Healthcare Compliance
HCR Definitions:
Actuarial Value: The percentage of total average costs for covered benefits that a plan will cover. Often referred to as a measure of the plan’s generosity. For example, a plan with an actuarial value of 70% will pay, on average, 70% of the costs of all covered benefits, and the plan participant would be responsible for 30% of the costs of all covered benefits. However, for any particular individual, the individual could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on the individual’s actual health care needs and the terms of the insurance policy.
Accountable Care Organization (ACO): A health organization in which provider payment is tied to quality metrics and reduction in overall cost of an assigned population. The ACO model seeks to improve beneficiary outcomes and promote value while slowing the growth in overall costs for a population of patients. It brings together coordinated networks of providers with shared responsibility to provide high quality care to their patients.
Adverse Selection: Occurs when sick individuals purchase health insurance in greater proportions than healthy individuals, thus raising the cost of health insurance premiums for everyone in a risk pool.
Allowed Amount: Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance" or "negotiated rate." If your provider charges more than the allowed amount, you may have to pay the difference. (See Balance Billing.) From healthcare.gov: https://www.healthcare.gov/glossary/allowed-amount/
Exchange Subsidies: Under the ACA, households that are below 400 percent but above 133 percent of the federal poverty line who have purchased health insurance in the exchanges are eligible to receive federal subsidies. The subsidies cover the premium amount above what these households are limited by the ACA to contribute to their health insurance premiums.
Excise Tax (also known as Cadillac tax): A 40 percent excise tax on High Premium Insurance Plans, that will be applied to the value of health insurance benefits exceeding a certain threshold ($10,200 for individual coverage and $27,500 for family coverage). The excise tax was to take effect in 2018 but has been repeatedly delayed and may be facing repeal. This tax is designed to discourage individuals and families from buying unusually high-cost insurance plans.
Health Insurance Exchange (Marketplace): A structured marketplace in which individuals would be able to purchase insurance from their choice of participating issuers. As part of the ACA, states can either be a state-based exchange, state partnership exchange, or federally-facilitated exchange. The responsibilities of both state and federal government differ in each scenario.
Independent Payment Advisory Board (IPAB): A government agency established by the ACA that is tasked with achieving specified savings in Medicare without affecting coverage or quality. Beginning in 2015, IPA B is required to make recommendations to reduce Medicare spending if per capita Medicare spending exceeds the specified target growth rate as set by CMS. From 2015 to 2017, the target growth rate is based on CPI. Beginning in 2018, the target growth rate is the increase in GDP per capita plus one percentage point.
Lawfully Present: For purposes of determining eligibility for the refundable premium tax credit (IRC section 36B), an individual shall be treated as lawfully present “only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States.” IRC 36B(e)(2).
Minimum Essential Coverage: Beginning in 2014, individuals must pay a tax if they do not have “minimum essential coverage,” and large employers will be subject to a potential penalty if they do not offer at least “minimum essential coverage” to at least 95% of their full-time employees. PPACA § 1501 added IRC §5000A(f)), which defines “Minimum essential coverage” as:
- Government sponsored programs including: Medicare, Medicaid, Children’s Health Insurance Program coverage (CHIP), TRICARE, coverage through Veterans Affairs, and Health Care for Peace Corps volunteers;
- Employer-sponsored plans including governmental plans, grandfathered plans and other plans offered in the small or large group market;
- Individual market plans, including grandfathered plans; or
- Other coverage designated as minimum essential coverage by HHS and/or the Dept. of the Treasury.
Minimum essential coverage includes the following:
- Employer-sponsored coverage (including COBRA coverage and retiree coverage)
- Coverage purchased in the individual market
- Medicare Part A coverage and Medicare Advantage
- Most Medicaid coverage
- Children's Health Insurance Program (CHIP) coverage
- Certain types of veterans health coverage administered by the Veterans Administration
- TRICARE
- Coverage provided to Peace Corps volunteers
- Coverage under the Non-appropriated Fund Health Benefit Program
- Individual coverage Health Reimbursement Arrangements integrated with individual coverage obtained by the individual outside of employer
Minimum essential coverage does not include coverage providing only limited benefits, such as coverage only for vision care or dental care, Medicaid covering only certain benefits such as family planning, workers' compensation, or disability policies.
Scope of Practice Laws: State laws that define the clinical services that nurses, pharmacists, and other non-physician health professionals can provide.
Tax Exclusion for Employer Provided Health Insurance: Excludes employer-provided health insurance benefits from taxable income and is considered a tax expenditure because it costs the federal government approximately $250 billion in lost revenue each year.
Value-Based Purchasing: Features additional payments to providers when they perform well on measures of value, such as improved preventative screenings or chronic disease management, and greater efficiency in care. By tying the financial incentives with quality measures, providers are expected to improve quality and achieve better health outcomes.