510(k) |
510(k)
One of two types of FDA authorization that permits a medical device or medical procedure to be legally marketed/sold in the U.S.
510(k) authorization is easier and faster to obtain than an FDA Pre-Market Approval (see, PMA).
It order for a 510(k) to be granted, USTR must prove to the FDA that the medical device or procedure is "substantially equivalent" to an already authorized FDA device or procedure (see, predicate).
Because a predicate device or procedure has already been granted FDA authorization, the new device or procedure -- shown to be "substantially equivalent" -- does not require extensive (if any) clinical testing.
A 510(k) takes approximately 90-days. It can take longer. |
| ABC Codes |
ABC Codes are reimbursement codes that were developed and patented by Alternative Link Systems for complementary and alternative medicine (CAM). |
| APC |
Ambulatory Payment Classification (APC)
The basic unit of payment in the Medicare Prospective Payment System for outpatient visits or procedures will be the APC. Under the APC system, outpatient services and procedures are classified for purchases of payment (similar to DRGs).
Under the APC system outpatient procedures and services are classified into 500 categories. These APCs cover approximately 5,000 outpatient services and procedures. Each APC is assigned a relative weight and this weight is used to calculate a basic payment, which is then subject to local adjustment. |
| ASC |
Ambulatory Surgical Center (ASC)
An organization that provides surgical services on an outpatient basis for patients who do not need to occupy an inpatient, acute care hospital bed. |
| BA |
Business Associate (BA)
A person or organization that performs a function or activity on behalf of a covered entity, but is not part of the covered entity's workforce. A business associate can also be a covered entity in its own right |
| C Codes |
Temporary Level II HCPCS code
Identify items that may qualify for "pass through" payments under the hospital outpatient prospective payment system (HOPPS) |
| CAM |
Complementary And Alternative Medicine |
| CE |
Covered Entity (CE)
Under HIPAA, this is a health plan, a health care clearinghouse, or a health care provider who transmits any health information in electronic form in connection with a HIPAA transaction. |
Claim Attachment |
Claim Attachment
Any of a variety of hardcopy forms or electronic records needed to process a claim in addition to the claim itself. |
| CLIA |
The Clinical Laboratory Improvement Act of 1988 (CLIA)
This program is regulated for compliance under guidelines set forth in Federal Regulations 42 CFR Parts 493.1 through 493.1850. |
CMS |
Centers for Medicare and Medicaid Services (CMS)
The U.S. Government agency with responsibility for the administration of the Medicare and Medicaid programs. Prior to June 14, 2001, known as the Health Care Financing Administration (HCFA) |
| COB |
Coordination of Benefits (COB)
A process for determining the respective responsibilities of two or more health plans that have some financial responsibility for a medical claim. Also called cross over. It is a provision in an insurance plan wherein a person covered under more than one group plan, has benefits coordinated such that all payments are limited to 100% of the actual charge or allowance. Most plans also specify rules whereby one insurer is considered primary and the other is considered secondary. |
| COBRA |
Consolidated Omnibus Budget Reconciliation Act (COBRA)
COBRA is a federal law that allows and requires past employees to be covered under company health insurance plans for a set premium. This program gives individuals the opportunity to remain insured when their current plan or position has been terminated. |
Code |
A code is a number given to a medical device or procedure. Without a code, insurance reimbursement will not be paid.
A code is granted by a committee composed of medical experts in the field related to the medical device or procedure, following careful review of all information related to the device or procedure.These experts work under either the AMA or Medicare's Health Care Financing Administration.
The documentation USTR presents to the appropriate code decision making body is in the form of a binder, a descriptor.
Note:
The medical device or procedure is already authorized by the FDA to be marketed in the United States. Now it is a matter of who will pay for it.
If only the patients will pay, no code is required -- so long as a physician is not required to use/supervise the device or perform / see to the performance of the procedure or write a prescription for the device or procedure.
If you can buy it in the drugstore, and do not need a prescription from a doctor, the device does not need a code.
