access – a person’s ability to obtain healthcare services.

accountable care organization (ACO) – ACOs are groups of doctors, hospitals, and other health care providers, who come together to give coordinated, high-quality care to their patients. The goal is to ensure patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When successful in delivering high quality care and spending wisely, the ACO will share in the savings it achieves.

acquisition – the purchase of one company by another.

affidavit – a written declaration made under oath before a notary public or other authorized officer.

alliance – the coming together of two or more firms to create a unique organizational entity (such as a joint venture), in which each firm retains its individual identity and internal control.

allowed spending – the payment amount to which an insurer agrees for a particular service. The amount may be paid entirely by the insurer, entirely out-of-pocket by the patient, or some combination of both.

all payer claims database (APCD) – an administrative database developed by a state to combine data on medical claims, pharmacy claims, dental claims, and eligibility and provider files from all payers in a state, giving policymakers statewide information on costs, quality, utilization patterns, and both access and barriers to care, as well as a number of other health care measures.

all-payer system – a healthcare system in which all payers would use the same fee schedule. Also called multiple payer system.

ambulatory care – all health services that are provided on an out-patient basis (also called out-patient care).

American Medical Association (AMA) – an organization comprised of American physicians. The AMA’s announced objective is to promote “the art and science of medicine and the betterment of public health.”

amended complaint – what results when the party suing (plaintiff or petitioner) changes the complaint he/she has filed. It must be in writing, and can be done before the complaint is served on any defendant, by agreement between the parties, or upon order of the court.

amicus curiae – Latin for “friend of the court,” a party or an organization that files a brief or participates in an argument in a case in which that party or organization is not one of the litigants, but nonetheless has an interest in the outcome, usually for policy reasons.

ancillary services – supplemental services, including laboratory, radiology and physical therapy, that are provided along with medical or hospice care.

answer – in law, a written pleading filed by a defendant to respond to a complaint in a lawsuit filed and served upon that defendant.

anticompetitive – tending to stifle or suppress competition in a market.

anti-tiering or anti-steering – provisions in contracts with health insurers to prevent them from driving patients to their competition, as insurers will sometimes employ steering and tiering through narrow, tiered networks to incentivize consumers to use lower-cost providers or provider networks to reduce healthcare expense. Practicing anti-tiering or anti-steering often allows providers to maintain market power as health insurers cannot offer their patients lower cost options. In recent years, states have attempted to regulate this.

antitrust enforcement – antitrust enforcement laws are those that attempt to prevent or control trusts or other monopolies to promote competition in business. Antitrust policy has varied over time and across industries and may be done by state, federal, or private actors.

Any Willing Provider statutes – laws that require health insurance carriers to include all health care providers affiliated with a health system or provider group as in-network if certain conditions are met, also known as, “any authorized provider.”

appeal – timely resort by an unsuccessful party in a lawsuit or administrative proceeding to an appropriate superior court empowered to review a final decision on the ground that it was based upon an erroneous application of law.

appellant – the party who appeals a court decision.

appellate court – a court of appeals that hears appeals from lower court decisions.

appellee – the party against whom an appeal is taken.

attorney general – in each state and the federal government the highest ranking legal officer of the government. The federal Attorney General is chief of the Department of Justice appointed by the President with confirmation required by the Senate and a member of the Cabinet.


bad faith – the intention to commit a dishonest act, including not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others.

balance billing – the practice of a healthcare provider billing a patient for the difference between what the patient’s health insurance chooses to reimburse and what the provider chooses to charge; sometimes called “extra billing.”

barriers to entry – obstacles that make it difficult to enter a given market, including those imposed by other firms seeking to limit competition, market forces, and regulation, patents, or licensing requirements.

beneficiary – a person who is eligible for or receiving benefits under an insurance policy or plan.

benefits – the services that members are entitled to receive based on their health plan.

benefit design – the way health insurance plans are curated and balanced between cost and coverage; a key part of reform efforts. States regulate benefit designs, including mandating certain medically necessary benefits or banning exclusions based on pre-existing conditions.

bid rigging – a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid.

biosimilars or biosimilar products – the equivalents of “generics” for biologic products.

