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.
Disproportionate share hospital (DSH)
A designation given to a hospital that meets CMS criteria for caregiving to indigent and/or state healthcare related program patients
EBIDA
 earnings, before interest, depreciation, and amortization; used by not for profit as a measure of operational efficiency; measure of operating success before the cost of long lived assets 
EBITDA
Earnings before interest, taxes, depreciation, and amortization; used for profits
Electronic health record (EHR)
A global computerized record containing storage and retrieval of patient health information in a digital format. Usually contains patient’s demographics, medical history, medications, allergy list, lab test results, radiology images, and advance directives. 
Exempt financing
Financing transactions or depth for tax exempt organizations
FASB
Financial accounting, standards board a private organization whose mission is to establish and improve the standards of financial accounting and reporting requirements for private businesses
Fee for service (FFS)
Traditional means of billing by health providers for each service performed; requesting payment in specific amounts for a specific services rendered
Fee schedule
Listing of fees or payments for specific provider services or supplies
Financing
Refers to source of resources used in funding a project or an investment
Fiscal intermediary (FI)
Public or private insurer agency selected by CMS to pay institutional claims under Medicare
Fiscal year
Accounting or reporting year adopted by an entity
Fixed asset
Business’ long-term assets, such as land, building, and equipment
Fixed asset turnover
An indicator of operating efficiency; the number of operating revenue dollars generated per dollar of fixed asset investment is the ratio formula
Fixed budget
Provides for space specified expenses that do not vary with activity levels
Fixed cost
Cost that remains constant over period of time or level of activity and is not affected by changes in volume
Flexible budget
Budget that, when prepared, recognizes the expenditures are a function of activity levels and are adjusted accordingly
Forecast
Estimate of the most profitable future financial position
Form 990
Name of IRS form applicable to not for profit organizations for reporting their activities for a fiscal period
Form 990
Name of IRS form applicable to not for profit organizations for reporting their activities for a fiscal period
Foundation
A fundraising entity, often affiliated with a healthcare system or provider
Full-time equivalent (FTE)
Workforce equivalent of one full-time individual or separate part-time workers for a specific period
Gatekeeper
Primary care physician, responsible for monitoring patient utilization of healthcare services; a type of health insurance plan requiring covered persons to select primary care physician or the plans participating providers. The patient is required to see the selected primary care physician for care and referrals to other healthcare providers within the plan. HMO’s use this type of health plan.
Generally excepted accounting principles (GAAP) Global Capitation
Form of citation that covers all medical expenses, including professional and institutional charges 
Gross margin
Net sales minus cost of goods sold; difference between sales, revenues, and manufacturing cost as an intermediate step in the computation of operating profits or net income
Health maintenance organization (HMO)
Health plan that has management responsibility for providing comprehensive healthcare services on a repayment basis to voluntarily enrolled person within a designated population
Health plan
Health insurance plan, HMO’s, PPO’s, self funded plans, or any other plans that pay for healthcare services to enrollees
Healthcare system
Corporate body that may own and manage health provider, facilities, or health related subsidiaries as well as non-health related facilities that are either freestanding or subsidiary corporations and may include multiple hospitals or one hospital and additional provider facilities or programs. 
