category.

New Technology Add-On Payment (NTAP): A CMS program that provides additional payment for technologies that have met CMS’s criteria for newness, cost, and substantial clinical improvement.

Outpatient Prospective Payment System (OPPS): Medicare’s hospital outpatient payment system.

Out-of-pocket: Costs that may include copayments, coinsurance, deductibles, and other similar charges that the beneficiary pays.

Per diem: Provides a fixed amount for a patient day regardless of the charges or costs incurred for caring for a particular patient.

Physician Fee Schedule (PFS): A listing of fees used by Medicare to pay doctors, providers, or other suppliers.

Program for All-Inclusive Care for the Elderly (PACE): A Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility.

Predicate Device:  An existing device that is substantially equivalent (similar in technical characteristics, and identical in Intended Use) to the technology the innovator has created. The existing device is called a predicate. 

Relative Value Units (RVUs): A system used by Medicare (in the Medicare Physician Fee Schedule) to determine and set payment or reimbursement amounts to providers.

RVU Update Committee (RUC): A panel led by the American Medical Association (AMA) which considers how to assign Relative Value Units (RVUs) for various technologies.

State Medicaid agency (SMA): The agency administering or supervising the administration of a State Medicaid plan.

Target Product Profile (TPP): Defines how the product can be differentiated from its competition.

Value-based Payment (VBP): Provider payment is linked to performance by making them accountable for the cost and quality of care they provide.

Value-based Care (VBC): A concept that relies on the implementation of alternative payment models (APMs) that give healthcare providers financial incentives that are based on cost-efficiency, coordination, value, and quality, rather than simply the volume of services provided. 

Drugs

Alternative Payment Models (APMs): Payment models that reimburse health care providers based on cost-efficiency, coordination, value, and quality, rather than simply the number of services provided.

Abbreviated New Drug Application (ANDA): Data which is submitted to FDA for the review and potential approval of a generic drug product.

Biologics License Application (BLA): A request for permission to introduce, or deliver for introduction, a biologic product into interstate commerce.

Center for Drug Evaluation and Research (CDER): The part of FDA that regulates and makes sure over-the-counter and prescription drugs, including biological therapeutics and generic drugs are safe and effective.

Centers for Medicare and Medicaid Services (CMS): A federal agency within the Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children''s Health Insurance Program (CHIP), and health insurance portability standards. CMS is also responsible for the Health Insurance Portability and Accountability Act (HIPAA) administrative simplification standards, quality standards in long-term care facilities, clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments, and the Children’s Health Insurance Program (CHIP).

Current Procedural Terminology (CPT®) Code: A numeric coding system maintained by the American Medical Association (AMA). This national standard is used for electronic transaction of health care information by federal programs, commercial insurers, and providers for describing health care services.

Durable Medical Equipment(DME): Medical equipment that can withstand repeated use, and meets other requirements.

Diagnosis Related Group (DRGs): A classification system that standardizes prospective payment for inpatient hospital services and encourages cost containment initiatives. DRG payments cover all charges associated with an inpatient stay from the time of admission to discharge.

Medicaid Drug Rebate Program: Program where manufacturers pay a state Medicaid program a rebate for outpatient prescription drugs dispensed to their respective beneficiaries.

Drug Utilization Review (DUR): An authorized, structured, ongoing review of prescribing, dispensing and use of medication against predetermined criteria.

FDA Adverse Event Reporting System (FAERS): A database on adverse event and medication error reports submitted to FDA to support FDA''s post-marketing safety surveillance program for drug and therapeutic biologic products.

Fee-for-service (FFS): A payment model where each medical service and procedure is paid for separately.

Health Care Common Procedure Coding System (HCPCS): A coding system used by physicians and other healthcare providers to classify all diagnoses, symptoms and procedures recorded in conjunction with care in the United States. HCPCS is divided into two principal subsystems: Level I is comprised of Current Procedural Terminology (CPT), Level II codes are used to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

Inpatient Prospective Payment System (IPPS): Medicare’s inpatient hospital payment system. Payments are based on set rates under Medicare Part A. CMS updates the IPPS annually, with comment periods open prior to implementation of the final rule.

Managed care organizations (MCOs): A health care provider, group or organization of medical service providers who offers managed care health plans. MCOs contract with insurers or self-insured employers and finances and delivers health care using a specific provider network and specific services and products. MCOs provide preventative medicine, patient education, quality, and managed services to reduce medical cost.

Medicare Severity-Diagnosis Related Group (MS-DRG): A system used by Medicare to group and categorize a patient’s hospital stay (products and services).

National Coverage Determination (NCD): An evidenced based process, with opportunity for public participation to determine if a proposed service, device, diagnostic, or drug is reasonable and necessary for the diagnosis or treatment of an illness or injury, and within the scope of a Medicare benefit category.

New Chemical Entities (NCE): A drug that contains no active moiety that has been approved by the FDA in any other application.

