Medicaid Definitions and Acronyms

DPHHS Acronyms

Definitions
A B C D E F G H I K L M N O P Q R S T U V

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Adjudication Cycle
The system processing of claims at the point where a decision has been made to pay, deny or suspend.

Adjustment
When a claim has been incorrectly paid, the payment amount can be changed by submitting an adjustment request.

Administrative Rules of Montana (ARM)
The rules published by the executive departments and agencies of the state government.

Advanced Life Support Assessment
An assessment performed by an ALS crew as part of an emergency response that was necessary because the client's reported condition at the time of dispatch was such that only an ALS crew was qualified to perform the assessment. An ALS assessment does not necessarily result in a determination that the client requires an ALS level of service.

Advanced Life Support Intervention
A procedure that is, in accordance with state and local laws, beyond the scope of authority of an emergency medical technician-basic (EMT-Basic).

Advanced Life Support Personnel
An individual trained to the level of the emergency medical technician-intermediate (EMT-Intermediate) or paramedic.

Allowed Amount
The maximum amount reimbursed to a provider for a health care service as determined by Medicaid or another payer. Other cost factors, (such as cost sharing, TPL, or incurment) are often deducted from the allowed amount before final payment. Medicaid's allowed amount for each covered service is listed on the Department fee schedule.

Ancillary Provider
Any provider that is subordinate to the client's primary provider, or providing services in the facility or institution that has accepted the client as a Medicaid client.

Assignment of Benefits
A voluntary decision by the client to have insurance benefits paid directly to the provider rather than to the client. The act requires the signing of a form for the purpose. The provider is not obligated to accept an assignment of benefits. However, the provider may require assignment in order to protect the provider's revenue.

Audit
A formal or periodic verification of accounts.

Authorization
An official approval for action taken for, or on behalf of, a Medicaid client. This approval is only valid if the client is eligible on the date of service.

Authorized Prescriber
A physician, osteopath, dentist, nurse, physician assistant, optometrist, naturopath, or other person duly authorized by law or rule in the State of Montana to prescribe drugs.

Average Wholesale Price (AWP)
The average wholesale price of a drug product from wholesalers nationwide at a point in time. The Department uses the AWP as reported by First Data Bank.

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Balance Billing
Balance billing is when the provider bills patients for the difference between the amount the provider charged and the maximum allowed by the payer. Balance billing is considered fraudulent (ARM 37.85.406).

Basic Medicaid
Patients with Basic Medicaid have limited Medicaid services. See the General Information For Providers manual, Appendix A: Medicaid Covered Services.

Brand Name
The proprietary or trade name selected by the manufacturer and placed upon a drug, its container, label, or wrapping at the time of packaging.

Bundled
Items or services that are deemed integral to performing a procedure or visit are not paid separately in the APC system. They are packaged (also called bundled) into the payment for the procedure or visit. Medicare developed the relative weights for surgical, medical and other types of visits so that the weights reflect the packaging rules used in the APC method. Items or services that are packaged receive a status code of "N".

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Carrier
A private insurance company.

Cash Option
Cash option allows the client to pay a monthly premium to Medicaid and have Medicaid coverage for the entire month rather than a partial month.

Centers for Medicare and Medicaid Services (CMS)
Administers the Medicare program and oversees the state Medicaid programs. Formerly the Health Care Financing Administration (HCFA).

Children's Health Insurance Plan (CHIP)
This plan covers some children whose family incomes make them ineligible for Medicaid. DPHHS sponsors the program, which is administered by BlueCross BlueShield of Montana.

Children's Special Health Services (CSHS)
CSHS assists children with special health care needs who are not eligible for Medicaid by paying medical costs, finding resources, and conducting clinics.

Claims Clearinghouse
When a provider contracts with a clearinghouse, the clearinghouse supplies the provider with software that electronically transmits claims to the clearinghouse. The clearinghouse then transmits the claims to the appropriate payers.

Clean Claim
A claim that can be processed without additional information from or action by the provider of the service.

Client
An individual enrolled in a Department medical assistance program.

Code of Federal Regulations (CFR)
Rules published by executive departments and agencies of the federal government.

Coinsurance
The client's financial responsibility for a medical bill as assigned Medicare (usually a percentage). Medicare coinsurance is usually 20% of the Medicare allowed amount.

Commercial Transportation
Travel services provided by air or ground commercial carrier, taxicab, or bus for a Medicaid client to receive medical care.

Compounding
The act of combining two or more active ingredients or adjusting therapeutic strengths in the preparation of a prescription.

Conversion Factor
A state specific dollar amount that converts relative values into an actual fee. This calculation allows each payer to adopt the RBRVS to its own economy.

Copayment
The client's financial responsibility for a medical bill as assigned by Medicaid (usually a flat fee).