However, if a manufacturer or provider wants (or hopes) that Medicare or an insurance company will pay, then a code is necessary. No code = no reimbursement.
There are two organizations that can decide to grant a code:
1. American Medical Association (see, CPT)
2. Medicare (see, HCFA) |
Consortiums |
A group of companies formed to promote a common objective or engage in a project that benefits all members. The relationship usually involves cooperation, sharing of resources and, sometimes, common ownership. |
| CORF |
Comprehensive Outpatient Rehabilitation Facility (CORF)
A CORF is a non-residential facility established and operated exclusively for the purpose of providing diagnostic, therapeutic, and restorative services for the rehabilitation of injured, disabled, or sick persons, at a single fixed location, by or under the supervision of a physician. |
| COT |
Chain of Trust (COT)
A term used in the HIPAA Security NPRM for a pattern of agreements that extend protection of health care data by requiring that each covered entity that shares health care data with another entity require that entity provide protections comparable to those provided by the covered entity, and that entity, in turn, require that any other entities with which it shares the data satisfy the same requirements. |
Coverage |
Coverage is a term that refers to a medical device or procedure that is paid for (reimbursed) by Medicare and/or private insurance companies.
How much is reimbursed is the subject of "pricing." |
CPT
Common Procedural Terminology
[a code issued by the AMA] |
Terminology means the words used in a specific field or profession.
To have "common" ("in broad use") terms makes it easier for professionals in the same field to "speak the same language."
Two organizations can issue a code for a medical device or medical procedure
(1) the AMA. It's codes are CPT codes; and
(2) Medicare (see, HCFA)
The AMA represents a large percentage of doctors. Any device or procedure used or prescribed by physicians must have a CPT code issued by the AMA, in order for reimbursement to occur under Medicare or private insurance companies.
Application submissions for a CPT code can be made 4 times a year. The AMA judges if a CPT code is to be issued based on the answer to the question: "Is this a new procedure or medical device". |
Descriptor |
A neatly packaged presentation, usually in a binder, which provides detailed information regarding a medical device or procedure.
USTR prepares a descriptor and submits it to either the AMA or Medicare (through Medicare's HCFA body). The code decision making body will then evaluate the medical device or procedure and issue (or not) a code.
Once a code is issued, insurance companies will reimburse the doctor/patient for the medical device and/or procedure. |
device
[medical device] |
Any object which is designed to be used in the prevention, care and/or health maintenance of a patient. |
| DME |
Durable Medical Equipment (DME)
DME is any medical equipment that can usually withstand repeated use, is useable at home, and is not beneficial to a person without an illness or injury. Splinting, orthopedic bracing, and wheelchairs are good examples of DME. |
| DMEPOS |
Durable Medical Equipment, Prosthetics, Orthotics and Supplies
CIGNA HealthCare Medicare Administration is one of four insurance companies selected by CMS to process Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) claims for the Medicare program. These companies function as Durable Medical Equipment Regional Carriers (DMERC). |
| DMERC |
Durable Medical Equipment Regional Carrier
Four insurance companies have been selected by CMS to process Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) claims for the Medicare program. Each company functions as a Durable Medical Equipment Regional Carrier (DMERC). |
| DRG |
Diagnosis Related Group (DRG)
A system of classifying medical cases for payment on the basis of diagnosis. Used under Medicare's prospective payment system (PPS) for inpatient hospital services. |
| Dx |
Diagnosis (Dx)
The provider's determination of a patient's condition, sign, or symptom, using the ICD-9-CM coding system. See International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) Coding . |
| EOB |
Explanation of Benefits (EOB)
A form received from the insurer which explains benefits that were paid and/or charges that were rejected. |
FDA
Food and Drug Administration |
The FDA is a Federally established organization that approves medical devices and medical procedures for use and sale in the U.S. and promotes itself as an unbiased watchdog for products/services sold in the U.S. that can or might affect the health of residents. |
FDA clearance
(see, 510(k)
or
FDA approval
(see, PMA) |
"Clearance" is a word used for a medical device or procedure that has gone through the 510(k) channel.
