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Medicaid Glossary

Medicaid Terms Defined, A-Z

Assertive Community Treatment (ACT) or Program of Assertive Community Treatment (PACT):
An evidence-based, outreach-oriented service delivery model for people with severe and persistent mental illnesses. The program uses a 24-hour per day, 7-day per week team approach and delivers comprehensive community treatment, rehabilitation, and support services to consumers in various settings including their homes, work and within the community. Provider teams are typically comprised of psychiatrists, nurses, social workers, substance abuse treatment specialists, vocational rehabilitation counselors and peer counselors.

Case Management:
A close observation of a patient’s progress by a health care professional who takes on the role of the case manager. Case management usually consists of the creation of a long-term treatment plan that guides a patient from the beginning of his or her care, perhaps starting in a hospital setting, through the patient’s discharge, via a "discharge plan", and details follow-up care and actions, such as regular appointments and therapy etc.

Centers for Medicare and Medicaid Services (CMS):
The federal agency in the U.S. Department of Health and Human Services (HHS) responsible for the administration of Medicaid, Medicare and State Children’s Health Insurance Program (SCHIP). This agency was formerly known as the Health Care Financing Administration (HCFA).

Early and Periodic Screening, Diagnostic, and Treatment Services (EPSDT) Programs:
One of the services that states are required to includes in their basic packagers for all Medicaid-eligible children under age 21. EPSDT services include periodic screenings to identify physical and mental conditions as well as vision, hearing and dental problems. EPSDT services also include follow-up diagnostic and treatment services to correct conditions identified during a screening without regard to where the state Medicaid plan covers those services with respect to adult beneficiaries.

Home and Community-Based Services (HCBS) Waiver or 1915c Waiver:
After the enabling section in the Social Security Act, this waiver authorizes the Secretary of HHS to allow a state Medicaid program to offer special services to beneficiaries at risk of institutionalization in a nursing facility or facility for the mentally retarded. These home- and community-based services, which otherwise would not be covered with federal matching funds, include case management, homemaker/home health aide services, rehabilitation services, and respite care. They also include, in the case of individuals with chronic mental illness, day treatment and partial hospitalization, psychosocial rehabilitation services, and clinic services.

Institution for Mental Diseases (IMD) Exclusion:
An IMD is a facility of more than 16 beds in which at least 50% of the residents have a primary diagnosis of a mental illness. The IMD exclusion is a rare instance in which Medicaid law prohibits federal contributions to the cost of medically necessary care furnished by licensed medical care providers to enrolled program beneficiaries.

Long-Term Care Services:
Long-term care is typically necessitated by disabling conditions that require nursing care or constant supervision. Long-term care is the implementation of professional assistance with the activities of daily living, such as dressing, eating, bathing and taking medication. Many different services are included in long-term care such as institutional care, i.e., nursing facilities, or non-institutional care such as home health care, personal care, adult day care, long term home health care, respite care and hospice care.

Managed Care Organizations (MCOs):
An entity that has entered into a risk contract with a state Medicaid agency to provide a specified package of benefits to Medicaid enrollees in exchange for monthly capitation payment on behalf of each enrollee.

Medicaid Buy-in Programs:
Programs designed to encourage a return to work while securing Medicaid health care coverage for individuals with disabilities. Eligibility for Medicaid Buy-In Programs is determined at the state level. Four basic criteria are used in evaluating an individual’s eligibility: age/citizenship & residency; disability; employment; and, income and resource levels. In addition, to qualify for a Buy-In Program an individual must be deemed disabled under the definition of disability used for determining eligibility to Social Security’s SSI and SSDI programs, or an individual must prove a disability through a state’s disability determination process. Moreover, an individual must be involved in an activity for which they are legally paid.

Medical Advisory Committee:
A public advisory group charged with advising the State's Medicaid agency and the State Department of Health and Social Services on policy and program changes to the Medicaid program.

