BPHC Acronyms and Glossary of Terms

GLOSSARY OF TERMS AND CONCEPTS FOR
PRIMARY HEALTH CARE CENTERS

340B: The 340B Drug Pricing Program limits the cost of drugs to federal purchasers and to certain grantees of federal agencies. Significant savings on pharmaceuticals may be seen by those entities that participate in this program.

1115 waiver: Medicaid waiver that grants the Secretary of Health and Human Services broad authority to waive certain laws relating to Medicaid for the purposes of conducting pilot, experimental or demonstration projects which are "likely to promote the objectives" of the program. These demonstration waivers allow states to change provisions of their Medicaid programs, including: eligibility requirements, the scope of services available, the freedom to choose a provider, a provider's choice to participate in a plan, the method of reimbursing providers, and the statewide application of the program.

1915(b) waiver: Allows states to require Medicaid recipients to enroll in HMOs or other managed care plan in an effort to control costs. The waivers allow states to: implement a primary care case management system; require Medicaid recipients to choose from a number of competing health plans; provide additional benefits in exchange for savings resulting from recipients' use of cost-effective providers; and limit the providers from which beneficiaries can receive non-emergency treatment. The waivers are granted for two years, with two-year renewals. Often referred to as "freedom-of-choice waiver."

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actual charge: the amount a physician or other practitioner actually bills a patient for a particular medical service or procedure. The actual charge may differ from the customary, prevailing, and/or reasonable charges under Medicare and other insurance programs.

actuary: in insurance, a person trained in statistics, accounting, and mathematics who determines policy rates, reserves, and dividends by deciding what assumptions should be made with respect to each of the risk factors involved (such as the frequency of occurrence of the peril, the average benefit that will be payable, the rate of investment earnings, if any, expenses, and persistency rates), and who endeavors to secure as valid statistics as possible on which to base his assumptions.

adverse selection: disproportionate insurance of risks who are poorer or more prone to suffer loss or make claims than the average risk. It may result from the tendency for poorer risks or less desirable insured (sick people) to seek or continue insurance to a greater extent than do better risks (healthy people), or from the tendency for the insured to take advantage of favorable options in insurance contracts. Favorable as compared to adverse selection, when intentional, is called skimming.

ambulatory care: all types of health services which are provided on an outpatient basis, in contrast to services provided in the home or to persons who are inpatients. While many inpatients Pay be ambulatory, the term ambulatory care usually implies that the patient has come to a location other than his home to receive services and has departed the same day.

amortization: the act or process of extinguishing a debt, usually by equal payments at regular intervals over a specific period of time.

ancillary services: hospital or other inpatient health program services other than room and board, and professional services. They may include X-ray, drug, laboratory or other services not separately itemized, but the specific content is quite variable.

appropriation: an act of Congress that permits Federal agencies to incur obligations and to make payments out of the Treasury for specific purposes. An appropriation usually follows enactment of authorizing legislation. An appropriation is the most common form of budget authority, but in some cases the authorizing legislation provides the budget authority.

assigned risk: a risk which underwriters do not care to insure (such as a person with hypertension seeking health insurance) but which, because of State law or otherwise, must be insured. Insuring assigned risks is usually handled through a group of insurers (such as all companies licensed to issue health insurance in the State) and individual assigned risks are assigned to the companies in turn or in proportion to their share of the State's total health insurance business. Assignment of risks is common in casualty insurance and less common in health insurance. As an approach to providing insurance to such risks, it can be contrasted with pooling of such risks in which the losses rather than the risks are distributed among the group of insurers.

assignment: an agreement in which a patient assigns to another party, usually a provider, the right to receive payment from a third-party for the service the patient has received. Assignment is used instead of a patient paying directly for the service and then receiving reimbursement from public or private insurance programs. In Medicare, if a physician accepts assignment from the patient, he must agree to accept the program payment as payment in full (except for specific coinsurance, co-payment and deductible amounts required of the patient). Assignment, then, protects the patient against liability for charges that the Medicare program will not recognize as reasonable. Under some national health insurance proposals physicians must agree to assignment for all of their patients or none of them; under Medicare, physicians may choose assignment for some of their patients but not others, and may do so on a claim by claim basis for some services but not others.

at risk: the state of being subject to some uncertain event occurring which connotes loss or difficulty. In the financial sense, this refers to an individual, organization (e.g., HMO) or insurance company assuming the chance of loss - through running the risk of having to provide or pay for more services than paid for through premiums or per capita payments. If payments are adjusted after the fact so that no loss can occur, then there is no risk. In fact, of course, losses incurred in one year may be made up by increases in premiums or per capita payments in the next year, so the "risk" is somewhat tempered. A firm that is at risk for losses also stands to gain from profits if costs are less than premiums collected. For a consumer being financially at risk usually means being without insurance or at risk for substantial out-of-pocket expenses. A second use of the term relates to the special vulnerability of certain populations to certain diseases or conditions; ghetto children are at risk for lead poisoning or rat bite; workers in coal mines are at risk for black lung disease.

authorization or authorizing legislation: in the Federal budget, legislation enacted by Congress which sets up or continues the legal operation of a Federal program or agency indefinitely or for a specific period of time, often three years in the health area. Such legislation is normally a prerequisite for subsequent appropriations, or other kinds of budget authority to be contained in appropriation acts. It may limit the amount of budget authority to be provided subsequently or may authorize the appropriation of "such sums as may be necessary"; in a few instances budget authority may be provided in the authorization. The term is often used more narrowly to refer to annual dollar limits specified in authorizing legislation or amounts which may be appropriated for the authorized program.

availability: a measure (in terms of type, volume and location) of the supply of health resources and services relative to the needs (or demands) of a given individual or community. Health care is available to an individual when he can obtain it at the time and place that he needs it, from appropriate personnel. Availability is a function of the distribution of appropriate resources and services, and the willingness of the provider to serve the particular patient in need.

