Glossary

Accreditation
A process where external organizations (or “accrediting bodies”) evaluate health care facilities’ policies, procedures, and performance to make sure they are meeting predetermined criteria.
Advance Beneficiary Notice of Noncoverage (ABN)
In Original Medicare, a notice that a doctor, supplier, or provider gives a person with Medicare before furnishing an item or service if the doctor, supplier, or provider believes that Medicare may deny payment. In this situation, if you aren’t given an ABN before you get the item or service, and Medicare denies payment, then you may not have to pay for it. If you are given an ABN, and you sign it, you’ll probably have to pay for the item or service if Medicare denies payment.
Advance directive
A written document stating how you want medical decisions to be made if you lose the ability to make them for yourself. It may include a living will and a durable power of attorney for health care.
Ambulatory surgical center
A facility where certain surgeries may be performed for patients who aren’t expected to need more than 24 hours of care.
Appeal
An appeal is the action you can take if you disagree with a coverage or payment decision made by Medicare, your Medicare health plan, or your Medicare Prescription Drug Plan. You can appeal if Medicare or your plan denies one of these: *Your request for a health care service, supply, item, or prescription drug that you think you should be able to get. *Your request for payment for a health care service, supply, item, or prescription drug you already got *Your request to change the amount you must pay for a health care service, supply, item or prescription drug. You can also appeal if Medicare or your plan stops paying providing or paying for all or part of a health care service, supply, item, or prescription drug you think you still need.
Assignment
An agreement by your doctor, provider, or supplier to be paid directly by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance.
Benefit period
The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you’re admitted as an inpatient in a hospital or SNF.
Benefits
The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan’s coverage documents.
Centers for Medicare and Medicaid Services {CMS}
The federal agency that runs the Medicare, Medicaid, and Children’s Health Insurance Programs, and the federally facilitated Marketplace.
Coinsurance
An amount you may be required to pay as your share of the cost for services after you pay any deductibles. Coinsurance is usually a percentage (for example, 20%).
Coordination of benefits
A way to figure out who pays first when 2 or more health insurance plans are responsible for paying the same medical claim.
Copayment
An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription drug. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription drug.
Cost sharing
An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription drug. This amount can include copayments, coinsurance, and/or deductibles.
Coverage determination (Part D)
The first decision made by your Medicare drug plan (not the pharmacy) about your drug benefits, including: *Whether a particular drug is covered *Whether you have met all the requirements for getting a requested drug *How much you’re required to pay for a drug *Whether to make an exception to a plan rule when you request it, The drug plan must give you a prompt decision (72 hours for standard requests, 24 hours for expedited requests). If you disagree with the plan’s coverage determination, the next step is an appeal.
Coverage gap (Medicare prescription coverage)
A period of time in which you pay higher cost sharing for prescription drugs until you spend enough to qualify for catastrophic coverage. The coverage gap (also called the “donut hole”) starts when you and your plan have paid a set dollar amount for prescription drugs during that year.
Creditable coverage (Medigap)
Previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy.
Creditable prescription drug coverage
Prescription drug coverage (for example, from an employer or union) that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penatly, if they decide to enroll in Medicare prescription drug coveage later.
Custodial care
Non-skilled personal care, like help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom. It may also includd the kind of health-related care that most people do themselves, like using eye drops. In most cases, Medicare doesn’t pay for custodial care.
Deductible
The amount you must pay for health care or prescriptions before Original Medicare, your prescription drug plan, or your other insurance begins to pay.
Durable medical equipment
Certain medical equipment, like a walker, wheelchari, or hospital bed, that’s ordered by your doctor for use in the home.
Durable power of attorney
A legal document that names someone else to make health care decisions for you. This is helpful if you become unable to make your own decisions.
Exception
A type of Medicare prescription drug coverage determination. A formulary exception is a drug plan’s decision to cover a drug that”s not on its drug list or to waive a coverage rule. A tiering exception is a drug plan’s decision to charge a lower amount for a drug that’s on its non-preferred drug tier. You or your prescriber must request an exception, and your doctor or other prescriber must provide a supporting statement explaining the medical reason for the exception.
Excess charge
If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge.
Extra help
A Medicare program to help people with limited income and resoruces pay medicare prescription drug program costs, like premiums, deductibles, and coinsurance.
