Healthcare accounting glossary Flashcards
Accounts Payable
Short term, debt, obligation, or liability owed by the organization to other persons or companies for goods or services furnished 
Accounts receivable
Money owed to an organization for goods or services furnished
Accounts receivable turnover
Ratio indicates how many times accounts receivable is collected in a given cycle 
Accrual basis of accounting
System of accounting that recognizes revenues when earned and expenses when resources used
Adjusted discharge
For adjusted discharges are patient days: adjusted discharges (days) = inpatient discharges (days) X (1 + [Gross outpatient Revenue/Gross Inpatient Revenue])
Adjusted patient days
Estimate of utilization by inpatient, outpatient and newborn based on total gross revenue
Aging
Process where an account receivable or accounts payable scheduled, listed, or arranged based on elapsed time from date of service or transaction
Allowance for bad debts
An estimate of the amount of accounts receivable that a healthcare provider will be unable to collect; it reduces the value of accounts receivable.
Ambulatory patient group, Ambulatory patient classification
Institutional outpatient reimbursement system based on the mythology developed by CMS; APC’s/APGS our two outpatient visits/services what DRG’s are to inpatient hospital admissions; the payments are based on categories or groupings of like or similar services requiring like or similar professional services and supply utilization
Amortization
 the systematic allocation of an item to revenue or expense over a number of accounting periods such as repayment of a loan on an installment basis
Annual debt service
Used to determine how much a hospital or health system is leveraged
Assets
Resources owned by the organization; one of the three major categories on the balance sheet
Assignment
Agreement in which a patient transfers to a provider, the right to receive payment from a third-party for the service the patient has received
Average age of plant
A measure of the average age in years of a hospitals fixed assets; a lower value indicates less of a need for replacement and a higher age indicates the need for more capital spending; accumulated depreciation divided by depreciation expense is the ratio formula
Average daily census ADC
Average number of inpatient, excluding newborns, receiving care each day during a reported period
Average length of stay ALOS
Everett State counted by days of All or a class of inpatient discharged over a given period, calculated by dividing the number of inpatient days by the number of discharges
Bad debt
Amount not recoverable from a patient following exhaustion of all collection efforts
Balance billing
Practice of a provider billing a patient for Balances not paid by a third-party
Balance sheet
Financial statement that presents a snapshot of the financial condition of a healthcare organization at a specific point in time; statement that list of financial resources (assets), financial obligations (liabilities), and ownership rights (equity/fund balance) within the organization
Bass capitation
Stipulated dollar amount to cover the cost of total healthcare per covered person, carried out services; usually stated in a monthly dollar amount
Bad days/1000
An aggregate measure reflecting, both admissions and length of state as well as a global measure of inpatient management; number of inpatient days per 1000 covered health plan members
Bad turnover rate
Number of times a facility bed, on average, changes occupants during a given period of time
Benchmarks
Industry standards for specific tasks or performance, normally set by surveying groups and comparing data cross groups
Bond
Long-term debt issued by business or government unit, whereby the issuer receives cash and in return issues a note; the issue agrees to make principal and interest payments on specific dates to holders of the bond 
Bond rating
Assignment or grading of the likelihood that an organization will not default on its bond obligation 
Book value
Cost of an asset less it’s accumulated depreciation
Break even point
The price of which transaction produces neither gain nor loss; this occurs when income matches expenditures; this definition can apply to a product, investment or the entire company’s operations
Budget
Comprehensive management plan of operation that formally expresses both broad and specific objectives and set standards for the evaluation of performance
Capital
Fixed or durable, non-labor, inputs or factors used in the production of goods and services, the value of such factors, or the money specifically allocated for the acquisition or development 
Capital asset
Depreciable property of a fixed or permanent nature, including buildings or equipment, not for sale in the regular course of business
Capital budget
Plan that outlines the organizations future expected expenditures on new fix assets (E. G., Land, building and equipment)
Capital cost
Cost of investing in the development of new facilities, services, or equipment, excluding operational cost
Capital expenditure
Outlet for capital assets such as facilities and equipment, excluding outlay for operation or maintenance
Capital expenditure growth rate
Gauge indicating how aggressive a hospital invest in its plant and equipment; high value indicates an active capital expenditure program of additions and replacements; measured as a percentage of the organizations, total gross property, plant, and equipment added in a given year 
Capital financing
Institutional funding for facilities and equipment that become part of the capital assets of the institution
Capital lease
Leasing arrangement where the Lea-see seeks a long-term commitment to use the asset with or without the eventual opportunity to purchase the asset
Capital structure
Structure of the liabilities and the net asset section of the organizations balance sheet
Capitation
Method under which selected health services are paid for on the basis of a fixed rate per eligible member without regard to the actual number or nature of services provided to each enrollee; typically paid per member per month (PMPM). Payment system in which providers receive a specific amount in advance to care for specific healthcare needs of defined population over a specific time period. capitated provider assumes the risk of caring for covered population for the PMPM amount. Set of health plan benefits that are contracted separately from the standard benefits package. 