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bad debts: the amount of income lost to a provider because of failure of patients to pay amounts owed. The impact of the loss of revenue from bad debts may be partially offset for proprietary institutions by the fact that income tax is not payable on income not received. They may also be recovered by increasing charges to paying patients by a proportional amount. Some cost-base reimbursement programs reimburse certain bad debts

beneficiary: a person who is eligible to receive, or is receiving, benefits from an insurance policy (usually) or health maintenance organization (occasionally) - usually include both people who have themselves contracted for benefits and their eligible dependents.

benefit package: a contractually defined set of health services, the cost of which is borne in full or in part by a health insurance plan.

Bureau of Primary Health Care (BPHC): The Bureau of Primary Health Care helps ensure that the people of our Nation receive adequate health care. BPHC programs include Black Lung Clinics, Community Health Centers, Federally Qualified Health Center Look-Alikes, Health Care for the Homeless, Healthy Schools Healthy Communities, Migrant Health Centers, Outreach and Primary Health Services for Homeless Children, and Public Housing Primary Care. It falls under the Health Resources and Services Administration of the U.S. Department of Health and Human Services.

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capital: fixed or durable non-labor inputs or factors used in the production of goods and services, the value of such factors, or money specifically available for their acquisition or development. This includes, for example, the buildings, beds, and equipment used in the provision of hospital services. Capital goods are usually thought of as permanent and durable (in cases of doubt, those lasting over a year) and should be distinguished from such things as supplies. Refers also to investment in self (human capital, for example where preventive care is purchased because of the positive effect such care may have on one's ability to sustain future earning capacity).

capitation: a method of payment for health services in which an individual or institutional provider is paid a fixed, per capita amount for each person served without regard to the actual number or nature of services provided to each person. Capitation is characteristic of health maintenance organizations but unusual for physicians. Also, a method of Federal support of health professional schools authorized by the Comprehensive Health Manpower Training Act of 1971, P.L. 92-157, and the Nurse Training Act of 1971, P.L. 92-158 (sections 770 and 810 of the PHS Act), in which each eligible school receives a fixed capitation payment from the Federal government for each student enrolled, called a capitation grant.

case-mix: the diagnosis-specific makeup of a health program's workload. Case-mix directly influences the length of stay, intensity, cost and scope of the services provided by a hospital or other health program.

categorically needy: persons who are both members of certain categories of groups eligible to receive public assistance, and economically needy. As used in Medicaid, this means a person who is aged, blind, disabled, or a member of a family with children under 18 (or 21, if in school) where one parent is absent, incapacitated or unemployed and, in addition, meets specified income and resources requirements which vary by State. In general, categorically needy individuals are persons receiving cash assistance under the AFW or SSI programs. A State must cover all recipients of AFDC payments under Medicaid; however, it is provided certain options (based, in large measure, on its coverage levels under the old Federal/State welfare programs) in determining the extent of coverage for persons receiving Federal SSI and/or State supplementary SSI payments. In addition, a State may cover additional specified groups, such as foster children, as categorically needy. A State may restrict its Medicaid coverage to this group or may cover additional persons who meet the categorical requirements as medically needy.

Centers for Medicare and Medicaid Services (CMS): The Centers for Medicare & Medicaid Services (CMS) is a federal agency within the U.S. Department of Health and Human Services. CMS is responsible for running the Medicare and Medicaid programs. With the Health Resources and Services Administration, CMS runs the State Children’s Health Insurance Program (SCHIP), a program that is expected to cover many of the approximately 10 million uninsured children in the United States.

claims made policy: a form of malpractice insurance gaining increasing popularity among insurers because it increases the accuracy of ratemaking. In this type of policy the insured is covered for any claim made, rather than any injury occurring, while the policy is in force. Claims made after the insurance lapses are not covered as they are by a claims incurred policy. This type of policy was initially resisted by providers because of the nature of medical malpractice claims, which may arise several years after an injury occurs. A retired physician, for example, could be sued and not covered, unless special provisions are made to continue his coverage beyond his years of practice. There are also retrospective problems for providers who switch from a conventional policy to a claim made policy, since the latter policy would not cover claims arising from events occurring during the years when the conventional policy was in effect. Insurers marketing such policies are now offering providers the opportunity to purchase insurance for both contingencies.

Clinical Laboratory Improvement Amendments (CLIA): The Clinical Laboratory Improvement Amendments establish quality standards for all laboratory testing to ensure the accuracy, reliability and timeliness of patient test results regardless of where the test was performed. A laboratory is defined as any facility which performs laboratory testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention, treatment of disease, or impairment of, or assessment of health. CLIA is user fee funded; therefore, all costs of administering the program must be covered by the regulated facilities, including certificate and survey costs.

Clinical Regional Advisory Network (CRAN): An organization of clinicians serving at Bureau of Primary Health Care supported health centers or providing care at similarly missioned organizations. The CRAN is involved in numerous clinical activities supporting the role of clinicians ranging from data collection, research, provider mentoring, to education.

coinsurance: a cost-sharing requirement under a health insurance policy which provides that the insured will assume a portion or percentage of the costs of covered services. The health insurance policy provides that the insurer will reimburse a specified percentage (usually 80 percent) of all, or certain specified covered medical expenses in excess of any deductible amounts payable by the insured. The insured is then liable for the remaining percentage of the costs, until the maximum amount payable under the insurance policy, if any, is reached.

