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Glossary

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Access

Potential and actual entry of a population into the health care delivery system; the ability to obtain needed medical care.

Access Device

A piece of equipment or a surgical adaptation for access to the patient's bloodstream (for hemodialysis) or to the peritoneal membrane (for peritoneal dialysis).

Activities of Daily Living

Basic self-care activities, including eating, bathing, dressing, transferring from bed to chair, bowel and bladder control, and independent ambulation. These activities which are widely used as a minimal basis for assessing individual functional status.

Adjustment

A procedure (such as age adjustment) used to remove the influence of the differences in the (age) distribution of populations being compared for some factor, for example, mortality. Usually, the method involves applying rates (such as mortality rates) calculated for subgroups of each comparison population to the comparable subgroups of the standard population. Then, using the distribution of the standard population, a corrected (adjusted) rate is computed for each comparison population.

Advance Directives

Directives about a person's preferences concerning medical treatment in the event of future incapacity to decide or communicate. These can be oral or written and can concern any aspect of medical treatment, although such directives usually focus on life-sustaining treatments in critical or terminal illness. Written, legally sanctioned advance directives include living wills and durable powers of attorney for health care.

Agreement

A written document executed between an ESRD facility and another facility in which the other facility agrees to assume responsibil-



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Kidney Failure and the Federal Government A Glossary A Access Potential and actual entry of a population into the health care delivery system; the ability to obtain needed medical care. Access Device A piece of equipment or a surgical adaptation for access to the patient's bloodstream (for hemodialysis) or to the peritoneal membrane (for peritoneal dialysis). Activities of Daily Living Basic self-care activities, including eating, bathing, dressing, transferring from bed to chair, bowel and bladder control, and independent ambulation. These activities which are widely used as a minimal basis for assessing individual functional status. Adjustment A procedure (such as age adjustment) used to remove the influence of the differences in the (age) distribution of populations being compared for some factor, for example, mortality. Usually, the method involves applying rates (such as mortality rates) calculated for subgroups of each comparison population to the comparable subgroups of the standard population. Then, using the distribution of the standard population, a corrected (adjusted) rate is computed for each comparison population. Advance Directives Directives about a person's preferences concerning medical treatment in the event of future incapacity to decide or communicate. These can be oral or written and can concern any aspect of medical treatment, although such directives usually focus on life-sustaining treatments in critical or terminal illness. Written, legally sanctioned advance directives include living wills and durable powers of attorney for health care. Agreement A written document executed between an ESRD facility and another facility in which the other facility agrees to assume responsibil-

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Kidney Failure and the Federal Government ity for furnishing specified services to patients and for obtaining reimbursement for those services. Allowable Costs Costs of operating a facility, which are accounted as reimbursable under the federal Medicare or the state Medicaid program. Ambulatory Peritoneal Dialysis A treatment where the patient is ambulatory at least part of the time while dialyzing. (See Continuous Ambulatory Peritoneal Dialysis.) Automated Peritoneal Dialysis Method A method where fluid exchanges are performed by a preset peritoneal dialysis cycling machine after connection by the patient or other operator. B Backup Dialysis A dialysis session furnished to an ESRD patient which is outside the patient's routine dialysis setting, e.g., a home patient dialyzing in the facility or an in-facility patient transferred to a backup (usually hospital) facility. Backup Hospital A hospital with whom a dialysis facility has a written agreement under which inpatient hospital care or other hospital services are available routinely and promptly to the dialysis facility's patients when needed. C Cadaveric Kidney Transplant The surgical procedure of removing a kidney from a cadaver and implanting it into a suitable recipient. Capitation 1. The method of paying for medical care by means of a prospective payment per patient or treatment that is independent of the number of services received. 2. A contractual agreement between the federal government and an organized health plan such as a health maintenance organization, whereby Medicare pays the plan a fixed prepaid amount per enrolled beneficiary. In return, the plan is responsible for providing all appropriate entitled health services for some specified period of time. Case Mix 1. The combination of diagnoses, medical care, and social care needs present in the population of a health care facility. 2. The relative frequency of admissions of various types of patients, reflecting different needs for hospital resources. Some ways of measuring case mix are based on patient diagnoses or the severity of their illness, some on the utilization of services, and some on the characteristics of the hospital or area in which it is located (this is measurement by proxy rather than actual measurement). Certificate-of-Need A certification made by a state that a certain health service is needed and authorizes a specific operator, at the operator's request, to provide that service. Charge The amount of money billed by a seller in return for a product or a service. A hospital's charge is equivalent to its list price for a ser-