New Drug Applications (NDA): A comprehensive document submitted to FDA requesting approval for marketing a new drug that has passed several clinical trials.

New Technology Add-On Payment (NTAP): A CMS program that provides additional payment for breakthrough technologies.

Outpatient Prospective Payment System (OPPS): Medicare’s hospital outpatient payment system.

Out-of-pocket: Costs that may include copayments, coinsurance, deductibles, and other similar charges that the beneficiary pays.

Pharmacy Benefit Manager (PBM): Manages drug price negotiations with biopharma, develops and manages formularies/preferred drug lists, rebates, and drug costs and responsible for processing and paying drug claims.

Physician Fee Schedule (PFS): A listing of fees used by Medicare to pay doctors, providers, or other suppliers.

Preferred Drug List (PDL): A list of covered medications that do not require a prior authorization.

State Medicaid agency (SMA): The agency administering or supervising the administration of a State Medicaid plan.

Target Product Profile (TPP): Defines how the product can be differentiated from its competition.

Value-based Contracts (VBC): A concept that relies on the implementation of alternative payment models (APMs) that give healthcare providers financial incentives that are based on cost-efficiency, coordination, value, and quality, rather than simply the volume

Diagnostics

Accountable Care Organizations (ACOs): A group of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves for the Medicare program.

Advanced Diagnostic Laboratory Tests (ADLT): A clinical diagnostic laboratory test covered under Medicare Part B that is offered and furnished only by a single laboratory. An ADLT cannot be sold for use by a laboratory other than the laboratory that designed the test or a successor owner.

Affordable Care Act (ACA): A federal statute and comprehensive healthcare reform, commonly known as Obamacare, that was enacted by Congress and signed into law by President Barack Obama in 2010 to make affordable health insurance available to more people, expand the Medicaid program and support innovative medical care delivery methods designed to lower the costs of health care.

Alternative Payment Models (APMs): Payment models that reimburse health care providers based on cost-efficiency, coordination, value, and quality, rather than simply the number of services provided.

Ambulatory Payment Classifications (APCs): Payment groups which cluster together items and services that are similar in clinical characteristics and cost.

Centers for Medicare and Medicaid Services (CMS): A federal agency within the Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children''s Health Insurance Program (CHIP), and health insurance portability standards. CMS is also responsible for the Health Insurance Portability and Accountability Act (HIPAA) administrative simplification standards, quality standards in long-term care facilities, clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments, and the Children’s Health Insurance Program (CHIP).

Clinical Decision Support (CDS): Provides clinicians, staff, patients or other individuals with knowledge and person-specific information, intelligently filtered or presented at appropriate times, to enhance health and health care. CDS encompasses a variety of tools to enhance decision-making in the clinical workflow. These tools include computerized alerts and reminders to care providers and patients; clinical guidelines; condition-specific order sets; focused patient data reports and summaries; documentation templates; diagnostic support, and contextually relevant reference information, among other tools.

Clinical Diagnostic Laboratory Tests (CDLT): The process of identifying a disease, condition, or injury based on the signs and symptoms a patient is having and the patient''s health history and physical exam. Further testing, such as blood tests, imaging tests, and biopsies, may be done after a clinical diagnosis is made.

Clinical Laboratory Improvement Amendments (CLIA): Regulatory standards established for laboratory testing that require clinical laboratories to be certified by CMS before a lab is allowed to accept human samples for diagnostic testing. See 42 C.F.R. Part 493.

Code on Dental Procedures and Nomenclature (CDT Codes): A set of codes and descriptions for dental procedures that cover oral health and dentistry that provide uniformity, consistency, and specificity in documenting dental treatment. CDT Codes are the HIPAA standard dental procedures.

Cost of Goods Sold (COGS): The direct costs of producing a product that is sold by a company. This includes materials and labor directly associated with creating the product.

Coverage with Evidence Development (CED): A paradigm whereby Medicare develops a National Coverage Determination (NCD) to cover items and services on the condition that they are furnished in the context of approved clinical studies or with the collection of additional clinical data (e.g., in a registry).

Covered Benefit: The items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan''s coverage documents.

Clinical Diagnostic Laboratory Tests (CDLT): The process of identifying a disease, condition, or injury based on the signs and symptoms a patient is having and the patient''s health history and physical exam. Further testing, such as blood tests, imaging tests, and biopsies, may be done after a clinical diagnosis is made.

Current Procedural Terminology (CPT®) Code: A numeric coding system maintained by the American Medical Association (AMA). This national standard is used for electronic transaction of health care information by federal programs, commercial insurers, and providers for describing health care services.

Coverage with Evidence Development (CED): A paradigm whereby Medicare develops a National Coverage Determination (NCD) to cover items and services on the condition that they are furnished in the context of approved clinical studies or with the collection of additional clinical data (e.g., in a registry).