• Bills patients for non-medically necessary services without a valid waiver on file.
• Exceeds the limiting charge.
• Bills a higher level of care than what was actually provided or needed.
• Requires a deposit or other payment from a Medicare beneficiary as a condition for admission, continued care, or other provision of services.

Although closely related, abuse is distinctively different than fraud. See also Fraud.

Active Treatment Period
The period covered by the physician's certification and recertification.

Actual Charge
The amount a physician or other practitioner actually bills for a particular medical service or procedure. Also referred to as "Billed Charge."

Adjustment
The reprocessing of a change to a previously settled claim. A new claim record will be created as a result of the adjustment. The original resolved claim will remain as it is on the file.

Administrative Law Judge (ALJ) Hearing
The third level of Medicare the appeals process. If at least $500.00 remains in controversy following a Hearing (the second level of appeals), further consideration may be made by an Administrative Law Judge of the Social Security Administration. The request for an ALJ must be made in writing within 60 days of the date of the Carrier’s fair hearing decision.

Admitting Physician
The physician responsible for admission of a patient to a hospital or other inpatient health facility. Some facilities have all admitting decisions made by a single physician (typically a rotating responsibility), called an admitting physician.

Advance Beneficiary Notice (ABN)
A notice given to the beneficiary to advise them that the service(s) may not be considered medically necessary by Medicare. ABNs are only required for services/procedures that are not medically necessary. Once the beneficiary has read a properly executed ABN, the beneficiary "knew, or could reasonably have been expected to know, that payment could not be made." ABNs are also referred to as "Waiver." See Waiver of Liability.

After Hours Services
Services provided outside the normal business operating hours. Extra payment is not allowed for services rendered after hours.

Allowed Charge (Medicare)
The amount Medicare will consider for payment for a given service or supply, before application of the deductible and coinsurance.

Ambulatory Surgical Center (ASC)
A free standing facility, other than a physician's office, where surgical and diagnostic services are provided on an ambulatory basis.

American Medical Association (AMA)
The national voluntary non-profit organization of professional medical personnel, composed of state and territorial medical societies and component county medical societies. The AMA attempts to speak for physicians nationally, conducts educational and publication services to members and (with member's dues) sponsors research to improve medical science.

Ancillary Services or Technology
Medical technology or services used directly to support basic clinical services, including diagnostic radiology, radiation therapy, clinical laboratory and other special services.

Assigned Claim
A claim type that directs payment to the provider/supplier. See also "Assignment."

Assignment (Medicare)
An agreement by a provider (physician or supplier) to accept Medicare beneficiary's rights to benefits under supplemental medical insurance (Part B), to bill the Medicare carrier rather than the patient, and to accept Medicare's approved charge paid by the carrier as payment in full (excluding the beneficiary's 20 percent coinsurance and the deductible). The provider may then bill the beneficiary only for the coinsurance and any applicable deductible.

Assignment Payment Method
The designation of who is to be paid for services/supplies billed through Medicare. On an assigned claim, payment is made to the provider, rather than the beneficiary. Under the assignment method, the doctor or supplier agrees to accept the charge approved by Medicare as total payment for covered services. (See Assignment.)

Attending Physician
The physician rendering the major portion of care or having primary responsibility for the care of the patient's major condition or diagnosis.

Automated Response Unit (ARU)
A device that allows providers and beneficiaries, through their touch-tone telephones, to directly access information on our computer regarding their current benefits.

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Bedridden
A physical limitation relating to the inability to remove one's self from bed.

Beneficiary (BENE)
One who is entitled to receive Medicare Part A and/or Medicare Part B benefits.

Bilateral Procedure
A surgical or nonsurgical procedure done on both sides of the body, i.e., arms, hips, legs.

Billed Amount
The amount actually charged for a service or supply. Also referred to as "Submitted Charge."

Billed Charge (Medicare)
See Actual Charge.

Billing Provider
The provider who submits a claim for payment on services he/she has performed or, in some cases, the group, such as a clinic, bills for performing providers within the group.

Bundled Services/Supplies
Payment for some procedures includes payment for various services and items defined as part of the payable procedure. The services that are included as part of the payable procedures are referred to as "bundled" services.