bundled payment – the reimbursement of health care providers, such as hospitals and physicians, “on the basis of expected costs for clinically-defined episodes of care,” and is also known as episode-based payment, episode payment, episode-of-care payment, case rate, evidence-based case rate, global bundled payment, global payment, or package(d) pricing. It has been described as a middle ground between fee-for-service reimbursement (in which providers are paid for each service rendered) and capitation.

buyout – the purchase of a controlling share in a company, especially by its own managers.


cafeteria plan – a benefit plan that gives employees a set amount of funds that they may spend on various benefit options, such as health insurance or retirement savings.

capitation – a payment arrangement for healthcare service providers whereby the provider is paid a fixed amount per patient, per period of time, paid in advance to the physician for the delivery of health care services whether or not that person seeks care.

carrier – an insurance or underwriting organization.

cartel – an agreement among two or more firms in the same industry to fix prices and/or carve up the market and restrict outputs. A cartel seeks to increase participating firms’ profits by reducing market competition. Cartels are particularly common when markets are oligopolies.

carve-out – a medical service that is separated out and contracted for independently from any other benefits.

catastrophic health insurance – health insurance that provides coverage for treating severe or lengthy illnesses or disability.

cause of action – the facts that give a person the right to seek judicial redress or relief against another. Also, the legal theory forming the basis of a lawsuit.

certificate of need programs (CON) – laws that require government permission before a facility can expand, offer a new service, or purchase certain pieces of equipment. Some states enacted these because they believed restricting entry would lower health care costs and increase service availability to the poor, under the theory that unregulated market competition would drive providers to over-invest in facilities and equipment and raise the cost of medical care.

certificate of public advantage (COPA) – a document that provides a state government’s written approval to allow and regulate a consolidation/merger that would otherwise be antitrust infringement; governs a Cooperative Agreement among two or more providers with the goal of protecting the

chargemaster – a comprehensive listing of items billable to a hospital patient or a patient’s health insurance provider.

chargemaster price – the charge-to-cost ratio based upon the Medicare-allowable rates for a service.

chronic care – treatment given to people whose health problems are long-term and continuing. Nursing homes, mental hospitals and rehabilitation facilities are chronic care facilities.

civil – as distinguished from criminal law, the part of the law that encompasses business, contracts, estates, domestic (family) relations, accidents, negligence and everything related to legal issues, statutes and lawsuits.

civil procedure – the body of rules and regulations set out in both state and federal laws that establish the format under which civil lawsuits are filed and conducted. Civil procedure refers only to form and procedure, and not the underlying substantive law giving litigants the right to sue or defend a lawsuit.

claim – in healthcare, an itemized statement of services and costs from a health care provider or facility submitted to the insured for payment. In law, the making of a demand for money due for property, from damages or for enforcement of a right.

class – in legal terms, all those persons in the same category, level of rights (e.g. heirs of a dead person who are related by the same degree), or who have suffered from the same incident. Whether a person is part of a class is often crucial in determining who may sue on behalf of the people who have been similarly damaged or collect his/her share if a class action judgment is given.

class action – a lawsuit that allows a large number of people with a common interest in a matter to sue or be sued as a group. Federal class actions are governed by Federal Rule of Civil Procedure Rule 23.

clawbacks – prescription drug over-payments that occur when a patient’s copay exceeds the total cost of the drug to the patient’s insurer or prescription benefit manager (PBM).

Clayton Act – a law enacted October 15, 1914 (codified at 15 U.S.C. §§ 12-27, 29 U.S.C. §§ 52-53), to add further substance to the U.S. antitrust law regime, specifically the Sherman Act, by broadening prohibitions on anticompetitive practices.

CMS – Centers for Medicare & Medicaid Services. The newly named federal agency, formerly the Health Care Financing Administration, that administers the Medicare, Medicaid and Child Health Insurance programs.

