The following seven definitions are need to know for AccuReports® Users. The Alphabetized Healthcare Acronyms Defined section that follows provides more general information for healthcare business professionals.
FRG and AccuReports® Basics
FRG Financial Recovery Group
Financial Recovery Group is a healthcare information technology company established in 1999 first to perform overpayment and recovery audits for health plans and later adding the two service lines of online analytical reporting software and medical economics advisory services for substantial financial risk and value-based contracts.
AR6 AccuReports® Version Six
AccuReports® Version Six is application software produced by FRG in 2019 to make it easy to identify opportunities to improve the financial performance of risk, shared savings and incentive contracts. Drill-through group, center and PCP summaries to member-level revenue, claims and pharmacy detail. AccuReports® was originally released in 2001 to help health plans distribute data and provider organizations aggregate data from multiple health plans. It has been re-released with enhancements in 2005, 2011, 2014 and 2019.
EFR Expense to Funding Ratio
The Expense to Funding Ratio is the fraction created by dividing the total medical expenses for a panel of members for a chosen time period by the corresponding medical cost budget. The medical cost budget is computed by multiplying the premium available to the risk pool by the target medical loss ratio for the panel manager (e.g. the group, center or PCP). EFRs below 100% mean the panel is consuming fewer resources than are allocated and thus creating a surplus or savings. EFRs over 100% indicate the presence of a deficit from either a revenue shortfall or an excess expense trend.
IBNR Incurred But Not Reported
IBNR is an estimate of medical claims that are expected to be presented for payment for a historical period but for a variety of reasons have not actually yet been paid. These estimates are made by the actuarial staff of a site sponsor or by the health plan that is the source of the IBNR data. IBNR is most volatile in the three most recent past months because that period is the least complete.
LMS Learning Management System
A Learning Management System is a software application for the administration, documentation, tracking, reporting and delivery of educational courses or training programs. FRG’s LMS helps new AccuReports® users learn the basics of the system and become certified through instructional videos and knowledge checks.
MLR Medical Loss Ratio
A Medical Loss Ratio is the fraction created by dividing the total medical expenses for a panel of members for a chosen time period by the total premium collected. Plan sponsors like CMS and state-specific Medicaid programs can mandate that HMOs spend a specific percentage (e.g. 85%) of premium collected on medical costs in aggregate. In many cases, any underspend is returned to the sponsor. Mathematically, MLR is computed as follows: if an insurer spends 80 cents out of every premium dollar to pay medical claims and fund activities that improve the quality of care, the insurer has a medical loss ratio of 80%. The MLR is equivalent to the EFR multiplied by the Target Loss Ratio for the panel.
PMPM Per Member Per Month
Per Member Per Month is a common insurance mechanism to express and compare medical economics statistics. Since the size of a population has a direct impact on the revenue provided to support its needs and the expenses paid for its medical services, converting revenue and expense items for a population into PMPMs allows an analyst to understand the average trends and compare them to others. Appropriate use PMPM statistics to develop comparisons requires understanding the underlying population and knowing the number of months in the computation.
ACO Accountable Care Organizations
Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers who voluntarily affiliate to provide coordinated high-quality care to their Medicare patients. For more information visit: https://innovation.cms.gov/initiatives/ACO/
AMA American Medical Association
The American Medical Association (AMA) was founded in 1847 and incorporated in 1897. It is the largest association of physicians, both allopathic (MD) and osteopathic (DO), and medical students in the United States.
CCLF Claim and Claim Line Feed
Claim and Claim Line Feed (CCLF) files are provided by CMS to ACO’s on a regular basis during the contract period so that they may understand the resource use patterns of their assigned population. CCLF files do not contain data on Medicare beneficiaries who have elected not to share their medical claims data. When an ACO has a defined service network provider roster, these files can be organized to understand whether assigned beneficiaries are receiving services within the ACO’s clinically integrated network or outside thereof. Interestingly, CCLF files can also include claims history for individuals who are not listed on the attribution table. FRG believes this data can be used to identify the members who may become attributed in the future due to having a history of service with an ACO provider.
CDHP Consumer-Directed Health Plan
Consumer-Directed Health Plans (CDHPs) come in various forms, but most commonly a CDHP offers a high-deductible health plan paired with a spending account for out-of-pocket costs such as a Health Savings Account (HSA) or integrated Health Reimbursement Arrangement (HRA).
CHIP Children’s Health Insurance Program
The Children’s Health Insurance Program (CHIP) is administered by the United States Department of Health and Human Services and provides matching funds to states providing health insurance for families with children.
