Compliance Glossary of Terms


American Association of Medical Colleges


Advance Beneficiary Notice—Written notification to a Medicare patient, before a service is rendered, that payment may be denied or reduced, because the service(s) may not be covered as medically reasonable and necessary according to the Medicare program.


Payment for items or services when there is no legal entitlement to that payment and the provider has not knowingly and/or intentionally misrepresented facts to obtain payment. Some inappropriate practices may initially be considered abusive, but later involve into fraud. See also fraud.


Usually refers to the Social Security Act


Americans with Disabilities Act


Process of determining whether a claim is paid


Additional payment or correction of records on a previously processed claim

Advisory Opinion

OIG issued opinion to an individual or entity regarding the legality of specific activities and transactions under the Anti-Kickback Statute.


Administrative Law Judge—Hears appeals of denied claims, as well as appeals from proposed OIG exclusions


American Medical Association


Statute under the Social Security Act that prohibits the offer, payment, solicitation or receipt of any form of remuneration for services rendered.


Related to price information, referrals and discriminatory pricing


Ambulatory Payment Classification—Result of Balanced Budget Act. Outpatient prospective payment system that transfers financial risk from Medicare to the provider of outpatient services. APC’s group similar clinical services together for reimbursement purposes.

Balance Bill

Difference between billed amount and amount approved by insurer.


Balance Budget Act of 1997—Law that changes sections of the Social Security Act, including several anti-fraud and abuse provisions and improvements to protect the Medicare programs integrity.


Person eligible to receive Medicare or Medicaid payment and/or services.


An insurance company that contracts with CMS and determines reasonable charges, accuracy and coverage for Medicare Part B services and processes Part B claims and payments.


Centers for Medicare & Medicaid Services (formerly known as HCFA)—Federal agency, part of DHHS that administers and oversees the Medicare program and a portion of the state Medicaid program. Responsibilities include managing contractor claims payment, fiscal audit and/or overpayment revention and recovery and developing and monitoring payment safeguards necessary to detect and respond to payment errors or abusive patterns of service delivery.


Code of Federal Regulations

Civil Monetary Penalty

Regulations which apply to any claim for services that was not provided as claimed or that was knowingly submitted as false and which provides guidelines for levying fines for such offenses.


Request for payment of benefits or services rendered by a provider or received by an insured individual


Clinical laboratory Improvement Amendments—1988 legislation that set quality and performance standards for all laboratory testing. CLIA standards are national and are not Medicare exclusive. CLIA applies to all providers rendering clinical laboratory and certain other diagnostic services, whether or not claims are filed to Medicare.


Consolidated Omnibus Budget Reconciliation Act


Adherence to the requirements of applicable laws and regulations.


Amount that insurance will not pay. The patient or the patient’s secondary insurance company is responsible for this amount.


See coinsurance

Corporate Integrity Agreement

A negotiated settlement between a health care provider and the government in which the provider accepts no liability but must agree to implement a strict plan of government-supervised corrective action.

Covered Service

Reasonable and medically necessary services rendered to patients and Se reimbursable to the provider


Current Procedural Terminology—System of uniform medical procedure codes to identify specific healthcare services performed. Developed by the AMA and used by most insurers and providers for billing purposes.


Amount a patient must pay before insurance begins to pay for covered services and supplies.


United States Department of Health and Human Services—Administers many of the federal “social” programs dealing with the health and welfare of the citizens of the USA. Parent of the Centers for Medicare and Medicaid Services (CMS).


Diagnosis Related Group—System that groups patients according to principal diagnosis, presence of a surgical procedure, age, presence or absence of significant complications, etc.

DRG Creep

Illegal practice of intentionally billing using a DRG which provides a higher payment rate than the DRG that accurately reflects the diagnosis and treatment actually provided.


United States Department of Defense


United States Department of Justice

DRG Creep

Unlawful practice of billing using a DRG code that provides a higher payment rate than necessary.


Equal Employment Opportunity Commission – U.S. agency created in 1964 to end discrimination based on race, religion, sex or national origin in employment. The commission reviews and investigates charges of discrimination and, if found to be true, attempts to remedy through conciliation or legal means.


Evaluation and Management Services


Employee Retirement Income Security Act – A 1974 federal act that exempts self-insured health plans from state laws governing health insurance and requires health plan to provide certain information to enrollees.


