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Accountable Care Organizations (ACOs)
Group of health care providers that contracts with a payer to assume responsibility for the delivery of care to its attributed patients and for those patients’ health outcomes.
Administrative Services-Only (ASO)
Commercial payers that perform administrative services for self-insured employers. Services can include plan design and network access, claims adjudication and administration, and/or population health management.
Advance Premium Tax Credit (APTC)
Federal tax credits available to those with incomes below 400% of the Federal Poverty Level (FPL) who enrolled in plans sold on the Health Connector. Credits may be applied directly to premiums to lower the member’s monthly payments or may be paid in a lump sum as a part of the member’s tax return. APTC amounts are calculated by comparing the individual’s income with the cost of the second-cheapest silver tier plan available to them. If the cost of that plan exceeds a specified percentage of the member’s income, the federal government pays the difference in APTCs.
Affordability Issues
In the Massachusetts Health Insurance Survey, affordability issues are defined as reporting any of the following: problems paying family medical bills in the past 12 months; having family medical bills at the time of the survey that are being paid over time, also known as family medical debt; spending a high share of family income on out-of-pocket health care expenses, defined as 5% or more of income for families below 200% of the Federal Poverty Level or 10% or more of income for other families, in the past 12 months; or having any unmet need for health care in the family due to cost in the past 12 months.
Aligned Measure Set
A set of quality measures for voluntary adoption by private and public payers and providers, specifically for use in global budget-based risk contracts, which aims to reduce administrative burden and focus quality improvement efforts on meaningful and high-priority measures. The measure set was developed and is updated annually by the Quality Measure Alignment Taskforce.
Alternative Payment Methods (APMs)
Payment methods used by a payer to reimburse health care providers that are not solely based on the fee-for-service basis. As part of the design of these payment methods, some of the financial risk associated with the delivery of medical care as well as the management of health conditions is shifted from payers to providers. Generally, APMs are intended to give providers new incentives to control overall costs (e g , reduce unnecessary services and provide services in the most appropriate setting) while maintaining or improving quality.
Annualized trend
Calculates a smooth spending trend across multiple years, also known as compound annual trend CHIA used the annualized trend to examine per capita spending for 2019 to 2021, calculated as (2021 Value/2019 Value)^(1/2)-1
All-Payer Claims Database (MA APCD)
The Massachusetts All-Payer Claims Database (MA APCD) is the most comprehensive source of health claims data from public and private payers providing insurance to Massachusetts residents and employees. The CHIA data sets include: medical, pharmacy, dental, vision, behavioral health and specialty services. The data also includes data on insurance products, affiliated providers and benefit plans. For more information on the collection, releases and data requests, please see the Massachusetts All-Payer Claims Database web page.
Benefit Level
A measure of the proportion of covered medical expenses paid by insurance Actuarial values may be estimated by several different methods; for the method used in this report, see the technical appendix.
Case Mix Data
The Massachusetts Acute Hospital Case Mix Database is a CHIA database comprised of:
For each of these patient encounter types, CHIA maintains detailed information, including: patient demographics, admission and discharge information, diagnostic and procedural coding, provider details and detailed charge information. For more information on the collection, releases and data requests, please see the Case Mix Data web page.
ConnectorCare
A type of qualified health plan offered through the Health Connector, the Commonwealth’s marketplace for health and dental insurance, with lower monthly premiums and cost-sharing for those with household incomes at or below 300% of the Federal Poverty Level (FPL).
Cost-Sharing
The amount of an allowed claim that the member is responsible for paying. This includes any copayments, deductibles, and coinsurance payments for the services rendered. Cost-sharing does not include out-of-pocket payments for goods and services not covered by the members’ health insurance policies (e.g., over-the-counter medicines, vision, and dental care).
Cost-Sharing Reduction (CSR) Subsidies
Payments made by the federal government and/or the Commonwealth of Massachusetts directly to ConnectorCare payers to lower copayments and eliminate deductibles and coinsurance in ConnectorCare plans.
Dually Eligible Beneficiary/Patient
A person who is enrolled in both Medicaid and Medicare.
Employer-Sponsored Insurance (ESI)
Health insurance plans purchased by employers on behalf of their employees as part of an employee benefit package.
Fully Insured
A fully insured employer contracts with a payer to pay for eligible medical costs for its employees and dependents in exchange for a pre-set annual premium.