Carve-out
Set of health plan, benefits that are contracted separately from the standard benefits package
Case management
Method of managing the provision of healthcare with the goal of improving continuity and quality of care while lowering cost
Case manager
Clinical professional, who works with patients, providers, families, and insurers to coordinate all the services deem necessary to care for the patient in the best and lowest cost medically appropriate setting 
Case mix
Clinical composition of a provider population among various diagnosis used as a factor and determining cost of service and rate setting; mix of patients who have different third-party payers for the medical bills (i.e., Medicare, private insurance, workers’ compensation)
Case mix index (cmi)
Measure of the relative costliness/acuity of patients treated in each hospital or group of hospitals
Case rate
Fixed reimbursement amount, depending on the type of case; typically includes both physician and hospital charges, limits the liability of the payer and shifts some of the financial risk to the provider
Cash
Also called currency; is used to determine the liquidity ratios and transact financial business; considered to be the most liquid of all assets 
Census
Count of patients who have the time counted dualy registered in providers’ care, normally on an inpatient basis; count of all the people in the United States, taking every 10 years by the federal government; list thing of all eligible members who want to be covered by a plan 
Centers for Medicare and Medicaid services (cmc)
Formally healthcare financing administration (hcfa); government agency and division of the US Department of health and human services (HHS) that is responsible for a ministering, Medicare, Medicaid, and the children’s health insurance program (chip); there is also the contacting agency for third-party payers who seek direct contractor/provider status for administration of the Medicare benefit package to enrollees
Charges
Prices assigned to units of medical services, such as a visit to a physician on an inpatient day at a healthcare facility; gross prices charge for healthcare services, considering any discounts to insurers, government payers, uninsured patients, patients who qualify for financial assistance or discounts for any other reasons
Chargemaster
Providers’ official list of charges (prices) for goods and services rendered
Charity care
Care) render to patients without expectation of compensation for such services
Chart of accounts
Listing of an organizations, account numbers, and titles within a general ledger system
Claim
Request to an insurer by an insured person or assignee for payment of benefits under an insurance policy
Claims Adjudication
In health insurance, this refers to the determination of a members payment, or financial responsibility, after a medical claim is applied to the members insurance benefits
Claims Billed
Submission of a claim for payment for services rendered by healthcare provider to the insured or to the patient
Claims incurred
Insurance companies, actual liability for all claims which have been incurred meaning that the covered individual has received services or supplies and those services have yet been paid by the insurance company
Claims paid
Actual amount paid to either individuals or providers to satisfy the contractual liability of a benefit plan; does not include member liability for copayments, coinsurance, deductibles, etc. 