COBRA – Consolidated Omnibus Budget Reconciliation Act of 1985).

co-defendant – when more than one person or entity is sued in one lawsuit, each party sued is called a co-defendant.

co-insurance – a cost-sharing requirement under some health insurance policies in which the insured person pays some of the costs of covered services.

collusion – secret agreement between two or more parties to limit competition, typically by fixing prices, dividing a market or limiting outputs or opportunities.

compensatory damages – damages recovered in payment for actual injury or economic loss, which does not include punitive damages (as added damages due to malicious or grossly negligent action).

competition – in markets, the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. Generally, when there is more competition, firms are more likely to be efficient and keep prices low. The spectrum of competition in markets ranges from perfect competition to monopoly and most markets function somewhere between the two.

consolidation – the merger of two or more commercial interests or corporations. Consolidation laws govern mergers, acquisitions, integrations, and joint ventures.

contestability – in economics, refers to a market structure with low sunk costs and freedom of entry and exit. The number of firms is not so important, but the threat of competition should be sufficient to keep prices low and prevent abuse of monopoly power. Few markets are perfectly contestable.

conspiracy – an agreement by two or more persons to commit a crime, fraud, or other wrongful act.

cooperative/co-op – a form of mutual insurance in which the health insurance entity is owned by the people that the entity insures.

co-pay – flat fee or payment that a patient pays for each doctor visit or prescription.

copay accumulators – a system in which patients’ co-pays and coupons do not count towards deductibles or out-of-pocket maximums. This mechanism allows insurers to attempt to prevent patients from cost-sharing or saving money at the pharmacy.

cost containment – a method of preventing the increase of healthcare costs beyond a set level by controlling or reducing inefficiency and waste in the healthcare system.

cost sharing – the share of costs by an insured’s out of pocket payment for a portion of health care costs not covered by the insurer. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.

cost shifting – when a hospital or other health-care provider charges an insured patient more than it does an uninsured patient for the same procedure or service to cover its costs.

covered services – treatments or other services for which a health plan pays at least part of the charge.


damages – the amount of money that a plaintiff may be awarded in a lawsuit.

declaration – a written statement made “under penalty of perjury” and signed by the declarant; similar to an affidavit (but not necessarily sworn to).

deductible – the amount of money, or value of certain services (such as one physician visit), a patient or family must pay before costs (or percentage of costs) are covered by the health plan or insurance company, usually calculated annually.

defendant – the party sued in a civil lawsuit or the party charged with a crime in criminal prosecution.

delivery reform – programs aimed at continuous improvement in the productivity of the health care delivery process, which could slow the rate of cost increase without diminishing the quality of care.

deponent – a person testifying at a deposition.

deposition – the taking and recording of testimony of a witness under oath before a court reporter in a place away from the courtroom before trial. A deposition is part of a permitted pre-trial discovery and may involve either a lay or expert witness.

diagnostic related groups (DRGs) – any of the payment categories that are used to classify patients and especially Medicare patients for the purpose of reimbursing hospitals for each case in a given category with a fixed fee regardless of the actual costs incurred.

dismissal – the ruling by the judge that all or a portion (one or more of the causes of action) of the plaintiff’s lawsuit is terminated (thrown out) at that point without further evidence or testimony. This judgment may be made before, during or at the end of a trial. A dismissal with prejudice means that the action may not be re-filed.

district court – a trial court in the federal court system. Within limits set by Congress and the Constitution, the district courts have jurisdiction to hear nearly all categories of federal cases, including both civil and criminal matters. There are 94 federal judicial districts, including at least one district in each state, the District of Columbia and Puerto Rico.

demographics – characteristics of human populations and population segments, especially when used to identify consumer markets.

direct access – a patient’s ability to see a doctor or receive a medical service without a referral from a primary care physician.

dissent – the opinion of a judge of a court of appeals, including the U.S. Supreme Court, that disagrees with the majority opinion.

diversity of citizenship – when opposing parties in a lawsuit are citizens of different states (including corporations incorporated or doing business in different states) or a citizen of a foreign country, which places the case under federal court jurisdiction.

divestiture – the court-ordered or voluntary giving up of a possession or right, which is a common result in an antitrust action to prevent monopoly or other restraint of trade.

docket – a calendar of the cases awaiting action in a court. Also, a brief entry of the court proceedings in a legal case.

dominant firm – the firm that controls most of the market in which it operates and has no significant competition. Its competitors are mostly small firms who compete with each other for the remaining market share.


