Glossary of Healthcare Terms

Healthcare organizations are classified by the following criteria: total number of facility beds, utilization, finances, and staffing.

The value in arm’s-length transactions, consistent with general market value, without taking into account any ability between parties to refer business to each other.

The price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

“[A] view as to whether the consideration offered in a deal is within the range of what would be considered ‘fair.’”

The payment system agreed upon between consultant and client based on the amount of time and resources an engagement requires and its profitability for the consultant. Generally flat fees and hourly rates are used for consulting.

A payment policy under which providers receive a fee for each service provided (e.g., an office visit, test, procedure, etc.).

A fee schedule is a payment system under which the fees for procedures are explicitly laid out and the physician agrees to accept those fees as full payment unless the discounted charges are less than the fee schedule; in which case the plan pays the lesser of the two.

A payment policy under which providers receive a fee for each service provided (for example, an office visit, test, procedure, etc.).

A method of financial analysis that may be used to understand the operational and financial status of a healthcare organization. Financial benchmarking consists of three steps (1) historical subject benchmarking, (2) benchmarking to industry norms, and, (3) financial ratio analysis.

Liability that assigns responsibility for any debt accrued by the practice.

A subset of financial benchmarking that uses ratios, calculated as measurements of various financial and operational characteristics that represent the financial status of an enterprise, which are then evaluated in terms of their relative comparison to generally established industry norms.

An ownership or investment interest in the DHS entity, or a compensation arrangement between the DHS entity and the referring physician or a member of his immediate family. The law further describes "ownership/investment interest" to include debt, equity or other means. The term also includes an interest in an entity that holds an ownership or investment interest in any entity providing DHS services.

Includes office share arrangements; management services agreements; and financing agreements including options.

New Generation biologics.

Liquidation value at which all, or the majority, of the assets will be sold at approximately the same time in a relatively quick fashion.