Hospital
Institutional health care provider with an organized medical and professional staff and with permanent facilities that are able to provide inpatient and outpatient services including medical, nursing, and other health-related care to patients
Hospital Based Physician (HBP)
Physician who furnishes services in a hospital through a contractual or employment relationship
Hospitalist
A physician based in a hospital, setting responsible for the care and treatment of hospitalized patients; spends most of their time in the hospital and are more readily available to the patient than the Doctor Who spends much of the day outside of the hospital and an office or a clinic setting 
Indemnity Insurance
Standard type of health insurance, where benefits are paid in a predetermined amount in the event of a covered loss
Independent practice Association (IPA)
Organizational structure through which private physicians participate in a prepaid medical plan, charge agreed-upon rates to enrolled patients, bill the association on a fee for service basis and are organized as part of a health maintenance organization 
Indirect Costs
Costs that are incidental or not related to the direct function of treating patients
Inpatient (IP)
Patient who’s is provided with room, board, and continuous acute nursing service in an area of a hospital where patients remain hospitalized overnight
Insurance
Contract that provides reimbursement for, or indemnification from, the results of a specific event
Integrated delivery system (IDS)
A system of healthcare providers organized to deliver a broad range of healthcare services; other terms include integrated healthcare delivery system (IHDS), integrated delivery network (IDN), and integrated delivery and financing system (IDFN)
Internal rate of return (IRR)
Percentage is returned on investment; rate of return at which the net present value equals zero
Interest
Money paid for the use of money
Keep performance indicators (KPI)
Financial statement ratio and/or operating indicator that is considered by management to be critical to the business’ financial performance
Length of stay (LOS)
Number of calendar days that elapse between an admission and discharge
Lessee
One who uses the asset in the leasing arrangement
Lessor
One who owns the asset in the leasing arrangement
Long-term depth capitalization
Formulated as long-term debt divided by long-term debt plus unrestricted net assets; higher values for this ratio, imply, a greater alliance on debt financing, and may imply a reduced ability to carry additional depth
Malpractice
Professional misconduct are lack of ordinary skill in the performance of a professional act
Malpractice insurance
Insurance either purchased or provided for by self funding to reimburse or compensate a provider for the adverse effects of a legal action
Managed care
Comprehensive healthcare plans that attempt to reduce costs through contractual agreements with providers and through care management initiative
Marginal cost
The next dollar spent to generate one additional unit of service
Market value
Current exchange price as of the date of the financial statement
Medicaid (Title XIX)
Federally, aided, state operated, and administered program which provides medical benefits for a certain indigent or low income persons in need of health and medical care; benefits, program eligibility, rates of payment for providers, and methods of administering determined by the state subject to federal guidelines
Medical Foundation Model
A tax exempt entity, usually a hospital or clinic that provides healthcare to patients. Physicians , Ally with foundations via professional service agreements. The foundation, not the doctor, holds the managed care contracts.
Medical group model
Competitive entity that offers a high degree of integration of healthcare delivery; is usually made up of a large multi specialty medical group operating under one tax ID that owns and operates one more clinics that may also include ancillary services such as laboratory and imaging, as well as ambulatory surgery; Generally the medical group contracts with payers separately from any hospital
Medical record
Record of a patient maintained by hospital or physician for the purpose of documenting clinical data on diagnosis, treatment, and outcome
Medicare (Title XVIII)
US health insurance program generally for people aged 65 and over, consist primarily of two separate but coordinated programs: hospital insurance (part A) And supplementary medical insurance (part b)
Medicare advantage
Medicare prescription drug, improvement and modernization act (MMA) replace the Medicare+Choice program with Medicare advantage, allowing Medicare beneficiaries to enroll in a managed care plan
Medicare part A
Hospital insurance program portion of Medicare, which automatically enroll all persons age 65 and over, entitled to benefits under the old age, survivors, disability, and health insurance program or railroad retirement; generally pays for inpatient care 
Medicare Part B
Voluntary portion of Medicare, which generally covers physician services; requires Enrollment and the payment of a monthly premium
Medicare Part C
A program known as Medicare advantage; if you are entitled to Medicare Part A and are enrolled in Part B, you are eligible to switch to a Medicare advantage plan provided by Medicare approved managed care plans, provided one pre more plans are available in your service area
Medicare part D
Medicare prescription drug plan for Medicare beneficiaries 
Medicare Payment Advisory Commission (MedPAC)
Independent advisory group appointed by Congress to review and make recommendations to the HHS secretary on issues affecting the Medicare program, including normal increases in Medicare payment rates; mandated by the balanced budget act as a consolidation of the prospective payment assessment commission (ProPAC) and the physician payment review commission (PPRC)
Medicare provider analysis and review file (MedPAR)
Database containing clinical and financial claims data for Medicare, beneficiaries, in which data elements are defined by Medicare billing requirements and are maintained by CMS
Medigap insurance
Supplemental insurance sold by private insurance companies to pay for medical expenses, not covered by Medicare
Member
Any individual enrolled in a healthcare benefit plan
Member month
Unit of volume measurement calculated, regardless of whether or not the member actually received services during the month
MS – DRG
Medicare severity adjusted DRG; system implemented by CMS October 1, 2007 and used in the inpatient perspective payment system. The number of DRGs was expanded to 745.