Situation or condition where coverage is disallowed by a subscriber’s contract. DHHS/OIG penalty imposed on a provider prohibiting the provider from billing Medicare or other government programs.

Exclusion List

OIG list of providers, individuals and entities that are excluded from Medicare reimbursement. Includes identifying information about the sanctioned party, specialty, notice date, sanction period and sections of the Social Security Act used in arriving at the determination to impose a sanction. The OIG sanctioned provider list is available on the Internet at List of Excluded Individuals/Entities Search and click “search”. Debarment, exclusion and suspension lists for all federal agencies are available on the Internet at Excluded Parties List System (EPLS) under “EPLS Reports Menu”.

Executive Order 127

Mandates mandatory disclosure of anyone attempting to influence SUNY persons in bid proposals by prospective contractors.


Any treatment, procedure, equipment, drug, drug usage, device or supply not generally recognized as accepted medical practice. Includes services or supplies requiring federal or other government approval not granted at the time services were rendered.


False Claims Act—Federal legislation that prohibits knowingly filing a false or fraudulent claim to the government for payment, knowingly using a false record or statement to obtain payment on a false or fraudulent claim paid by the government and conspiring to defraud the government by getting a false or fraudulent claim allowed or paid.


Fiscal Intermediary—CMS contractor that determines reasonable charges, accuracy and coverage for Medicare Part A services and processes Part A claims and payments.


Knowing and willful execution, or attempt at execution, of a scheme or artifice to defraud any healthcare benefit program, or to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property owned by, or under the custody or control of any healthcare benefit program. See also abuse.

Fraud Alert

OIG issuances regarding practices that the OIG considers suspect or of particular concern.

Global Fee

Combined technical (equipment) and professional (physician) charges or payment.


General Services Administration – Federal agency that manages the federal governments property and records, including the construction and operation of buildings and procurement and distribution of supplies, among other functions.


Health Care Financing Administration—Former name of Centers for Medicare & Medicaid Services. See CMS. A component of the U.S. Department of Health and Human Services that administers the Medicare program and some aspects of state Medicaid programs.


Healthcare Common Procedure Coding System—Uniform method for providers and suppliers to report professional services, procedures and supplies. HCPCS includes CPT codes (Level I), national alphanumeric codes (Level II) and local codes (Level III) assigned and maintained by local Medicare contractors.


Health Insurance Portability and Accountability Act of 1996—One provision imposes significant changes to fraud and abuse controls. Another provision protects health insurance coverage for workers and their families when they change or lose their jobs, including those with pre-existing conditions.


Health Maintenance Organization—Organizations that combine the functions of insurers and providers of care, giving most necessary medical care for a prepaid fee and placing emphasis on prevention and careful assessment of medical necessity.


A common reporting system giving anonymous telephone access to employees seeking to report possible instances of wrong-doing.


International Classification of Diseases, 9th revision-Clinical Modification—A national coding method to enable providers to effectively document the medical condition, symptom or complaint that is the basis for rendering a specific service. The coding system consists of 3-5 character numeric or alphanumeric codes for reporting purposes.

Incident To

Services rendered by employees of physicians or physician-directed clinics, when the services provided are integral, though incidental, to the physician’s professional service.


Situation in which a business agrees to pay a physician for every patient referred for a specific study or other service. This is prohibited by federal law.


Local Medical Review Policy—Formal document developed through a specifically defined process that provides criteria for claim and review of payment decisions to ensure that suitability of the carrier’s medical policies, medical care and review guidelines are consistent with standards of medical practice.


Joint federal and state program established by Title XIX of the Social Security Act which helps with medical costs for some people of all ages who have low incomes and limited resources. The program varies from state to state.

Medicare Integrity Program

Created by Congress as part of the HIPAA Act of 1996 to provide a stable source of funding for program integrity efforts to support the Medicare program via cost report audits, medical review, anti-fraud activities and Medicare Secondary Payer review.

Medicare Mill

Provider group that aggressively seeks out Medicare patients

Medicare Part A

Title XVIII of the Social Security Act which provides insurance for hospital, skilled nursing facility, home healthcare and hospice costs to workers and beneficiaries insured under Social Security, certain dependants and certain disabled Social Security beneficiaries.