economic rent – an excess payment made to or for a factor of production over and above the amount expected by its owner. Economic rent arises due to market imperfections; it would not exist if markets were perfect, because competitive pressures would drive down prices. Economic rent should not be confused with the more commonly used “rent,” which simply refers to a payment made for temporary use of an asset or property.

economies of scale – the decrease in unit cost of a product or service resulting from large-scale operations, as in mass production.

efficiency – a broad term that implies an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency.

elasticity – a measure of a variable’s sensitivity to change in another variable. In economics, elasticity refers to the degree to which individuals (consumers/producers) change their demand/supply in response to price or income changes.

ERISA – Employee Retirement Income Security Act.

enjoin – to require (a person) to do or refrain from doing (some act), especially by issuing an injunction.
exclusive provider organizations (EPO)/exclusive provider arrangement (EPA) – an indemnity or service plan that provides benefits only if those hospitals or doctors with which it contracts provide the medical services, with some exceptions for emergency and out-of-area services.

expert witness – a person who is a specialist in a subject, often technical, who may present his/her expert opinion without having been a witness to any occurrence relating to the lawsuit or criminal case.

evergreening – the practice of extending the life of a patent that is about to expire.

externalities – side effects or consequences of an industrial or commercial activity that affect other parties without this being reflected in the cost of the goods or services involved.


facility fee – a fee provider offices sometimes charge when a hospital owns the medical office. Amounts can vary greatly based on location. Some states prohibit this type of fee.

fact finder/finder of fact – the entity (jury or judge, if there is no jury) that decides whether facts have been proven in a trial or lawsuit.

fail first – a strategy to lower costs by requiring patients to try one or several generic prescriptions before trying the higher-cost versions. Also known as “step therapy.”

federal court – a trial or appellate court in the system which handles civil and criminal cases based on jurisdictions enumerated in the Constitution and federal statutes. These courts include federal district courts, courts of appeals and the US Supreme Court, as well as specialized courts such as bankruptcy, tax, claims (against the government) and veterans’ appeals.

fee-for-service – a system in which physicians or other providers bill separately for each patient encounter or service they provide. This method of billing means the insurance company pays all or some set percentage of the fees hospitals and doctors set and charge. This is still the main system of paying for healthcare services in the United States.


gag clause – a provision that may be incorporated in a physician’s contract with managed care organizations that prevents the physician from being open with patients about the terms of the patient’s coverage and cheaper healthcare options. Some states prohibit or inhibit gag clauses. This has become a popular issue recently, especially as these clauses relate to pharmaceutical prices.

gag order – a judge’s order that prohibits the attorneys and parties to a pending lawsuit or criminal prosecution from talking to the media or the public about the case.

gatekeeper – the person in a managed care organization, often a primary care provider who controls a patient’s access to healthcare services and whose approval is required for referrals to other services or other specialists.

global payment or global budget – a set amount under which the provider group, health system, or hospital system must operate for a given year.

good faith – a sincere intention to deal fairly and honestly with others in a transaction or agreement.

group insurance – health insurance offered through business, union trusts or other groups and associations.


health maintenance organization (HMO) – a health plan that provides comprehensive medical services to its members for a fixed, prepaid premium. Members must use participating providers and are enrolled for a fixed period of time. HMOs can do business either on a for-profit or not-for-profit basis.

health savings account (HSA) – a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in an HDHP. The funds contributed to this type of account are not subject to federal income tax when deposited.

health reimbursement arrangement (HRA) – an IRS-approved, employer-funded, tax-advantaged personalized health benefit that reimburses employees for out-of-pocket medical expenses and individual health insurance premiums, also referred to as a heath reimbursement account.

high deductible health plan (HDHP) – a health insurance plan with lower premiums and higher deductibles than a traditional plan; this type of plan is required to have a health savings plan (HSA).

horizontal integration – the acquisition of additional business activities that are at the same level of the value chain in similar or different industries. This can be achieved by internal or external expansion.

horizontal merger – a merger occurring between companies in the same industry with similar product lines.

hornbook law –a fundamental and well-accepted legal principle that does not require explanation, as it might appear in a legal primer like a hornbook.