CMPL Civil Monetary Penalties Law
The Civil Monetary Penalties provisions of 42 U.S. Code § 1320a–7a. authorize the Secretary of Health and Human Services to assess fines and exclude individuals and organizations from federal programs if they are found to have defrauded or abused the resources of Medicare and Medicaid programs. Follow these links for additional information: https://oig.hhs.gov/fraud/enforcement/cmp/cmpa.asp or https://www.law.cornell.edu/uscode/text/42/1320a-7a
CMS Centers for Medicare and Medicaid Services
The Centers for Medicare and Medicaid Services (CMS) administers Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) through its own authority under the United States Department of Health and Human Services (HHS) and in partnership with states.
DME Durable Medical Equipment
Durable Medical Equipment (DME) is any equipment that provides therapeutic benefits to patients with certain medical conditions and is of a substantial and typically mechanical or pneumatic nature. According to Medicare, such devices include, for example, wheelchairs, crutches, walkers, test strips, hospital beds, oxygen and breathing assist devices, etc.
DOJ Department of Justice
The Department of Justice is an executive department of the U.S. government, responsible for the enforcement of the law and administration of justice in the United States, equivalent to the justice or interior ministries of other countries.
EHR Electronic Health Record
An Electronic Health Record (EHR), synonymous with Electronic Medical Record (EMR), is an electronic version of a patient’s medical history that is maintained by the provider over time and may include all clinical data relevant to that persons care under a particular provider, including demographics, progress notes, problems, medications, vital signs, past medical history, immunizations, laboratory data and radiology reports.
EPO Exclusive Provider Organization
An Exclusive Provider Organization (EPO) is a form of health plan in which care for members is only covered if provided by the doctors and hospitals within the EPO network. There are no out-of-network benefits.
FCA Civil False Claims Act
The Civil False Claims Act is a federal law that imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. It is the federal government’s primary litigation tool in combating fraud against itself.
FDR First Tier, Downstream and Related Entities
First tier, downstream, and related entities are individuals or entities that are providing services under a Medicare Part C (Advantage) or Medicare Part D (Pharmacy) program. Medicare Advantage and Part D organizations have a contract with CMS. First Tier entities have a contract with a Medicare Advantage or Part D organization. Downstream entities are involved below the level of the First Tier entities in providing services. Related Entities are those that share ownership and control with the top tier MAO or Part D organization and are involved in their management functions, property leases, materials or providing services to enrollees.
FWA Fraud, Waste and Abuse
Every plan sponsor, first tier, downstream and related entity (FDR) must have an effective compliance plan, anti-fraud plan, and fraud and abuse policies and procedures in place to address fraud, waste, abuse and recovery. These procedures should assist employees and agents in detecting, correcting, preventing and reporting fraud, waste and abuse.
HCC Hierarchical Condition Category
Hierarchical Condition Categories (HCCs) are the fundamental elements of the models used to align medical expenditure to expected cost through risk adjustment. HCCs were first joined with Diagnostic Cost Group (DCGs) in the all-encounter risk adjustment model implemented for Medicare+Choice in 2004 based on analysis from 2000 (see https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Reports/downloads/pope_2000_2.pdf). In 2020, HCCs, defined by clusters of related ICD-10 diagnosis codes and which can be given a higher significance based on the presence of comorbidities (e.g. diabetes Code: 19 vs diabetes with complications code: 18), are used to develop Medical Risk Adjustment (MRA) scores which in turn are used by CMS to set the capitated premium for Medicare Advantage plans so that revenue follows clinical complexity and expected cost.
HDHP High-Deductible Health Plan
A high-deductible health plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is also a requirement for having a Health Savings Account (HSA, defined below).
HEDIS Healthcare Effectiveness Data & Information Set
The Healthcare Effectiveness Data & Information Set (HEDIS) is a set of healthcare performance measures widely used in the managed care industry. The standards were developed and are maintained by the National Committee for Quality Assurance (NCQA). HEDIS guidelines are used to measure the quality of care delivery based on ratios of eligible beneficiaries receiving recommended service (e.g. rate of adult females receiving mammograms, rate of adult males receiving prostate screening, rate of diabetics with blood sugar in control range, etc.). These ratios in their composite form across all measured categories (i.e. measures) are compiled with Consumer Assessment of Healthcare Providers and Systems (CAHPS) and Health Outcomes Survey (HOS) results to form the basis of the Star Ratings program in Medicare. HEDIS measures are also used in combination with state-specific measures of quality to evaluate health plan performance in Medicaid Managed Care contracts.
HHS Health and Human Services
The Department of Health and Human Services is cabinet-level department of the U.S. federal government with the goal of protecting the health of all Americans and providing essential human services. Each presidential administration appoints HHS leaders for approval by the Senate. The Centers for Medicare and Medicaid Services (CMS) is an agency of this department.
HIE Health Information Exchange
Electronic health information exchange (HIE) allows doctors, nurses, pharmacists, other health care providers and patients to appropriately access and securely share a patient’s vital medical information electronically, thereby improving the speed, quality, safety and cost of patient care.