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Case Mix
A measure of the mix of cases being treated by a particular health care provider. It is intended to reflect the patients' different needs for resources. Case mix is generally established by estimating the relative frequency of various types of patients seen by the provider in question during a given time period. It may be measured by factors such as diagnosis, severity of illness, utilization of services, and provider characteristics.

Certification
As used in Utilization Review, certification means attesting medical necessity for institutional admission on the basis of pre-established standards. As used with Medicare-approved institutions and providers, it means they are qualified for being reimbursed by the Medicare program.

Centers for Medicare & Medicaid Services (CMS)
Agency within the U.S. Department of Health and Human Services that administers the Medicare and Medicaid programs. CMS is responsible for developing Medicare payment regulations to implement Medicare law and for overseeing Medicare carrier and intermediary operations.

Centers for Medicare & Medicaid Service's Common Procedural Coding System (HCPCS)
Codes CMS requires when billing services and supplies. HCPCS includes CPT codes to describe physician services, as well as codes to describe non-physician services and supplies (level l, ll, and III codes).

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
A program administered by the U.S. Department of Defense, which pays for care delivered by civilian health providers to retired members, and dependents of active and retired members, of the seven uniformed services of the United States (Army, Navy, Air Force, Marine Corps, Commissioned Corps of the Public Health Service, Coast Guard, and the National Oceanic and Atmospheric Administration).

CHAMPVA (Civilian Health and Medical Program of Veterans Administration)
See CHAMPUS.

Check Replacement Policy
Replacement of lost, stolen, defaced, mutilated or destroyed checks, or checks paid on forged endorsements have specific regulations that must be followed. These regulations protect providers and beneficiaries from monetary losses due to lost, stolen or forged checks. Medicare certifies the validity of the evidence of the loss and forwards it to the issuing bank. The bank pursues the recovery of funds according to State law and commercial banking practices. You will receive a replacement check after recovery of the forged check.

Check Suppression
In 1996, CMS introduced an initiative to save program dollars. Medicare Part B does not issue payment checks for less than $1.00 to providers or beneficiaries. Medicare will place the money in a "hold" account. When Medicare receives other claims that require payment, they will "add" the money from the "hold" account and issue a check.

Claim
A request for payment of benefits received for services rendered.

Claim Control Number (CCN)
A number assigned to a claim by Medicare Services.

Claim Form
The current version of the CMS -1500 accepted by Medicare.

Clinical Laboratory Improvement Amendment (CLIA)
CLIA of 1988 essentially requires all providers who perform laboratory testing to register with the CLIA program. The CLIA program is conducted by the Health Care Financing Administration's Health Standards and Quality Bureau.

Claim, "Clean"
A "clean" claim is one that does not require investigation or development outside the Medicare operation on a pre-payment basis.

Ref: MCM, section 5240.

Claim, "Other"
Claims that do not meet the definition of "clean" claims are considered "other" claims.

CMS-1500 Form
The basic form used in the Medicare program for claims from physicians and suppliers, except for ambulance services. The CMS -1500 form has also been adopted by CHAMPUS and has received the approval of the AMA Council on Medical Services.

Coinsurance
After the beneficiary pays the annual deductible, he/she will owe a share of the Medicare-approved charges for most services and supplies. This share is called coinsurance. Usually, the coinsurance share is 20% of the Medicare-approved charge.

Compliance
Program to help an organization meet federal and state guidelines. For details, refer to the General Accounting Office (GAO) web-site at www.gao.gov.

Consolidated Omnibus Budget Reconciliation Act (COBRA)
Government legislation, effective May 1, 1986, which requires that most employers sponsoring group health plans to offer employees and their families the opportunity for continuation of health coverage under certain circumstances. Also, those people on Medicare who are currently working can elect to have their group health coverage primary to Medicare.

Contractor Advisory Committee (CAC)
A physician advisory committee for Medicare Part B, that works with the Carrier Medical Director to develop/revise medical policies.

Conversion Factor (CF)
A monetary multiplier that converts relative value units (RVUs) into payment amounts.