Medically Needy Populations:
A Medicaid eligibility group that is optional and is composed of individuals who qualify for coverage because of high medical expenses, commonly for hospital or nursing home care. These individuals meet Medicaid’s categorical requirements – i.e., they are children or parents or aged or individuals with disabilities – with an income that is too high to enable them to qualify for "categorically needy" coverage. Instead, they qualify for coverage by "spending down" – i.e., reducing their income by their medical expenses. States that elect to cover the "medically needy" do not have to offer the same benefit package to them as they offer to the "categorically needy."

Optional Populations and Optional Services:
Describes Medicaid eligibility groups or service categories that states may cover if they so choose and for which they may receive federal Medicaid matching payments at their regular matching rate or Federal Medicaid Assistance Program (FMAP). About half of all federal Medicaid funds are used to match the cost of optional services or optional populations.

Personal Care Services:
Medicaid personal care services are an optional Medicaid benefit provided to individuals who are not inpatients or residents of a hospital, nursing facility, intermediate care facility for the mentally retarded, or Institution for Mental Disease (IMD). Personal care services may include a range of human assistance provided to persons with disabilities and chronic conditions of all ages to enable them to accomplish tasks that they would normally do for themselves if they did not have a disability.

Pharmacy and Therapeutics Committee (P&T Committees):
Originally, P&T Committees were developed to select drugs for formularies of health care institutions or health plans. Over time, their roles have evolved into improving the process of medication management and helping to reduce the risk of medication error.

Preferred Drug Lists (PDL):
Indicate which drugs providers are permitted to prescribe without seeking prior authorization. For drugs not included on the PDL, providers must obtain approval from the state Medicaid agency before the drug can be dispensed. Decisions regarding which drugs to include on a PDL are usually based on the Medicaid program’s assessment of relative clinical benefit within a therapeutic class and judgement about the value to the state based on total costs, including all manufacturers’ rebates.

Preferred Provider Organization (PPO):
An organized network of healthcare providers, typically reimbursed on a discounted fee-for-service basis. Coverage may or may not be available outside of the network for a higher co-payment.

Purchasing Pools:
Due to the rise in numbers of prescription drugs taken by individuals and increasing drug costs to states that result, some states are joining together, either with employee health plans within the state or with other neighboring states, to create drug purchasing pools. These pools allow states to negotiate manufacturer discounts based on bulk rates.

Rehabilitation Option (Rehab Option):
Covered Medicaid Rehab Option services may include educational services, peer services, family education, social and recreational activities, and substance abuse services. Services covered under the Rehab Option must be designed to assist individuals with a serious and persistent mental illness to achieve their highest degree of independent functioning and recovery.

State Children’s Health Insurance Program (SCHIP):
A federal-state matching program of health care coverage for uninsured low-income children. In contrast to Medicaid, SCHIP is a block grant to the states; eligible low-income children have no individual entitlement to a minimum package of health care benefits. Children who are eligible for Medicaid are not eligible for SCHIP. States have the option of administering SCHIP through their Medicaid programs or though a separate program (or a combination of both).

State Mental Health Planning Council:
States are required to develop and implement comprehensive mental health plans for adults with serious mental illness and children with serious emotional disturbances. State plan implementation must be monitored and progress reported annually. The primary vehicle for plan creation and implementation are State Mental Health Planning Councils. Typically, State Mental Health Planning Councils represent consumers, families, and advocacy interests.

Tax Equity and Fiscal Responsibility Act (TEFRA) or the Katie Beckett Option:
Allows states to extend Medicaid coverage to certain disabled children in their homes rather than in institutions. To qualify for TEFRA benefits, the child must be disabled according to the Supplemental Security Income (SSI) definition of disability and must meet the medical-necessity requirement for institutional care. Children who live in institutions or who receive extended care in institutions are not eligible in the TEFRA category.

Think Tanks:
Public policy research organizations that examine current and future challenges and offer options for meeting them. Some think tanks have a broad scope of research while others focus on specific issues. Think tanks may specialize in partisan research or may be impartial, they may also perform advocacy work. Regardless of their focus, think tanks inform the debate over public policy issues for the policy makers, the public, and the media.