Glossary of Medicare Terms
ACUTE ILLNESS - A disease or condition that comes on rapidly and severely, but that can–with proper treatment–be cured, such as pneumonia or a broken bone.
ANNUAL COORDINATED ELECTION PERIOD - The period of time between November 15 and December 31 of every year when you can change your Medicare private drug plan and/or your Medicare health plan choice for the following year. This is also the time you can enroll in the Medicare prescription drug benefit (Part D) if you do not enroll during your Initial Enrollment Period (you may have to pay a premium penalty if you enroll during this time unless you had drug coverage from another source that was at least as good as Medicare’s and you were not without that coverage for more than 63 days). Your new coverage will begin January 1.
APPEAL - A special kind of complaint you make if you disagree with certain kinds of decisions made by Original Medicare or by your health plan. You can appeal if you request a health care service, supply or prescription that you think you should be able to get from your health plan, or you request payment for health care you already received, and Medicare or the health plan denies the request. You can also appeal if you are already receiving coverage and Medicare or the plan stops paying. There are specific processes your Medicare Advantage Plan, other Medicare Health Plan, Medicare drug plan, or the Original Medicare plan must use when you ask for an appeal.
APPROVED AMOUNT - The fee that Medicare sets as its rate for a medical service. Medicare will cover 80 percent of this amount (or 50 percent for mental health services) and you (or your supplemental insurance) are responsible for the remainder. All doctors and other providers who take assignment must accept this approved amount as full payment, even if they normally charge more for the service.
ASSIGNMENT - In the Original Medicare Plan, this means a doctor or supplier agrees to accept the Medicare-approved amount as full payment. If you are in the Original Medicare Plan, it can save you money if your doctor accepts assignment. You still pay your share of the cost of the doctor's visit.
BENEFICIARY - A person who has health care insurance through the Medicare or Medicaid program.
BENEFIT PERIOD - A "benefit period" begins the day you go to a hospital or skilled nursing facility (SNF). The benefit period ends when you haven’t received any hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods.
CENTERS FOR MEDICARE &
MEDICAID SERVICES (CMS) - Formerly known as the Health Care Financing Administration
(HCFA), CMS is the
CERTIFICATE OF CREDITABLE COVERAGE - A written certificate issued by a group health plan or health insurance issuer (including an HMO) that states the period of time you were covered by your health plan.
CHRONIC CONDITION - A condition that that lasts a year or longer or recurs, and may result in long-term care needs. Some examples of chronic illnesses include Alzheimer’s disease, arthritis and diabetes.
COINSURANCE - The amount you may be required to pay for services after you pay any plan deductibles. In the Original Medicare Plan, this is a percentage (like 20%) of the Medicare approved amount. You have to pay this amount after you pay the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan, the coinsurance will vary depending on how much you have spent.
COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY (CORF) - A facility that mainly provides rehabilitation services after an illness or injury, and provides a variety of services including physician's services, physical therapy, social or psychological services, and outpatient rehabilitation.
COORDINATION OF BENEFITS - Process for determining the respective responsibilities of two or more health plans that have some financial responsibility for a medical claim. Also called cross-over.
COPAYMENT (or CO-PAYMENT) - In some Medicare health and prescription drug plans, the amount you pay for each medical service, like a doctor’s visit, or prescription. A copayment is usually a set amount you pay. For example, this could be $10 or $20 for a doctor’s visit or prescription. Copayments are also used for some hospital outpatient services in the Original Medicare Plan.
COST SHARING - Any out-of-pocket payment the patient makes for a portion of the costs of covered services. Deductibles, coinsurance, copayments and balance bills are types of cost sharing.
COST TIERS - A system that drug plans use to price medications. Generic drugs are generally on the first, and least expensive tier, followed by brand-name drugs, and then specialty drugs, with each subsequent tier requiring higher out-of-pocket costs.
COVERAGE GAP - Also called a “Doughnut Hole.” A gap in insurance coverage during which you must pay all drug costs in full; followed by “catastrophic coverage” from the insurance plan.
CREDITABLE COVERAGE - Is health coverage that you had in the past that gives you certain rights when you apply for new coverage.
CREDITABLE PRESCRIPTION DRUG COVERAGE - Prescription drug coverage (like from an employer or union), that pays out, on average, as much as or more than Medicare’s standard prescription drug coverage.
