Medicare Glossary

A notice that is given by a doctor, supplier, or provider before providing a service or product for which Medicare may deny payment. If you are not given an ABN before you receive a service or product and Medicare denies payment, you may not have to pay for it. If you are given an ABN and you sign the notice, you will likely have to pay for the item or service if Medicare does deny payment. An ABN is only applicable if you are enrolled in Original Medicare, Part A and Part B.

A notice that you will receive from a Medicare Advantage Plan (Medicare Part C) letting you know in advance whether or not it will cover a particular service. This is different from an ABN (Advance Beneficiary Notice) which only applies to Medicare Part A and Part B.

A written set of instructions stating how you want medical decisions to be made on your behalf if you lose the ability to make them for yourself. This can include a living will and a durable power of attorney for health care.

The action you can take if you disagree with a coverage or payment decision made by Medicare or your Medicare plan/Medicare Prescription Drug Plan. You can submit an appeal for the following cases:

• Medicare denies your request for a health care service, item, supply, or prescription that you believe you should be able to get

• Medicare denies your request for payment for a health care service, item, supply or prescription that you already received

• Medicare denies your request to change the amount you must pay for a health care service, item, supply, or prescription

• Medicare or your Medicare plan stops providing or paying for a service, item, supply, or prescription you think you still need

An agreement by your doctor, provider, or supplier to be paid and accept the payment amount directly by Medicare. In the agreement, they agree to not bill you for any more than the Medicare deductible and coinsurance.

The person who receives health care benefits through Medicare or Medicaid.

A type of QIO (organization of doctors and health care experts under contract with Medicare) that uses doctors and health care experts to review complaints and quality of care for Medicare beneficiaries. This organization make sure there is consistency in the review process while taking into consideration other factors and needs, including general quality of care and medical necessity.

The time that Original Medicare measures your use of hospital or skilled nursing facility (SNF) services. The period begins the day you are admitted as an inpatient in a hospital or SNF and it ends when you haven't received any inpatient hospital or SNF care for 60 days in a row. If you enter into a hospital or SNF after a benefit period has ended, then a new benefit period will begin. You must pay the inpatient hospital deductible for each benefit period and coinsurance is determined by the number of days you have been in the hospital or facility during each period. There is no limit to the number of benefit periods.

A company that acts on behalf of Medicare to collect and manage information on other types of insurance or coverage that a person with Medicare may have. They determine whether the coverage will pay before or after Medicare. The BCRC also obtains repayment when Medicare makes a conditional payment, and the other payer is determined to be primary.

An insurance plan that is designed to protect you from paying high out-of-pocket costs. It is geared towards patients who are generally healthy and don't need to visit their physician on a regular basis. This plan usually covers hospital stays, x-rays, and surgical expenses. Medicare Part A and Part B does not offer catastrophic coverage but Medicare Part D (prescription drug coverage) does offer it. After you have spent a certain out-of-pocket amount, you will only pay 5% of the cost for each prescription in addition to the monthly plan premium. Medicare private plans may also have catastrophic coverage but the caps may exclude certain high cost services.

A health care benefit for the dependents of qualifying veterans. In this program, the VA shares the cost of covered health services and supplies with eligible beneficiaries.

A request for payment that you or your health provider submits to your health insurance company when you receive items or services that are covered.

Coinsurance is your share of the costs of a covered health care service. The amount is calculated as a percent of the allowed amount of the service. For example, if your coinsurance is 20%, you would pay 20% on all covered services until you reach the out-of-pocket maximum.

A facility that provides a variety of services on an outpatient basis. Services include diagnostics, therapeutic services, psychological or social services, and rehabilitation.

The amount that you may be required to pay as your share of the cost for a medical service or supply. A copayment, or copay, is usually a set amount, rather than a percentage. For example, you might $10 for a doctor's visit or prescription. In Original Medicare, copayments are also used for some hospital outpatient services.