"Approval" is a word used for a medical device or procedure that has gone through the PMA channel.
The FDA authorizes a medical device or procedure to be sold in the United States.
How it is sold and who pays for it, is not an issue. Simply, it can be legally sold in the U.S. |
| FFS |
Fee-For-Service (FFS)
Refers to paying medical providers for individual services rendered. UCR, CPR and Fee Schedules are examples of fee for service systems. |
Final Payor |
When used in USTR marketing materials, the "final payor" is the insurance company |
| G-Codes |
Temporary Level II HCPCS code
Identify professional health care procedures and services that would be coded as CPT-4, but for which no CPT-4 code exists. |
HCFA |
Health Care Financing Administration (HCFA)
The U.S. Government agency with responsibility for the administration of the Medicare and Medicaid programs. Effective June 14, 2001, HCFA's name was changed to the Centers for Medicare and Medicaid Services (CMS). |
| H-Codes |
Temporary Level II HCPCS code
Used by state Medicaid agencies to identify mental health services. |
| HCPCS |
HCFA Common Procedural Coding System (HCPCS)
Health care insurers process over 5 billion claims every year. HCPCS codes were developed to help ensure that claims could be processed in a consistent and simplified way. HCPCS codes are divided into three subsystems: Level I, Level II and Level III, each designated for a specific purpose.
It is a three-level coding system, consisting of: CPT, National or Level 2, and Local or Level 3 codes. CPT and National Level 2 codes are recognized and used by the majority of health care insurers.
A medical code set that identifies health care procedures equipment, and supplies for claim submission purposes. It has been selected for use in the HIPAA transactions. |
HCPCS
Health Care Procedural Coding System
a code issued by HCFA
[Health Care Financing Administration] |
One of two types of Codes (for the other, see, CPT)
Medicare seeks medical devices and/or procedures which are uniquely different in design, use and function to existing devices or procedures ("breakthrough technology").
It wants healthier seniors so it can reduce payments for medical expenses.
Medicare seeks "breakthrough" technologies that can keep seniors healthier, longer.
Applications for a HCPCS are accepted in April and decisions are made in November. |
HCFA
Health Care Financing Administration |
A federal agency that evaluates and administers medical technology, reimbursement codes, and national billing and fee schedules. |
| HIPAA |
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
A Federal law that allows persons to qualify immediately for comparable health insurance coverage when they change their employment relationships. Title II, Subtitle F, of HIPAA gives HHS the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care information. Also known as the Kennedy-Kassebaum Bill, K2, or Public Law 104-191 |
HMO |
Health Maintenance Organization (HMO)
Prepaid health plans that provide a range of services in return for fixed monthly premiums or other payment methods. Virtually any organization can sponsor an HMO, including the government, medical schools, hospitals, employers, labor unions, and insurance companies. |
ICD-9-CM |
International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)
Refers to the International Classification of Diseases, 9th Revision, Clinical Modification. A standardized system of describing diagnoses and procedures. The coding and terminology provide a uniform language that will accurately designate primary and secondary diagnosis and provide for reliable, consistent communication on claim forms. |
| IDE |
An investigational device exemption ( IDE ) allows the investigational device to be used in a clinical study in order to collect safety and effectiveness data required to support a Premarket Approval (PMA) application or a Premarket Notification [510(k)] submission to FDA. Clinical studies are most often conducted to support a PMA. Only a small percentage of 510(k)'s require clinical data to support the application. Investigational use also includes clinical evaluation of certain modifications or new intended uses of legally marketed devices. All clinical evaluations of investigational devices, unless exempt, must have an approved IDE before the study is initiated. |
Indemnity |
(1) obligation to make good any loss or damage another person has incurred or may incur
(2) right that the person suffering loss or damage is entitled to claim. |
| IRB |
Institutional Review Boards
Under FDA regulations, an IRB is an appropriately constituted group that has been formally designated to review and monitor biomedical research involving human subjects. In accordance with FDA regulations, an IRB has the authority to approve, require modifications in (to secure approval), or disapprove research. This group review serves an important role in the protection of the rights, safety and welfare of human research subjects.