hypothetical monopolist test – in antitrust law, the hypothetical monopolist test may be used to determine whether a relevant product market is properly defined as a first step to evaluating whether a company has monopoly power. In applying the test, the question posed is whether a hypothetical monopolist could profitably impose a small but significant and non-transitory increase in price in the product market as defined. If yes, the market is correctly defined.


independent practice association (IPA) – a group of private physicians who join together in an association to contract with a managed care organization.

indigent care – care provided, at no cost, to patients who do not have health insurance or are not covered by Medicare, Medicaid, or other public programs.

injury – a comprehensive term for any wrong or harm done by one individual to another individual’s body, rights, reputation, or property. Any interference with an individual’s legally protected interest.

inelastic – an economic term used to describe the situation in which the supply and demand for a good or service are unaffected when the price of that good or service changes.

integrated delivery system (IDS) – a coordinated health care system formed by physician groups and hospitals that work together to deliver of a broad range of health services.

interlocutory actions – actions taken by courts when an appellate court must answer a question of law before a trial may proceed. Can also occur when an appellate court must prevent irreparable harm from occurring to a person or property during proceedings of a lawsuit.

interrogatories – a set of written questions to a party to a lawsuit asked by the opposing party as part of the pre-trial discovery process. These questions must be answered in writing under oath or under penalty of perjury within a specified time.


JD – short for Juris Doctor. Signifies that the holder received a law degree.

John/Jane Doe – a fictitious name used for a possible defendant who is unknown at the time a complaint is filed to start a lawsuit.

joinder – the joining together of several lawsuits or several parties all in one lawsuit, provided that the legal issues and the factual situation are the same for all plaintiffs and defendants.

joint venture – an enterprise entered into by two or more people for profit, for a limited purpose.

judgment – the final decision by a court in a lawsuit, criminal prosecution or appeal from a lower court’s judgment.

judicial notice – the authority of a judge to accept as facts certain matters which are of common knowledge from sources which guarantee accuracy or are a matter of official record, without the need for evidence establishing the fact.

jurisdiction – the authority given by law to a court to try cases and rule on legal matters within a particular geographic area and/or over certain types of legal cases.



liability – a comprehensive legal term that describes the condition of being actually or potentially subject to a legal obligation.

litigant – any party to a lawsuit. This means plaintiff, defendant, petitioner, respondent, cross-complainant and cross-defendant, but not a witness or attorney.

litigation – any lawsuit or other resort to the courts to determine a legal question or matter.


magistrate – in federal courts, usually an official who conducts routine hearings assigned by the federal judges, including preliminary hearings in criminal cases. Magistrate judges may also hear cases in their entirety at the consent of the parties.

managed care – any arrangement for health care in which an organization, such as an HMO, another type of doctor-hospital network, or an insurance company, acts as intermediate between the person seeking care and the physician.

managed competition – a purchasing strategy that uses competition rules derived from rational microeconomic principles to obtain maximum value for employers and consumers; rewards, using more subscribers and revenue, health plans that do the best of job of improving quality, cutting cost, and satisfying patients. The sponsor and cost-conscious consumers make “best job” judgements and do not reward plans that select good risks, segment markets, or otherwise defeat the goals of this type of system.

mandate – law requiring that a health plan or insurance carrier must offer a particular procedure or type of coverage.

market concentration – extent or degree to which a relatively small number of firms account for a relatively large percentage of the market.

market forces – forces of demand and supply representing the aggregate influence of self-interested buyers and sellers on price and quantity of the goods and services offered in a market.

market power –the influence a company has over the marketplace. A company with market power typically can raise the price of its products without affecting demand.

market share – the percentage of a total market, in terms of either value or volume, accounted for by the sales of a specific brand.

Medicaid – an insurance program for people with low incomes who are unable to afford healthcare. Although funded by the federal government, Medicaid is administered by each state. Following very broad federal guidelines, states determine specific benefits and amounts of payment for providers.

Medicare – a federal program of medical care benefits created in 1965 designed for those over age 65 or permanently disabled. Medicare consists of two separate programs: A and B. Medicare Part A, which is automatic at age 65, covers hospital costs and is financed largely by employer payroll taxes. Medicare Part B covers outpatient care and is financed through taxes and individual payments toward a premium.