CUSTODIAL CARE - Nonskilled, personal care, such as 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 include care that most people do themselves, like using eye drops. In most cases, Medicare doesn’t pay for custodial care.
DEDUCTIBLE - The amount of health care expenses you must pay before your health plan or Medicare begins to pa for costs associated with a medical service. These amounts can change every year.
DENIAL OF COVERAGE - A refusal by Medicare or a private plan to pay for medical services that are not covered under its policy.
DOUGHNUT HOLE - See “Coverage Gap.”
DRUG CLASS - A group of drugs that treat the same symptoms or have similar effects on the body.
DRUG LIST - A list of drugs covered by a plan. This list is also called a formulary.
DUAL ELIGIBLE - A person who has both Medicare and Medicaid.
DURABLE MEDICAL EQUIPMENT (DME) - Equipment that is primarily serving a medical purpose, is able to withstand repeated use, and is appropriate for use in the home; for example, wheelchairs, oxygen equipment and hospital beds. To be covered by Medicare, durable medical equipment must be prescribed by a doctor. Many types of adaptive equipment are not covered.
ELECTION / ENROLLMENT PERIODS - The times when a Medicare-eligible person can choose to join or leave a Medicare plan. There are four types of election periods: the annual coordinated election period, the initial enrollment period, the special enrollment period, and the open enrollment period.
END-STAGE RENAL DISEASE (ESRD) - Permanent kidney failure that requires a regular course of dialysis or a kidney transplant.
EXCESS CHARGES - If you are in the Original Medicare Plan, this is the difference between a doctor’s or other health care provider’s actual charge (which may be limited by Medicare or the state) and the Medicare-approved payment amount.
EXPLANATION OF MEDICARE BENEFITS (EOMB) - The notice you get from Medicare after receiving medical services from a doctor, hospital or other health care provider. It tells you what the provider billed Medicare, Medicare's approved amount, the amount Medicare paid, and what you have to pay. It is not a bill.
EXTRA HELP - A Federal program that is administered by Social Security that helps people with Medicare who have low incomes and assets pay for their Medicare drug coverage (including coinsurance, deductibles, and premiums). If you have Medicaid, receive Supplemental Security Income (SSI), or are enrolled in a Medicare Savings Program (MSP), then you are automatically eligible for Extra Help.
FEDERAL POVERTY LEVEL (FPL)
- The federally set level of income that an individual or family can earn below
which it is recognized that they can not afford necessary services. The FPL is
used in eligibility criteria of many programs, including Extra Help and
Medicaid. The FPL changes every year and varies depending on the number of
people in your household. It is higher in
FISCAL INTERMEDIARY - A private company that has a contract with Medicare to pay Part A and some Part B bills (for example, bills from hospitals).
FORMULARY - A list of drugs covered by a plan.
GENERIC DRUG - A copy of a brand-name drug that is regulated by the Food and Drug Administration to be identical in dosage, safety, strength, how it is taken, quality, performance and intended use (definition from the U.S. Food and Drug Association).
GRIEVANCE - A complaint about the way your Medicare health plan is giving care. For example, you may file a grievance if you have a problem calling the plan or if you are unhappy with the way a staff person at the plan has behaved toward you. A grievance is not the way to deal with a complaint about a treatment decision or a service that is not covered (see Appeal).
GUARANTEED ISSUE RIGHTS (ALSO CALLED "MEDIGAP PROTECTIONS") Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you a policy, or place conditions on a policy, such as exclusions for pre-existing conditions, and can’t charge you more for a policy because of past or present health problems.
GUARANTEED RENEWABLE - A right you have that requires your insurance company to automatically renew or continue your Medigap policy, unless you make untrue statements to the insurance company, commit fraud or don’t pay your premiums.
HEALTH MAINTENANCE ORGANIZATION (HMO) (MEDICARE) - A type of Medicare Advantage Plan that is available in some areas of the country. Plans must cover all Medicare Part A and Part B health care. Some HMOs cover extra benefits, like extra days in the hospital. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency.
HOMEBOUND - A person whose condition is such that there exists a normal inability to leave home, and leaving home requires "a considerable and taxing effort. A person does not have to be confined to the bed to be considered homebound by Medicare. Leaving home for short periods of time for special non-medical events, such as a family reunion, funeral or graduation, would not exclude someone from being considered homebound. A doctor must certify this condition.