Coordination of Benefits (COB)
A method to determine whether or not payment of benefits will be reduced because of group coverage with another insurance company (carrier). It is an attempt to avoid double payment on a claim, yet ensure full payment for benefits is made.

Copayment
A type of cost sharing whereby insured or covered persons pay a specified flat amount per unit of service or unit of time (e.g., $ 10 per visit, $25 per inpatient hospital day) and their insurer pays the rest of the cost. The copayment is incurred at the time the service is used. The amount paid does not vary with the cost of the service (unlike coinsurance, which is payment of some percentage of the cost).

Correct Coding
A comprehensive package of edits designed to detect improper reporting of procedures. Improper reporting of procedures is separate reporting of codes that are components of the entire procedure and are billed for by the same physician on the same day. Payment for a certain procedure includes payment for various services and items defined as part of the payable procedure.

Co-Surgery
Under some circumstances, the individual skills of two surgeons are required to perform a surgical procedure on the same patient during the same operative session. This may be required because of the complex nature of the procedure(s) and/or the patient's condition. In these cases, the additional physician is not acting as an assistant-at-surgery. Special payment rules apply to co-surgery.

Coverage
The interpretation of what services and supplies are covered under Medicare law and meet with locally accepted Medicare practice.

Custodial Care Facility
A facility that provides room, board, and other personal assistance services, generally on a long-term basis, and that does not include a medical component.

Ref: MCM, section 4020.5.

Covered Services
Hospital, medical, and other health care expenses incurred by the beneficiary entitled to a payment of benefits under a health insurance policy. The term defines the type and amount of expense that will be considered in the calculation of benefits.

Current Procedural Terminology (CPT)
A system of terminology and coding developed by the American Medical Association that is used for describing, coding and reporting medical services and procedures.

Customary
The most common charge by a physician for a particular service to the majority of his/her patients. It is calculated over a period of time called a base year, using all occurrences that the provider billed for that particular service. The amount the provider charges 50 percent of the time becomes the customary charge for that provider for that service. (Compare with prevailing.)

Customary, Prevailing, and Reasonable (CPR) Method (Medicare)
The method used by Medicare carriers to determine the approved charge for a particular Part B service from a particular physician or supplier. Under this method, the approved charge is limited to the lowest of the physician's actual charge for the service, the physician's customary charge for the service, and charges by peer physicians or suppliers in the same locality. If necessary, prevailing charges are adjusted by the Medicare Economics Index.

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Deductible (annual)
An amount the beneficiary must pay before payments for covered services begin. For example, Medicare Part B requires the insured to pay the first $100 of covered expenses during a calendar year before Medicare will begin payment. The deductible can be met by any combination of covered services.

Deductible (Blood)
After the beneficiary has replaced or paid for the first three pints of blood and met the $100.00 annual deductible, Medicare will pay 80 percent of the approved charges for blood, starting with the fourth pint.

Ref: MCM, sections 2050.5B, 2455.B, and 5114.1 B.

Deductibles, Waiver of
See Waiver of Co-payments and Deductibles.

Denial
Determination that certain care or services cannot be reimbursed.

Department of Health and Human Services (DHHS)
A cabinet level agency in the Executive Branch of the U.S. Government. As the name suggests, it is the primary federal funding and regulatory agency for non-military programs to enhance the public health and public welfare (except for parallel programs conducted by the Office of Economic Opportunity or U.S. Bureau of Indian Affairs). DHHS administers Social Security programs, Medicare and the federal portion of Medicaid.

Diagnosis
Description of disease, injury, symptom, etc. that afflict the patient, reported by use of ICD-9 codes.

Diagnosis Code
A numerical classification descriptive of diseases, injuries, and causes of death. Medicare requires physicians to include a complete diagnosis code (or codes) on each claim submitted for payment. CMS has adopted the International Classification of Diseases Ninth Revision Clinical Modification (ICD-9-CM) coding system for this purpose.

Disability
Physical or mental handicap resulting from sickness or injury.

Durable Medical Equipment (DME)
Some illnesses or conditions require that the patient have special equipment available in his home for movement and/or specific therapy. This equipment is termed durable medical equipment, or DME. DME includes such things as wheelchairs, crutches, hospital beds, kidney machines, traction equipment, ventilators, oxygen equipment, etc.