The purpose of IRB review is to assure, both in advance and by periodic review, that appropriate steps are taken to protect the rights, safety and welfare of humans participating as subjects in the research. To accomplish this purpose, IRBs use a group process to review research protocols and related materials (e.g., informed consent documents). The IRB must monitor and review an investigation throughout the clinical study. |
| J-Codes |
J Codes
A subset of the HCPCS Level II code set with a high order value of "J" that has been used to identify certain drugs and other items. The final HIPAA transactions and code sets rule states that these J codes will be dropped from the HCPCS, and that NDC codes will be used to identify the associated pharmaceuticals and supplies.(However, the most recent information indicates that J-Codes may remain.) |
| K-Codes |
Temporary Level Il HCPCS code
Used by DMERCs in situations when the national permanent HCPCS level II codes do not include codes needed to implement a DMERC medical review policy. |
| Local Code(s) |
Local Code(s)
A generic term for codes defined for a state or other political subdivision, or for a specific payer. This term is most commonly used to describe HCPCS Level III Codes, but also applies to state assigned Institutional Revenue Codes, Condition Codes, Occurrence Codes, Value Codes, etc. |
| LMPR |
Local Medical Review Policy |
Medicare |
A national health program established by the federal government to provide medical and hospital care for older people and for the needy. The money comes from Federal funds. |
| NDC |
National Drug Code (NDC)
A medical code set that identifies prescription drugs and some over the counter products, and that has been selected for use in the HIPAA transactions. |
| Non-Participating Provider (Medicare) |
Non-Participating Provider (Medicare)
A provider who does not sign a Medicare participating agreement, and therefore is not obligated to accept assignment on all claims. |
| PAR |
Participating Provider (PAR)
A hospital, pharmacy, physician or ancillary services provider who has contracted with a health plan to provide medical services for a determined fee or payment. |
| Pass Through |
Transitional Pass-Through Payment
A mechanism that allows for additional payment for "new technology" under the Medicare Outpatient Prospective Payment System (OPPS). These payments are for medical products that were not included in the 1996 CMS cost study from which APC's were derived and are in addition to the related APC payment.
For medical devices, transitional pass-through payment is based on hospital charges adjusted by a hospital-specific cost-to-charge ratio enveloped by CMS for this purpose. Separate payment will eventually be phased out as CMS incorporates costs for new technology into the overall APC payment. |
| Payment |
Payment
Payment refers to the amount of reimbursement provided to the hospital and the physician for services related to the procedure. |
| PCA |
Progressive Corrective Action
(PCA) review was developed by CMS to conduct medical reviews of sampled claims to identify potential problems, lower error rates and increase education to providers. |
PCP |
Primary Care Provider (PCP)
A healthcare professional who acts as a member's personal healthcare manager. The PCP evaluates a patient's medical condition and either treats the condition or coordinates required healthcare services. |
PMA
Pre-Market Approval |
FDA approval category
The more difficult to obtain FDA authorization -- the other being a 510(k) clearance.
It is more difficult because the medical device or procedure is NOT "substantially equivalent" to something already being marketed (a predicate device) in the U.S.
This device or procedure has a higher level of risk in use and/or it is based upon such a new technology that the FDA requires clinical studies and far more detailed information before it is willing to authorize a medical device or procedure to be sold in the U.S.
A PMA takes at least 180 days. It can take far longer. |
POS |
Point of Service Plan (POS)
The newest type of managed care organization that differs from others in one critical aspect. Insureds who decide to go outside the plan for health care services receive reduced benefits. |
PPO |
Preferred Provider Organization (PPO)
An arrangement whereby an insurer or managing entity contracts with a group of health care providers who furnish services at lower than usual fees in return for prompt payment and a certain volume of patients. |
PPS |
Prospective Payment System (PPS)
Under Medicare, payments to hospitals for inpatient services are prospectively determined amounts based on the DRG assigned at discharge. |
Predicate |
This is a word used to describe a medical device or medical procedure that already exists and has already received FDA authorization to be marketed in the United States. |
Pricing |
How much money will an insurance company pay for a medical device or procedure is the subject of "pricing". In its broadest sense, the pricing must be "reasonable" and "necessary".
