Medicare Glossary

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Term Definition
AAPCC

See Adjusted average per capita cost.

Accountable Care Organization (ACO)

An Accountable Care Organization (ACO) is a local health care organization, designated by an applicable purchaser (such as Medicare) to be accountable for all applicable expenditures and care of a defined population of beneficiaries.

Adjusted Average Per Capita Cost

(AAPCC) Medicare payments to contracting HMOs and CMPs for enrolled beneficiaries are based upon a formula the uses the adjusted average per capita costs per county as the initial basis for payment, with various demographic and other risk adjustments applied to this rate. The AAPCC has based on actuarial estimates of the per capita cost Medicare incurs paying claims on a fee-for-service (FFS) basis in a beneficiary's county of residence.

Affordable Care Act

See Patient Protection and Affordable Care Act (PPACA)

All patient diagnosis related groups

An enhancement of the original DRGs, designed to apply to a population broader than that of Medicare beneficiaries, who are predominately older individuals. The APDRG set includes groupings for pediatric and maternity cases as well as of services for HIV-related conditions and other special cases.

Ambulatory Surgical Center (ASC)

Certified facilities to provide outpatient surgical procedures.

Ambulatory Visit Group

Classification of outpatient care, similar in scope to the inpatient classification of care according to DRGs (Diagnosis-Related Groups.)

Base Year Costs

In Medicare, the amount a hospital actually spent to render care in a previous time period. Depending on the hospital's Medicare cost reporting period, the base year was the fiscal year ending on or after September 30, 1982 and before September 30, 1983 for hospitals in operation at that time.

Basic DRG Payment Rate

The payment rate a hospital will receive for a Medicare patient in a particular diagnosis-related group. The payment rate is calculated by adjusting the standardized amount to reflect wage rates in the hospital's geographic area (and cost of living differences unrelated to wages) and the costliness of the DRG.

Bundled Payment

Rather than paying separately for each item or service, a single payment is made for a defined group of services. The bundled payment may cover services furnished by a single entity (hospital or other provider) or it may be used to pay for items and services furnished by several providers in multiple care delivery settings. The bundled payment may cover services furnished by a single entity (hospital or other provider). In this context, bundled payment refers to a single negotiated episode payment of a predetermined amount for all services (physician, hospital, and other provider services) furnished during an episode of care. This could be paid prospectively or retrospectively.

Centers for Medicare & Medicaid Services

The federal agency under the Department of Health and Human Services responsible for the Medicare and Medicaid programs. Formerly called the Health Care Financing Administration (HCFA).

Chronic Care Improvement Program

The prior name applied top the Medicare Health Support program

CMS

Centers for Medicare and Medicaid Services

Competitive Medical Plan

Term used by HCFA (now CMS) in the Medicare+Choice program contracting with plans that are not federally qualified HMOs that contract under the HMO component of the program.

Comprehensive Primary Care Initiative

The Comprehensive Primary Care (CPC) initiative is a multi-payer initiative fostering collaboration between public and private health care payers to strengthen primary care. Medicare will work with commercial and State health insurance plans and offer bonus payments to primary care doctors who better coordinate care for their patients. Primary care practices that choose to participate in this initiative will be given resources to better coordinate primary care for their Medicare patients.

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