Medicare Supplements or Medigap – a privately-purchased health insurance policy available to Medicare beneficiaries to cover costs of care that Medicare does not pay. Some policies cover additional costs, such as preventive care, prescription drugs, or at-home care.

merger – any combination of two or more business enterprises into a single enterprise.

monopoly – exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

monopsony – the market condition that exists when there is one buyer (in contrast to monopoly, in which there is only one seller).

moral hazard – a risk incurred by an insurance company with respect to the possible lack of honesty or prudence among policyholders

most favored nation clause (MFN) – a contract provision in which a seller/licensor agrees to give the buyer the best terms it makes available to any other buyer. These clauses are sometimes included in contracts between health plans and providers, but a number of states ban them for their anticompetitive effects. Also referred to as most favored customer clause, most favored licensee clause, prudent buyer clause, or nondiscrimination clause


network – a group of affiliated contracted healthcare providers.

network adequacy – laws that try to promote the adequacy of their healthcare/provider networks so patients have adequate access to care; subset of “provider network”

non-compete provision – an agreement, typically in an employment contract, that an employee (i.e. physician) will not compete with his or her current employer (i.e. current practice group or hospital) within a geographic area for a limited amount of time. These may include a non-solicitation clause.

non-participating provider – a healthcare provider that is not part of a health plan. Usually patients must pay their own healthcare costs to see a non-participating provider.

non-solicitation provision – a contract provision that prohibits a physician from soliciting or continuing to offer medical care to patients of the current medical group.


oligopoly – the market condition that exists when there are few sellers, as a result of which they can greatly influence price and other market factors.

out-of-pocket costs – the amount of money that a person must pay for his or her healthcare, including: deductibles, co-pays, payments for services that are not covered, and/or health insurance premiums that are not paid by his or her employer.

outcomes – measures of the effectiveness of particular kinds of medical treatment. This term refers to what is quantified to determine whether a specific treatment or type of service works.

overlap health plans – healthcare plans that offer both marketplace and Medicare-managed healthcare coverage.


participating physician or provider – healthcare providers who have contracted with a managed care plan to provide eligible healthcare services to members of that plan.

patent – the exclusive right granted by a government to an inventor to manufacture, use, or sell an invention for a certain number of years.

payer – The organization responsible for the costs of healthcare services. A payer may be private insurance, the government, or an employer’s self-funded plan.

pay for delay – the practice of brand name drug companies paying their generic counterparts to hold off on marketing the generic products. This causes delays for patients in accessing cheaper or generic versions of drugs.

per se doctrine/rule – a rule or doctrine applied in antitrust cases to the analysis of suspect market conduct, where the courts assume prima facie violations of the antitrust laws.

pharmacy benefit manager (PBM) – a third part administrator of prescription drug programs and/or benefits for HMOs.

physician hospital organization (PHO) – an organization that contracts with payers on behalf of one or more hospitals and affiliated physicians (who still own their practices).

play or pay – this system would provide coverage for all people by requiring employers either to provide health insurance for their employees and dependents (play) or pay a contribution to a publicly-provided system that covers uninsured or unemployed people without private insurance (pay).

point of service (POS) – a type of insurance in which the patient can choose from different types of provider systems (indemnity plan, PPO or HMO) each time he or she needs healthcare services. Usually, members are required to pay more to see PPO or non-participating providers than to see HMO providers.

population-based payment – a payment arrangement in which a provider entity agrees to accept responsibility for the health of a group of patients in exchange for a set amount of money. Global payments and shared risk payments can be considered population-based payments.

portability – a person’s ability to keep his or her health coverage during times of change in health status or personal situation (such as change in employment or unemployment, marriage or divorce) or while moving between health plans.

pre-authorization – the process where, before a patient can be admitted to the hospital or receive other types of specialty services, the managed care company must approve of the proposed service in order to cover it.

pre-existing condition – a medical condition or diagnosis that began before coverage began under a current plan or insurance contract.

predatory pricing – a pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.