Cosmetic
Serving to modify or improve the appearance of a physical feature, defect, or irregularity.

Cost Sharing
The client's financial responsibility for a medical bill assessed by flat fee or percentage of charges.

Covered Outpatient Drug
A drug approved for safety and effectiveness as a prescription drug under the federal Food, Drug, and Cosmetic Act, and manufactured or distributed by manufacturers/labelers who have signed a drug rebate agreement with the federal Department of Health and Human Services (DHHS).

CPT-4
Physicians' Current Procedural Terminology, Fourth Edition. This book contains procedure codes which are used by medical practitioners in billing for services rendered. The book is published by the American Medical Association.

Credit Balance Claims
Adjusted claims that reduce original payments, causing the provider to owe money to the Department. These claims are considered in process and continue to appear on the remittance advice until the credit has been satisfied.

Crossovers
Claims for clients who have both Medicare and Medicaid. These claims may come electronically from Medicare or directly from the provider.

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Dental Service
The medically necessary treatment of the teeth and associated structures of the oral cavity. Dental service includes the provision of orthodontia and prosthesis.

Denturist Services
Full or partial denture services that are provided by a licensed denturist. Services provided must be within the scope of their profession as defined by law.

DESI (Drug Efficacy Study Index) or ("less than effective drugs")
An index that measures one drug against a clinical response criteria. If the index is low, the drug is classified as less than effective.

Dispense
The interpretation of a prescription or order for a legend drug and, pursuant to that prescription or order, the proper selection, measuring, compounding, labeling, or packaging necessary to prepare that prescription or order for delivery.

Dispensing Fee
A fee set by the Department to reimburse pharmacies for their administrative costs incurred in filling prescriptions for clients.

Disposition
The end result of processing a claim is the assignment of a status or disposition.

DPHHS, State Agency
The Montana Department of Public Health and Human Services (DPHHS or Department) is the designated State Agency that administers the Medicaid program. The Department's legal authority is contained in Title 53, Chapter 6 MCA. At the Federal level, the legal basis for the program is contained in Title XIX of the Social Security Act and Title 42 of the Code of Federal Regulations (CFR). The program is administered in accordance with the Administrative Rules of Montana (ARM), Title 37, Chapter 86.

Drug Formulary
A list, developed by the DUE CARE Board, of outpatient drugs covered by the Prescription Drug Program, including products with limited coverage and requiring prior authorization.

Drug Utilization Review (DUR) Program
A quality assurance program for covered outpatient drugs which assures that prescriptions are appropriate, medically necessary, and not likely to result in adverse medical outcomes.

Dual Eligibles
Clients who are covered by Medicare and Medicaid are often referred to as "dual eligibles."

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Early and Periodic Screening, Diagnosis and Treatment (EPSDT)
This program provides Medicaid-covered children with comprehensive health screenings, diagnostic services, and treatment of health problems.

Electronic Funds Transfer (EFT)
Payment of medical claims that are deposited directly to the provider's bank account.

Emergency Medical Condition
A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain). In such, a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in placing the health of the individual in serious jeopardy, serious impairment to body functions, or serious dysfunction of any bodily organ or part.

Emergency Response
Responding immediately at the BLS or ALS1 level of service to a 911 call or the equivalent in areas without a 911 call system.

Emergency Services
A service is reimbursed as an emergency if one of the following criteria is met:

  • The service is billed with a CPT code of 99284 or 99285
  • The client has a qualifying emergency diagnosis code. A list of emergency diagnosis codes is available on the Provider Information website.
  • The services did not meet one of the previous two requirements, but the hospital believes an emergency existed. In this case, the claim and documentation supporting the emergent nature of the service must be mailed to the emergency department review contractor (see Key Contacts).

EMT-Basic
An individual who is qualified in accordance with state and local laws as an EMT-Basic.

EMT-Intermediate
An individual who is qualified in accordance with state and local laws as an EMT-Intermediate.

EMT-Paramedic
An individual who is qualified in accordance with state and local laws as an EMT-Paramedic.

Essential for Employment Services for Basic Medicaid Clients
Medicaid may reimburse for dental services for recipients who are employed or have been offered employment. Refer to Chapter 1, Covered Services and Limitations for more information related to this service.

Estimated Acquisition Cost (EAC)
The department's best estimate of the price providers generally and currently pay for a drug marketed or sold by a particular manufacturer or labeler in the package size most frequently purchased by providers.

Experimental
A non-covered item or service that researchers are studying to investigate how it affects health.

Explanation of Benefits Codes (EOB)
A three digit code which prints on Medicaid remittance advice (RA) that explains why a claim was denied or suspended. The explanation of the EOB codes is found at the end of the RA.

Explanation of Medicare Benefits (EOMB)
A notice sent to providers informing them of the services which have been paid by Medicare.