Net accounts receivable
Accounts receivable reduced by all contractual allowances, covered in government, participation agreement, and third-party managed care contracts
Net assets
And not for profit organizations, net assets often is used in place of “equity”; residual amount from total assets less total liabilities 
Net fixed assets
Value of assets after deducting depreciation
Net income
Net of revenues, expenses, gains, and losses over a specified period of time
Net operating income
Net revenue less operating expenses, but before all non-operating income and expenses, as well as taxes that result in profit
Net working capital
Current assets minus current liabilities
Net operation loss
Net revenue last operation expenses, but before other income and expense and taxes that result in a loss
Net operation revenue
Total revenue less contractual allowance reductions
Net patient service revenue
Represents revenue, actually collected after all contractual adjustments and bad debts are removed
Net present value
The sum of the present values (PVs) of the individual cash flows. NPV is a central tool in discounted cash flow (DCF) analysis, and is a standard method for using the time value of money to appraise long-term projects use for budgeting, it measures the excess or shortfall of cash flows, in present value terms, once financing charges are met
Not for profit organization (NFP)
Tax exempt organization chartered for charitable purpose; entity organized under any states not for profit, corporation, enabling statute for purposes, such as charity, education, research, religion, or other purposes in which private persons are not permitted to receive distributions of assets 
Observation
23 hour or less stay in hospital setting
Occupancy rate
Measure of percentage of beds occupied in a hospital over a period of time
One time revenue
Amount of money received from a non-repeating source or event, such as a sale of an asset 
Operating budget
Budget that combines both revenue and expense budgets
Operating costs
Costs and expenses, directly attributable to operations of business activity
Operating lease
A lease with no transfer of ownership interest; annual rent commitment are recorded as rental expense in the current period as they occur
Operating margin
Defined in the healthcare industry as total operating revenues minus total operating expenses. Margin percentage is a measure of operating success in controlling cost per dollar of revenue.
Out of pocket (OOP) cost
Portion of payment for health services required to be paid by the participating member in the health plan
Outpatient (OP)
A person who receives healthcare services without being admitted into a hospital
Outpatient service
Hospital healthcare service provided to patients who do not require admission as inpatient
Overhead expenses
Excludes economic cost of physicians time in delivering the services, but includes shared expenses, such as office rent, utilities, and insurance; physician groups may share these expenses equally, but they may also share them according to other allocation methods
Patient day
Unit of measured depicting lodging in a facility between two consecutive census taking periods; unit of time (days) inpatient services of healthcare facility are utilized by patient 
Patient financial obligation
The amount the patient owes for healthcare services after payment from other sources, and after any discounts have been considered; includes copayments, deductibles, coinsurance, and the amounts to due for services not covered by insurance
Patient mix
Numbers and types of patients served by provider or insurer, classified, according to their home, socioeconomic characteristics, diagnosis, or severity of illness 
Pay for performance (P4P)
Uses incentives to encourage and reinforce the delivery of evidence based practices to improve healthcare, quality and services as efficiently as possible; also available to hospitals in certain markets
Payers
Insurance companies or other financing vehicles, employers, or government entities (Medicare, Medicaid) that pays a provider for the delivery of healthcare services on behalf of their clients, employees, or other covered lives.
Peer review (PR)
Concurrent and retrospective review by practicing physicians or other healthcare professionals of the quality and efficiency of patient care, practices or services ordered or performed by other physicians or other professionals 
Per diem reimbursement
Payment based on a negotiated rate which can be varied by service
Per member per month (PMPM)
Payment for each plans’ member for one month
Per thousand members per year (PTMPY)
Provider utilization expressed as hospital inpatient days per thousand members per year
Point of service (POS )
Healthcare insurance plan that allows the member to select to use providers either in network or out of network; beneficiaries are enrolled and then HMO, but have the option to go outside of the network for an additional cost
Precertification (pre-admission certification, pre-admission review, or precert)
Process of obtaining authorization from the health benefit plan for routine hospital admissions (inpatient or outpatient) or other high call services prior to services delivery
Preferred provider organization (PPO)
An arrangement whereby a third-party payer contracts with a group of medical care providers who furnish services at lower than usual fees in return return guarantees of a certain volume of patients 
Premium
Periodic payment, usually monthly, made to the health benefit plan in return for providing health benefits, coverage to members under the contract
Prepaid
Incidence of an expenditure before the benefits are received
Present value
Value today of an amount to be received or paid later at an assumed discount or interest rate
Pricing transparency
Making hospital prices widely available to patients who may want to shop around for certain services; usually applicable to elective services where the patient can afford to take the time to shop around; patient with high deductible health plan as well as consumers to find value and quality when comparing healthcare procedures and services