preferred provider organization (PPO) – a type of insurance in which the managed care company pays a higher percentage of the costs when a preferred (in-plan) provider is used. The participating providers have agreed to provide their services at negotiated discount fees.

premium – the amount paid periodically to buy health insurance coverage.

premium cap – the maximum amount of money an insurance company can charge for coverage.

prescription drug list (PDL) – a list of the most commonly prescribed drugs on a healthcare plan. Otherwise, a list of covered prescriptions by an HMO.

preventive care – Healthcare services that prevent disease or its consequences. It includes primary prevention to keep people from getting sick (such as immunizations), secondary prevention to detect early disease (such as Pap smears) and tertiary prevention to keep ill people or those at high risk of disease from getting sicker (such as helping someone with lung disease to quit smoking).
price discrimination –a pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets or territories.

price gouging – when a seller spikes the prices of goods, services, or commodities to a level much higher than is considered fair and reasonable. This practice is considered exploitative and potentially unethical. Many states prohibit price gouging though what constitutes price gouging depends on the price and type of good or service.

price manipulation laws – laws against target price discrimination, price fixing, predatory pricing, etc.

primary care – basic or general routine office medical care, usually from an internist, obstetrician-gynecologist, family practitioner, or pediatrician.

primary care provider (PCP) – the health professional who provides basic healthcare services. The PCP may control patients’ access to the rest of the healthcare system through referrals.

prior authorization – a requirement that a physician obtain approval from a patient’s health insurance plan to prescribe the patient a specific medication

product hopping – the practice of moving a patient from one branded drug to another with a longer patent life to extend market exclusivity of the drug.

provider – an individual or institution who provides medical care, including a physician, hospital, skilled nursing facility, or intensive care facility.

provider payment – laws that regulate how providers are paid. These may encourage certain payment models.

provider-sponsored organization – healthcare providers (physicians and/or hospitals) who form an affiliation to act as insurer for an enrolled population.

public option – a proposal to create a government-run health insurance agency that would compete with other private health insurance companies within the United States.


quality assessment – measurement of the quality of care.

quality assurance and quality improvement – a systematic process to improve quality of healthcare by monitoring quality, finding out what is not working, and fixing the problems of healthcare delivery.

quality-based (or value-based) reform – laws that target quality or value. For example, they may pay providers based on quality performance or encourage patients to seek care from high-quality providers.

quality measure – laws that make information regarding quality of service available to patients to aid in making their provider selection.

quality of care – the measure of whether health services result in desired health outcomes.


rate setting – a practice that establishes in advance the amount that hospitals will be paid no matter how high or low their costs actually are in any particular year.

rate regulation – state laws that regulate the rates that providers, insurers, etc. may charge. This may include rate setting.

reference pricing – a cost containment strategy by which a payer will offer to pay a specific price for a healthcare good or service and providers may either agree to that price or charge more. If they charge more, the patient must pay the difference out of pocket. Payers use reference pricing to steer patients toward lower cost providers, sometimes high value providers. Some states regulate the use of reference pricing.

referral system – the process through which a primary care provider authorizes a patient to see a specialist to receive additional care.

regressive tax – a tax that takes a higher percentage of low incomes than high ones. Sales taxes, especially on food, clothing, medicine, and other basic necessities are widely cited as examples of regressive taxes.

reimbursement – the amount paid to a provider for services provided to a patient.

rent seeking – when a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

right to shop  – a program in which an insurer creates an incentive or savings that financially rewards patients for choosing providers with costs lower than average. The insurer typically shares any savings from the lower-cost provider with the patient, which gives the patient a financial incentive to seek a higher-value provider even with a flat co-pay or already met deductible. Also known as “shared savings.”

risk evaluation and mitigation strategy (REMS) – the USFDA can require pharmaceutical companies to provide these for prescriptions with serious safety concerns to ensure their benefits outweigh possible related risks. As of 2019, there were 76 FDA-approved REMS.

rule of reason – a doctrine developed by the United States Supreme Court in its interpretation of the Sherman Antitrust Act. The rule is that only combinations and contracts unreasonably restraining trade are subject to actions under the anti-trust laws. The Rule of Reason can be therefore considered a complement to per se illegality. Under the latter, the action, without consideration for circumstances, is illegal.