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Fiscal Agent
ACS State Healthcare LLC is the fiscal agent for the State of Montana and processes claims at the Department's direction and in accordance with ARM 37.86 et seq.

Full Medicaid
Patients with Full Medicaid have a full scope of Medicaid benefits. See the General Information For Providers manual, Appendix A: Medicaid Covered Services.

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Generic Equivalents
Drug products are considered pharmaceutical equivalents if they contain the same active ingredient(s), are of the same dosage form and are identical in strength or concentration, and route of administration. They may differ in characteristics such as shape, scoring configuration, packaging, excipients (including colors, flavors, preservatives), expiration time, and within certain limits, labeling. (FDA Approved Drug Products with Equivalence Evaluations, 12th Edition, 1992.)

Generic Name
The official title of a drug or drug ingredients published in the latest edition of a nationally recognized pharmacopoeia or formulary.

Gross Adjustment
A lump sum debit or credit that is not claim specific made to a provider.

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HCPCS
Acronym for the Healthcare Common Procedure Coding System, and is pronounced "hick-picks." There are three types of HCPCS codes:

  • Level 1 includes the CPT-4 codes.
  • Level 2 includes the alphanumeric codes A - V which CMS maintains for a wide range of services from ambulance trips to hearing aids which are not addressed by CPT-4 coding.

  • Level 3 includes the alphanumeric codes W - Z which are assigned for use by state agencies (also known as local codes).

Health Insurance Portability and Accountability Act (HIPAA)
A federal plan designed to improve efficiency of the health care system by establishing standards for transmission, storage, and handling of data.

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ICD-9-CM
The International Classification of Diseases, 9th Revision, Clinical Modification. This is a three volume set of books which contains the diagnosis codes used in coding claims, as well as the procedure codes used in billing for services performed in a hospital setting.

Immediate Response
The ambulance provider begins as quickly as possible to take the steps necessary to respond to the call.

Indian Health Service (IHS)
IHS provides health services to American Indians and Alaska Natives.

Individual Adjustment
A request for a correction to a specific paid claim.

Internal Control Number (ICN)
The unique number assigned to each claim transaction that is used for tracking.

Investigational
A non-covered item or service that researchers are studying to investigate how it affects health.

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Kiosk
A "room" or area in the Montana Virtual Human Services Pavilion (VHSP) web site that contains information on the topic specified.

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Legend or Prescription Drugs
Any drugs required by any applicable federal or state law or regulation to be dispensed by prescription only or which are restricted to use by practitioners only.

Less Than Effective Drugs
See DESI.

Lock-in Pharmacy
The pharmacy dispenses all the client’s pharmaceutical needs. If the pharmacy cannot meet a specific need, the pharmacy or the client must call the Managed Care Bureau to request a temporary suspension to the “lock-in.”

Loop Trip
A "loop trip" is performed when a client requires scheduled non-emergency service and is transported to the service and returned to the point of origin on the same day.

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Mass Adjustment
Adjustments made to multiple claims at the same time. They generally occur when the Department has a change of policy or fees that is retroactive, or when a system error that affected claims processing is identified.

Maximum Allowable
The maximum dollar amount a provider may be reimbursed for specific services, supplies, or equipment.

Maximum Allowable Cost (MAC) Program
The maximum amount paid for a specified dosage form and strength of a multiple source drug product.

Medicaid
A program that provides health care coverage to specific populations, especially low-income families with children, pregnant women, disabled people and the elderly. Medicaid is administered by state governments under broad federal guidelines.

Medically Accepted Indication
Any use for a covered outpatient drug which is approved under the Federal Food, Drug and Cosmetic Act, which appears in peer-reviewed medical literature or which is accepted by one or more of the following compendia:

  • The American Hospital Formulary Service Drug Information;
  • The American Medical Association Drug Evaluations;
  • The United States Pharmacopoeia Drug Information; or

  • DRUGDEX.

Medically Necessary
A term describing a requested service which is reasonably calculated to prevent, diagnose, correct, cure, alleviate or prevent worsening of conditions in the client. These conditions must be classified as one of the following: endanger life, cause suffering or pain, result in an illness or infirmity, threaten to cause or aggravate a handicap, or cause physical deformity or malfunction. There must be no other equally effective, more conservative or substantially less costly course of treatment available or suitable for the client requesting the service. For the purpose of this definition, "course of treatment" may include mere observation or, when appropriate, no treatment at all.

Medicare
The federal health insurance program for certain aged or disabled clients.

Mental Health Services Plan (MHSP)
This plan is for individuals who have a serious emotional disturbance (SED) or a severe and disabling mental illness (SDMI), are ineligible for Medicaid, and have a family income that does not exceed an amount established by the Department.