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Kidney Failure and the Federal Government vice. Medicare, Medicaid, most Blue Cross plans, and some other payers, however, do not pay charges, but pay another rate, variously determined, for inpatient hospital services. Thus, the charge is not the price from Medicare's or certain other payers' perspectives. Chronic Maintenance Dialysis Dialysis that is regularly furnished to an ESRD patient in either a hospital-based, independent (non-hospital-based), or home setting. Claim A request to a third-party payer (e.g., private insurer, government payment program, or employer payment program) by a person covered by the third-party's program or an assignee (usually a provider of service) for payment of benefits. Classification The act or process of systematically arranging in groups or categories according to established criteria. Under the Prospective Payment System (PPS), hospital patients are classified into disease categories using the ICD-9-CM diagnostic classification system and then clustered into diagnosis-related groups (DRGs). Cohort A population group that shares a common property, characteristic, or event, such as a year of birth or year of marriage. The most common one is the birth cohort, a group of individuals born within a defined time period, usually a calendar year or a 5-year interval. Coinsurance The portion of the balance of covered medical expenses that a beneficiary must pay after payment of the deductible. Under Medicare Part B, after the annual deductible has been met, Medicare will generally pay 80 percent of approved charges for covered outpatient services and supplies; the remaining 20 percent is the coinsurance, for which the beneficiary is liable. Comorbidity For the purposes of the Prospective Payment System (PPS), a preexisting condition (disease, disorder, disability, or other risk factor) that will, in the opinion of clinical experts, increase length of stay by at least one day in approximately 75 percent of cases with a specific diagnosis. Continuous Ambulatory Peritoneal Dialysis (CAPD) A type of peritoneal dialysis whereby the patient dialyzes at home, being continuously filled with dialyzing fluid and making three to five exchanges of fluid per day. Continuous Cyclic Peritoneal Dialysis (CCPD) A continuous, ambulatory automated method for nightly fluid exchanges, and one exchange indwelling throughout the daytime. Cost Actual expenses incurred for inputs. For example, the cost of nursing home care includes direct costs such as staff salary, facility, equipment, supplies, and indirect costs such as mortgage, general and administrative fees, and cost of capital.

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Kidney Failure and the Federal Government Cost-Based Reimbursement A method of paying for services based on the costs incurred by a provider to furnish those services. Cost Sharing Financing arrangements whereby the consumer pays some out-of-pocket cost to receive care. Coverage (Medicare) The range of services authorized for entitled beneficiaries. Current Procedural Terminology 1. Coding system for physician services developed by the American Medical Association; basis of the HCFA Common Procedures Coding System. 2. Coding system for procedures performed by physicians that is used in Medicare Part B billing. Customary, Prevailing, and Reasonable (CPR) Method (Medicare) The method used by Medicare carriers to determine the approved charge for a particular Part B service from a particular physician or supplier; based on the actual charge for the service, previous charges for the service by the physician or supplier in question (customary), and previous charges by peer physicians or suppliers in the same locality. (See Usual, Customary, and Reasonable Charges.) D Deductible A form of cost sharing in which the insured incurs an initial expense of a specified amount within a given time period (e.g., $250 per year) before the insurer assumes liability for any additional costs of covered services. Diabetes Mellitus A constitutional disorder of carbohydrate metabolism that is characterized by inadequate secretion or utilization of insulin, by excessive amounts of sugar in the blood and urine, and by thirst, hunger, and loss of weight. Frequent complications include damage to the heart, circulation, eyes, and kidneys. Diagnosis-Related Groups A classification system that groups patients according to diagnosis, type of treatment, age, and other relevant criteria. In October 1983, Medicare instituted a prospective reimbursement system based on 467 DRGs. Under this system, hospitals are paid a set fee for treating patients in a single DRG category, regardless of the actual cost of care for the individual. Dialysis A process of maintaining the chemical balance of the blood when the kidneys have failed; specifically, a process by which dissolved substances are removed from a patient's body by diffusion from one fluid compartment to another across a semipermeable membrane. The types of dialysis currently used are hemodialysis and peritoneal dialysis (CAPD and CCPD are peritoneal dialysis techniques). Dialysis Center A hospital unit that is approved to furnish the full spectrum of diagnostic, therapeutic, and rehabilitative services required for the care of ESRD dialysis patients, including inpatient and outpatient dialysis.