HOME HEALTH AIDE - A worker who helps a patient at home with activities of daily living, such as getting in and out of bed, dressing, bathing, eating and using the bathroom. Medicare does not pay separately for aides to perform house-keeping services, such as cooking and cleaning, but they may do light housekeeping related to personal care during the visit. Medicare will not pay for home health aide services unless they are accompanied by a skilled need.
HOME HEALTH CARE - Limited part-time or intermittent skilled nursing care and home health aide services, physical therapy, occupational therapy, speech-language pathology services, medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), medical supplies, and other services.
HOSPICE CARE - 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 as well. Hospice care is covered under Medicare Part A (Hospital Insurance).
INITIAL ENROLLMENT PERIOD - The Initial Enrollment Period is the Medicare enrollment period for individuals as they turn age 65. This seven-month period starts three months prior to the month of the individual's 65th birthday and continues three months following the month the individual turns 65 years of age. The individual's Medicare effective date depends on when the individual enrolls in Medicare within the Initial Enrollment Period.
INPATIENT CARE - Health care that you get when you are admitted to a hospital or skilled nursing facility.
LIFETIME RESERVE DAYS - Also known as "reserve days." When you are in the hospital for more than 90 days, Medicare pays for 60 additional reserve days that you can only use once in your lifetime. They are not renewable once you use them.
LONG-TERM CARE - A variety of services that help people with health or personal needs and activities of daily living over a period of time. Long-term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities. Most long-term care is custodial care. Medicare doesn’t pay for this type of care if this is the only kind of care you need.
LONG-TERM CARE OMBUDSMAN - An independent advocate for nursing home and assisted living facility residents who provides information about how to find a facility and how to get quality care. Every state is required to have an Ombudsman Program that addresses complaints and advocates for improvements in the long-term care system.
LOW-INCOME SUBSIDY (LIS): See Extra Help.
MEDICAID - A joint Federal and State program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
MEDICAID SPEND-DOWN - A state-run Medicaid program for people whose income is higher than would normally qualify them for Medicaid, but who have high medical expenses that reduce their incomes to the Medicaid eligibility level. Not all states have Medicaid spend-down.
MEDICAL SOCIAL SERVICES - A service generally intended to help the patient and family cope with the logistics of daily life with an advanced illness. Medical social services include assessing social and emotional factors related to the patient’s illness and care; evaluating the patient’s home situation, financial resources, and availability of community resources; and helping the patient access community resources to assist in recovery. The social worker may also provide counseling to the patient and family to address emotions and issues related to the illness.
MEDICALLY NECESSARY - Services or supplies that are needed for the diagnosis or treatment of your medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of you or your doctor.
MEDICARE ADVANTAGE PLAN – A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or Private Fee-for-Service Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plans, and are not paid for under Original Medicare.
MEDICARE-APPROVED AMOUNT - Also called "Medicare-approved charge." This is the amount Medicare will pay for certain medical services or equipment. Generally you are responsible for paying 20% of the Medicare-approved amount.
MEDICARE ADVANTAGE PRESCRIPTION DRUG (MA-PD) PLAN - A Medicare Advantage plan that offers Medicare Prescription Drug coverage and Part A and Part B benefits in one plan.
MEDICARE COST PLANS - Medicare cost plans are a type of HMO that contracts as a Medicare Health Plan. As with other HMOs, the plan only pays for services outside its service area when they are emergency or urgently needed services. However, when you are enrolled in a Medicare Cost Plan, if you get routine services outside of the plan's network without a referral, your Medicare-covered services will be paid for under the Original Medicare Plan, and you will be responsible for the Original Medicare deductibles and coinsurance.
MEDICARE MANAGED CARE PLAN - A type of Medicare Advantage Plan that is available in some areas of the country. In most managed care plans, you can only go to doctors, specialists, or hospitals on the plan’s list. Plans must cover all Medicare Part A and Part B health care. Some managed care plans cover extras, like prescription drugs. Your costs may be lower than in the Original Medicare Plan.