One of four regional carriers responsible for processing claims for all durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), including parenteral and enteral nutrition, and immunosuppressant drugs.

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Electronic Data Interchange (EDI)
Claims submitted electronically. All Medicare carriers and many commercial insurers are equipped to receive claims via modem or computer tape. Also referred to as "Electronic Media Claim (EMC)."

Emergency Care
Care for patients with severe or life-threatening conditions that require immediate intervention.

Employer Group Health Plan (EGHP)
A health insurance or benefit plan that is offered through an employer of 20 or more employees.

End Stage Renal Disease (ESRD)
The stage of kidney impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life.

Ref: MCM, section 2330.1.

Entitlement
In order to be entitled to Medicare Part B benefits, beneficiaries pay a monthly Part B premium. Enrollment is processed through the local Social Security Office or Railroad Retirement Office. Generally people are eligible for Medicare when:

• They reach age 65;
• Are disabled for more than 29 months; or
• Are diagnosed with end-stage renal disease.

Ref: MCM, section 1050.1.

Established Patient
An established patient is a patient who has been seen by the physician within the past three years.

Explanation of Benefits (EOB)
See "Medicare Summary Notice."

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Facility
The physical location where medical services are provided. When used in regards to services performed in a facility setting, the term "facility" includes, inpatient hospital, outpatient hospital, emergency room, ambulatory surgical center and skilled nursing facility.

Fair Hearing
A step in the Part B Medicare appeals process after a Review has been requested and performed. A Fair Hearing is a formal procedure presided over by a Hearing Officer. It offers the beneficiary or provider an opportunity to present the reasons for their dissatisfaction with the payment (or denial of payment) that Medicare has made on their claim.

Federal Employee Program (FEP)
A national cost group encompassing civilian employees of the Federal Government.

Fee-For-Service
The usual arrangement of a doctor-patient relationship, where a patient or insurer is billed after the physician or supplier renders a service. Compare with HMOs, which are prepaid, not fee-for-service arrangements.

An exhaustive list of physician services in which each entry is associated with one specific monetary amount representing the approved payment.

Fiscal Year
A twelve month period for which an organization plans the use of its funds. In Medicare, the federal fiscal year runs from October 1 through September 30.

Fraud
Intentional deception or misrepresentation that could result in some unauthorized benefit to oneself or other person. Fraud is illegal and carries a penalty when proven. Examples of fraud include:

• Billing for services not provided;
• Misrepresenting the diagnosis for the patient to justify the services;
• Soliciting, offering, or receiving a kickback, bribe or rebate for services; etc.

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Global Fee
A fee that encompasses all services required to complete the service. For diagnostic procedures, the global fee includes the combined Professional and Technical charge for a service. For surgical services, see Global Surgery.

Global Surgery
Global Surgery is the payment for surgical services in a standard package of the preoperative, intraoperative and postoperative services. The global surgery fee covers the physician's charge for preoperative care, the surgery itself, surgical trays and other supplies (in most cases), and postoperative care.

CMS regulates the length of both the pre- and postoperative periods. The preoperative period is limited to the day before surgery for major surgeries. There is no preoperative period for minor surgeries.

The postoperative period depends on whether the surgery is major or minor. If a surgery is major, the postoperative period is 90 days. However, the postoperative period for minor surgeries and endoscopies is either zero or 10 days.

Group Insurance
An insurance plan by which a number of employees (and their dependents), or members of a similar homogeneous group, are insured under a single policy, issued to their employer or the group with individual certificates of insurance given to each insured individual or family. Individual employees may be insured automatically by virtue of employment, only on meeting certain conditions (employment for over a month for example), or only when they elect to be insured. The policyholder or insured is the employer, not the employees.

Group Practice
Physicians or other health professionals providing services with income pooled and redistributed to the members of the group according to some prearranged plan. Groups vary in size, composition and financial arrangements.

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Health Insurance Claim Number (HIC Number)
An alpha-numeric identification code assigned to a Medicare beneficiary. It is common for the HIC number to be the beneficiary’s Social Security Number with an alpha suffix.