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Kidney Failure and the Federal Government Dialysis Facility A unit (hospital-based or freestanding) which is approved to furnish dialysis services directly to ESRD patients. Dialysis Station The single functional unit of a dialysis facility which is needed to provide therapy to one patient. Durable Power of Attorney for Health Care A form of advance directive by which an individual delegates, in a legally valid document, decision-making authority to some other person to act in his or her behalf regarding medical care when the individual has lost the capacity to decide or to communicate especially regarding life-sustaining treatment. E Eligibility Requirements To qualify for Medicare under the renal provision of the Social Security Act, a person must have ESRD and either be entitled to a monthly insurance benefit under Title II of the Social Security Act (or an annuity under the Railroad Retirement Act), or be fully or currently insured under Social Security (railroad work may count), or be the spouse or dependent child of a person who meets at least one of these last two requirements (there is no minimum age for eligibility). In addition, an application for Medicare beneficiary status must be filed (effective October 1, 1978). End-Stage Renal Disease (ESRD) Advanced destruction of the kidneys by disease resulting in chronic, irreversible, near total loss of kidney function. ESRD Network A legally authorized regional organization, consisting of ESRD providers in a designated geographic area, which collects data for HCFA, conducts medical reviews, and supports patients and providers. Epidemiology The scientific study of the distribution and occurrence of human diseases and health conditions and their determinants. F Federal Prospective Payment Amount The portion of the hospital prospective payment rate derived from national and regional standardized prospective payment amounts. During the transition period of Medicare's Prospective Payment System, hospitals are paid at a rate that blends the federal and hospital-specific portion. After the transition period, the payment rate is based entirely on the federal standardized payment amount. From April 1, 1988, through September 30, 1990, the federal rate will be based on the national average standardized amount, or a blend of 85 percent national and 15 percent regional amounts, whichever is higher. Fee for Service Refers to paying physicians for individual medical services rendered, as opposed to paying them with salaries or under capitation. Customary, prevailing, and reasonable (CPR), usual, customary, and reasonable (UCR), and fee schedules are examples of fee for service.

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Kidney Failure and the Federal Government H Hemodialysis A method of dialysis in which blood from a patient's body is circulated through an external device or machine and thence returned to the patient's bloodstream. Such an artificial kidney machine usually is designed to remove fluids and metabolic waste products from the bloodstream by placing the blood in contact with a semipermeable membrane which is bathed on the other side by an appropriate chemical solution resembling normal plasma water referred to as dialysate. Home Dialysis Patients Medically able individuals who maintain their own dialysis equipment at home and, after proper training, perform their own treatment alone or with the assistance of a helper. Hypertension Persistently high blood pressure. The chief importance of hypertension lies in the increased risk it confers of illness and death from cardiovascular, cerebrovascular, and renal disease. I In-Unit (In-Facility, In-Center) Patients Individuals whose dialysis is performed in a dialysis unit or facility. Incidence The frequency of new occurrences of a condition within a defined time interval. The incidence rate is the number of new cases of specific disease divided by the number of people in a population over a specified period of time, usually 1 year. Intermittent Peritoneal Dialysis A technique where dialysis solution is infused and dialysate is drained through a single catheter. During a fluid exchange (cycle) three distinctive periods occur: inflow, dwell, and outflow. After the outflow, before the next inflow, and during the dwell, the flow of fluid is interrupted, hence the term intermittent. L Living Related Donor Transplant The surgical procedure of removing a kidney from a living relative of the patient and implanting it in the patient. Living Will A form of advance directive by which an individual expresses, in written legal instructions, his or her preferences for medical treatment if he or she becomes incompetent to decide or unable to communicate at the end of life. There are general forms for living wills and specific forms sanctioned by law in most states. M Manual Peritoneal Dialysis Method A method where fluid exchanges are performed manually with active participation of a person (patient, partner, or nurse) during each exchange procedure. Margins Percentage of Medicare payments remaining after accounting for Medicare costs. The aggregate margin for a group of outpatient dialysis facilities is defined as total Medicare payments for the group minus total Medicare costs for the group, divided by total Medicare payments for the group.