Community Access Program (CAP): The Community Access Program is a demonstration program funded by Congress to assist communities and safety net providers in developing the infrastructure necessary to participate in integrated health systems and coordinating care for the uninsured. No more than 15 percent of CAP grant funds can be used to pay for direct services. Grantees must be public and private non-profit entities that demonstrate a commitment to and experience with providing health care to the uninsured. A CAP grantee must represent a community-wide coalition that is built upon health care providers that serve all patients regardless of ability to pay and that include sufficient partners necessary to provide access to a comprehensive range of services.

community health center: an ambulatory health care program usually serving a catchment area with scarce or non-existent health services or a population with special health needs. Grant support for such centers was originally provided on a research and demonstration basis from the community Action Program of the Office of Economic Opportunity. Subsequently, the funding authority for these projects shifted to section 314(e) of the Public Health Service Act. In 1975 legislation was approved, authorizing the community Health Centers program under section 330 of the PHS Act. Community health centers attempt to coordinate Federal, State and local resources in a single organization capable of delivering both health care and related social services to a defined population. While such centers may not directly provide all types of health care, they usually take responsibility for arranging for all medical services needed by their patients.

community rating: a method of establishing premiums for health insurance in which the premium is based on the average cost of actual or anticipated health care used by all subscribers in a specific geographic area or industry and does not vary for different groups or subgroups of subscribers or with such variables as the group's claims experience, age, sex, or health status. the BMD Act(section 1302(8) of the PHS Act) defines community rating as a system of fixing rates of payments for health services which may be determined on a per person or per family basis "and may vary with the number of persons in a family, but mist be equivalent for all individuals and for all families with similar composition.,, The intent of community rating is to spread the cost of illness evenly aver all subscribers (the whole community) rather than charging the sick more than the healthy for health insurance. Community rating is the exceptional means of establishing health insurance premiums in the United States today. The Federal Employee's Health Benefits Program for example is experience rated, not community rated.

consortium: generally, a formal arrangement between or among two or more entities, functioning under a set of written rules to which each entity (member) agrees to abide, for purposes of conducting joint actions to benefit each member. Consortiums, may involve like entities (horizontal), or different entities (vertical), and may be formed for such purposes as shared staffing or system, joint purchasing of supplies or products, access to capital financing, revenue enhancement, new ventures (service or product lines), or to ward off destructive competition. (See also. shared services)

consultation: requesting advice from another provider, usually a specialist, regarding the diagnosis and/or treatment of a patient.

contingency reserves: reserves set aside by an insurance company for unforeseen or un-planned circumstances and expenses other than the normal losses incurred by the risks insured.

co-payment: a type of cost sharing whereby insured or covered persons pay a specified flat amount per unity of service or unit to time (e.g., $2 per visit, $10 per inpatient hospital day), their insurer paying the rest of the cost. The co-payment is incurred at the time the service is used. The amount paid does not vary with the cost of the service (unlike coinsurance, which is payment of some percentage of the cost).

cost-related or cost-based reimbursement: one method of payment of medical care programs by Medicare for health centers and, typically Blue Cross plans or government agencies, for services delivered to patients. In cost-related systems, the amount of the payment is based on the costs to the provider of delivering the service. The actual payment may be based on any one of several different formulae, such as full cost, full cost plus an additional percentage, allowable costs, or a fraction of costs. Other reimbursement schemes are based on the charges for the services delivered, or on budgeted or anticipated costs for a future time period (prospective reimbursement)

cost sharing: provisions of a health insurance policy which require the insured or otherwise covered individual to pay some portion of his covered medical expenses. Several forms of cost-sharing are employed, particularly deductibles, coinsurance and co-payments. A deductible is a set amount which a person must pay before any payment of benefits occurs. A co-payment is usually a fixed amount to be paid with each service. Coinsurance is payment of a set portion of the cost of each service. Cost-sharing does riot refer to or include the amounts paid in premiums for the coverage. The amount of the premium is directly related to the benefits provided and hence reflects the amount of cost-sharing required. For a given set of benefits, premium increase as cost-sharing requirements decrease. In addition to being used to reduce premiums, cost sharing is used to control utilization of covered services, for example, by requiring a large co-payment for a service that is likely to be overused.

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deductible: the amount of loss or expense that must be incurred by an insured or otherwise covered individual before an insurer will assume any liability for all or part of the remaining cost of covered services. Deductibles may be either fixed dollar amounts or the value of specified services (such as two days of hospital care or one physician visit). Deductibles are usually tied to some reference period over which they must be incurred, e.g., $100 per calendar year, benefit period, or spell of illness. Deductibles in existing policies are generally of two types: 1) static deductibles which are fixed dollar amounts, and 2) dynamic deductibles which are adjusted from time to time to reflect increasing medical prices. A third type of deductible is proposed in some national health insurance plans: a sliding scale deductible, in which the deductible is related to income and increases as income increases.

dual choice: the practice of giving people a choice of more than one health insurance or health program to pay for or provide their health services. Usually done by employers who offer employees more than one group health insurance program, or a health insurance program and a prepaid group practice to choose from as a benefit of their employment. Characteristic of the Federal Employees Health Benefit Program. Required by the HM Act, of employers with respect to qualified HMOs.