Medicare does not place much of a limit on how much it is willing to pay for a device or procedure so long as the device/procedure is proven to be of a "substantial" benefit over an existing device or procedure. |
Procedure |
A word that describes an action taken to prevent, care for or maintain the health of a person. A chiropractor uses his hands to correct a misalignment of a patient's skeletal structure.This is a procedure. It has a agreed upon pricing, it is covered by insurance companies (coverage) and will be reimbursed (reimbursement) by them. |
| Q Codes |
Temporary Level II HCPCS code
Identify services that would not be given a CPT-4 code such as drugs, biologicals, and other medical equipment or services. |
RBRVS |
Resource Based Relative Value Scale (RBRVS)
A government mandated relative value system implement January 1992 that is used for calculating national fee schedules for services provided to Medicare patients. Physicians are paid on relative value units (RVUs) for procedures and services. The three components of each established value are: work RVU, practice expense RVU, and malpractice expense RVU. |
Regional Medicare |
CMS has 10 ROS (Regional Offices) that work closely together with Medicare contractors in their assigned geographical areas on a day-to-day basis. Four of these ROS monitor Network contractor performance, negotiate contractor budgets, distribute administrative monies to contractors, work with contractors when corrective actions are needed, and provide a variety of other liaison services to the contractors in their respective regions. |
Reimbursement |
Reimbursement means to be repaid. When used in the medical field, the term means that Medicare and/or an insurance company is going to pay for the medical device or procedure.
Not every medical device or procedure needs to have reimbursement. But when it is, sales and profits can greatly increase.
For reimbursement to be available, USTR needs to submit a descriptor so that a code is issued. |
| Rights |
The HHS entity responsible for enforcing the HIPAA privacy rules. |
RVU |
Relative Value Units
A government mandated relative value system
implemented January 1992 that is used for calculating national fee
schedules for services provided to Medicare patients. Physicians are paid
on relative value units (RVUs) for procedures and services. The three
components of each established value are: work RVU, practice RVU, and
malpractice RVU.
|
| SADMERC |
Statistical Analysis Durable Medical Equipment Regional Carrier
SADMERC is Palmetto Government Benefits Administrators and is contracted by HCFA (Health Care Financing Administration to assist suppliers and manufacturers in the proper use of the HCFA Common Procedure Coding System (HCPCS). The HCPCS is used to identify items of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) for purpose of Medicare billing. |
Synergistic |
describing cooperation amongst distinct entities, working together |
| T-Codes |
Temporary Level II HCPCS code
Used by state Medicaid agencies for Medicaid Program administration. |
Technology Assessment |
USTR's action of analyzing a medical device to determine a realistic value.
This allows manufacturers to judge cost. When USTR provides this information to an insurance company, it does so that it can maximize how much an insurance company will pay for the use of the medical device. |
Technology Assessment Insurer Management Network |
This service basically can provide manufacturers of medical devices insight into new product lines. It can also provide insurance companies with advance notice of emerging technologies which, if used, may reduce their reimbursement expenses. |
Temporary Code |
A temporary code is one assigned to a procedure or device to get it recognized as a legitimate procedure. Getting a temporary code is a step used to bridge from no code to a CPT 1 national code. |
Third-Party |
Someone other than the parties directly involved in an action or transaction; having no legal interest in the matter.
For example, the doctor and patient are "directly" involved in an action.
The insurance company is not directly involved. It simply pays (reimburses) for the service. The insurance company is a third-party. |
| TPS |
Third Party Administrator (TPA)
An organization that processes health care claims without bearing any insurance risk. |
| UCR |
Usual, Customary and Reasonable (UCR)
A method of determining benefits by comparing the provider's charges to those of his or her peers in the same community and specialty. |