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Kidney Failure and the Federal Government Market Basket Forecasts the change in the hospital industry's price; an input index reflecting changes in hospital labor markets and nonlabor-related expenses. Medicaid A federal/state health insurance program, authorized in 1965 as Title XIX of the Social Security Act, to provide medical care for low-income individuals. Federal regulations specify mandated services, but states can expand services and eligibility standards at their cost. The federal government's share of costs ranges from 50 to 78 percent and is based on per-capita income in the state. Medicare A nationwide, federally administered health insurance program authorized in 1965 as Title XVIII of the Social Security Act, to cover the cost of hospitalization, medical care, and some related services for most people over age 65, people receiving Social Security Disability Insurance payments for 2 years, and people with ESRD. Medicare consists of two separate but coordinated programs — Part A (Hospital Insurance) and Part B (Supplementary Medical Insurance). Health insurance protection is available to Medicare beneficiaries without regard to income. Medicare Carriers Fiscal agents (typically Blue Cross or Blue Shield plans or commercial insurance firms) under contract to HCFA for administration of specific Medicare tasks. These tasks include computing reasonable charges under Medicare Part B, making actual payments, determining whether claims are for covered services, denying claims for non-covered services, and denying claims for unnecessary use of services. Medicare Cost Report (MCR) An annual report required of all institutions participating in the Medicare program that is used to identify Medicare-reimbursable costs. The costs are defined and reported following guidelines established by the Medicare program. The 1981 MCRs were used to develop both the Federal standardized amounts and the original diagnosis-related group (DRG) weights for the Prospective Payment System. Medicare Provider Analysis and Review File (MEDPAR) HCFA data file that contains billed-charge data and clinical characteristics, such as principal diagnosis and principal procedures, for Medicare hospital discharges during a fiscal year. Before 1984, the MEDPAR file contained only a 20 percent sample of inpatient bills submitted by hospitals. Since 1985, it has included those bills as well as bills on all Medicare inpatient discharges. For 1984, the comparable file is called the PATBILL file. Monthly Capitation Payment A predetermined reimbursement amount per patient per month that is paid for physician outpatient dialysis-related services under Medicare. Morbidity A diseased state; often used in the content of a ''morbidity rate,'' i.e., the rate of disease or proportion of diseased people in a

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Kidney Failure and the Federal Government population. In common clinical usage, any disease state or complication is referred to as morbidity. Morbidity Rate The rate of illness in a population. The number of people ill during a time period divided by the number of people in the total population. Mortality Rate The death rate, often made explicit for a particular characteristic, e.g., gender, sex, or specific cause of death. Mortality rate contains three essential elements: (1) the number of people in a population group exposed to the risk of death (the denominator); (2) a time factor; and (3) the number of deaths occurring in the exposed population during a certain time period (the numerator). O Organ Procurement The process of acquiring donor kidneys. Organ Procurement Agency An organization that performs or coordinates the performance of all the following services: acquisition and preservation of donated kidneys, and maintenance of a system to locate prospective recipients for acquired organs. Outcome The consequences related to a specific medical intervention for an individual or a group of patients. P Panel Reactive Antibody (PRA) A value, expressed as a percentage, that indicates a person's sensitivity to various antigens. It is determined by mixing a sample of an individual's blood with blood samples from a large number of people considered to be representative of the general population. The number of reactions between the patient's blood and this cell panel is converted to a percentage. The greater the PRA value, the greater the likelihood that existing antibodies will cause a positive crossmatch reaction, preventing the transplant. Part A (Medicare) Medicare's Hospital Insurance program, which covers specified hospital inpatient services, posthospital extended care, and home health care services. Part A, which is an entitlement program for those who are eligible, is available without payment of a premium, although those not automatically eligible for Part A may enroll in the program by paying a monthly premium. The beneficiary is responsible for an initial deductible and/or copayment for some services. Part B (Medicare) Medicare's Supplementary Medical Insurance program, which covers physician services, hospital outpatient services, outpatient physical therapy and speech pathology services, and various other limited ambulatory services and supplies such as prosthetic devices and durable medical equipment. This program also covers home health services for Medicare beneficiaries who have Part B coverage only. Enrollment in Part B is optional and requires payment of a monthly pre-