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effectiveness: the degree to which diagnostic, preventive, therapeutic or other action or actions achieves the intended result. Effectiveness requires a consideration of outcomes to measure. It does riot require consideration of the cost of the action, although one way of comparing the effectiveness of actions with the same or similar intended results is to compare the ratios of their effectiveness to their costs. Usually synonymous with efficacy in common use.

efficiency: the relationship between the quantity of inputs or resources used in the production of medical services and the quantity of outputs produced. Efficiency has three components: input productivity (technical efficiency), input mix (economic efficiency), and the scale of operation. Efficiency is usually measured by indicators such as output per person-hour or cost per unit of output. However, such indicators fail to account for the numerous relevant dimensions (such as quality) of both inputs and outputs and are, therefore, only partial measures. Colloquially, efficiency measures the "bang for the buck" but, as the above suggests, it is a difficult concept to define and quantify. Ultimately, efficiency should probably be measured in terms of the costs of achieving various health outcomes defining it in terms of productivity assumes that what is produced is efficacious and used in an effective manner.

encounter: a face to face contact between a patient and a health care provider during which health care services are provided.

enrollee: one who enrolls in a pre-paid health program for health services.

expanded medical capacity: Increased and expanded access to primary health care services by increasing penetration into a health center’s current service area to improve the health status of the people in those areas.

experience rating: a method of establishing premiums for health insurance in which the premium is based on the average cost of actual or anticipated health care used by various groups and subgroups of subscribers and thus varies with the health experience of groups and subgroups or with such variables as age, sex, or health status. It is the most common method of establishing premiums for health insurance in private programs.

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Federal Tort Claims Act (FTCA): The FTCA program allows 330 grantees to apply for coverage under the law that provides their Centers (and thereby employees and certain contractors) with immunity from medical malpractice suits for actions that fall within the scope of their employment. Potential plaintiffs must follow the requirements of the FTCA for relief, which would apply to acts, or omissions of covered entities in the performance of covered activities.

Federal Register: an official, daily publication of the Federal Government which publishes proposed rulemaking, final rules and regulations, and legal notices.

Federally Qualified Health Center: A facility located in a medically underserved area that provides preventive primary medical care under the general supervision of a physician. FQHCs must be a public or a private nonprofit entity, serve, in whole or in part, a Federally designated Medically Underserved Area (MUA) or Medically Underserved Population (MUP), and meet the statutory, regulatory and policy requirements for grantees supported under section 330 of the Public Health Service Act. FQHC status entitles them to receive reasonable cost reimbursement for Medicaid and Medicare services they provide in accordance with Section 1905 (1)(2)(B) of the Social Security Act. FQHCs may or may not receive section 330 funding.

Federally Qualified Health Center Look Alike (FQHC LA): FQHC LAs are a distinct class of Federally Qualified Health Centers under the law. Look Alikes are distinguished from other organizations that are recognized as FQHCs because Look Alikes receive no grant funding. Look Alikes, by definition, must meet the requirements for health centers (section 330 grantees) and are governed by the same expectations as grant funded health centers, i.e., be a public or a private nonprofit entity, serve, in whole or in part, a Federally designated Medically Underserved Area (MUA) or Medically Underserved Population (MUP), meet the statutory, regulatory and policy requirements for grantees supported under section 330 of the PHS Act, comply with the policy implementation documents for the Balanced Budget Act of 1997 amendment which added the requirement that an FQHC Look-Alike entity may not be owned, controlled or operated by another entity. By virtue of their FQHC status, they are entitled to receive reasonable cost reimbursement for Medicaid and Medicare services they provide in accordance with Section 1905 (1)(2)(B) of the Social Security Act.

fee for service: Method of charging whereby a physician or other practitioner bills for each encounter or service rendered. This is the usual method of billing by the majority of the country's physicians. Under a fee for service payment system, expenditures increase only if the fees themselves increase but also if more units of service are charged for, or more expensive services are substituted for less expensive ones. This system contrasts with salary, per capita or prepayment systems, where the payment is not changed with the number of services actually used or if none are used. While the fee for service system is now generally limited to physicians, dentists, podiatrists and optometrists, a number of other practitioners, such as physician assistants, have sought reimbursement on a fee for service basis.

fee schedule: a list of charges for specific health care services.

Field Office Review and Recommendation (FORR): Provides the Field Office and the Bureau of Primary Health Care with information about the application and the organization’s performance to assure that the grantee has made significant progress in implementing the current year’s business and health care plans and can compete in its marketplace.

fiduciary: relating to or founded upon a trust or confidence. A fiduciary relation exists where an individual or organization has an explicit or implicit obligation to act in behalf of another person's or organization's interests in matters which affect the other person or organization. A physician has such a relation with his patient and a hospital trustee with a hospital.

fiscal agent or intermediary: a contractor that processes and pays provider claim on behalf of a payer (such as Medicare or State Medicaid agency). Fiscal agents are rarely at risk, but rather serve as an administrative unit for the payer, handling the payment of bills. Fiscal agents may be insurance companies, management firms, or other private contractors.

free standing: an ambulatory care facility that has no physical connection with a hospital or other health care unit.

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Generally Accepted Accounting Principles (GAAP): This body of uniform accounting standards is promulgated by the Governmental Accounting Standards Board, and allows for comparability between jurisdictions.

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Health Insurance Flexibility and Accountability (HIFA): A new Medicaid and State Children's Health Insurance Program section 1115 waiver approach. The primary goal of the HIFA demonstration initiative is to encourage new comprehensive state approaches that will increase the number of individuals with health insurance coverage within current-level Medicaid and SCHIP resources.