Health Professional Shortage Area (HPSA)
Areas identified by the Public Health Service as medically underserved. Physicians in dedicated HPSAs are paid a bonus of 10% above Medicare payment schedule for the professional component of their services.

Hearing
See Fair Hearing.

Homebound
A patient is considered "homebound" if leaving home requires a considerable and taxing effort, or the patient doesn't go out very often or for short periods, or if it is medically inadvisable.

Generally, homebound patients are unable to leave their residences without the aid of crutches, walkers, wheelchairs, etc. or another person's assistance. Illnesses such as heart disease and some psychiatric problems may make it inadvisable for patients to leave their homes. However, aged persons who stay at home due to feebleness or concerns about security are not considered homebound.

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Indemnification
If the provider is being held liable for charges for noncovered services and has received payment from the beneficiary for payment of the noncovered charges, Medicare will not hold the beneficiary responsible, except for the applicable deductible and coinsurance amounts. Any such indemnification payments will be considered overpayments to the provider.

Independent Diagnostic Testing Facility (IDTF)
An IDTF is a fixed location, a mobile entity, or an individual non-physician practitioner that provides diagnostic testing procedures only. This entity must be independent of a hospital or physician’s office, and the tests must be performed by licensed, certified non-physician personnel under appropriate physician supervision.

Note: Approved portable X-ray suppliers or physician’s offices that furnish other services, including group practices or multi-specialty clinics, are not IDTFs.

Independent Laboratories
An independent laboratory is one which is independent both of an attending or consulting physician's office and of a hospital.

INKEY
Medigap insurer's unique identifier number.

Inquiry
Requests for information or assistance made by or on behalf of a beneficiary, provider or the Government. Written inquires may be made in any format (letter, memorandum, note attached to a claim, etc.). Allowable charge complaints and appeals are excluded from this definition.

Intermediary
A private insurance organization that contracts with the Federal Government to handle Medicare Part A payment for services by hospitals, SNFs, and home health agencies.

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Limiting Charge
A percentage limit on fees specified by legislation that nonparticipating physicians may bill Medicare beneficiaries on nonassigned claims above the fee schedule amount. The limit is 15 percent above the fee schedule for nonparticipating physicians on unassigned claims.

Limiting Charge Exception Reports (LCERs)
A report that used to be sent to nonparticipating providers who submit unassigned claims with charges in excess of the limiting charge established for each procedure. As of October 1998, LCERs are no longer issued.

Locality
Geographic areas defined by Medicare for determining payment amounts. There are now about 89 Medicare localities, some covering entire states, other counties, groups of counties, or metropolitan areas. Physician Payment Reform reduced wide variations in payments among localities, sometimes within a few miles of each other, experienced under the Customary, Prevailing & Reasonable (CPR) system.

Locum Tenens
An arrangement by which an absent physician bills for the services of a substitute physician when a reciprocal agreement exists. In such case, the billing physician (who is the patient's regular physician) is deemed the performing physician.

Ref: OBRA 1990, section 4110.

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Mandatory Claim Submission
Physicians and suppliers must submit all Medicare claims within a set time period after the date of service. Physicians and suppliers who fail to submit a claim or who impose a charge for completing a claim are subject to sanctions, monetary penalties of up to $2,000.00 per violation and/or Medicare Program exclusion.

Medicaid
A state and federal program of public assistance to persons whose income and resources are insufficient to pay for health care. Title XIX of the Federal Social Security Act provides matching federal funds for financing state Medicaid programs, effective January 1, 1966.

Medical Necessity
The basis for a service from a medical viewpoint omitting any sociological or economic reason.

Medical Review
The review of medical records or information as it relates to services rendered and billed by a provider or beneficiary for payment. This review is performed by the medical staff of physicians, registered nurses, licensed practical nurses, etc.

Medically Necessary
The level of services and supplies (that is, frequency, extent and kinds) is adequate for the diagnosis and treatment of illness or injury. Medically necessary includes the concept of appropriate medical care.

Med-Supp
A supplementary insurance policy, issued by private carriers, to cover expenses not paid by Medicare (see also Supplemental Health Insurance).

