Accountable Care: care that centers on the patient and aligns their care team to support shared decision-making and help realize the best achievable health outcomes for all through equitable, comprehensive, high quality, affordable, longitudinal care (HCP-LAN).

Capitation: a way of paying health care providers or organizations in which they receive a predictable, upfront, set amount of money to cover the predicted cost of all or some of the health care services for a specific patient over a certain period of time (CMS).

Center for Medicare and Medicaid Innovation (CMMI) or CMS Innovation Center: develops and tests new healthcare payment and service delivery models to: improve patient care, lower costs, and better align payment systems to promote patient-centered practices (CMS).

Downside Risk: uncertainty associated with potential financial losses; a risk arrangement that includes both upside and downside risk may be referred to as a “two-sided risk arrangement” (CMS).

Fee-for-Service: Fee-for-service (FFS) is a method in which doctors and other health care providers are paid for each service performed. Examples of services include tests and office visits (HHS).

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): bipartisan legislation signed into law on April 16, 2015. MACRA created the Quality Payment Program (QPP) that:

  • Repeals the flawed Sustainable Growth Rate (PDF) formula;
  • Changes the way that Medicare rewards clinicians for value over volume;
  • Streamlines multiple quality programs under the new Merit Based Incentive Payments System (MIPS); and
  • Gives bonus payments for participation in eligible alternative payment models (CMS).

Medicare Advantage (MA) Plan: are health plans approved by Medicare but are run by private companies. These companies provide Medicare Part A and Part B covered services and may include Medicare drug coverage too. Medicare Advantage plans are sometimes called “Part C” or “MA” plans.  (CMS).

Pay for Performance (P4P): attach financial incentives/disincentives to provider performance. P4P ties reimbursement to metric-driven outcomes, best practices, and patient satisfaction (NEJM).

Population-based Payment (PBP): A payment mechanism by which providers receive reduced fee-for-service payments from CMS, with the amount taken out redistributed in monthly per-beneficiary per-month payments. (Next Generation ACO Request For Applications).

Risk: uncertainty associated with potential financial gains or losses (CMS).

Risk Arrangement: an agreement in which a CMS Innovation Center model participant is held financially responsible for the quality and cost of care delivered to beneficiaries in exchange for flexibilities regarding the way they deliver care (CMS).

Social Determinants of Health (SDoH): are the conditions in the environments where people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks. SDOH can be grouped into 5 domains: economic stability; education, access and quality; health care access and quality; neighborhood and built environment; and social and community context (HHS).

Special Needs Plan (SNP): a Medicare Advantage (MA) coordinated care plan (CCP) specifically designed to provide targeted care and limit enrollment to special needs individuals.  A special needs individual could be any one of the following:

  1. An institutionalized individual,
  2. A dual eligible, or
  3. An individual with a severe or disabling chronic condition, as specified by CMS.

A SNP may be any type of MA CCP, including either a local or regional preferred provider organization (i.e., LPPO or RPPO) plan, a health maintenance organization (HMO) plan, or an HMO Point-of-Service (HMO-POS) plan.  There are three different types of SNPs:

  1. Chronic Condition SNP (C-SNP)
  2. Dual Eligible SNP (D-SNP)
  3. Institutional SNP (I-SNP) (CMS).

Total Cost of Care: Total cost of care (TCOC) is a broad indicator of spending for a given population (i.e., payments from payer to provider organizations). In the context of population-based payment models, in which provider accountability spans the full continuum of care, TCOC includes all spending associated with caring for a defined population, including provider and facility fees, inpatient and ambulatory care, pharmacy, behavioral health, laboratory, imaging, and other ancillary services (HCP-LAN).

Upside Risk: uncertainty associated with potential financial gains; a risk arrangement that includes only upside risk may be referred to as a “one-sided risk arrangement” (CMS).

Voluntary alignment: Voluntary alignment is the process that lets Medicare FFS beneficiaries select, or “voluntarily align” with, a primary clinician. ACOs must notify beneficiaries of their ability to, and the process by which, he or she may identify or change the person he or she chose for the purposes of voluntary alignment (CMS).


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