Cadillac Tax

The popular name for the Affordable Care Act’s (ACA’s) excise tax on high cost employer-sponsored health coverage, which is a 40 percent tax on plans with values exceeding $10,200 for individual coverage and $27,500 for families. It is scheduled to take effect in 2020.

Cafeteria Plan (Section 125 Plan)

Provides participants an opportunity to receive certain benefits, such as reimbursement for some out-of-pocket medical expenses, on a pretax basis. It is a separate written plan maintained by an employer for employees that meets the requirements of Section 125 of the Internal Revenue Code.

CAHPS (H-CAHPS or CAHPS hospital survey)

The Consumer Assessment of Healthcare Providers and Systems is a national, standardized survey instrument and data collection methodology for measuring patients’ perspectives of hospital care, thus enabling valid comparisons to be made across all hospitals. CAHPS was developed by the Agency for Healthcare Research and Quality in partnership with numerous private organizations.


A fixed payment to provide health care services to an individual for a set period of time, regardless of the actual number or nature of services provided.


An entity that may underwrite or administer a range of health benefit programs. May refer to an insurer or a managed health plan.


A payer strategy in which an insurerisolates (“carves out”) a benefit and hires another organization to provide this service. Common carve-outs include behavioral health and prescription drugs. The technique is intended to allow the insurer to better control its costs.

case management

A process in which a health plan identifies covered persons with specific health care needs, then devises and carries out a plan to achieve the best patient outcome in the most cost-effective manner.

case mix

The mix of patients treated within a particular institutional setting, such as a hospital or within a particular health plan. Case mix may be measured by the severity of patients’ illnesses or the prospective use of care resources.

case mix adjustment

Change in payment to a health plan or provider to avoid overpaying or underpaying when health status or likely use of services varies from average.

Cash and Counseling

A former Medicaid program in some states that allowed certain Medicaid beneficiaries, frail elders and adults with disabilities to purchase their own personal care and related services. Medicaid provided a monthly allowance, the amount of which is determined after assessing the beneficiary’s need for community-based long-term services and supports. In October 2011, Cash and Counseling was replaced by the Community First Choice Option, a provision of the Affordable Care Act (ACA) that will be available in all states. (See Long-Term Services and Supports chapter.)

catastrophic health insurance

Health insurance that provides protection against the high cost of treating severe or lengthy illnesses. Such policies cover all or most medical expenses above a relatively high specified amount.

categorical eligibility

Medicaid’s eligibility pathway for individuals who can be covered. The program’s 25+ categories have been organized into five broad groups – children, pregnant women, adults in families with dependent children, individuals with disabilities and the elderly. In states that elected to expand their Medicaid programs, the Affordable Care Act (ACA) broadened Medicaid eligibility to all individuals under age 65 with incomes up to 133 percent of the federal poverty level and who are not eligible for Medicare. (See Medicaid and CHIP chapter.)

Center for Consumer Information and Insurance Oversight (CCIIO)

Created by the Affordable Care Act (ACA) to ensure compliance with the new insurance market rules, this agency of the U.S. Dept. of Health and Human Services oversees the medical loss ratio rules and assists states in reviewing insurance rates. In addition, it oversees the state-based insurance marketplaces, or exchanges, the temporary high-risk pool program and the early retiree reinsurance program. It also compiles and maintains data for an Internet portal providing information on insurance options. Formerly the Office of Consumer Information and Insurance Oversight.

centers of excellence

Health care facilities selected to deliver specific services, often exclusively, based on criteria such as experience, outcomes, efficiency and effectiveness.

certificate of need

The requirement that a health care institution obtain permission from an oversight agency before making major changes to its facilities or facility-based services, or before building new facilities.


A tool increasingly used by physicians in hospitals as a reminder to follow certain steps to reduce hospital-acquired infections or surgical errors.

cherry picking

The practice of insurance companies taking only those businesses or individuals that are good health risks, and avoiding higher health risks. Also called”skimming.”The Affordable Care Act (ACA) includes provisions, such as guaranteed issue and risk corridors, to reduce any incentive insurers may have to engage in cherry picking.

Children’s Health Insurance Program (CHIP)

A program created by a 1997 law to provide federal matching funds for states to spend on health coverage for uninsured kids. The program is designed to reach uninsured children whose families earn too much money to qualify for Medicaid but not enough to afford private coverage. Congress initially authorized CHIP for a 10-year period that expired at the end of September 2007. CHIP was reauthorized and enlarged early in 2009 in the Children’s Health Insurance Program Reauthorization Act (CHIPRA), which increased CHIP funding by about $32 billion through 2013 to cover an additional 4 million children. The Affordable Care Act (ACA) requires states to maintain existing income eligibility levels for children in CHIP (and Medicaid) until 2019, and it extended funding for CHIP through 2015. In 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) extended funding for CHIP until September 2017. It funds a 23 percent increase in federal matching rates for each state until September 2017. (See Medicaid and CHIP chapter.)

Choosing Wisely

An initiative of the American Board of Internal Medicine (ABIM) Foundation that promotes conversations between patients and physicians by helping patients choose care that is supported by evidence, not duplicative of other tests or procedures already received, free from harm, and truly necessary.

chronic condition

A condition that is not expected to improve, that lasts a year or longer or recurs, and may result in long-term care needs. Examples include Alzheimer’s disease, arthritis, diabetes, epilepsy and some mental illnesses.