balance billing

A provider’s bill to a covered person for charges above the amount paid by the health plan or insurer. In some cases this is because a provider is not part of the insurer’s network.

basic health program (BHP)

Beginning in 2015 under the Affordable Care Act (ACA), states have the option to create a basic health program to provide coverage to individuals with incomes between 133 and 200 percent of the federal poverty level, in lieu of having these individuals get coverage and premium subsidies through the state’s health insurance exchange. The plan would exist outside of the health insurance exchange and would include the essential health benefits as defined under the ACA. Cost-sharing under this plan would also be limited. If states choose to offer this plan, the federal government will provide states 95 percent of what it would have paid to subsidize these enrollees in the health insurance exchange. So far, only Minnesota and New York have chosen to implement a basic health program.


Goals set as a way for hospitals and doctors to analyze quality data, both internally, and against data from other hospitals and doctors to identify best practices of care and improve quality.

best practices

The most up-to-date patient care methods, which result in the best patient outcomes and minimize patient risk of death or complications.


A medicine derived from living cells cultured in a laboratory.

Biologics Price Competition and Innovation Act (BPCIA)

The Affordable Care Act amends the Public Health Service Act to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biological product. This pathway is provided in the part of the law known as the Biologics Price Competition and Innovation Act (BPCIA). Under the BPCIA, a biological product may be demonstrated to be “biosimilar” if data show that, among other things, the product is “highly similar” to an already-approved biological product.


A drug with a similar composition to its biologic “reference” drug that has no differences in safety, potency, or purity.


Automated monitoring of health data sources to identify trends that may indicate an emerging epidemic, whether naturally occurring or as a result of bioterrorism.

block grant

A lump sum of money that the federal government gives to a state or local government to spend for certain purposes. Normally, it is based on a formula, the objectives are broadly defined, and the grant’s source places relatively few limits on the money’s use.

bundled payments

A form of provider payment in which providers or hospitals receive a single payment for all of the care provided for an episode of illness, rather than per service rendered. Total care provided for an episode of illness may include both acute and post-acute care. The Affordable Care Act (ACA) established pilot programs in Medicare and Medicaid to pay a bundled payment for episodes of care involving hospitalizations.

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.