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Kidney Failure and the Federal Government mium. The beneficiary is also responsible for a deductible and a coinsurance payment for most covered services. Peritoneal Dialysis A procedure that introduces dialysate into the abdominal cavity to absorb and remove waste products through the peritoneum (a membrane which surrounds the intestines and other organs in the abdominal cavity). It functions in a manner similar to that of the (artificial) semipermeable membrane in the hemodialysis machine. Two other forms of peritoneal dialysis are continuous ambulatory peritoneal dialysis and continuous cycling peritoneal dialysis. Physician Payment Review Commission The commission reviews physician payment in the Medicare program, describing a comprehensive proposal for reform of Medicare payment to physicians including a Medicare fee schedule, balance-billing limits, expenditure targets, and a program of effectiveness research and development of practice guidelines. Prevailing Charge One of the factors determining a physician's payment for a service under Medicare. It is currently set at the 75th percentile of customary charges of all physicians in the community. Since 1976, its growth has been limited to the increase in the Medicare Economic Index. (See Customary, Prevailing, and Reasonable Method.) Prevalence The number of existing cases of a disease or condition in a given population at a specific time. Professional Standards Review Organizations (PSROs) Community-based physician-directed, nonprofit agencies established under the Social Security Amendments of 1972 (Pub. L. No. 92-603) to monitor the quality and appropriateness of institutional health care provided to Medicare and Medicaid beneficiaries. PSROs have been replaced by Professional Review Organizations (PROs—utilization and quality control peer review organizations). Program Management and Medical Information System (PMMIS) A system that contains, in part, medical information on patients and the services that they have received during the course of their therapy. The HCFA ESRD PMMIS is an automated system of medical records that deals primarily with current Medicare-eligible ESRD patients but also maintains historical information on people no longer classified as ESRD patients by reason of death or successful transplantation. In addition, it contains information on ESRD facilities and facility reimbursement. Prospective Payment 1. A method of payment for health care services in which the amount of payment for services is set before the delivery of those services and the hospital (or other provider) is at least partially at risk for losses or stands to gain from surpluses that accrue during the payment period. Prospective payment rates may be per-service, per-capita, per-diem, or per-case rates. 2. Payment for medical care on the

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Kidney Failure and the Federal Government basis of rates set in advance of the time period in which they apply. The unit of payment may vary from individual medical services to broader categories, such as hospital case, episode of illness, or person capitation. Prospective Payment Assessment Commission The commission reviews the goals, principles, rates, and major design features of the Medicare PPS, and it advises the Congress and the Secretary of DHHS. Q Quality Assessment Measurement and evaluation of quality of care for individuals, groups, or populations. Quality Assurance 1. Process of measuring quality, analyzing the deficiencies discovered, and taking action to improve performance, followed by measuring quality again to determine whether improvement has been achieved. It is a systematic, cyclic activity using standards for measurement. 2. Activities to safeguard or improve the quality of medical care by assessing quality and taking action to correct any problems found. Quality of Medical Care The degree to which actions taken or not taken increase the probability of beneficial health outcomes and decrease risk and other untoward outcomes, given the existing state of medical sciences and art. R Rate Setting A method of payment for health care services in which a state (or other) regulatory body decides what prices a hospital, for example, may charge in a given year. Reasonable and Necessary (Medicare) Criteria used by HCFA or Medicare contractors to determine which services are eligible for Medicare coverage. Coverage is distinguished from payment in that coverage refers to services available to eligible beneficiaries, and payment refers to the amount and methods of payment for coverage. The criteria used to determine whether a service is reasonable and necessary are (1) general acceptance as safe and effective, (2) not experimental, (3) medically necessary, and (4) provided according to standards of medical practice in an appropriate setting. Rebasing Method for calculating the base payment rate using most recent cost and charge information. Renal Dialysis Center See Dialysis Center. Renal Dialysis Facility See Dialysis Facility. Renal Transplant Center See Transplant Center. Resource-Based Relative Value Scale An index that assigns weights to each medical service, representing the relative amount to be paid for each service based on resources consumed or required to produce the service.