Health Insurance Portability and Accountability Act of 1996 (HIPAA): Protects health insurance coverage for workers and their families when they change or lose their jobs. The Administrative Simplification provisions of the HIPAA require the Department of Health and Human Services to establish national standards for electronic health care transactions and national identifiers for providers, health plans, and employers. It also addresses the security and privacy of health data.

health maintenance organization (HMO): an entity with four essential attributes: 1) an organized system for providing health care in a geographic area, which entity accepts the responsibility to provide or otherwise assure the delivery of 2) an agreed upon set of basic and supplemental health maintenance and treatment services to 3) a voluntarily enrolled group of persons, and 4) for which services the HMO is reimbursed through a predetermined, fixed, periodic prepayment made by or on behalf of each person or family unit enrolled in the HMD without regard to the amounts of actual services provided. The HMO is responsible for providing most health and medical care services required by enrolled individuals or families. These services are specified in the contract bet-~ the HMO and the enrollees. The HMO must employ or contract with health care providers who undertake a continuing responsibility to provide services to its enrollees. HMOs are of public policy interest because the Prototypes appear to have demonstrated the Potential for providing high quality medical services for less money than the rest of the medical system.

health professional(s) shortage area (HPSA): Any of the following which the Secretary determines has a shortage of health professional(s): (1) An urban or rural area (which need not conform to the geographic boundaries of a political subdivision and which is a rational area for the delivery of health services); (2) a population group; or (3) a public or nonprofit private medical facility.

hold harmless provision: a provision of law that prevents a governmental entity, institution or other party from suffering additional expenses or loss of benefits as a result of a change in a statute or regulations. Without such a provision such an entity or institution would be responsible for expenses not previously anticipated due to an expanded caseload, more generous coverage provisions, or both. On the other hand ' the use of hold harmless provisions often creates substantial confusion, heterogeneity and inequity in eligibility, coverage and responsibilities under a statute. In insurance, a provision offering the insured protection in disputes between the insurer and the provider of a covered service.

home health agency: an agency which provides nursing services and at least one additional therapeutic service in the home.

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income poverty guidelines: income guidelines determined annually by the Community Service Administration which specify the level of income that is used to determine program eligibility, for numerous federal programs (e.g., food stamps), WIC, Hill-Burton and "zero par' categories at CHCs and MHCS).

incur: in insurance, to become liable for a loss, claim or expense. Cases or losses incurred are those occurring within a fixed period for which an insurance plan becomes liable whether or not reported, adjusted and paid.

individual practice association (IPA): a partnership, corporation, association, or other legal entity which has entered into an arrangement for provision of their service with persons who are licensed to practice medicine, osteopathy, dentistry, or with other health providers (a majority of whom are licensed to practice medicine or osteopathy), which arrangement provides; that such persons provide their professional services in accordance with a compensation arrangement established by the entity; and to the extent feasible (I) that such persons use such additional professional personnel, allied health professions personnel, and other health personnel, as are available and appropriate for the effective and efficient delivery of the services, (II) for the sharing by such persons of medical and other records, equipment, and professional, technical and administrative staff, and (III) for the arrangement and encouragement of the continuing education of such persons in the field of clinical medicine and related areas. IPAs are am source of professional services for HMOs and are modeled after medical foundations.

Integrated Services Development Initiative (ISDI): A Bureau of Primary Health Care program that funds networks of community health centers to contribute to increased access, greater coordination and continuity of care, improved quality, increased information analysis, enhanced medical decision-making, reduced costs, greater efficiency, enhanced recruitment of providers, and increased clout in the marketplace.

intensity of service: the quantities of services provided to patients in a hospital or same other identifiable setting. Intensity can be expressed in terms of a weighted index of services provided, or in terms of a set of statistics indicating the average number of laboratory tests, surgical procedures, X-rays, etc., provided per patient or per patient day. Intensity is a function of the type of program and its case-mix.

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Joint Committee on Accreditation of Healthcare Organizations (JCAHO): The Joint Commission evaluates and accredits nearly 18,000 health care organizations and programs in the United States. The accreditation initiative is a means for grant supported health centers to satisfy their requirement for an on-site quality review in lieu of the Primary Care Effectiveness Review (PCER).

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life safety code: a fire safety code prepared by the National Fire Protection Association. The provisions of this Code relating to hospitals and nursing facilities must (except in instances where a waiver is granted) be met by facilities certified for participation under Medicare and Medicaid. Me Secretary of HM may accept a State's fire and safety code, in lieu of the National life Safety Code, if he finds that it is imposed by law and will provide adequate protection for inpatients of nursing facilities. The code is based on the Southern standard Building Code that contains optimum (not minimum) standards.

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malpractice: professional misconduct or lark of ordinary skill in the performance of a professional act. A practitioner is liable for damage or injuries caused by malpractice. Such liability, for same professions like medicine, can be covered by malpractice insurance against the costs of defending suits instituted against the professional and/or any damages assessed by the court, usually up to a maximum limit. Malpractice requires that the patient demonstrate some injury and that the injury be negligently caused.

managed care: a concept which assumes that each person who enters into the health care system has a provider who coordinates and manages his or her care, assures access to primary, secondary and tertiary care and coordinates efforts at all levels for effectiveness, cost efficiency, quality of care and avoidance of duplicate effort.

management information system: a system which provides management with information necessary for decision making.

Medicaid (Title XIX): a Federally-aided, State operated and administered program which provides medical benefits for certain low-income persons in need of health and medical care. The program, authorized by title XIX of the Social Security Act, is basically for the poor. It does riot cover all of the poor, however, but only persons who are members of one of the categories of people who can be covered under the welfare cash payment programs - the aged, the blind, the disabled, and members of families with dependent children where one parent is absent, incapacitated or unemployed. Under certain circumstances states may provide Medicaid coverage for individuals who are not categorically related. Subject to broad Federal guidelines, States determine the benefits covered, program eligibility, rates of payment for providers, and methods of administering the program. Medicaid is estimated to provide services to some 25 million people, with Federal-State expenditures of approximately $40 billion in fiscal year 1985.

medically indigent: a person who is too impoverished to meet his medical expenses. It may refer to either persons, whose income is low enough that they can pay for their basic living costs but not their routine medical care, or alternately, to persons with generally adequate income who suddenly face catastrophically large medical bills.

