Contracting Terms: Defining the Evolution of Healthcare

Feel like you need to take “Business as a Second Language,” or some other crash course, to learn the language of contracting? Here are a few definitions to get you started.


Accountable Care Organizations (ACOs): Groups of providers and hospitals who jointly provide coordinated care to Medicare beneficiaries.


Alternative Payment Models: Emerging reimbursement models, like bundled payments, designed to streamline revenue-cycle management as healthcare transitions to value-based care.


Bundled Payment: An alternative payment model in which a group of providers receives a single payment for one episode of coordinated care. 

Clean Claim: A claim that is complete, legible, and accurate, according to the requirements of the Center for Medicare and Medicaid Services, and that requires no additional investigation or delay in reimbursement.


Credentialing: The process of verifying physicians’ professional records. The ACA has significantly increased credentialing requirements for physicians, which can impact payer reimbursements.


Management Services Organization (MSO): A healthcare-specific organization created to perform administrative and management services that align with the delivery of coordinated care.


Non-compete Clause: A contractual agreement in which a provider agrees not to practice medicine in a certain geographic area for a specified period. Sometimes called “restrictive covenants.”

Professional Services Agreement (PSA): A contractual agreement between a healthcare entity and a physician group or individual provider, in which a provider or provider group agrees to employment terms for a specified period.


Quality-assurance Plans: Programs or activities designed to assure quality improvement in a medical setting, including quality evaluations, problem assessment, improvement measures, and follow-up monitoring.


Shared-savings Programs: An alternative payment model developed to move Medicaid and Medicare payments to a system based on values and outcomes by promoting accountability, coordinated care, and investment in high-quality, efficient services.

Timely Filing Guideline: A payer’s time limit on claims submissions.


Value-based Contracting: A contract with a provider that ties physician compensation to cost-efficiency and/or quality-performance measures. 


Volume-based Contracting: A payment system that compensates physicians  
for each service a patient needs. 


Wraparound Services: Programs that help coordinate health services for children, families, or individuals with complex behavioral and mental-health needs.

Sources: 
Centers for Medicare & Medicaid Services; US Department of Health & Human Services; Healthcare. gov; Healthcare Financial Management Association; United Healthcare; National Committee for Quality Assurance; PYA, P.C.; Washington State Health Care Authority.