Hospital Pricing Glossary
Plain-language definitions of hospital billing, quality ratings, and healthcare pricing terms. 25 terms and counting.
Billing & Pricing
Case Mix Index (CMI)A measure of the average complexity and resource intensity of a hospital's patients — higher CMI means the hospital treats sicker, more complex patients.Chargemaster (Charge Description Master)A hospital's master list of prices for every item and service — from aspirin to surgery — typically containing tens of thousands of line items with prices that bear little relation to actual costs.Diagnosis Related Group (DRG)A classification system that groups hospital inpatient stays into categories based on diagnosis, procedures, and patient complexity — used by Medicare to determine how much a hospital gets paid.Hospital Price TransparencyA federal rule (effective January 2021) requiring all U.S. hospitals to publicly display their prices — including chargemaster rates, negotiated rates with each insurer, and cash-pay discounts.Inpatient Prospective Payment System (IPPS)Medicare's payment system for hospital inpatient stays — paying a fixed amount per DRG rather than reimbursing each individual service.Surprise Medical Bill (Balance Billing)An unexpected bill from an out-of-network provider — often occurring during emergencies or when an in-network hospital uses out-of-network specialists without the patient's knowledge.UpcodingThe practice of assigning a patient to a higher-severity DRG code than their actual condition warrants — resulting in higher Medicare reimbursement.
Quality & Safety
CMS Star Rating (Hospital Overall Rating)A 1-to-5 star rating assigned by CMS to hospitals based on quality measures — covering mortality, safety, readmissions, patient experience, and timely care.HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems)A standardized patient satisfaction survey that measures patients' perspectives on their hospital experience — covering communication, responsiveness, cleanliness, pain management, and discharge information.Mortality Rate (Hospital)The rate of patient deaths within 30 days of hospital admission for specific conditions — risk-adjusted to account for differences in patient severity.Readmission RateThe percentage of patients who return to the hospital within 30 days of discharge for the same or related condition — a key quality metric tracked by CMS.Value ScoreHospitalCostData's proprietary A-F grade combining price (40%), quality rating (40%), and patient outcomes (20%) — measuring whether a hospital delivers good care at a fair price.
Insurance & Coverage
Deductible (Health Insurance)The amount you must pay for healthcare services before your insurance begins to pay — ranging from $0 for some plans to $7,000+ for high-deductible plans.MedicaidA joint federal-state health insurance program for low-income individuals — paying hospitals even less than Medicare and covering over 90 million Americans.MedicareFederal health insurance for Americans aged 65+ and certain younger people with disabilities — covering hospital stays (Part A), outpatient care (Part B), and prescription drugs (Part D).Out-of-Pocket MaximumThe most you'll pay for covered healthcare services in a plan year — after reaching this amount, your insurance pays 100% of covered services.
Hospital Types
Critical Access Hospital (CAH)A small, rural hospital (25 beds or fewer) designated by CMS to receive cost-based reimbursement — ensuring rural communities maintain access to essential hospital services.For-Profit HospitalAn investor-owned hospital that operates to generate returns for shareholders — making up about 25% of U.S. community hospitals, with the rest being nonprofit or government-owned.Nonprofit HospitalA hospital organized as a tax-exempt entity — making up about 56% of U.S. community hospitals — that reinvests revenue into the community in exchange for federal, state, and local tax exemptions.Teaching HospitalA hospital affiliated with a medical school that trains resident physicians — typically larger, more complex, and higher-cost than community hospitals, but often offering more advanced care.
Regulation & Oversight
Centers for Medicare & Medicaid Services (CMS)The federal agency that administers Medicare, Medicaid, and the ACA marketplace — setting hospital payment rates, quality standards, and the data that HospitalCostData uses.Certificate of Need (CON)A state regulation requiring hospitals to get government approval before building new facilities, adding beds, or purchasing major equipment — intended to prevent excess capacity and control costs.
Patient Rights & Protections
Charity Care (Financial Assistance)Free or reduced-cost hospital care provided to patients who cannot afford to pay — all nonprofit hospitals are required to have financial assistance policies.Good Faith EstimateA written estimate of expected charges for scheduled healthcare services that uninsured or self-pay patients have the right to receive under the No Surprises Act.Medical DebtUnpaid healthcare bills — the leading cause of personal bankruptcy in the United States, affecting approximately 100 million Americans who carry some form of medical debt.