Medicare Part B

Title XVIII of the Social Security Act which provides insurance for physician services, outpatient hospital care and various other services such as ambulance and laboratory services. DME and PT/OT to workers and beneficiaries insured under Social Security, certain dependants and certain disabled Social Security beneficiaries.

Medical Necessity

Services determined to be consistent with symptoms or diagnosis and treatment of the patient’s condition, disease, ailment or injury that is appropriate with the standards of good medical practice. Services are not provided primarily for the convenience of the insured, the hospital or the physician and the most appropriate level of service that can be safely provided are utilized.


Medicare Secondary Payer—Statutory requirement that under certain circumstances private or other government insurance programs available to beneficiaries be exhausted before Medicare must pay.

National Practitioner Data Bank

A federal repository established pursuant to the Health Care Quality Improvement Act of 1986 that contains information regarding physicians and other health care providers relating to professional competence malpractice claim settlements or judgments.


Omnibus Budget Reconciliation Act of 1995—Extension of Stark law regarding self-referrals


Office of the Inspector General—An organizational component of the Office of the Secretary, DHHS. Responsible for conducting and supervising audits, investigations and inspections relating to the programs and operations of DHHS, including Medicare and Medicaid. OIG provides leadership and coordination, recommends policies and corrective actions, prevents and detects fraud and abuse in DHHS programs and operations and is responsible for all DHHS criminal investigations including Medicare fraud whether committed by contractors, grantees, beneficiaries or providers of service.

Operation Restore Trust

Federal program that investigates, identifies and reduces/eliminates health care fraud. Focused on fraud/abuse in Medicare billing practices, physician/hospital relationships to labs and other providers.


Operation Restore Trust—Federal/State partnership to fight Medicare/Medicaid fraud, waste and abuse.


Occupational Safety and Health Administration – A component of the Department of Labor that develops and administers standards relating to the wellbeing of workers at the job-site, develops and issues regulations in this area, conducts investigations and inspections to determine status of compliance with safety and health standards and regulations and issues citations and proposes penalties for non-compliance.


Anything that falls outside a considered norm


Provider Identification Number—Unique individual provider number issued to a provider by the local Medicare contractor allowing the physician or patient to receive reimbursement for claims filed to the contractor.


Prospective Payment System – The system for paying services for Medicare patients (see DRG) whereby patients are classified into categories for which prices are negotiated or determined in advance. /td>

Progressive Corrective Action

Used by CMS to identify and target problem providers based on data. Emphasis is on education. Formerly known as focused medical review.


Peer Review Organization—Organization contracting with CMS to review medical necessity and quality of care provided to Medicare beneficiaries.


generic term for any person i.e. physician or entity i.e. home health agency, skilled nursing facility, hospital etc. approved to provide/give care to Medicare beneficiaries and to receive payment from Medicare.

Qui Tam

The “Whistle Blower” provision that allows any person having knowledge of a false claim against the government to bring action against the suspected wrongdoer on behalf of the United States Government.


Racketeer Influenced and Corrupt Organizations Act

Safe Harbor

Provisions that protect certain individuals, providers or entities from criminal prosecution and/or civil sanctions when certain requirements are met for actions which may appear as unlawful or inappropriate according to Medicare law.


See “Exclusion”

Sarbanes-Oxley Act

Acts to prevent, detect and address misconduct within an organization with emphasis on auditing, accounting and financials.


Social Security Administration—Federal Agency that administers various programs funded under the Social Security Act and determines eligibility for Medicare benefits.

Stark Law

implemented in 1995 that prohibits a physician or his immediate family from having a financial relationship with an entity to which Medicare patients are referred to receive a designated health service.
Part of the Social Security Act that has statutory authority for the Medicare program
Part of the Social Security Act that has statutory authority for the Medicaid


Unlawful practice of submitting bills piecemeal in order to maximize the reimbursement for tests/procedures that should be billed together at a lower rate.

Upcoding Unlawful

practice of using a billing code that provides a higher payment rate than the billing code that should be used for the service furnished to the patient. Major focus of OIG enforcement.

Reference Material:

  • Compliance 101, Debbie Troklus & Greg Warner, HCCA, 2001.
  • Medicare Resident and New Physician Training Manual, 6th edition, CMS, 2002.
  • Medicare Fraud and Abuse, 2nd edition, First Coast Service Options, 1999.