Mentally Incompetent
According to CFR 441.251, a mentally incompetent individual means an individual who has been declared mentally incompetent by a federal, state, or local court of competent jurisdiction for any purpose, unless the individual has been declared competent for purposes which include the ability to consent to sterilization.

Minimal Services
According to CPT 2001, when client's visit does not require the presence of the physician, but services are provided under the physician's supervision, they are considered minimal services. An example would be a patient returning for a monthly allergy shot.

Montana Breast and Cervical Cancer Treatment Program
This program provides Basic Medicaid coverage for women who have been screened through the Montana Breast and Cervical Health Program (MBCHP) and diagnosed with breast and/or cervical cancer or a pre-cancerous condition.

Montana Access to Health (MATH) Web Portal
A secure website on which providers may view clients' medical history, verify client eligibility, submit claims to Medicaid, check the status of a claim, verify the status of a warrant, and download remittance advice reports.

Multiple Source Drug
A drug marketed or sold by two or more manufacturers or labelers or a drug marketed or sold by the same manufacturer or labeler under two or more different proprietary names or both under a proprietary name.

Mutually Exclusive Code Pairs
These codes represent services or procedures that, based on either the CPT-4 definition or standard medical practice, would not or could not reasonably be performed at the same session by the same provider on the same patient. Codes representing these services or procedures cannot be billed together.

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NABP
National Association of Boards of Pharmacies.

National Drug Code (NDC)
An 11-digit number the manufacturer assigns to a pharmaceutical product and attaches to the product container at the time of packaging that identifies the product's manufacturer, dose form and strength, and package size.

Newsletter
An informational letter sent to providers (such as the Montana Medicaid Claim Jumper or the Passport to Health Provider Newsletter).

Non-rebate Drugs
Drugs manufactured or distributed by manufacturers/labelers who have not signed a drug rebate agreement with the federal Department of Health and Human Services (DHHS) or the state Department of Public Health and Human Services (DPHHS).

Nurse First Advice Line
A 24-hour, seven-days-a-week nurse triage line. Clients call in with symptoms and a registered nurse follows clinically-based algorithms to an “end point” care recommendation. The care recommendation explains what level of health care is needed – including self-care. If self-care is recommended, clients are given detailed self-care instructions.

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Obsolete Drug
A drug that has been identified as obsolete by the manufacturer and is no longer available.

Obsolete NDC
A national drug code replaced or discontinued by the manufacturer or labeler.

Outpatient
A person who has not been admitted by a hospital as an inpatient, who is expected by the hospital to receive services in the hospital for less than 24 hours, who is registered on the hospital records as an outpatient, and who receives outpatient hospital services, other than supplies or prescription drugs alone, from the hospital.

Outpatient Hospital Services
Outpatient hospital services are those preventive, diagnostic, therapeutic, rehabilitative, palliative items or services provided to an outpatient by or under the direction of a physician, dentist, or other practitioner.

Over-the-Counter (OTC) Drug
Drugs (non-legend) that do not require a prescription before they can be dispensed.

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Packaged
Items or services that are deemed integral to performing a procedure or visit are not paid separately in the APC system. They are packaged (also called bundled) into the payment for the procedure or visit. Medicare developed the relative weights for surgical, medical and other types of visits so that the weights reflect the packaging rules used in the APC method. Items or services that are packaged receive a status code of "N".

Passport Authorization Number
This is a seven digit number assigned to Passport providers. When a Passport provider refers a client to another provider for services, this number is given to the other provider and is required when processing the claim.

Passport to Health
A Medicaid managed care program where the client selects a primary care provider who manages the client's health care needs.

Pay and Chase
Medicaid pays a claim and then recovers payment from the third party carrier that is financially responsible for all or part of the claim.

Pending Claim
These claims have been entered into the system, but have not reached final disposition. They require either additional review or are waiting for client eligibility information.

Pharmacist
A person duly licensed by the Montana State Board of Pharmacy to engage in the practice of pharmacy.

Pharmacy
Every site properly licensed by the Board of Pharmacy in which practice of pharmacy is conducted.

Point-of-Sale (POS)
A pharmacy claims processing system capable of adjudicating claims on-line.

Potential Third Party Liability
Any entity that may be liable to pay all or part of the medical cost of care for a Medicaid, MHSP or CHIP client.

Prescription
An order for drugs or devices issued by a practitioner duly authorized by law or rule in the State of Montana to prescribe drugs or devices in the course of his or her professional practice for a legitimate medical purpose.

Prior Authorization (PA)
The approval process required before certain services or supplies are paid by Medicaid. Prior authorization must be obtained before providing the service or supply.

Private-pay
When a client chooses to pay for medical services out of his or her own pocket.

Prospective Drug Use Review (Pro-DUR)
A process in which a request for a drug product for a particular patient is screened for potential drug therapy problems before the drug is dispensed.