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Healthcare Glossary

Healthcare Glossary





Advanced Beneficiary Notice

A notice presented to fee-for-service Medicare patients advising that Medicare is likely not to pay for a particular service that has been ordered by the patient's physician. The notice lists the item(s) or service(s), an estimate of the cost for the item(s) or service(s), and the reason why Medicare may not pay, giving the patient information needed to make an informed choice about whether or not to accept financial responsibility for the item(s) or service(s).


American Hospital Association



Agency for Healthcare Research

and Quality



American Medical Association



Ambulatory Payment Classification

A specific payment methodology used by various healthcare payers to pay for selected outpatient services as defined by the payer; the APC payment methodology was adopted by Medicare in CY2000 as the payment system of choice to pay for facility services provided to Medicare outpatients; see also Outpatient Prospective Payment System (OPPS).


Ambulatory Patient Group

A specific payment methodology used by various healthcare payers to pay for selected outpatient services as defined by the payer.


All-Patient Refined Diagnosis Related Group

Expansion of the basic DRG structure by adding subclasses to reflect severity of illness and risk of mortality.


Ambulatory Surgery Center



Average Sale(s) Price

Drug pricing information submitted by drug manufacturers to

CMS on a quarterly basis.


Average Wholesale Price

Used relative to drug pricing.


Critical Access Hospital



Complication or Co-




Correct Coding Initiative

Officially known as the Medicare National Correct Coding Initiative (NCCI), CCI code-pair edits are automated prepayment edits that prevent improper payment when certain codes are submitted together for Part B-covered



Cost to Charge Ratio



Clinical Documentation Improvement



Code on Dental Procedures and Terminology

Clinical code-set owned, maintained and published annually by the American Dental Association; used to describe dental

services and procedures provided by dental health professionals.


Case Mix Index

Case mix index (CMI) is the average relative weight for a target population of patients whose inpatient services have been coded and grouped using the Medicare MS-DRG system. In general, the CMI reflects the relative severity of illness and complexity of care provided for the target group of patients. Example: A hospital with a CMI >1.000 is presumed to be caring for a patient population that is sicker and likely to require more resource consumption than a hospital with a CMI <1.000. CMI is calculated by summing the relative weights of the assigned DRGs for the target population and dividing by the total number of patients in

the target population.


Centers for Medicare and Medicaid


Proprietary clinical code-set owned, maintained and published annually by the American Medical Association.


Current Procedural Terminology



Discharges Not Final Billed



Discharges Not Final Coded



Diagnosis Related Group

A statistical system used to classify inpatient hospital stays into clinically similar groups of cases requiring similar care and treatment and consuming a similar level of healthcare resources. The DRG system was originally developed for Medicare as a prospective payment mechanism for inpatient services.


Fee For Service

Healthcare payment models where services are typically not bundles and are paid for using a cost or negotiated rate for each service provided.


Healthcare Common Procedure Coding




Health Information Management

Most commonly used to describe hospital operations related to management and maintenance of patient-specific

healthcare information maintained in hard-copy or electronic "medical records."


Health Level Seven International

A framework and set of standards used for the exchange, integration, sharing and retrieval of electronic health



International Classification of Diseases - 10th Revision

Maintained by the World Health Organization (WHO), the International Classification of Diseases (ICD) is the standard diagnostic tool for epidemiology, health management and clinical purposes. This includes the analysis of the general health situation of population groups. It is used to monitor the incidence and prevalence of diseases and other health

problems. The 10th revision was endorsed by WHO in 1990 and many WHO member states began using it in 1994.


International Classification of

Disease - version 10 - Clinical Modification

United States' adaptation of ICD-10 for the purpose of assigning and reporting clinical codes for documented diagnoses.


International Classification of Disease - version 10 - Procedure Coding


Procedure coding system specifically developed to replace Volume 3 of the ICD-9-CM system for the purpose of coding and reporting inpatient services and procedures.


International Classification of Disease - version 9 - Clinical Modification

United States' adaptation of ICD-9 for the purpose of assigning and reporting clinical codes for diagnoses and healthcare related services and procedures. ICD-9-CM Volumes 1 and 2 are used for reporting diagnoses (DX) and ICD-9-CM Volume 3 is specific for reporting services and

procedures (PX).


Inpatient Prospective Payment System



Local Coverage Decisions

Medicare payment policy documents developed and maintained at the local level by local or regional Medicare Contractors. LCDs were previously known as Local Medical

Review Policies (LMRP).


Major Complication or Co-Morbidity



Medicare Severity

Diagnosis Related Group

Severity-adjusted DRG payment methodology implemented

by Medicare on October 1, 2007 for inpatient, acute care services. See: DRG


Medically Unlikely Edits

The CMS developed Medically Unlikely Edits (MUEs) to reduce the paid claims error rate for Part B claims. An MUE for a HCPCS/CPT code is the maximum units of service that a provider would report under most circumstances for a single beneficiary on a single date of service. Not all CPT/HCPCS codes have an MUE. MUE was implemented January 1, 2007

and is utilized to adjudicate claims at Carriers, Fiscal Intermediaries, and DME MACs.


National Coverage Determination

Medicare coverage is limited to items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury (and within the scope of a Medicare benefit category). National coverage determinations (NCDs) are made through an evidence-based process, with opportunities for public participation. In some cases, CMS' own research is supplemented by an outside technology assessment and/or consultation with the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC). In the absence of a national coverage policy, an item or

service may be covered at the discretion of the Medicare contractors based on a local coverage determination (LCD).


National Drug Codes



Not otherwise specified




Prospective Payment System



Principal Diagnosis

That condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care."


Patient Financial Services



Present on Admission

For each diagnosis code reported on an inpatient claim, a POA code is appended to indicate whether or not the condition represented by the diagnosis code was present at the time of admission. POS indicators carry specific payment

implications under Medicare IPPS.


Principal Procedure

The principal procedure (PPX) is one that was performed for definitive treatment rather than one performed for diagnostic or exploratory purposes, or was necessary to take care of a complication. When two procedures are performed that meet this definition, then the one most related to the principal diagnosis should be assigned as the

principal procedure.


Standard Analytical File



Secondary Diagnosis

Also called "other diagnoses;" UHDDS Definition for Other Diagnoses: "All conditions that coexist at the time of admission, that develop subsequently, or that affect the treatment received and/or the length of stay. Diagnoses that

relate to an earlier episode [and] which have no bearing on the current hospital stay are to be excluded."


Status Indicator



Secondary Procedure

Per UHDDS guidelines, all significant procedures are to be reported. Significant procedures include those that are surgical in nature; carry a procedural risk; carry an anesthetic risk; or require specialized training. Procedures that meet these guidelines and are listed in addition to the principal

procedure (see PPX) are commonly referred to as secondary procedures (SDX).


Type of Bill



Uniform Hospital Discharge Data Set