Primary care
Routine medical care, normally provided a doctors office or professional and related services administered by an internist, family practitioner, obstetrician – gynecologist or pediatrician in ambulatory setting, with referral to secondary care specialists as necessary
Primary care physician (PCP)
Family, physicians, general practitioners, internist, pediatricians, and occasionally OBGYNs, who act as patiences principal or first contact for healthcare services
Prospective payment system (PPS)
Method of payment by which rates of payment to providers for services to patients are established in advance for fiscal year; providers are paid these rates for services delivered, regardless of the costs actually incurred in providing these services
Provider
Healthcare professional, a group of healthcare professionals, a hospital, or some other facility that provides healthcare services to patients
Quick ratio
Cash, short term, investments, and receivables divided by current liabilities
Ratio analysis
A significant component of financial statement analysis; summarizes financial statement relationship among the financial statement elements
Reimbursement
Process by which healthcare providers receive payment for their services
Reinsurance
Insurance purchased by a health benefits plan to protect it against extremely high cost cases (specific reinsurance) or against extremely high claims cost in total (aggregate reinsurance)
Return on assets (ROA)
Net income divided by total assets; a useful gauge of profitability by measuring the size of the surplus generated and relation to the amount of assets needed to achieve the surplus
Return on equity (ROE)
Net income divided by book value; a financial indicator that measures a hospitals ability to add new investment in plant equipment without adding excessive levels of new debt; the amount of net income earned per dollar of assets or equity; an increase is a positive trend
Return on investment (ROI)
Percentage gain or loss experienced from an investment
Revenue
The income that results from the sale of goods and the rendering of services, which is measured by the charge made to patients for goods and services furnished to them; gains from the sale or exchange of assets, interest, and dividends earned on investments and unrestricted donations of resources to the hospital are also considered revenue
Revenue cycle
All administrative and clinical functions that contribute to the capture, management, and resolution of patient service
Self insurance
Program for providing group insurance with benefits, financed and risk assumed entirely through the internal means of the policyholder, instead of through coverage purchased from a commercial carrier 
Self insured or self funded plan
Health plan where the risk for medical cost is assumed by the employer, union, or Planet administrator rather than an insurance company or managed care plan that handles the administrative functions of the plan
Self-pay patients
Patients who are personally responsible for all or portion of their healthcare bills because of fact they’re such as health plan cost sharing provisions (annual deductible or copayments); services not covered by health insurance; or the lack of coverage by private insurance or governmental healthcare programs
Semi variable costs
Step costs that are fixed up to a certain level of operations; upon reaching a predetermined level, these costs become variable
Statement of cash flows
A financial statement that summarizes the current period business activities on a cash basis
Statement of earnings
See statement of income
Statement of income/statement of operations
A report of a companies, revenues, expenses, games, and losses that are the result of operating and non-operating activities over a specific period of time
Statement of revenue and expenses
See statement of income
Stop loss insurance
Reinsurance that provides protection for the expenses of medical treatment above a certain cost limit; maximum amount of a plan member is required to spend for services in a given or over a lifetime 
Tax exempt organization
Organization determined by the IRS to be exempt from federal income tax under under internal revenue code section 501 (a) regulations
Tax exempt bonds
Bonds, in which the interest payments to the investor are exempt from IRS taxation; bond must be issued by an organization that has received tax exempt from the IRS and are used to fund projects that qualify as exempt uses; backed by the organizations’ revenue and offer lower interest rates, then taxable bonds
Third-party payer
Entity, other than the patient that pays for healthcare services; examples include Medicare, indemnity insurance, Medicaid, and HMO’s
Uncompensated Care
Services absorbed by a provider and providing medical care for patients who do not pay
Uninsured patients
Self-pay patients who have no commercial health insurance or government sponsored health coverage for their healthcare at any given time during the year
Utilization
The frequency with which a benefit is used, for example, 3200 doctors office visits per 1000 HMO members per year; utilization experience multiplied by the average cost per unit of service delivered equals Costs
Utilization management (UM)
Integration of utilization review, risk management, and quality assurance into management in order to ensure the judicious use of the facilities resources and high-quality care
Utilization review (UR)
Review of appropriateness of healthcare services on a prospective, concurrent, and retrospective basis
Variable cost
A cost whose unit value remains relatively constant, but whose aggregate value changes, usually proportionately to changes in volume
Withhold
Form of compensation, whereby a health plan withholds payment to a provider until the end of a period at which time the plan distributes any surplus based on some measure of provider efficiency or performance 
Working capital
Some of an institutions, short term or concurrent assets, including cash, marketable (short term) securities, accounts receivable, and inventories minus current liabilities
