Healthcare Industry Acronyms and Terms

As a Relentless Health Value (RHV) listener, you may hear a few industry acronyms or terms that are unfamiliar to you. The RHV team tries to define some of these during an episode. To make it easier, we have compiled a list that we thought would be helpful as you listen or read the show notes.

Are we missing an acronym? Let us know.

ACA
Accountable Care Act. This was a law that did many things, but one of them was to regulate health plans with things like a mandated MLR (see below) max.

APCD
All-payer claims database. This is a large state-level database that collects healthcare claims data from both public and private insurance plans. These databases aggregate medical, pharmacy, and dental claims, along with enrollment and provider files, to provide a comprehensive picture of healthcare services within a state.

ASO
Administrative services only. Refers to a carrier (such as Blue Cross Blue Shield, United, Cigna, Aetna, for example) who is providing only administrative services on behalf of a self-insured client. A self-insured employer, union, or other plan sponsor is taking all the risk, but an ASO negotiates provider contracts, processes their claims, and does other administrative work. ASOs are a kind of TPA (see below).

AWP
Average wholesale price.

BUCAH
An acronym for the big consolidated carriers—Blue Cross Blue Shield, United, Cigna, Aetna, and Humana.

CAA
Consolidated Appropriations Act.

CFO
The chief financial officer who works at a self-insured employer.

CHDHP
Consumer high deductible health plan.

CHRO
Chief human resources officer.

COE
Center of Excellence.

CPT Code
Current procedural terminology is the code that clinical organizations send to insurance companies/administrators for payment for outpatient services.

Direct Contracting
This is when an employer goes directly to a hospital or physician practice or surgery center and negotiates a “direct contract” directly with that clinical organization and cuts out the carrier/“insurance company” from the mix. This matters because it’s been said by Cynthia Fisher in episode 457 that the “spread pricing” (ie, the amount the carrier adds to the top of any provider bill) can be in the range of 30% if we’re talking about status quo carriers or administrators.

DRG Code
Diagnosis-related group is the code that hospitals send to insurance companies for payment for an inpatient stay.

EBC
Employee benefit consultant.

ERISA
Employee Retirement Income Security Act.

HR
The human resources department for self-insured employers is what we’re talking about when we say “HR.”

IRL
In real life. Not an acronym limited to the healthcare sector in this country but extremely pertinent when there are so many instances where theory does, in no way, equal what is happening in reality.

Leapfrog Score
This is a hospital safety grade. The score is represented by an A, B, C, D, or F letter grade, assigned to US hospitals based on their performance in preventing medical errors, accidents, injuries, and infections.

MLR
Medical loss ratio. This is a rule that says that an insurance carrier must spend around 85% of the premiums it collects on medical bills or drugs so their profits and administrative fees are capped. You can see this is a great rationale to buy clinical practices or pharmacies so you can count dollars you pay yourself as medical costs. Also, it drives prices up because the higher the prices, the more dollars you can make when you can only make 15%.

MRF
Machine-readable file.

NADAC
National average drug acquisition cost

NPI
National Provider Identifier.

PBM
Pharmacy benefit manager, like CVS, OptumRx, Express Scripts.

Reinsurance
Also known as stop-loss coverage. It’s the insurance a self-insured employer gets to cover any crazy catastrophic healthcare costs that might happen during any given year, like a cell and gene therapy that costs $3.2 million, and possibly bankrupt the self-insured employer.

RFP
Request for proposal.

Steering Navigation
Guides patients and plan members through the complex healthcare system to improve care coordination, access to services, and health outcomes while managing costs. “Steering” is a strategic benefit design by employers, using financial incentives to direct members toward specific high-value providers. “Navigation” is a more personalized approach that helps individuals overcome barriers to care.

TPA
Third-party administrator. A company working with self-insured employers or other self-insured plan sponsors to administer their health plan. This means negotiating contracts oftentimes, processing claims, managing prior authorization programs, etc. If these TPA services are offered by a large carrier, then see “ASO” above.

WAC
Wholesale acquisition cost.