medically needy: in the Medicaid program, persons who have enough income and resources to pay for their basic living expenses (and so do not need welfare), but not enough to pay for their medical care. Medicaid law requires that the standard for income used by a State to determine if someone is medically needy cannot exceed 133 percent of the maximum amount paid to a family of similar size under the welfare program for families with dependent children (AFDC). In order to be eligible as a medically needy, people must fall into one of the categories of people who are covered under the regular Medicaid program. They receive benefits if their income after deducting medical expenses is low enough to meet the eligibility standard. Forty States now provide Medicaid coverage to medically needy.

medically underserved area (MUA): a geographic location (i.e., an urban or rural area) which has insufficient health resources (manpower and/or facilities) to meet the medical needs of the resident population. Such areas are also defined by measuring the health status of the resident population, an area with an unhealthy population being considered underserved. The term is defined and used several places in the PHS Act in order to give priority to such areas for Federal assistance.

medically underserved population (MUP): Population groups with economic barriers (low-income or Medicaid-eligible populations), or cultural and/or linguistic access barriers to primary medical care services. The term is defined and used several places in the PHS Act in order to give priority to such areas for Federal assistance.

Medicare (Title XVIII): a nationwide health insurance program for people aged 65 and over, for persons eligible for social security disability payments for aver two years, and for certain workers and their dependents who need kidney transplantation or dialysis. Health insurance protection is available to insured persons without regard to income. Monies from payroll taxes and premiums from beneficiaries are deposited in special trust funds for use in meeting the expenses incurred by the insured. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B).

medigap policy: a supplemental health insurance policy designed to supplement Medicare.

mid-level practitioners: nurse practitioner and physician assistants.

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National Health Service Corps (NHSC): a program which places U.S. health personnel in Health Professional Shortage Areas (HPSAs) for the purpose of improving the delivery of health care and services to persons residing in such areas. The Corps was established by the Emergency Health Personnel Act of 1970. The first Corps members were assigned in January, 1972.

new access point: A new delivery site for the provision of comprehensive primary and preventive health care services. New access points include new starts, which are organizations that do not currently receive funds under the section 330 program for which they are applying, and expansions, which are organizations that currently receive funds under a section 330 program, that propose to expand their capacity under that program to serve a new patient population through the establishment of one or more new primary health care service delivery sites.

notice of grant award (NGA): The unified notice of grant award is the document utilized by the Bureau of Primary Health Care to award funds to private non-profit and public organizations based on the approval of a grant application. The unified notice of grant award provides a description of funding awarded for community and migrant health center, health care for the homeless, public housing primary care, and healthy schools health communities approved projects. The notice reflects acceptance of the budget breakdown by object class category as reflected on the Standard Form 424A submitted as part of the application or as revised.

notch: a sudden and sharp discontinuity in health or financial benefits for individuals with slightly different income. In certain public and medical assistance programs, an additional dollar of income can mean a total loss of benefits. For example, in Medicaid, families just below the income eligibility standard receive fully subsidized coverage while families with only slightly more income and just above eligibility standards receive no benefits. Substantial incentives for families to restrict their incomes in order to remain eligible may result. Spend down provisions are used to compensate for notches. A notch may also occur when, without change in eligibility, c0st-sharing requirements increase suddenly with a small change in income.

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occurrence policy: the conventional form of malpractice insurance, under which the insured is covered for any claim arising from an incident which occurred or is alleged to have occurred during the policy period, regardless of when the claim is made. The only limiting factors are the statutes of limitations, which vary from state to State. An alternative type of policy is the claims made policy.

Office of Rural Health Policy (ORHP): The Office of Rural Health Policy promotes better health care service in rural America. The programs are established under titles XVIII and XIX on the financial viability of small rural hospitals, the ability of rural areas (and rural hospitals in particular) to attract and retain physicians and other health professionals, and access to (and the quality of) health care in rural areas. It falls under the Health Resources and Services Administration of the U.S. Department of Health and Human Services.

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Policy Information Notices (PIN): PINs provide official BPHC guidance to grantee organizations regarding a broad range of areas affecting BPHC grantees.

Point-of-Service Health Plan (POS): Also identified as open-ended HMO. A plan combining the features of an HMO with an indemnity insurance option. The member uses the plan like an HMO and receives HMO coverage; but the member may exercise "freedom of choice" and seek care outside the HMO system with additional charges (higher copayments and deductibles, and submission of claims forms). Members choose how and from whom to receive services at the time they need them.

Pre-Application Guidance Letter (PAGL): The PAGL, which is sent to all grantees and is issued six months prior to the start of the budget period, provides information on the due date of a renewal application, general instructions regarding submission of the application, significant changes in the application instructions, and sometimes highlights new priorities for the fiscal year. It also provides information on the mid-year assessment of the grantee.

Preferred Provider Organization (PPO): An arrangement in which the health plan contracts with independent physicians, hospitals and other health care providers who become the "preferred" or "participating" providers. Providers typically accept reduced, "discounted fee-for-service" rates of reimbursement from the health plan in exchange for access to the PPO’s enrollees. PPOs have fewer restrictions than HMOs (e.g., patients are not required to select a primary care physician or seek prior authorization for services). Patients may choose to receive care from providers who do not participate in the PPO, with higher co-payments and deductibles attached to services provided by non-participating providers.

prepaid health plan (PHP): generically, a contract between an insurer and a subscriber or group of subscribers whereby the PHP provides a specified set of health benefits in return for a periodic premium. In Medicaid, the term refers to organizational entities other than federally-qualified or state qualified HMOs (including most CHCs and NHCs) which are eligible for risk based contracting with State Medicaid agencies.

prepayment: inconsistently used, sometimes synonymous with insurance, sometimes refers to any payment ahead of time to a provider for anticipated services (such as an expectant mother paying in advance for maternity care), sometimes distinguished from insurance as referring to payment to organizations (such as HMOs, prepaid group practices and medical foundations) which, unlike an insurance company, take responsibility for arranging for and providing needed services as well as paying for them.