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Kidney Failure and the Federal Government Risk A measure of the probability of an adverse or untoward outcome and the severity of the resultant harm to health of individuals in a defined population and associated with the use of a medical technology for a given medical problem under specified conditions of use. S Self-Care Services Services provided by a dialysis facility or center in which patients who have been trained to perform self-dialysis do so with little or no professional assistance. Self-Dialysis Patients Patients who have been trained in dialysis techniques and dialyze themselves in a dialysis facility with minimal staff assistance or at home without professional assistance. Patients who are entirely responsible for administering their own dialysis treatments without professional support (except in emergency situations) are in this category. Special-Purpose Facility A renal dialysis facility that is approved to furnish dialysis at special locations on a short-term basis to a group of dialysis patients otherwise unable to obtain treatment in the geographical area. The special locations must be either special rehabilitative (including vacation) locations servicing ESRD patients temporarily residing there, or locations in need of ESRD facilities under emergency circumstances. Staff-Assisted Dialysis Dialysis performed by the staff of the renal dialysis center or facility. Supplemental Security Income A federal income support program for low-income, disabled, aged, and blind people. Eligibility for the monthly cash payments is based on the individual's current status without regard to previous work or contributions to a trust fund. Some states supplement the federal benefit. Supplementary Medical Insurance A voluntary insurance program (also known as Medicare Part B) that provides insurance benefits for physician and other medical services in accordance with the provisions of Title XVIII of the Social Security Act, for aged and disabled individuals who elect to enroll under such program. The program is financed by premium payments by enrollees, and contributions from funds appropriated by the federal government. Survey Period The period January 1 through December 31 of each year for which all ESRD facilities must complete Form HCFA-2744, ESRD Facility Survey. T Tax Equity and Fiscal Responsibility Act (Pub. L. No. 97-248) (TEFRA) Legislation enacted in 1982 that initiated the shift in the Medicare program away from cost-based reimbursement for hospitals toward prospective payment. TEFRA made other major changes in audit, medical claims

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Kidney Failure and the Federal Government review, and utilization and peer review. The most significant was to establish the PRO program as a substitute for the PSRO program. Third-Party Payment Payment by a private insurer or government program to a medical provider for care given to a patient. Tidal Peritoneal Dialysis A technique where, after an initial fill of the peritoneal cavity, only a portion of dialysate is drained and replaced by fresh dialysis fluid with each cycle, leaving the majority of dialysate in constant contact with the peritoneal membrane until the end of the dialysis session, when the fluid is drained as completely as possible. Transfer For the purposes of PPS, a movement of a patient (1) from one inpatient area or unit of the hospital to another area or unit of the hospital; (2) from the care of a hospital paid under prospective payment to the care of another such hospital; or (3) from the care of a hospital under prospective payment to the care of a hospital in an approved statewide cost-control program. Transient ESRD Patients Patients who are treated by ESRD facilities episodically (less than 51 percent of the survey period), e.g., vacationers. Transplant The surgical procedure that involves removing an organ from a cadaver or a living donor and implanting it in another individual. Transplant Center A hospital unit that is approved to furnish direct transplantation and other medical and surgical specialty services for the care of the ESRD transplant patient, including inpatient dialysis furnished directly or under arrangement. U Updating Method of inflating a base payment rate for years in which the rate is not recalculated using more recent data. Usual, Customary, and Reasonable Charges (UCR) In private health insurance, a basis for determining payment for individual physician services. "Usual" refers to the individual physician's fee profile, equivalent to Medicare's "customary" charge screen. "Customary," in this context, refers to a percentile of the pattern of charges made by physicians in a given locality (comparable to Medicare's "prevailing'' charges). "Reasonable" is the lesser of the usual or customary screens. (See Customary, Prevailing, and Reasonable Method.) W Waivers Exemption from meeting a particular regulatory requirement. Waivers of certification requirements may be given by states to facilities. Waivers of program requirements may be given by the federal government to states.