Claims review
Retrospective or perspective review by government, medical foundations, insurers, or others responsible for payment to determine the financial liability of the payer, eligibility of the beneficiary and provider, appropriateness of the services provided, amount requested under an insurance or repayment, contract, and utilization rates for a specific plans
Clean claim
Claim that can be processed without additional information from the provider or third-party
Clearing house
Third-party use for centralizing the sending, and receiving of electronic messages, claims, documents, and other remittance advices between organizations
Contract
Legal arrangement between two parties; legal arrangement between an insurer, and the provider under which a provider agrees to certain terms such as specified reimbursement rates for healthcare services provided, and the insurer agrees to certain terms such as timely payment 
Contractual adjustment/deductions
Accounting adjustment required to reflect uncollectible differences between established charges for services rendered to insured persons and rates payable for those services under contract with third-party payers
Contribution margin
Revenue from services minus all variable expenses; difference between per unit of revenue and per unit cost (variable cost rate) and the amount that each unit of output contributes to over the fixed costs
Coordination of benefits (COB)
Claims review procedure by which a claim cover by two or more carriers is identified as a liability of each is determined for the purpose of avoiding duplication of payments
Copayment
A type of cost sharing arrangement under which the insured pays a predetermined dollar amount per episode of service, with the insurer paying the remainder 
Cost
Expenses incurred
Cost accounting
Process used to calculate the expense associated with delivery of an individual unit of service
Cost allocation
Assignment to each of several organizational departments or services an equitable portion of the costs of activities that serve them all
Cost center
The grouping of all related costs attributable to a “financial center” within an institution, E.G., department or program, segregated for accounting or reimbursement purposes 
Cost of Capital
Rate of return required to undertake a project; the discount rate that reflects the overall average risk of the project or business
Cost outlier
Patient whose cost of treatment exceeds the predefined cost threshold established for DRG payments assigned 
Cost plus
Insurance contractual arrangement whereby the subcontracted payer of claims for a group health plan is paid the actual cost of the claim settlement plus a fixed amount for providing claims processing services 
Cast-based reimbursement
Method of Medicare reimbursement for critical access hospitals, and other cost report based payment
Cast sharing
Method by which part of the cost of medical services is shared between the plan and the patient
Cost shifting
The practice of charging certain patients higher rates to recoup losses sustain when a third-party pair reimburses at a lower rate for other patients 
Covered person
Individual who meets plan eligibility requirements, and for whom current premium payments are paid
Covered service
Service supplied by provider to a patient, which is included in the scope of insurance benefits
Current assets
Asset that is expected to be converted into cash within one accounting period (often a year)
Current liabilities
Financial obligations that are paid within one year
Days cash on hand
Cash plus short and long-term investments divided by total expenses less depreciation divided by 365; measure the number of days on average cash expense at the hospital, maintains in cash or marketable securities; measure of short and long-term liquidity; a higher value indicates debt, repayment ability
Days and accounts receivable
Netta accounts receivable divided by (net patient revenue/365); Ratio indicates how quickly a hospital is converting its receivables into cash
Days Per 100
For a stated population of 100 individuals, the estimated number of hospital inpatient days per year
Debt service coverage
Measures total debt service coverage, including interest plus principal, against annual funds available to pay debt service; does not take into account positive or negative cash flow associated with balance sheet changes; higher value indicates better debt repayment ability
Deductible
Accounting treatment applied to the recipient or accrual of revenue before it is earned; monies received that have not been yet earned, such as capitation receipts on the basis of PMPM
Depreciation
The systematic allocation of the cost of capital assets over a predetermined period time frame
Diagnosis Related Groups (DRGs)
Patient classification system that relates demographic, diagnostic, and therapeutic characteristics of patients to length of patient stay and amount of resources consumed ; provides a framework for specifying hospital case mix; identifies a number of classifications of illnesses and injuries for which Medicare payment is made under prospective pricing system
Direct Contracting
Single or multi-employer health care alliances that contract directly with providers for health care services with no insurance company or managed care plan involvement
Direct Cost
Cost that is clearly and directly associated with rendering services
Discharge Planning
Coordination by provider personnel with external sources to provide the necessary care to the patient when the patient is discarded
Discount Rate
Interest rate used to adjust a future cash flow to its present value
Discounted Fee For Service
A contractual arrangement between a provider and payer where the provider agrees to accept less than a normal charge for providing a service; usually specified as a fixed percent such as 90%, 85%, 80%, etc. Of the normal charge.