Funding Type
The segmentation of health plans into 2 types—fully insured and self-insured—based on how they are funded.
Group Insurance Commission (GIC)
The organization that provides health benefits to state employees and retirees in Massachusetts.
Health Care Cost Growth Benchmark (Benchmark)
The projected annual percentage change in Total Health Care Expenditure (THCE) measure in the Commonwealth, as established by the Health Policy Commission (HPC). The benchmark is tied to growth in the state’s economy, the potential gross state product (PGSP). For 2023 and beyond, the benchmark will be established by law at a default rate of PGSP, though the HPC Board can modify to any amount deemed reasonable, subject to legislative review.
Health Connector
The Commonwealth’s state-based health insurance marketplace where individuals, families, and small businesses can purchase health plans from insurers.
Health Maintenance Organizations (HMOs)
Insurance plans that have a closed network of providers, outside of which coverage is not provided, except in emergencies. These plans generally require members to coordinate care through a primary care physician.
High Deductible Health Plan (HDHP)
As defined by the IRS, a health plan with an individual plan deductible exceeding $1,400 in 2021-2022; $1,500 in 2023; and $1,600 in 2024 For a family plan, HDHPs are those with a deductible exceeding $2,800 for 2021-2022; $3,000 for 2023; and $3,200 for 2024.
High Share of Family Income Spent on Out-of-Pocket Health Care Expenses
For families under 200% of the Federal Poverty Level, spending 5% or more, or for all other families, spending 10% or more, of family income on out- of-pocket health care expenses. Out-of-pocket health care expenses include all family spending on deductibles, copays, and coinsurance for benefits covered by insurance, and all family spending on non-covered medical, dental, and vision services that family members paid for directly. Out-of-pocket expenses do not include premiums for health insurance.
Hospital Financial Metric Formulas and Calculations
Financial ratio analysis is one critical component of assessing a hospital's financial condition. CHIA examines several main areas including capital reinvestment, liquidity, profitability, and solvency hospital financial reporting. A full list of formulas and calculations can be found at the Financial Metric Formulas and Calculations web page.
Limited Network
A health insurance plan that offers members access to a reduced or selective provider network, which is smaller than the payer’s most comprehensive provider network within a defined geographic area and from which the payer may choose to exclude from participation other providers who participate in the payer’s general or regional provider network. This definition, like that contained within Massachusetts Division of Insurance regulation 211 CMR 152.00, does not require a plan to offer a specific level of cost (premium) savings in order to qualify as a limited network plan.
Managing Physician Group Total Medical Expenses
Measure of the total health care spending of members whose plans require the selection of a primary care provider associated with a physician group, or who are attributed to a primary care provider according to a contract between a payer and provider.
Market Sector
Average employer or group size segregated into the following categories: individual purchasers, small group (up to 50 employees), mid-size group (51-100 employees), large group (101-499 employees), and jumbo group (500+ employees) In the small group market segment, only those small employers that met the definition of “Eligible Small Business or Group” per Massachusetts Division of Insurance Regulation 211 CMR 66 04 were included; otherwise, they were categorized within mid-size.
MassHealth (Massachusetts Medicaid Program)
MassHealth provides health benefits and help paying for them to qualifying children, families, seniors, and people with disabilities living in Massachusetts. It is a joint federal and state program designed for low to moderate income residents. Learn more about MassHealth.
MassHealth Primary Care Sub-Capitation Program
Primary care practices participating in any of MassHealth’s Accountable Care Organizations (ACOs) are paid a fixed per-member, per-month rate for a set of primary care services. Sub-capitation rates are designed to cover typical primary care services and to increase MassHealth’s investment in primary care. Through the sub-capitation program, MassHealth is investing to help primary care providers shift their care model and operations away from typical fee-for-service medicine and towards more team-based, integrated primary care to improve their patients’ experience and quality of care, and to better support primary care providers.
Medical Loss Ratio (MLR)
As established by the Division of Insurance: the sum of a payer’s incurred medical expenses, their expenses for improving health care quality, and their expenses for deductible fraud, abuse detection, and recovery services, all divided by the difference of premiums minus taxes and assessments. This ratio is calculated within a licensed payer and market segment over a 3-year average.
Merged Market
The combined health insurance market within which both individual (non-group) and small group plans are purchased.
Net Prescription Drug Spending
Payments made to pharmacies for members’ prescription drugs minus rebates received by the health plan from manufacturers.