Formulary
A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a drug list.
Generic drug
A prescription drug that has the same active-ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Adminisration (FDA) rates these drugs to be as safe and effective as brand-name drugs.
Grievance
A compaint about the way your Medicare health plan or Medicare drug plan is giving care. For example, you may file a grievance if you have a problem calling the plan or if you’re unhappy with the way a staff person at the plan has behaved towards you. However, if you have a complaint about a plan’s refusal to cover a service, supply, or prescription, you file an appeal.
Guarunteed issue rights (Medigap protections)
Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medicgap policy. In these situations, an insurance company can’t deny you a Medicgap policy, or place conditions on a Medigap policy, like exclusions for pre-existing conditions, and can’t charge you more for a Medigap policy becasue of a past or present health problem.
Guarunteed renewable policy
An insurance policy that can’t be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don’t pay your premiums. All Medigap policies issued since 1992 are guaranteed renewable.
Health care providor
A person or organization that’s licensed to give health care. Doctors, nurses, and hospitals are examples of health care providers.
Health coverage
Legal entitlement to payment or reimbursement for your health care costs, generally under a contract with a health insurance company, a group health plan offered in connection with employment, or a government program like Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).
High deductible Medigap policy
A type of Medigap policy that has a high deductible but a lower premium. You must pay the deductible before the Medigap policy pays anything. The deductible amount can change each year.
Hospice
A special way of caring for people who are terminally ill. Hospice care involves a team-oriented approach that addresses the medical, physical, social, emotional, and spiritual needs of the patient. Hospice also provides support to the patient’s family or caregiver.B36B34:B38B15B34B34:B40B15
Independent reviewer
An organization (sometimes called an Independent Review Entity or IRE) that has no connection to your Medicare health plan or Medicare Prescription Drug Plan. Medicare contracts with the IRE to review your
Initial coverage limit
Once you’ve met your yearly deductible, you’ll pay a copayment or coinsurance for each covered drug until you reach your plan’s out-of-pocket maximum (or initial coverage limit). You’ll then enter your plan’s coverage gap (also called the “donut hole”).
In-network
Doctors, hospitals, pharmacies, and other health care providers that have agreed to provide members of a certain insurance plan with services and supplies at a discounted price. In some insurance plans, your care is only covered if you get it from in-network doctors, hospitals, pharmacies, and other health care providers.
Inpatient care
Health care that you get when you’re admitted to a health care facility, like a hospital or skilled nursing facility.
Inpatient hospital care
Treatment you get in an acute care hospital, critical access hospital, inpatient rehabilitation facility, long-term care hospital, inpatient care as part of a qualifying research study, and mental health care.
Inpatient hospital services
Services you get when you’re admitted to a hospital, including bed and board, nursing services, diagnostic or therapeutic services, and medical or surgical services.
Lifetime reserve days
In Original Medicare, these are additional days that Medicare will pay for when you’re in a hospital for more than 90 days. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance.
Limiting charge
In Original Medicare, the highest amount of money you can be charged for a covered service by doctors and other health care suppliers who don’t accept assignment. The limiting charge is 15% over Medicare’s approved amount. The limiting charge only applies to certain services and doesn’t apply to supplies or equipment.
Living will
A written legal document, also called a “medical directive” or “advance directive.” It shows what type of treatments you want or don’t want in case you can’t speak for yourself, like whether you want life support. Usually, this document only comes into effect if you’re unconscious.
Long term care
Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living, like dressing or bathing. Long-term supports and services can be provided at home, in the community, in assisted living, or in nursing homes. Individuals may need long-term supports and services at any age. Medicare and most health insurance plans don’t pay for long-term care.
Medicaid
A joint federal and state program that helps with medical costs for some people with limited income and resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
Medicaid certified provider
A health care provider (like a home health agency, hospital, nursing home, or dialysis facility) that’s been approved by Medicaid. Providers are approved or “certified” if they’ve passed an inspection conducted by a state government agency.
Medicare
Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Medicare Advantage Plan (Part C)
A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
Medicare Advantage Prescription Drug Plan (MA-PD)
A Medicare Advantage plan that offers Medicare prescription drug coverage (Part D), Part A, and Part B benefits in one plan.
Medicare approved amount
In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It may be less than the actual amount a doctor or supplier charges. Medicare pays part of this amount and you’re responsible for the difference.