Medically Unnecessary
This term may be used when:

1. The physician and Medicare disagree on the patient's need for a particular medical service;
2. Medicare usually does not pay for the particular service in question;
3. The treatment is too new and innovative, or
4. There is another reason for nonpayment.

This term does not necessarily mean that the physician who performed the service in question is not providing appropriate medical care.

Medicare
The federal government's hospital and medical insurance program for the aged, disabled, and those with end-stage renal disease. There are two parts to Medicare: Part A - hospital insurance and Part B - supplemental medical insurance. Title XVIII of the Federal Social Security Act provides for the legislative authority for the Medicare program.

Medicare Economic Index (MEI)
An index used in the Medicare program to update physician fee levels in relation to annual changes in the general economy for inflation, productivity, and changes in specific health sector practice expenses factors including malpractice, personnel costs, rent, and other expenses.

Medicare Fee Schedule (MFS)
This is the payment system for payment services established in OBRA 1989 (P.L. 101-239), starting in 1992. It determines payment amounts based on a relative value scale that has components for work, practice expense and malpractice expense. It replaced the Customary, Prevailing & Reasonable (CPR) charge methodology through a four-year transition.

Medicare Part A
Government hospital insurance program that covers hospitals, skilled nursing facilities, Home Health Agencies, etc.

Medicare Part B
Governmental medical insurance program that covers doctors' services, outpatient hospital care, diagnostic tests, ambulance services and other services not covered under Medicare Part A or Durable Medical Equipment Prosthetic and Orthotics.

Medicare Participating Physician/Supplier Directory (MEDPARD)
A directory of providers who have signed a Participation Agreement and agree to accept assignment on all claims. This directory is primarily for Medicare beneficiaries to use when selecting a physician or supplier. The directory includes a geographical listing by county/parish, city, and specialty as well as an alphabetical listing. Beginning January 1, 1999, MEDPARD information can be found on the Internet through the Carrier’s Web Site.

Medicare Secondary Payer (MSP)
When a patient has insurance that is primary, Medicare may be used as, and should be billed as, a secondary payer of benefits to the other insurance. See "Secondary Payer."

Medicare Summary Notice (MSN)
Narrative document mailed to the beneficiary or his/her representative, with or without a check, which explains final disposition/payment of a Medicare claim. The Medicare Summary Notice (MSN) has replaced the EOMB.

Medicare Supplemental Policy
See Medigap Policy.

Medigap Policy
A health insurance policy designed to supplement Medicare coverage. A Medigap policy meets the statutory definition of a "Medicare supplemental policy" contained in Section 1882(g)(1) of Title XVIII of the Social Security Act. It is a health insurance policy or other health benefit plan offered by a private entity to those persons entitled to Medicare benefits and is specifically designed to supplement Medicare benefits. It fills in some of the "gaps" in Medicare coverage by providing payment for some of the charges for which Medicare does not have responsibility due to the applicability of deductibles, coinsurance amounts, or other limitations imposed by Medicare. It does not include limited benefit coverage available to Medicare beneficiaries such as "specified disease" or "hospital indemnity" coverage. Also, it explicitly excludes a policy or plan offered by an employer to employees or former employees, as well as that offered by a labor organization to members or former members.

Modifier
A two-digit code that is used with CPT and/or HCPCS codes in order to provide additional information about the billed procedure.

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Group Setting: The patient will be considered a new patient to a physician if the patient has not been seen by another member of the group who is in the same specialty within the last three years.

Nonparticipating Provider (NonPAR)
A physician or supplier who treats Medicare beneficiaries but does not have a legal agreement with the program to accept assignment on all Medicare services. NonPAR physicians may bill beneficiaries more than the Medicare fee schedule, but no more than the limiting charge, on a service-by-service basis.

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Offset
The process established to recover an overpayment made to a beneficiary or provider. Either party may be put on offset if monies are not returned within 30 days after the date of the first refund request. Subsequent claim payments are applied to offset the overpayment.