MEDICARE MEDICAL SAVINGS
ACCOUNT (MSA) - A savings account that allows Medicare to deposit a certain
amount of money you can use to pay towards the deductible of a high-deductible
Medicare private health plan (Medicare Advantage plan). The amount deposited
each year is only a portion of the deductible the plan charges. If you need
enough care to meet the full deductible, you have to pay the remainder
MEDICARE PRESCRIPTION DRUG COVERAGE - Optional coverage available to all people with Medicare through insurance companies and other private companies.
MEDICARE SAVINGS PROGRAMS (MSP) - Programs that help pay your Medicare premiums and sometimes also coinsurance and deductibles.
MEDICARE SELECT - A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.
MEDICARE SUMMARY NOTICE (MSN) - A notice you get after the doctor or provider files a claim for Part A and Part B services in the Original Medicare Plan. It explains what the provider billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay.
MEDIGAP OPEN ENROLLMENT PERIOD - A one-time-only six month period when you can buy any Medigap policy you want that is sold in your state. It starts in the first month that you are covered under Medicare Part B and you are age 65 or older. During this period, you can’t be denied coverage or charged more due to past or present health problems.
MEDIGAP POLICY - Medicare
supplement insurance sold by private insurance companies to fill
"gaps" in Original Medicare Plan coverage. Except in
NON-FORMULARY DRUGS - Drugs not on a plan-approved drug list.
OPEN ENROLLMENT PERIOD - A certain period of time when you can join a Medicare health plan. During that time, the plan must allow all eligible individuals to join.
OPT OUT - Doctors can "opt out" of Medicare by notifying the Medicare carrier that they will not accept Medicare payments and telling their patients–in writing before treating them–that Medicare will not pay for their services and that the patients must pay for the care themselves. Doctors who have "opted out" can charge as much as they want, and their patients have to pay the entire bill themselves. The only time a doctor who has opted out can receive payment from Medicare is when the doctor provides a patient emergency or urgent care services and the patient does not have a contract with that doctor. If the doctor did not provide a written contract before the patient received the services, the patient is not liable for payment.
ORIGINAL MEDICARE PLAN - A fee-for-service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). In some cases you may be charged more than the Medicare-approved amount. The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Also known as Traditional Medicare.
PART A - The part of Medicare that covers most medically necessary hospital, skilled nursing facility, home health, and hospice care.
PART B - The part of Medicare that covers most medically necessary doctors' services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health, and some home health and ambulance services.
PART C - The part of Medicare concerning private health care plans that can offer Medicare benefits. These plans, which are sometimes known as Medicare Advantage plans, include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee for Service plans (PFFSs) and Medical Savings Accounts (MSAs). You must have Medicare Parts A and B to join a Part C plan.
PART D - The part of Medicare that provides prescription drug coverage provided by private companies. Most people who enroll in Part D pay a monthly premium in addition to their Part B premium.
PENALTY - An amount added to your monthly premium for Medicare Part B, or for a Medicare Prescription Drug Plan, if you don’t join when you’re first able to. You pay this higher amount as long as you have Medicare. There are some exceptions.
PHYSICIAN SERVICES - Services provided by an individual licensed under state law to practice medicine or osteopathy. Physician services given while in the hospital that appear on the hospital bill are not included.
POINT-OF-SERVICE (POS) OPTION - An HMO option that lets you use doctors and hospitals outside the plan for an additional cost.
PREFERRED PROVIDER ORGANIZATION (PPO) PLAN (MEDICARE) - A type of Medicare Advantage Plan in which pay less if you use doctors, hospitals, and providers that belong to the network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
PREMIUM - The periodic payment to Medicare, an insurance company, or a health care plan for health care or prescription drug coverage.
PRESCRIPTION DRUG PLAN (PDP) - A "stand-alone" Medicare drug plan offered through a private insurance company that only offers prescription drug benefits for people with Medicare.
PREVENTIVE SERVICES - Health care to keep you healthy or to prevent illness (for example, Pap tests, pelvic exams, flu shots, and screening mammograms).
PRIMARY CARE DOCTOR - A doctor who is trained to give you basic care. Your primary care doctor is the doctor you see first for most health problems. He or she makes sure that you get the care that you need to keep you healthy. He or she may talk with other doctors and health care providers about your care and refer you to them. In many HMOs, you must see your primary care doctor before you can see any other health care provider.
PRIVATE FEE-FOR-SERVICE PLAN (PFFS PLAN)- A type of Medicare Advantage Plan in which you may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare Program, decides how much it will pay and what you pay for the services you get. You may pay more or less for Medicare-covered benefits. You may have extra benefits the Original Medicare Plan doesn’t cover.
PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE) - PACE combines medical, social, and long-term care services for frail people to help people stay independent and living in their community as long as possible, while getting the high-quality care they need. PACE is available only in states that have chosen to offer it under Medicaid. Special rules for eligibility may apply.
BENEFICIARY PROGRAM (QMB) - Federal program administered by each state's
Medicaid program that helps people with Medicare with low incomes pay their
coinsurance, deductibles, and premiums.
QUALITY IMPROVEMENT ORGANIZATION (QIO) - Groups of practicing doctors and other health care experts. They are paid by the federal government to check and improve the care given to Medicare patients. They must review your complaints about the quality of care given by: inpatient hospitals, hospital outpatient departments, hospital emergency rooms, skilled nursing facilities, home health agencies, Private Fee-for-Service Plans, and ambulatory surgical centers. These doctors also review fast-track termination decisions in comprehensive outpatient rehabilitation facilities, skilled nursing facilities, and home health and hospice settings for people in Medicare Health Plans.
REFERRAL - A written order from your primary care doctor for you to see a specialist or get certain services. In many HMOs, you need to get a referral before you can get care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for your care.
REHABILITATION - Rehabilitative services are ordered by your doctor to help you recover from an illness or injury. These services are given by nurses and physical, occupational, and speech therapists. Examples include working with a physical therapist to help you walk and with an occupational therapist to help you get dressed.
SECOND OPINION - This is when another doctor gives his or her view about what you have and how it should be treated.
SECONDARY PAYER - An 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 - The area where a health plan accepts members. For plans that require you to use their doctors and hospitals, it is also the area where services are provided. The plan may disenroll you if you move out of the plan’s service area.
SERVICE CATEGORY - A general description of the types of services provided under the service and/or the characteristics that define the service category.
SHIP (State Health Insurance Assistance Program) - A federally-funded program in each state that answers questions about Medicare free of charge.
SIGNIFICANT BREAK IN COVERAGE - Generally, a significant break in coverage is a period of 63 consecutive days during which an individual has no creditable coverage. In some states, the period is longer if the individual’s coverage is provided through an insurance policy or HMO. Days in a waiting period during which you had no other health coverage cannot be counted toward determining a significant break in coverage.
SKILLED CARE - Medically reasonable and necessary care performed by a skilled nurse or therapist. If a home health aide (someone who provides help with daily living activities, such as bathing and eating) or other person can perform the service, it is not considered "skilled care." Skilled nursing includes care from Registered Nurses (RNs) and Licensed Practical Nurses (LPNs). Skilled therapy includes care from licensed physical, occupational and speech therapists.
SKILLED NURSING FACILITY (SNF) - A nursing facility with the staff and equipment to give skilled nursing care and/or skilled rehabilitation services and other related health services.
SPECIAL ENROLLMENT PERIOD (SEP)- A period of time, triggered by specific circumstances, during which you can enroll in Medicare Part B or Part D without having to pay a premium penalty. Under Part B, your SEP begins the month after employment or group health coverage ends (whichever comes first). Under Part D, you are eligible for an SEP if you lose—through no fault of your own—any type of drug coverage that was considered "creditable."
SPECIAL NEEDS PLAN - A special type of plan that provides more focused health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or who have certain chronic medical conditions.
SPECIALIST - A doctor who treats only certain parts of the body, certain health problems, or certain age groups. For example, some doctors treat only heart problems.
SPECIFIED LOW-INCOME MEDICARE BENEFICIARY PROGRAM (SLMB) - Federal program administered by each state's Medicaid program that pays the Part B premium for people with Medicare with low incomes.
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 INSURANCE DEPARTMENT - A state agency that regulates insurance and can provide information about Medigap policies and other private insurance.
SUPPLEMENTAL INSURANCE - Supplemental insurance fills gaps in Medicare coverage by helping to pay for the portion of health care expenses that Original Medicare does not pay for, such as deductibles and coinsurance. Supplemental insurance includes Medigap plans and retiree insurance from a former employer. Supplemental insurance may offer additional benefits that Medicare does not cover.
WAITING PERIOD - The time between when you sign up for a Medigap or private Medicare health plan and the coverage begins.