HIPAA Health Insurance Portability and Accountability Act
HIPAA is the federal Health Insurance Portability and Accountability Act of 1996. The primary goals of the law is to make it easier for people to keep health insurance, protect the confidentiality and security of healthcare information and help the healthcare industry control administrative costs.
HMO Health Maintenance Organization
A health insurance organization to which subscribers and or their sponsors pay a predetermined fee in return for access to a range of medical services from physicians and other healthcare workers contracted with the organization.
HRA Health Reimbursement Arrangement (1)
These arrangements enable employers to provide all employees of a particular class within their payroll system with a fixed budget for buying medical insurance (in 2020) or reimbursing medical expenses under specific circumstances set by law and refined by the employer. Funds are allocated for reimbursement but not provided upfront: in fact, only after medical expenses are incurred or premiums paid, can employees request reimbursement through a debit card at the time of service or by providing receipts as part of an established reimbursement process. If any portion of the employee’s allocation is left unspent, it reverts to the employer. The amount used and unused is tracked in an account, often referred to as a Health Reimbursement Account, with the same acronym. These arrangements are IRS-approved, employer-funded, and tax-advantaged health benefit plans.
HRA Health Risk Assessment (2)
A Health Risk Assessment is a basic medical exam in which biometric, patient and family medical history data is collected to assess health status at the time of the exam. HRAs are a fundamental component of Medical Risk Adjustment because they afford clinicians the opportunity in a clinical setting to record key diagnostic information which can correct incompleteness in the risk adjustment record. This is particularly important part of new member enrollment intake for Medicare beneficiaries who have recently aged-in and is often covered by carriers at no cost to the patient.
HSA Health Savings Account
A Health Savings Account is an account that employees who have opted for a high-deductible health insurance policy can use to accrue pre-tax savings for medical expenses (but not policy premiums), typically through a payroll deduction. Additional details are available on HealthCare.gov.
IDN Integrated Delivery Network
A network of health care organizations under a parent holding company. Some IDNs have an HMO component, while others are a network of physicians only, or of physicians and hospitals.
IDS Integrated Delivery System
See IDN.
IPA Independent Practice Association
Groups of independent physicians who associate through a contract or who enter into arrangements with a central entity for the purpose of providing services to managed care organizations on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis are collectively referred to as IPAs. An IPAs organizational structure depends on the scope of services provided to the MCOs and also to the associated physicians. The structure is often defined by the variety of specialties that its providers represent (e.g. multi-specialty, or primary care only, etc.) and their relationship to the central entity: employed or sub-contractor affiliate arrangements. In FRG’s experience, the concentration of employed providers has a direct correlation with the IPA management team’s ability to enforce compliance provisions and deliver financial performance on risk contracts.
MACRA The Medicare Access and CHIP Reauthorization Act
MACRA was bipartisan legislation signed into law April 16, 2015. It changed the payment system for doctors who treat Medicare patients by integrating value based payment models into a multi-year payment structure. Most notably, it also revised the Balanced Budget Act of 1997 in so much as it made the payment rates for providers permanently associated with the incentive payment model instead of the annual increase in physician fee schedules that became part of revenue reconciliation for the preceding decade under the Sustainable Growth Rate Formula.
MAO Medicare Advantage Organization
MAOs are a type of health insurance company that provides coverage within Part C of Medicare (Medicare Advantage) in the United States. Medicare Advantage plans receive capitated risk adjusted revenue from CMS and pay primary care providers for managed health care services either on a monthly fee per enrollee (capitation), or on a fee for service basis provided (fee-for-service) at their discretion. Enrollment in MA plans reached 22 million, or 34% of all Medicare beneficiaries in 2019, according to the Kaiser Family Foundation. Read more on CMS’s assessment of MA plans and their relationship to Value Based Care on the Innovation Center’s website.
MIPS Merit-Based Incentive Payment System
The Merit-Based Incentive Payment System is one of the two payment tracks created under MACRA; the other is the Advanced Alternative Payment Model (AAPM) track. MIPS adjusts payment based on performance in four performance categories: Quality, Cost, Advancing Care Information (ACI), and Clinical Practice Improvement Activities (CPIA). For more information visit CMS.gov.
MLN Medicare Learning Network
The Medicare Learning Network® is the name for official Centers for Medicare & Medicaid Services (CMS) national provider education products designed to promote national consistency of Medicare provider information.
MMA Medicare Modernization Act
The Medicare Prescription Drug, Improvement and Modernization Act, also called the Medicare Modernization Act or MMA, is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program’s 38-year history.