prevailing: a charge which falls within the range of charges most frequently used in a locality for a particular medical service or procedure. The top of this range establishes an over-all limitation on the charges that a carrier, which considers prevailing charges in reimbursement, will accept as reasonable for a given service, without adequate special justification. Current Medicare rules state that the limit of an area's prevailing charge is to be the 75th percentile of the customary charges for a given service by the physicians in a given area. For example, if customary charges for an appendectomy in a locality were distributed so that 10 percent of the services were rendered by physicians whose customary charge was $150, 40 percent by physicians who charged $200, 40 percent who charged $250, and 10 percent who charged $300 or more, then the prevailing charge would be $250, since this is the level that, under Medicare regulations, would cover at least 75 percent of the cases.

preventive medicine: care designed to prevent disease and or its consequences. a) Primary, such as immunization, aimed at preventing disease; b) Secondary, such as disease screening programs, aimed at early detection of disease; and c) Tertiary, such as physical therapy, aimed at restoring function after disease has occurred.

primary care: basic or general health care which emphasizes the point when the patient first seeks assistance from the medical care system and the care of the simpler and more common illnesses. The primary care provider usually also assumes ongoing responsibility for the patient in both health maintenance and therapy of illness. It is comprehensive in the sense that it takes responsibility for the overall coordination of the care of the patient's health problems, be they biological, behavioral or social. The appropriate use of consultants and community resources is an important part of effective primary care. Such care is generally provided by physicians, but is increasingly provided by other personnel such as nurse practitioners, physician assistants and nurse midwives.

Primary Care Associations (PCA): Primary Care Associations represent safety net providers throughout the State. They are uniquely positioned to work with providers, policy makers, program administrators, and communities to advance the goals of increasing access and reducing disparities. The Bureau of Primary Health Care provides grants to these organizations.

Primary Care Effectiveness Review (PCER): The PCER is a comprehensive performance review tool to support continuous quality improvement of health centers. The primary purpose is to assess health center compliance with law, regulation and program expectations and to identify areas requiring improvement. It could also be used to provide consultation in areas in which improvement, though not required, would enhance health center performance and its ability to provide high quality, cost competitive health care.

Primary Care Offices (PCO): Primary care offices are located within State government. They are uniquely positioned to work with policy makers, program administrators, communities, and providers to advance the goals of increasing access and reducing disparities. The Bureau of Primary Health Care has cooperative agreements with primary care offices in each State.

primary care physician (PCP): A physician, usually an internist, pediatrician or family physician, devoted to general medical care of patients. Most HMOs require members to choose a primary care physician, who is then expected to provide or authorize all care for that patient.

Program Assistance Letter (PAL): PALs are a mechanism used by the Bureau of Primary Health Care to provide information to grantee organizations regarding a broad range of areas affecting grantees. A PAL does not establish an official requirement, rather it describes an issue and suggests some action that will benefit health centers.

Prospective payment system (PPS): A payment method in which the amount of payment is set in advance, and the hospital is at least partially at risk for either the losses or gains made in treating the patient.

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quality assurance: activities and programs intended to assure the quality of care in a medical program, to remedy identified deficiencies in quality and to assess the programs own effectiveness.

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reasonable cost: generally the amount which a third party using cost-related reimbursement will actually reimburse. Under Medicare, reasonable costs are costs actually incurred in delivering health services excluding any part of such incurred costs found to be unnecessary for the efficient delivery of needed health services. The law stipulates that, except for certain deductible and coinsurance amounts that must be paid by beneficiaries, payments to institutional providers (except hospitals) shall be made on the basis of the reasonable cost of providing the covered services. Medicare has prescribed rules setting forth the method or methods to be used and the items to be included in determining the reasonable cost of covered care. The regulations require that costs be apportioned between Medicare beneficiaries and other hospital patients so that neither group subsidizes the costs of the other. The items or elements of cost, both direct and indirect, which the regulations specify as reimbursable are known as allowable costs. Such costs are reimbursable on the basis of a hospital’s actual costs to the extent that they are reasonable and are related to patient care. Under certain conditions the following items maybe included as allowable costs: capital depreciation; interest expenses; educational activities; research costs related to patient care; unrestricted grants, gifts and income from endowments; value of services of non-paid workers, compensation of owners; payments to related organizations; and return on equity capital of proprietary providers. Bad debts may only be included to the extent institutions fail in good faith efforts to collect the debts.

reinsurance: the practice of one insurance company buying insurance from a second company for the purpose of protecting itself against part or all of the losses it might incur in the process of honoring the claims of its policyholders. The original company is called the ceding company; the second is the assuming company or reinsurer. Reinsurance may be sought by the ceding company for several reasons: to protect itself against losses in individual cases beyond a certain amount, where competition required it to offer policies providing coverage in excess of these amounts; to offer protection against catastrophic losses in a certain line of insurance, such as aviation accident or polio insurance; or to protect against mistakes in rating and underwriting in entering a new line of insurance such as major medical

relative value unit (RVU): The unit of measure for a relative value scale. RVUs must be multiplied by a dollar conversion factor to become payment amounts. This is a common term in economics.

reserves: balance sheet accounts set up to report the liabilities faced by an insurance company under outstanding insurance policies. Their purpose is to secure as true a picture as possible of the financial condition of the organization (by permitting conversion of disbursements from a paid to an accrual basis). The company sets the amount of reserves in accord with its own estimates, State laws, and recommendations of supervisory officials and national organizations. Regulatory agencies can accept the reserves or refuse them as inadequate or excessive. For Blue Cross plans, for example reserves are set aside to cover average monthly claims and operating expenses for some period of time. Reserves, while estimated, all are obligated amounts and have four principal components; reserves for known liabilities not yet paid; reserves for losses incurred but unreported; reserves for future benefits; and other reserves for various special purposes, including contingency reserves for unforeseen circumstances.

rural health clinics (RHCs): Rural Health Clinics are provider organizations in rural medically underserved areas or in designated health profession shortage areas. Unlike community/migrant health centers, RHCs may be for-profit organizations and are not required to have a governing board with a majority of clinic users. RHCs provide primary medical care, including pediatric and dental care (dependent on provider availability), and may deliver some primary, mental health care services. RHCs must have a nurse practitioners or physician assistant available at least 60 percent of the time. RHCs do not necessarily receive federal community health center grants, but they are eligible for Medicaid and Medicare following the same reimbursement policies that apply to community/migrant health centers.

