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Glossary of terms
This glossary of terms contains general descriptions that are used in discussing Medicare coverage and reimbursement. Private payers may use other terms or define these terms differently. Please consult the Centers for Medicare & Medicaid Services (CMS) or other payers for comprehensive definitions and requirements relating to coding, coverage, and reimbursement for items and services.
APC: Ambulatory Payment Classification. Under Medicare's Hospital Outpatient Prospective Payment System (HOPPS), items and services are assigned to payment categories called Ambulatory Payment Classifications or APCs. Current Procedural Terminology (CPT®*) and Healthcare Common Procedural Coding System (HCPCS) codes are grouped into APCs on the basis of clinical characteristics and the resources required to provide the particular service.
CC: Complications and comorbidities (CCs) are diagnosis codes used by Medicare to assign individual cases to MS-DRGs based on severity of illness.
Carrier: Carriers are private insurance companies that serve as CMS's agent in adjudicating and processing claims for payment under Medicare Part B. Thus, Medicare Carriers make coverage and payment decisions regarding items or services related to physician and supplier services.
AMA CPT®* Code: American Medical Association (AMA) Current Procedural Terminology (CPT®*) codes provide a uniform language for healthcare professionals, including physicians, physician assistants, and nurse practitioners, to bill their services to payers. CPT® codes are recorded on claim forms and submitted to payers to facilitate payment for the services or procedures performed.
Fiscal intermediary: Fiscal intermediaries (FIs) are private insurance companies that serve as CMS's agent in adjudicating and processing claims for services covered and paid under Medicare Part A.
HCPCS code: Healthcare Common Procedural Coding System (HCPCS) codes are used by all payers and describe certain services, supplies, drugs, and durable medical equipment. HCPCS J codes are typically used to describe drugs and biologics.
HOPPS: Hospital Outpatient Prospective Payment System. Medicare prospective payment system that assigns hospital outpatient payments to Ambulatory Payment Classifications or APCs. CPT® and HCPCS codes are grouped into APCs on the basis of clinical characteristics and the resources required to provide the particular service.
ICD-9-CM code: International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnosis codes are used to designate specific patient diagnoses. ICD-9-CM procedure codes are used to designate specific patient procedures in the hospital inpatient setting.
ICD-9 V codes: Supplementary ICD-9 diagnosis codes used to report factors, other than a disease or injury, influencing health status and contact with health services.
Inpatient setting: Setting of care in which items and services are furnished to a patient admitted to a hospital for at least an overnight stay.
IPPS: Hospital Inpatient Prospective Payment System (IPPS). Under the IPPS system, each Medicare hospital inpatient stay is assigned to a Medicare severity diagnosis-related group (MS-DRG) based on the patient's characteristics and the procedures performed during his or her inpatient stay. Medicare then pays the hospital a prospectively-determined amount defined by the MS-DRG.
MAC: Medicare administrative contractors (MACs) will replace FIs, carriers, and Durable Medical Equipment Regional Carriers by 2011. The new MACs will assume all Medicare coverage and payment functions of the current Part A FIs and Part B carriers.
MCC: Major complications and comorbidities (MCCs) are diagnosis codes used by Medicare to assign individual cases to MS-DRGs based on severity of illness.
MS-DRG: Medicare severity diagnosis-related group. Medicare payment grouping for inpatient hospitalizations incorporating disease severity, as indicated by MCCs or CCs (see above). Medicare inpatient claims are assigned to an MS-DRG based on the patient's characteristics and the procedures performed during his or her inpatient stay. Medicare then pays the hospital a prospectively-determined amount that is associated with the DRG selected.
Outpatient setting: Setting of care in which medical and other services are provided by a hospital or other qualified facility to a patient within a 24-hour period (ie, the patient is never admitted).
RVU: Relative value unit (RVUs) are relative weights, or values, that are intended to reflect the relative resources required to perform each procedure. The resources required to perform a procedure are divided into 3 components: a physician work component, a practice expense component, and a malpractice component.
- *
- CPT is a registered trademark of the American Medical Association. Current Procedural Terminology (CPT) is copyright 2007 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values or related listings are included in CPT. The AMA assumes no liability for the data contained herein. Applicable FARS/DFARS restrictions apply to government use.
Helpful links
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Professional organizations
- American Medical Association Current Procedural Terminology payment search
- American Academy of Neurology Supplementary ICD-9 'V-Code'
Government sites