MRA Medical Risk Adjustment
Medicare Risk Adjustment (MRA) refers to the process of adjusting Medicare patient risk scores according to their demographic characteristics and the diagnostic codes assigned to them by healthcare professionals. For more information about the background of Medicare Risk Adjustment and an overview of the process, click here.
MSO Management Services Organization
An organization owned by a group of physicians, a physician hospital joint venture, or investors in conjunction with physicians. MSO’s generally provide practice management and administrative support services to individual physicians and group practices. Like IPA’s, an MSO’s ability to deliver results depends significantly on its scope of services and organizational structure. MSO’s operating employed physician model provider organizations achieve risk contract and care gap closure at higher rates than affiliate model MSO’s in value-based care arrangements.
MSSP Medicare Shared Savings Program
According to the Centers for Medicare & Medicaid Services (CMS), the Medicare Shared Savings Program (MSSP) aims to encourage coordination and cooperation among providers to improve the quality of care for Medicare Fee-For-Service (FFS) beneficiaries and reduce unnecessary costs.
NAACOS The National Association of ACOs
Accountable Care Organizations (ACOs) offer enormous opportunities for patients and providers to work together to achieve enhanced quality of care, reduced costs and improved health outcomes. This national association of these organizations hosts conferences that facilitates advocacy to regulators.
NBI MEDIC National Benefit Integrity Medicare Drug Integrity Contractor
Established under section 1893 of the Social Security Act, the Medicare Integrity Program (MIP) calls for the Centers for Medicare & Medicaid Services (CMS) to enter into contracts with eligible entities to review provider actions, audit claims, report on overpayments, and reveal issues with Medicare program integrity.
NCQA National Committee for Quality Assurance
NCQA is a not for profit 501(c)(3) corporation that provides accreditation for physicians and health insurance companies and publishes the HEDIS guidelines. NCQA has also developed recognition programs for Patient Centered Medical Homes (PCMH). For more information, visit their website: https://www.ncqa.org/about-ncqa/
OIG Office of Inspector General
According to the organization’s own website (https://oig.hhs.gov/ ), the HHS OIG is the largest inspector general’s office in the Federal Government. Its 1,600 employees are dedicated to combating fraud, waste and abuse and to improving the efficiency of HHS programs. The majority of the OIG’s resources go toward the oversight of Medicare and Medicaid. The OIG under HHS also oversees the Center for Disease Control and Prevention (CDC), the National Institutes of Health (NIH) and the Food and Drug Administration (FDA).
PBM Pharmacy Benefit Manager
Is a third-party administrator (TPA) of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.
PCP Primary Care Provider
A primary care physician is a physician who provides both the first contact for a person with an undiagnosed health concern as well as continuing care of varied medical conditions, not limited by cause, organ system, or diagnosis. Since recently, the term is primarily used in the United States.
PDP Prescription Drug Plan
A prescription drug plan (PDP) is one option for individuals who want to enroll in the Medicare Part D prescription drug coverage, which subsidizes the costs of prescription drugs for enrollees. A prescription drug plan (PDP) is a stand-alone plan, covering only prescription drugs.
PHO Physician Hospital Organization
A PHO is a legal entity formed by a hospital and a group of physicians to further mutual interests and to achieve market objectives. A PHO generally combines physicians and a hospital into a single organization for the purpose of obtaining payer contracts, and in that way functions like an IPA (above).
POS Place of Service (1)
The setting in which medical care is provided. The most common places of service for operational and financial analysis are 11: Office (physician); 21: Inpatient Hospital; 22: Outpatient Facility; 23: Emergency Room; and 31: Nursing Facility. For a complete listing, visit the CMS website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Website-POS-database.pdf
POS Point of Service (2)
Point of Service is a term for a type of managed care health insurance plan in the United States. It combines characteristics of the health maintenance organization (HMO) and the preferred provider organization (PPO). The POS is based on a managed care foundation—lower medical costs in exchange for more limited choice.
PPO Preferred Provider Organization
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network.
PSRO Professional Standards Review Organizations
The Social Security Act provides for Professional Standards Review Organizations (PSROs) in order to promote the effective, efficient, and economical delivery of health care services of proper quality. PSRO’s are responsible for reviewing services for which payment may be made under the Act.
QIO Quality Improvement Organization
The QIO program is of the largest federal programs dedicated to improving health quality for Medicare beneficiaries to achieve the strategic goals of value based care. QIOs are multi-disciplinary groups of health quality experts, clinicians, and consumers and are of two types: 1) beneficiary and family centered and 2) innovation networks to improve safety, health, care coordination and clinical quality.
RAPS Risk Adjustment Payment System
The RAPS system encompases both a statistical process that takes into account the underlying health status of beneficiaries to estimate future costs of care and a computer system administered by CMS to collect the data relevant to building those statistics. More information about each can be found on the Risk Adjustment section of the CMS website.
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