Medicare HMO
A type of Medicare Advantage Plan (Part C) available in some areas of the country. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Most HMOs also require you to get a referral from your primary care physician.
Medicare Health Plan
Generally, a plan offered by a private company that contracts with Medicare to provide Part A and Part B benefits to people with Medicare who enroll in the plan. Medicare health plans include all Medicare Advantage Plans, Medicare Cost Plans, and Demonstration/Pilot Programs. Programs of All-inclusive Care for the Elderly (PACE) organizations are special types of Medicare health plans that can be offered by public or private entities and provide Part D and other benefits in addition to Part A and Part B benefits.
Medicare Medical Savings Account (MSA)
MSA Plans combine a high deductible Medicare Advantage Plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount so you generally will have to pay out-of-pocket before your coverage begins.
Medicare Part A (Hospital insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Medicare Part B (Medical insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
Medicare Plan
Any way other than Original Medicare that you can get your Medicare health or prescription drug coverage. This term includes all Medicare health plans and Medicare Prescription Drug Plans.
Medicare PPO plan
A type of Medicare Advantage Plan (Part C) available in some areas of the country in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
Medicare Prescription Drug Plan (Part D)
Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
Medicare Private Fee for Service Plan (PFFS)
A type of Medicare Advantage Plan (Part C) in which you can generally go to any doctor or hospital you could go to if you had Original Medicare, if the doctor or hospital agrees to treat you. The plan determines how much it will pay doctors and hospitals, and how much you must pay when you get care. A Private Fee-For-Service Plan is very different than Original Medicare, and you must follow the plan rules carefully when you go for health care services. When you’re in a Private Fee-For-Service Plan, you may pay more or less for Medicare-covered benefits than in Original Medicare.
Medicare Savings Plan
A Medicaid program that helps people with limited income and resources pay some or all of their Medicare premiums, deductibles, and coinsurance.
Medicare Special Needs Plan (SNP)
A special type of Medicare Advantage Plan (Part C) that provides more focused and specialized health care for specific groups of people, like those who have both Medicare and Medicaid, who live in a nursing home, or have certain chronic medical conditions.
Medicare Summary Notice (MSN)
A notice you get after the doctor, other health care provider, or supplier files a claim for Part A or Part B services in Original Medicare. It explains what the doctor, other health care provider, or supplier billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay.
Medigap basic benefits
Benefits that all Medigap policies must cover, including Part A and Part B coinsurance amounts, blood, and additional hospital benefits not covered by Original Medicare.
Medigap open enrollment period
A one-time-only, 6-month period when federal law allows you to buy any Medigap policy you want that’s sold in your state. It starts in the first month that you’re covered under Part B and you’re age 65 or older. During this period, you can’t be denied a Medigap policy or charged more due to past or present health problems. Some states may have additional open enrollment rights under state law.
Medigap policy
Medicare Supplement Insurance sold by private insurance companies to fill “gaps” in Original Medicare coverage.
Network
The facilities, providers, and suppliers your health insurer or plan has contracted with to provide health care services.
Network Pharmacies
Pharmacies that have agreed to provide members of certain Medicare plans with services and supplies at a discounted price. In some Medicare plans, your prescriptions are only covered if you get them filled at network pharmacies.
Non preferred pharmacies
A pharmacy that’s part of a Medicare drug plan’s network, but isn’t a preferred pharmacy. You may pay higher out-of-pocket costs if you get your prescription drugs from a non-preferred pharmacy instead of a preferred pharmacy.
Optional; supplemental benefits
Services that Medicare doesn’t cover, but that a Medicare health plan may choose to offer. If you enroll in a plan with these services, you may choose to buy the services. If you choose to buy these benefits, you’ll pay for them directly, usually as a premium, copayment, and/or coinsurance. These services may be offered individually or as a group of services, and they may be different for each Medicare health plan.
Original Medicare
Original Medicare is a fee-for-service health plan that has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).
Out of network
A benefit that may be provided by your Medicare Advantage plan. Generally, this benefit gives you the choice to get plan services from outside of the plan’s network of health care providers. In some cases, your out-of-pocket costs may be higher for an out-of-network benefit.
Out of pocket costs
Health or prescription drug costs that you must pay on your own because they aren’t covered by Medicare or other insurance.