Ryan White Comprehensive AIDS Resources Emergency (CARE) Act: The CARE Act was signed into law on August 15, 1990 to improve the quality and availability of care for people with HIV/AIDS and their families. The CARE Act funds primary care and support services for individuals living with HIV disease who lack health insurance and financial resources for their care. CARE Act programs reach more than 500,000 individuals each year. While ambulatory health care and support services are the primary focus of the legislation, training, technical assistance, and demonstration projects are also funded.

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safety net: The health care system of each state that provides care to people, even if they do not have health insurance or money to pay for care. The safety net is comprised of doctors, dentists, nurses, and others who work in public hospitals, non-profit community hospitals, community-based and school-based health centers, public health clinics, and private practices, often in isolated rural and poor urban areas where most other providers choose not to practice.

scope of project: A description of a health center’s project, categorized by five core elements: services, sites, providers, target population, and service area(s).

Shared Integrated Management Information System (SIMIS): The Shared Integrated Management Information System (SIMIS) Initiative was developed to significantly improve the health center’s ability to collect, manage and use information, in order to improve its ability to be more cost-competitive. The focus of the SIMIS Initiative is to strategically align health center information systems with business objectives in an effort to meet demands driven by competition in the marketplace.

shared services: the coordinated, or otherwise explicitly agreed upon, sharing of responsibility for provision of medical or non-medical services on the part of two or more otherwise independent hospitals or other health programs. The sharing of medical services might include, for example, an agreement that one hospital provide all pediatric care needed in a community and no obstetrical services while another undertook the reverse. Examples of shared non-medical services would include joint laundry or dietary services for two or more nursing homes. Common laundry services purchased by two or more health programs from one independent retailer of laundry services are not usually thought of as shared services unless the health programs own or otherwise control the retailer.

spend down: a method by which an individual establishes eligibility for a medical care program by reducing gross income through incurring medical expenses until net income (after medical expenses) becomes low enough to make him eligible for the program. The individual in effect, spends income down to a specified eligibility standard by paying for medical care until his bills become high enough in relation to income to allow him to qualify under the program's standard of need, at which point the program benefits begin. The spend-down is the same as a sliding scale deductible related to the Over-all income level of the individual. For example, if persons are eligible for program benefits if their income is $200/month or less, a person with a $300/month income would be covered after spending $100 out-of-pocket on medical care; a person with an income of $350 would not be eligible until he incurred medical expenses of $150. The term spend-down originated in the Medicaid program. An individual whose income makes him ineligible for welfare but is insufficient to pay for medical care, can become Medicaid-eligible as a medically needy individual by spending same income on medical care.

State Children’s Health Insurance Program (SCHIP): SCHIP is a State and Federal partnership designed to help children without health insurance, many of whom come from working families with incomes too high to qualify for Medicaid but too low to afford private health insurance. The SCHIP law appropriated $40 billion in federal funds over 10 years to improve children's access to health coverage.

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technical assistance (TA): Technical assistance is a professional/client relationship designed to assess need, identify gaps, set goals and apply resources, help, know-how and/or coaching. It is designed to move the client organization toward change.

Title V: Title V of the Social Security Act was enacted in 1935 and authorized the creation of the Maternal and Child Health Services programs, providing a foundation and structure for ensuring the health of mothers and children. Title V is a Federal/State partnership to provide and assure mothers and children access to quality services; to reduce infant mortality and the incidence of preventable diseases and handicapping conditions among children; to provide rehabilitation services to children under the age of 16; and to provide and promote family-centered, community-based, coordinated care for children with special health care needs and to facilitate the development of community based systems of services for these children. Title V is administered by the Maternal and Child Health Bureau (MCHB) as part of the Health Resources and Services Administration, U.S. Department of Health and Human Services.

Title X: Title X of the Public Health Services Act of 1970 was the first program devoted completely to family planning services. It provides Federal grants to provide money to subsidize family planning care to poor women. Grants are given to clinics, public agencies, private nonprofit organizations for training, technical assistance and other services.

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Uniform Data System (UDS): a uniform set of tables, data elements and definitions pertaining to the operational, financial and administrative management of the program, which EHCDA grantees are required to file on a semi-annual basis.

underwriting: in insurance, the process of selecting, classifying, evaluating and assuming risks according to their insurability. Its fundamental purpose is to make sure that the group insured has the same probability of loss and probable amount of loss, within reasonable limits, as the universe on which premium rates were based. Since premium rates are based on an expectation of loss, the underwriting process must classify risks into classes with about the same expectation of loss.

utilization review (UR): evaluation of the necessity, appropriateness and efficiency of the use of medical services, procedures and facilities. In a hospital this includes review of the appropriateness of admissions, services ordered and provided, length of stay, and discharge practices, both on a concurrent and retrospective basis. Utilization review can be done by a utilization review committee, peer review group, or public agency.

Montana Primary Care Association 1805 Euclid Avenue Helena, MT 59601 Phone: (406) 442-2750 Fax: (406) 449-2460