Omnibus Budget Reconciliation Act of 1989 (OBRA 89)
Legislation mandating the Medicare physician payment reform. OBRA 89 specifies that the Physician Payment Reform (PPR) system be based on an Resource-Based Relative Value Scale (RBRVS) and that its implementation be budget-neutral, that is, costing no more than would have been spent under the old Customary, Prevailing & Reasonable (CPR) charge system.

Optical Character Recognition (OCR)
Allows information entered on an OCR form to be read and retrieved by a scanning machine, thus eliminating the need for the information to be manually keyed. The red CMS- 1500 claim form is an OCR form.

Ordering Physician
The physician who has ordered diagnostic tests, services, items (e.g., durable medical equipment), or supplies for the beneficiary.

Out-of-Pocket
Copayment, coinsurance and/or deductible paid by the beneficiary.

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Payment Floor
A waiting period mandated by the government. The waiting period is determined by the date a claim is received and begins the day after the date of receipt. Payment for Medicare claims cannot be issued until the waiting period has expired.

Peer Review Organization (PRO)
Groups of practicing doctors and other health care professionals who are paid by the federal government to review the care given to Medicare patients.

Performing Physician
The doctor or supplier who actually renders the service (also referred to as a "rendering physician"). When services are provided by non-physician medical personnel "incident to" a physician's services, the non-physician’s services are incident to the performing physician’s services.

Physician
When used within the meaning of §1861(r) of the Social Security Act, and used in connection with performing any function or action, the term refers to

Physician Payment Reform (PPR)
A legislative change in the way Medicare pays for physician and nonphysician practitioner services required by the Omnibus Reconciliation Act of 1989 (PL 101-239). This statute includes a national fee schedule based on a resource-based relative value scale with geographic adjustments for differences in cost of practice, volume performance standards, and beneficiary protections.

Privacy Act
The Privacy Act requires that Medicare release payment information to providers only on assigned claims. Carriers may release limited information in response to inquiries from physicians and suppliers regarding the status of unassigned claims they submit for services furnished to Medicare patients on or after September 1, 1990. The information releasable to the provider on such unassigned claims is limited to the following claim status:

Ref: MCM, sections 10000,10010,12020. F, and 12025.

Procedural Service
A service such as endoscopy, that is dependent in a substantial way on the use of a medical device.

Procedure Code
A CPT or HCPCS code used by a physician or provider of services to describe the procedure or service rendered to the patient.

Professional Component
Portion of payment for a service covering physician work, practice costs and professional liability insurance. For diagnostic procedures, the interpretation is considered the professional component as opposed to the technical component, which covers the use of equipment and supplies and technician salaries.

Profile
A collection of all fees that a provider would expect to be paid.

Provider
An individual or institution that gives medical care.

Provider-Based Physician
A physician who generally receives compensation from (or through) a provider, i.e., through a hospital, a skilled nursing facility, home health agency, etc. These physicians may also be receiving compensation from medical schools or other organizations that have arrangements with the provider for the services they render to provider patients.

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Reasonable Charge
The least of the customary, prevailing, lowest charge limit (LCL), inflationary index (IL) charge or the amount submitted on the claim. Reasonable charge was part of the Customary, Prevailing & Reasonable (CPR) charge method.

Reassignment of Benefits
Providers may sign an agreement to pass on all benefits to another entity, such as a Group Practice, or Clinic.

Rebate on Medicare Payment
The Medicare and Medicaid anti-kickback statute makes it illegal to offer or pay anything of value to induce a person to order any item or service for which payment may be made under Medicare or Medicaid (or another state health care program). Each violation of this statute can result in a felony conviction, and those convicted shall be fined up to $25,000 or imprisoned for up to five years, or both. Report indications of kickbacks to the local Medicare Carrier Fraud and Abuse Department.

Ref: MCM, section 11001.

Rebundling
The grouping together of separately billed services into one procedure code.

Reconsideration
See Review.

Relative Value Scale (RVS)
A coded listing of physician or other professional services using units that indicate the relative value of the various services they perform, taking into account the time, skill and cost required for each service. Appropriate conversion factors are used to translate the units into dollar fees for each service.

