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CMS Reimbursement
Medicare and Medicaid Reimbursement Methodologies
| Term | Definition |
|---|---|
| allowable/ limiting charge | maximum fee a physician/provider may charge |
| All-Patient diagnosis related group (AP-DRG) | DRG system adapted for use by third-party payers to reimburse hospitals for inpatient care provided to non-Medicare beneficiaries (i.e. BCBS, commercial health plans, TRICARE); DRG assignment is based on intensity of resources. |
| All-Patient Refined diagnosis related group (APR-DRG) | adopted by Medicare in 2008 to reimburse hospitals for inpatient care provided to Medicare beneficiaries;expands original DRG system(based on intensity of resources)to add subclassifications to each DRG including; severity of illness and risk of mortality |
| ambulatory surgical center (ASC) | state licensed, Medicare-certified supplier (not provider) of surgical healthcare services that must accept assignment on Medicare claims |
| ambulatory surgical center payment rate | predetermined amount for which ASC services are reimbursed, at 80% after adjustment for regional wage variations |
| balance billing | billing beneficiarfies for amounts not reimbursed by payers (not including copayments and coinsurance amounts); this practice is prohibited by Medicare regulations |
| case mix | the types and categories of patients treated by a healthcare facility or provider |
| chargemaster (charge description master-CDM) | term hospitals use to describe a patient encounter form |
| CMS program transmittal | communicate new or changed policies and / or procedures that are being incorporated into a specific CMS Internet-only program manual |
| CMS Quarterly Provider Update (QPU) conversion factor | an online CMS publication that contains information about regulations and major policies currently under development, regulations and major policies completed or cancelled and new or revised manual instructions |
| Diagnostic and Statistical Manual (DSM) | classifies mental health disorders and is based on ICD; published by the American Psychiatric Association |
| disproportionate share hospital (DSH)adjustment | policy in which hospitals that treat a high percentage of low-income patients receive increased Medicare payments |
| durable medical equipment, prosthetics/ orthotics,a nd supplies (DMEPOS)fee schedule | defined by Medicare as equipment that can withstand repeated use, is primarily used to serve a medical purpose, is used in the patient's home, and would not be used in the absence of illness or injury |
| employer group health plan (EGHP) | contributed to by an employer or employee pay -all plan; provides coverage to employees and dependents without regard to the enrollee's employment status (ie., full-time, part-time, or retired) |
| ESRD composite payment rate system grouper software | bundles end-stage renal disease drugs and related laboratory tests with the composite rate payments, resulting in one reimbursement amount paid for ESRD services provided to patients |
| health insurance prospective payment system (HIPPS) code set | five-digit alphanumeric codes that represent case-mix groups about which payment determinations are made for the HH PPS |
| Home Assessment Validation and Entry (HAVEN) | data entry software used to collect OASIS assessment data for transmission to state databases |
| home health resource groups (HHRGs) | classifies patients into one or 80 groups which range in severity level according to three domains: clinical , functional, and service utilization |
| incident to | Medicare regulation which permitted billing Medicare under the physician's billing number for ancillary personnel services when those services were "incident to" a service performed by a physician |
| indirect medical education (IME) adjustment | aproved teaching hospitals receive increased Medicare payments, which are adjusted depending on the ratio of residents-to-beds (to calculate operating costs) and residents-to-averge daily census (to calculate capitol costs) |
| inpatient prospective payment system (IPPS) | system in which Medicare reimburses hospitals for inpatient hospital services according to a predetermined rate for each discharge |
| IPPS 3-day payment window/ IPPS 72-hour rule | requires that outpatient preadmission services provided by a hospital for a period of up to three days prior to a patient's inpatient admission be covered by IPPS DRG payment for diagnostic and tx services when the in-pt dx code matches preadmission dx |
| large group health plan | proveded by an employer that has 100 or more employees or a multi-employer plan in which at least one employer has 100 or more full- or part-time employees |
| limiting charge | maximum fee a physician may charge |
| long-term (acute) care hospital prospective payment system (LTCHPPS) | classifies patients according to long term (acute) care DRGs, in which are based on patients' clinical characteristics and expected resource needs; replaced the reasonable cost-based payment system. |
| major diagnostic category (MDC) | organizes diagnosis-related groups (DRG's) into mutually exclusive categories, which are loosely based on body systems |
| Medicare physician fee schedule (MPFS) | payment system that reimburses providers for services and procedures by classifying services according to relative value units (RVUs); aka Resource-Based Relative Value Scale |
| Medicare severity diagnosis-related groups (MS-DRGs) | improves recognition of severity of illness and resource consumption and reduce cost variation among DRGs |
| Medicare Summary Notice (MSN) | notifies Medicare beneficiaries of actions taken on claims; previously called an Explanation of Medicare Benefits or EOMB |
| Outcomes and Assessment Information Set (OASIS) | group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement |
| outlier | hospitals that treat unusually costly cases receive increased Medicare payments; the additional payment is designed to protect hospitals from large financial losses due to unusually expensive cases |
| outpatient encounter | includes all outpatient procedures and services(same day surgery, x-rays, laboratory tests, and so on)provided during one day to the same patient |
| relative value units (RVU) | payment components consisting of physician work, practice expense, and malpractice expense |
| Resident Assessment Validation and Entry (RAVEN) | data entry system used to enter MDS data about SNF patients and transmit those assessments in CMS-standard format to individual state databases |
| retrospective reasonable cost system | reimbursement system in which hospitals report actual charges for inpatient care to payers after discharge of the patient from the hospital |
| revenue code | 4 digit codes that indicate location or type of service provided to an institutional patient; reported in FL 42 of UB-04 |
| revenue cycle management | process facilities and providers use to ensure financial viability |
| risk of mortality (ROM) | likelihood of dying |
| severity of illness (SOI) | extent of physiological decompensation or organ system loss of function |
| site of service differential | reduction of payment when office-based services are performed in a facility, such as a hospital or outpatient setting, because the doctor did not provide supplies, utilities, or the costs of running the facility |
| wage index | adjusts payments to account for geographic variations in hospitals' labor costs |
Created by:
tina.reynolds
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