income-related premium

Premiums for Medicare Part B and Part D that apply to higher-income Medicare beneficiaries. The Medicare Modernization Act of 2003 established an income-related Part B premium requiring higher-income Medicare beneficiaries to pay a greater share of average Part B costs (35 percent to 80 percent, depending on their income). Beneficiaries are required to pay the income-related Part B premium if their income is equal to or greater than $85,000 for an individual and $170,000 for a couple in 2010. The Affordable Care Act (ACA) froze the threshold for the income-related Part B premium at 2010 levels through 2019. The ACA also created an income-related Part D premium, effective in 2011, using the same surcharge percentages and income thresholds as for Part B. Similar to the Part B premium provision, the income thresholds for the Part D income-related premium are not indexed to increase annually, thus making more beneficiaries subject to the higher premiums each year.

Independent Payment Advisory Board (IPAB)

Created by the Affordable Care Act (ACA), the IPAB was intended to establish a board of 15 members appointed by the president and confirmed by the Senate for six-year terms. The board is tasked with submitting proposals to Congress to reduce Medicare spending by specified amounts if the projected per beneficiary spending exceeds the target growth rate. If the board fails to submit a proposal, the secretary of the Department of Health and Human Services is required to develop a detailed proposal to achieve the required level of Medicare savings. The secretary is required to implement the board’s (or his or her own) proposals, unless Congress adopts alternative proposals that result in the same amount of savings. The board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income subsidies under Part D. Due to relatively low growth in Medicare spending, the IPAB has not yet been triggered, and thus far, no one has been appointed to the board.

Indirect Medical Education adjustment (IME)

A Medicare payment supplemental to diagnosis-related group (DRG) payments for each beneficiary inpatient stay. It is intended to compensate teaching hospitals for the various costs associated with running an academic health center that trains and employs large numbers of medical residents. Many teaching hospitals tend to treat sicker patients with less insurance coverage, requiring a more costly mix of staff, and may use more expensive and complex interventions. (Also see Direct Graduate Medical Education payment.)

individual insurance market

The market where individuals who do not have group (usually employer-based) coverage purchase private health insurance. This market is also referred to as the non-group market.

individual mandate

A law requiring individuals to obtain health care coverage, and in some cases, forcing individuals to pay a penalty if they choose not to participate. The individual mandate of the Affordable Care Act (ACA) went into effect January 1, 2014. In July 2013, the Obama Administration announced that exemptions would be granted for certain people, including American Indians, those with religious objections and those facing financial hardships.


A person who is admitted to a hospital, usually for 24 hours or more.

Institute of Medicine (IOM)

A nonprofit organization that works outside the framework of government to ensure scientifically informed analysis and independent guidance on matters of biomedical science, medicine and health. The institute provides unbiased, evidence-based and authoritative information and advice concerning health and science policy to policy-makers, professionals, leaders in every sector of society and the public at large.

integrated provider

A group of providers that offers comprehensive and coordinated care, and usually provides a range of medical care facilities and service plans including hospitals, physician group practices, a health plan and other related health care services.

interchangeable biologic

An interchangeable biological product is biosimilar to an FDA-approved reference product and meets additional standards for interchangeability.  An interchangeable biologic may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product.

intergovernmental transfer (IGT)

Transfer of funds among or between different levels of government, including state-owned or operated health care providers, local governments, and non-state-owned or operated health care providers. The term is most often used in Medicaid, where transfers of governmental funds to the state Medicaid agency are used as the non-federal share to draw down federal matching funds for allowable Medicaid expenditures. States also use IGTs as the non-federal share to draw down federal matching funds for Medicaid Disproportionate Share Hospital payments.


The ability to exchange and use information; usually in a large heterogeneous network made up of several local networks. Interoperability is an issue with electronic medical records held by different providers.

Investigational New Drug (IND)

If a drug is successful in the initial stage of the FDA approval process (the preclinical phase, usually 3-4 years), its developer will submit an application to the FDA as an IND and will enter the clinical phase of the drug approval process.