deductible

A fixed amount, usually expressed in dollars in the form of an annual fee, that the beneficiary of a health insurance plan must pay directly to the health care provider before a health insurance plan begins to pay for any costs associated with the insured medical service.

defensive medicine

The practice of health care providers ordering tests that may not be necessary to protect themselves from potential malpractice lawsuits. Said by some to be a major cause of high health care costs.

Deficit Reduction Act Of 2005 (DRA)

Made significant changes to the Medicaid program by allowing states to increase premiums and cost-sharing for families and to base benefits on private plans. The law also tightened long-term care asset transfers and capped the exemption for home equity at $500,000. Requires Medicaid beneficiaries to show proof of citizenship upon applying for or renewing their benefits.

defined benefit

A health insurance model used by an employer or government program where specified health services covered under the plan are standardized and guaranteed. The cost of providing the standard benefits may fluctuate. One example of a defined benefit plan is traditional Medicare. (Contrast with defined contribution.)

defined contribution

A health benefit model used by employers or government programs where health services covered may fluctuate based on choice of plan, but the employer or government contributes a set amount (percentage or dollar amount) towards the purchase of the selected health plan. A defined contribution plan limits the financial liability of employers or the government, because the contribution is defined, or fixed. (Contrast with defined benefit.)

delivery systems

Networks of providers and payers that provide care and compete with other systems for enrollees. Systems may include hospitals, physicians and other providers and sites offering a full range of preventive and treatment services. Also known as coordinated care networks, community care networks and integrated health systems.

demonstration project

An experimental program supported through a grant or a cooperative agreement, generally to establish or demonstrate the feasibility of new methods or types of services.

diagnosis-related group (DRG)

A way of determining payments to hospitals, used under Medicare’s prospective payment system (PPS) and by some other public and private payers. The DRG system classifies patients into groups based on the principal diagnosis, treatments and other relevant criteria. Hospitals are paid the same for each case classified in the same DRG, regardless of the actual cost of treatment.

direct care workers

Nursing assistants, home health aides, and personal care aides provide an estimated 70 to 80 percent of the paid hands-on, long-term services and supports and personal assistance received by Americans who are elderly or living with disabilities or other chronic conditions.

Direct Graduate Medical Education payment (DGME)

Medicare payment to approved teaching hospitals to help cover the direct costs of training residents to become board-eligible in their field. Hospitals receive full payments to help cover resident salaries, fringe benefits and compensation for attending physicians, for residents in their initial residency period (the minimum number of years required to qualify for board certification in that specialty) and half payments for residents who have completed their initial training and are sub-specializing. Direct GME payments vary significantly among hospitals and depend on the number of residents at the hospital, the hospital-specific per resident amount and the size of the hospital’s inpatient Medicare population.

direct-to-consumer advertising (DTC)

The use of mass media (television, newspapers, magazines, etc.) to reach the general public. DTC advertising is often used by the pharmaceutical industry to promote their products. These advertisements must meet certain standards under federal regulations.

Disproportionate Share Hospital Adjustment (DSH)

An increased payment under Medicare’s prospective payment system or under Medicaid for hospitals that serve a large share of low-income uninsured patients. The Affordable Care Act (ACA) reduced DSH allotments under the assumption that many formerly uninsured patients will gain coverage from Medicaid or the ACA marketplaces. The law also altered how DSH funds are allocated to hospitals. Effective for discharges occurring during or after FY 2014, hospitals receive 25 percent of the amount they previously would have received under the current statutory formula for Medicare DSH. The remainder, equal to 75 percent of what would have been paid as Medicare DSH, is available for an uncompensated care payment after the amount is reduced for changes in the percentage of uninsured individuals.

doughnut hole

Also known as “donut hole.” Coverage gap in Medicare Part D prescription drug coverage, as originally enacted, where enrolled beneficiaries paid 100 percent of their prescription drug costs after their total drug spending exceeded an initial coverage limit until they qualified for catastrophic coverage. Beginning January 1, 2011, the Affordable Care Act (ACA) began shrinking the doughnut hole by reducing beneficiary copayments each year, until the doughnut hole is essentially eliminated by 2020. (See Medicare chapter.)

drug tier

Most drug benefit plans classify drugs on a formulary into groups called “tiers” and establish different levels of cost-sharing for each tier. Lower tiers may have a fixed dollar copayment, but higher tiers increasingly use a percentage of drug cost to determine a patient’s cost share.

dual eligible

A Medicare beneficiary who also receives either a full range of Medicaid benefits offered in his or her state, or help with Medicare out-of-pocket expenses. (Also see Medicare Savings Programs, Qualified Medicare Beneficiary and Specified Low-Income Medicare Beneficiary.) To promote better coordination of Medicare and Medicaid services for dual eligibles, the Affordable Care Act (ACA) created a new Federal Coordinated Health Care Office — an “Office of Duals” — within the Centers for Medicare & Medicaid Services.