scope of practice – laws that explain who is a provider for the purposes of practicing medicine, writing prescriptions, etc. For example, laws may give registered nurses the ability to prescribe medications. Care from alternative, or non-physician, providers is often less expensive than care from a physician.

self-insurance – a type of insurance arrangement where employers, usually large employers, pay for medical claims out of their own funds rather than contracting with an insurance company for coverage.

shared savings – a program in which an insurer creates an incentive or savings that financially rewards patients for choosing providers with costs lower than average. The insurer typically shares any savings from the lower-cost provider with the patient, which gives the patient a financial incentive to seek a higher-value provider even with a flat co-pay or already met deductible. Also known as “right to shop.”

shared risk – while payers are establishing shared-savings programs and other payment models in an effort to create new financial incentives for high-quality care, they are also considering payment methods that confer a portion of the financial risk to the provider to try to create stronger incentives than shared savings alone.

Sherman Antitrust Act – a landmark federal statute in the history of United States antitrust law passed by Congress in 1890. It prohibits certain business activities that federal government regulators deem to be anticompetitive, and requires the federal government to investigate and pursue trusts.

sine die – meaning “for an indefinite period,” e.g. during COVID-19, some states suspended their regular legislative sessions sine die.

single payer system – a healthcare reform proposal in which healthcare costs are paid by taxes rather than by the employer and employee. All people would have coverage paid by the government.

socialized medicine – a healthcare system in which providers are paid by the government, and healthcare facilities are run by the government.

SSNIP – small but significant and non-transitory increase in price. This measure is used in applying the hypothetical monopolist test.

standard benefit package – a defined set of benefits provided to all people covered under a health plan.

surprise billing – when charges arise because an insured individual inadvertently received care from an out-of-network provider. This arises most commonly from emergency or ambulatory care services.


telehealth or telemedicine laws – any laws that permit, restrict, or encourage the practice of medical services over the phone, internet, etc. States may regulate the use of specific types of telemedicine, the primary three of which are store-and-forward, real-time, and remote monitoring.

third party administrator (TPA) – an organization that processes health plan claims but does not carry any insurance risk.

third party payer – an organization other than the patient or healthcare provider involved in the financing of personal health services.

tiered network design – a type of network design in which providers are sorted into tiers based upon total cost of care, pricing or some quality and cost index and patients have different cost-sharing rates for providers from different tiers to incentivize patients to receive care from lower cost, higher quality providers. States may attempt to regulate, restrict, or promote a tiered network design.

trade secret – a formula, practice, process, design, instrument, pattern, commercial method, or compilation of information not generally known or reasonably ascertainable by others by which a business can obtain economic advantage over competitors or customers. In healthcare, this can be price information, such as pricing for pharmaceuticals, benefit design, etc. State regulations vary on trade secrets.

tying – the practice of selling one product or service as a mandatory addition to the purchase of a different product or service.


uncompensated care – healthcare provided to people who cannot pay for it and who are not covered by any insurance.

underinsured – people who have some type of health insurance but not enough insurance to cover their the cost of necessary healthcare.

underwriting –  this process is the basis of insurance. It analyzes the health status and history, claims experience (cost), age and general health risks of the individual or group who is applying for insurance coverage.

uninsured –  those who do not have health insurance of any type.

utilization review –  a health insurance company’s opportunity to review a request for medical treatment to confirm that the plan provides coverage for the services. It helps the insurer minimize cost and determine the appropriateness of the recommended treatment. States may encourage, prohibit, or inhibit utilization review.

utilization – how many times people use particular healthcare services during particular periods of time.


value-based payment – payment programs that reward health care providers with incentive payments for the quality of care they provide patients. Providers, including hospitals and physicians, are paid based on patient health outcomes.

vertical integration – the degree to which a firm owns its upstream suppliers and its downstream buyers. Unlike horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production.

vertical restraint – Vertical restraints are agreements that limit competition made among competitors on different levels of the distribution and production process.


waiting period – the amount of time a person must wait from the date he or she is accepted into a health plan (or from when he or she applies) until the insurance becomes effective and he or she can receive benefits.