Penalty
An amount added to your monthly premium for Part B or a Medicare drug plan (Part D) if you don’t join when you’re first eligible. You pay this higher amount as long as you have Medicare. There are some exceptions.
Pharmacy network
Pharmacies that have agreed to provide members of certain Medicare plans with services and supplies at a discounted price. In some Medicare plans, your prescriptions are only covered if you get them filled at network pharmacies.
Point of service option
In a Health Maintenance Organization (HMO), this option lets you use doctors and hospitals outside the plan for an additional cost.
Power of Attorney
A medical power of attorney is a document that lets you appoint someone you trust to make decisions about your medical care. This type of advance directive also may be called a health care proxy, appointment of health care agent, or a durable power of attorney for health care.
Pre existing condition
A health problem you had before the date that new health coverage starts.
Preferred pharmacy
A pharmacy that’s part of a Medicare drug plan’s network. You pay lower out-of-pocket costs if you get your prescription drugs from a preferred pharmacy instead of a non-preferred pharmacy.
Premium
The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.
Preventive services
Health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (for example, preventive services include Pap tests, flu shots, and screening mammograms).
Primary care doctor
The doctor you see first for most health problems. He or she makes sure you get the care you need to keep you healthy. He or she also may talk with other doctors and health care providers about your care and refer you to them. In many Medicare Advantage Plans, you must see your primary care doctor before you see any other health care provider.
Prior authorization
Approval that you must get from a Medicare drug plan before you fill your prescription in order for the prescription to be covered by your plan. Your Medicare drug plan may require prior authorization for certain drugs.
PACE Program
A special type of health plan that provides all the care and services covered by Medicare and Medicaid as well as additional medically necessary care and services based on your needs as determined by an interdisciplinary team. PACE serves frail older adults who need nursing home services but are capable of living in the community. PACE combines medical, social, and long-term care services and prescription drug coverage.
QDWI Program
A state program that helps pay Part A premiums for people who have Part A and limited income and resources.
Qualified Individual Program (QI)
A state program that helps pay Part B premiums for people who have Part A and limited income and resources.
Qualified Medicare Beneficiary Program (QMB)
A state program that helps pay Part A premiums, Part B premiums, and other cost-sharing (like deductibles, coinsurance, and copayments) for people who have Part A and limited income and resources.
Referral
A written order from your primary care doctor for you to see a specialist or get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for the services.
Respite care
Temporary care provided in a nursing home, hospice inpatient facility, or hospital so that a family member or friend who is the patient’s caregiver can rest or take some time off.
Secondary payor
The insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other insurance depending on the situation.
Service area
A geographic area where a health insurance plan accepts members if it limits membership based on where people live. For plans that limit which doctors and hospitals you may use, it’s also generally the area where you can get routine (non-emergency) services. The plan may disenroll you if you move out of the plan’s service area.
Skilled nursing care
Care like intravenous injections that can only be given by a registered nurse or doctor.
Special Low Income Beneficiary Program (SLMB)
A state program that helps pay Part B premiums for people who have Part A and limited income and resources.
State Health Insurance Assistance Program (SHIP)
A state program that gets money from the federal government to give free local health insurance counseling to people with Medicare.
State Medical Assistance (Medicaid) Office
A state or local agency that can give information about, and help with applications for, Medicaid programs that help pay medical bills for people with limited income and resources.
State Pharmaceutical Program (SPAP)
A state program that provides help paying for drug coverage based on financial need, age, or medical condition.
Step Therapy
A coverage rule used by some Medicare Prescription Drug Plans that requires you to try one or more similar, lower cost drugs to treat your condition before the plan will cover the prescribed drug.
Tiers
Groups of drugs that have a different cost for each group. Generally, a drug in a lower tier will cost you less than a drug in a higher tier.
TRICARE
A health care program for active-duty and retired uniformed services members and their families.
TRICARE for Life (TFL)
Expanded medical coverage available to Medicare-eligible uniformed services retirees age 65 or older, their eligible family members and survivors, and certain former spouses.
Urgently needed care
Care that you get outside of your Medicare health plan’s service area for a sudden illness or injury that needs medical care right away but isn’t life threatening. If it’s not safe to wait until you get home to get care from a plan doctor, the health plan must pay for the care.