Key Terms and Concepts Flashcards
CHFP HFMA
Provider - general
A provider is a licensed professional or entity that
provides a medical service to a patient.
Facility provider
A facility provider is an acute care hospital, long-term
care hospital, inpatient rehab hospital, psychiatric
facility, skilled nursing facility, assisted living facility,
home health agency, hospice agency, clinic or
ambulatory surgery center.
Professional
provider
A professional provider is a physician, pharmacist,
registered nurse or allied professional provider (APP)
rendering a medical service to a patient. (Clinical
social workers and physical therapists are examples of
APPs).
Primary care
Primary care physicians are trained and boardcertified in family practice, general practice, general
internal medicine and pediatrics. They frequently
coordinate a patient’s care and refer patients to
specialists.
Specialist
A specialist is a physician who specializes in a specific
disease, body system or type of healthcare.
Third-party payer
A third-party payer is a health insurance plan paying a
provider for healthcare services delivered to its
insured patients. The other two parties in a healthcare
business transaction are the patient and the provider
Out-of-pocket
payment
Payments made by patients in addition to what their
health insurance plan pays are known as out-ofpocket payments.
Deductible
A deductible is a pre-determined amount that the
patient pays before the insurer begins to pay for
service.
Coinsurance
Coinsurance is a percentage of the insurance payment
amount that is paid by the patient, along with the
amount paid by the insurer.
Copay
A copay is a flat amount that a patient pays at each
time of service.
Claim
Claim is another word for a bill for healthcare services
provided.
Pre-authorization
Insurers may require providers to contact them to preauthorize certain high-cost services before treatment.
A pre-authorization is an acknowledgement by the
payer that it considers the service medically necessary
and will pay for it.
Benefit payment
Once the insurer has determined the claim is
appropriate, a payment is made to the provider. This
payment is officially termed a benefit payment.
Beneficiary
Insurers usually refer to the patient for which services
are paid as the beneficiary
Covered benefit
The services for which the insurer will pay are usually
referred to as a covered benefit.
Denial
The insurer may determine that the claim from the
provider is not a covered benefit and will not pay the
claim. This is known as a denial.
Remittance advice
A remittance advice is a written explanation
accompanying an insurer’s payment (or non-payment)
of a patient account to a provider. The copy sent to
the patient is known an Explanation of Benefits (EOB).
Medicare Part A
Medicare Part A (Hospital Insurance) is one of two
parts of the original Medicare program established by
Title XVIII of the Social Security Act in 1965. It pays
for hospital inpatient, skilled nursing facility, hospice
and some home health care. Part A is a premium-free
benefit funded by FICA payroll deductions.
“Categorical” eligibility starts on when a U.S citizen
who paid FICA taxes for at least 40 calendar quarters
turns 65. Disabled individuals under 65 who have
received Social Security for 24 months also qualify for
Medicare. Funded by a 2.9% payroll tax.
Medicare Part B
Medicare Part B (Supplemental Medical Insurance) is
the “voluntary” part of original Medicare. It pays for
physician services, outpatient hospital and clinic care
and some home health services. While beneficiaries
over 65 pay a monthly premium tied to their prior year
income, about 75% of the total cost is paid from
general tax revenues. Since Part B is voluntary and
not everyone may qualify for Part A, it is possible for a
patient to have Medicare Part B but not Medicare Part
A or vice versa.
Medicare
Advantage
(Medicare Part C)
Medicare Advantage plans, launched in 1997, are
commercial insurance plans (HMOs, PPOs or fee-forservice plans) that offer Medicare beneficiaries an
alternative to traditional Medicare. About 30% of
Medicare beneficiaries select Advantage plans because
benefits frequently exceed those of traditional
Medicare. Beneficiaries pay the normal monthly Part B
premium to CMS and sometimes also a separate
Medicare Advantage premium to the commercial
payer. Most plans have narrower provider choices than
traditional Medicare. CMS pays Medicare Advantage
plans a fixed, risk-adjusted monthly fee per
beneficiary that slightly exceeds the estimated cost of
providing similar services under traditional Medicare.
Medicare
Prescription Drug
benefit (Medicare
Part D)
The Medicare Part D program, launched in 2006,
covers prescription medications for Medicare
beneficiaries. Commercial plans have monthly
premiums and vary in the cost and kinds of drugs
covered. Plans are allowed to negotiate discounts with
drug manufacturers.
Centers for
Medicare and
Medicaid Services
(CMS)
The federal government, through the Centers for
Medicare and Medicaid Services or CMS, oversees all
parts of the Medicare and Medicaid programs. CMS can
waive a state’s requirement to participate in traditional
Medicaid if the state offers beneficiaries plans with
better benefits.
Medicare Cost
Report
A Medicare Cost Report is an annual report that
institutional providers participating in the Medicare
program must submit to their Medicare Administrative
Contractor. For providers paid prospectively, the cost
report determines reimbursement for certain add-on
payments but does not affect the overall payment
rate. For providers paid retrospectively, the cost report
determines the payment rate. CMS uses cost report
data to update DRG and APC weights and determine
market basket updates
Medicare Trust
Fund
The Medicare Trust Fund is the pool of FICA taxes that
pays for Medicare Part A and B. Unless Medicare is
reformed or payroll taxes are increased, the trust fund
is expected to be depleted within the next ten years.