Relative Value Unit (RVU)
Basic element of measure for the Medicare Resource-Based Relative Value Scale (RBRVS). Each service is assigned relative value units for physician work, practice expenses and professional liability insurance. The three added together are the relative value of the service. RVUs are modified by geographic practice cost index values to compensate for regional variations in practice costs.

Remittance (Part B)
An account of assigned claims processed for a particular provider of services.

Red Book (Drug Topics Red Book)
A monthly publication of drug allowances used by Medicare carriers to determine allowable charges for drugs and biologicals.

Referring Physician
The physician who has sent the beneficiary to another physician or, in some cases to a supplier (e.g., physical therapist, occupational therapist) for consultation and/or treatment.

Remittance Advice (RA)
Explanation of Medicare Part B payment/benefits.

Rendering Physician
The provider who performs services (also referred to as Performing Physician).

Resource-Based Relative Value Scale (RBRVS)
A relative value scale developed by a Harvard research team that assigns values to physician services based on the resource cost of providing those services. As the basis of Medicare's payment schedule, it is the cornerstone of the Physician Payment Reform (PPR). The RBRVS payment schedule is intended to even out regional payment differences that existed under the old Customary, Prevailing & Reasonable (CPR) charge system as well as establish a rational basis for setting payments for office visits and other "cognitive" services relative to surgery and other "procedural" services.

Review
Also known as Reconsideration. The first step in the appeals process whereby a claim that has been totally or partially denied is given an independent review. None of the personnel involved in the original determination is involved in the reconsideration. See Fair Hearing and Administrative Law Judge Hearing for additional levels of appeal.

Roster Billing
To be used when a provider who accepts assignment bills for mass immunizations.

Rural Health Clinics (RHCs)
A certified facility located in a rural medically underserved area that provides ambulatory primary medical care under the general direction of a physician. Refer inquiries to Medicare Part A Intermediary.

Ref: MCM, sections 2260 and 4020.5.

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Specialty
Medical area of focus of the provider. Examples include:

• Radiology
• Nuclear Medicine
• Physician Assistant
• General Practice

Social Security Administration (SSA)
The largest subdivision of DHHS, established by the Social Security Act, August 14, 1935, originally as Social Security Board and then the Federal and Security Agency with present title and structure dating from Government Reorganization Act of 1953. Administers part of Social Security Law, which provides monthly benefits to old age survivors and disability benefits. Also administers Title XVIII (Medicare).

Statement of Intent (SOI)
Provision that permits providers who cannot secure the necessary information to file a claim within the Medicare timely filing guidelines to request an extension by filing a SOI.

Supplemental Health Insurance
Health insurance that covers expenses not covered by separate health insurance already held by the insured. For example, insurance to people covered under Medicare that covers either the cost of cost-sharing required by Medicare, services not covered, or both.

Surrogate UPIN
A Unique Physician Identification Number (UPIN) used by providers that have not been assigned a permanent UPIN.

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Technical Component
Portion of payment for physician services covering equipment, supplies and technician salary, as opposed to the professional component, which covers physician work, practice overhead and professional liability costs.

Third-Party Payer
Any organization that pays or insures health or medical expenses on behalf of beneficiaries or recipients (e.g., Blue Cross and Blue Shield Plans, commercial insurance companies, Medicare, and Medicaid). The individual or employer generally pays a premium for such coverage in all private and some public programs. The organization then pays bills on the patient's behalf. Such payments are called third-party payments and are distinguished by the separation between the individual receiving the service (the first party), the individual or institution providing it (the second party) and the organization paying for it (the third party).

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The UPIN is currently used for identifying the referring/ordering physician. The UPIN is a six-position alpha-numeric identifier issued only to physicians through a national registry (i.e., A12345). Each physician's UPIN is unique – there are no duplicate numbers. Claims submitted without required UPlNs will be denied.

Update
The annual adjustment to the Medicare fee schedule conversion factor. If the update is not set by Congress, the law specifies that it will be the appropriate index (generally the MEI) adjusted by the actual performance measured against the Medicare volume performances standard.

UPIN
See Unique Physician Identification Number.

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Worker's Compensation Laws
Insurance program that reimburses employees for illness or injuries that are work-related. Also pays benefits to dependents of employees killed in the course of and because of their employment.