Out-of-Pocket Expenses
Out-of-pocket expenses include spending by an individual consumer on deductibles, copays, and coinsurance for benefits covered by insurance, and all spending on non-covered medical, dental, and vision services that the individual pays for directly Out-of-pocket expenses do not include premiums for health insurance.
Percent of Benefits Not Carved Out
The estimated percentage of a comprehensive package of benefits (e.g., pharmacy, behavioral health) that are accounted for within a payer’s reported claims.
Point-of-Service (POS)
Insurance plans that generally require members to coordinate care through a primary care physician and offer both in-network and out-of-network coverage options.
Preferred Provider Organizations (PPOs)
Insurance plans that identify a network of “preferred providers” while allowing members to obtain coverage outside of the network, though typically with higher levels of cost-sharing. PPO plans generally do not require enrollees to select a primary care physician.
Premium Retention
The difference between the total premiums collected by payers (net of MLR rebates) and the total spent by payers on incurred medical claims. Also known as non-medical expenses and surplus.
Premiums, Earned, Net of MLR Rebates
The total gross premiums earned after removing medical loss ratio rebates incurred during the year (though not necessarily paid during the year), including any portion of the premium that is paid to a third party (e g , Connector fees, reinsurance).
Prescription Drug Rebate
A refund for a portion of the price of a prescription drug Such refunds are paid retrospectively and typically negotiated between the drug manufacturer and pharmacy benefit managers, who may share a portion of the refunds with clients that may include insurers, self-funded employers, and public insurance programs. The refunds can be structured in a variety of ways, and refund amounts vary significantly by drug and payer.
Prevention Quality Indicators
A set of indicators that assess the rate of hospitalizations for “ambulatory care sensitive conditions,” conditions for which high-quality preventive, outpatient, and primary care can potentially prevent complications, more severe disease, and/or the need for hospitalizations. These indicators calculate rates of potentially avoidable hospitalizations in the population and can be risk-adjusted.
Product Type
The segmentation of health plans along the lines of provider networks. Plans are classified into one of four mutually exclusive categories in this report: Health Maintenance Organizations, Point-of-Service, Preferred Provider Organizations, and Other.
Qualified Health Plans (QHPs)
A health plan certified by the Health Connector to meet benefit and cost-sharing standards.
Risk Adjustment
The Affordable Care Act program that transfers funds between payers offering health insurance plans in the merged market to balance out enrollee health status (risk).
Self-Insured
A self-insured employer takes on the financial responsibility and risk for its employees’ and employee-dependents’ medical claims, paying claims and administrative service fees to payers or third-party administrators.
Standard Quality Measure Set (SQMS)
The Commonwealth’s Statewide Quality Advisory Committee recommends quality measures annually for the state’s Standard Quality Measure Set. The Committee’s recommendations draw from the extensive body of existing, standardized, and nationally recognized quality measures.
Tiered Network Health Plans
Insurance plans that segment their provider networks into tiers, with tiers typically based on differences in the quality and/or the cost of care provided Tiers are not considered separate networks, but rather sub-segments of a payer’s HMO or PPO network. A tiered network is different than a plan simply splitting benefits by in-network vs out-of-network; a tiered network will have varying degrees of payments for in-network providers.
Total Health Care Expenditures (THCE)
A measure of total spending for health care in the Commonwealth Chapter 224 of the Acts of 2012 defines THCE as the annual per capita sum of all health care expenditures in the Commonwealth from public and private sources, including (i) all categories of medical expenses and all non-claims related payments to providers, as included in the health status adjusted total medical expenses reported by CHIA; (ii) all patient cost-sharing amounts, such as deductibles and copayments; and (iii) the net cost of private health insurance, or as otherwise defined in regulations promulgated by CHIA.
Total Medical Expenses (TME)
The total medical spending for a member population based on allowed claims for all categories of medical expenses and all non-claims- related payments to providers. TME is expressed on a per member per month basis.
Treat-and-Release Emergency Department (ED) Visit
An emergency department visit not resulting in an inpatient admission or an outpatient observation stay at the same facility.
Unmet Family Needs for Health Care Due to Cost
Health care that a resident or a family member living in the household perceived as necessary but decided to forgo in the past 12 months due to the cost of that care. This includes the following types of health care: doctor care; nurse practitioner, physician assistant, or midwife care; specialist care; mental health care or counseling; substance use care or treatment; prescription drugs; dental care; vision care; or medical equipment.