The initial decision made by your Medicare drug plan (not the pharmacy) about you prescription drug benefits. This includes:

• whether a particular drug is covered

• how much you are required to pay for a drug

• whether you have met all requirements for obtaining a requested drug

You must call or write your plan to make an exception. The Medicare drug plan must make a decision in a timely manner (72 hours for standard requests, 24 hours for expedited requests).

A period of time when you pay higher cost sharing for prescription drugs until you spend enough to quality for catastrophic coverage. The coverage gap, also known as the "donut hole", begins when you and your plan have paid a set dollar amount for prescription drugs within that year.

Previous health insurance coverage (such as a group health plan, Medicare, Medicaid or other health plan) that can be used to shorten a pre-existing waiting period under a Medigap policy. Health insurance coverage you had within 63 days of securing a new insurance policy can qualify for creditable coverage. Proof of coverage can be shown by a certificate of creditable coverage or other documents from the health insurance provider, such as a health insurance ID card.

Prescription drug coverage from something like an employer or union that is considered to be as good as Medicare Part D in terms of the coverage and benefits. Those who have this kind of coverage when they become eligible for Medicare can usually keep the coverage without paying a penalty should they decide to enroll in Medicare prescription drug coverage later.

A facility that provides outpatient services to people in rural areas. They can also provide inpatient services on a limited basis.

Non-skilled personal care that is not covered by Medicare in most cases. Custodial care includes assistance with daily living activities such as cooking, eating, cleaning, shopping, bathing, dressing, getting in and out of a bed and/or chair, etc. It can also include health care that most people do themselves, such as taking medications or putting in eye drops.

The amount that you must pay for health care or prescriptions before Original Medicare, the prescription drug plan, or your other health insurance begins to pay. In Original Medicare, you pay a new deductible for each benefit period for Part A and for each year for Part B.

Special projects, often referred to as "pilot programs" or "research studies", that test improvements in Medicare coverage, payment and quality of care. Demonstrations are typically operated for a limited time and for a specific group of people in specific areas.

Certain medical equipment that is ordered by a doctor for you to use in the home. Items can include walkers, wheelchairs, hospital beds or other items that allow you to perform certain tasks that you may be unable to due to a medical condition and/or illness. Durable medical equipment is covered by Medicare Part B under home health services.

A legal document that identifies someone else to make healthcare decisions for you in the event you become unable to make your own decisions.

A Medicare Prescription Drug Plan decision in response to your written request about prescription drug coverage. A formulary exception is the plan's decision to cover a drug that is not on the drug list (formulary) or to waive a coverage rule. A tier exception is the plan's decision to lower the amount for a drug that is not in a preferred drug tier. Your doctor or prescriber must provide a supporting statement along with your request for the exception that states the medical reason for the exception.

The difference between the amount your doctor or provider is legally permitted to charge and the Medicare-approved amount.

A Medicare program that helps individuals with limited income pay for Medicare prescription drug program costs, such as premiums, deductibles and coinsurance. Qualifying for Extra Help from Medicare depends on your income and you may receive full Extra Help or partial Extra Help.

The list of prescription drugs that are covered by a prescription drug plan or other insurance plan with prescription coverage.

A complaint or dispute in regards to the way that your Medicare health or drug plan is operating or providing care. If you have a complaint, you may file a grievance within 60 days after the incident occurred. You can file a grievance for a problem such as difficulty calling the plan, the conditions of a facility, or if you are unhappy with the way a plan staff member has treated you. However, if you have a complaint about the plan's decision to refuse to cover a service, product or prescription, you must file an appeal.

Generally, a health plan that is offered by an employer or employee organization (such as a union) that provides health care coverage for employees and their families. This group health plan may be primary or secondary to Medicare depending on your employment status and the size of the company that you work for.

Consumer protection rights that you have in situations where insurance companies are required by law to sell or offer you a Medigap policy. Under these rights, an insurance company cannot deny you insurance coverage or place conditions on a policy based on your pre-existing conditions. They also can't charge you more for a Medigap policy because of a past or present health condition.

A right that states your insurance company can't terminate a policy and must automatically renew or continue your Medigap coverage. This right is applicable unless you make false statements to the insurance company, commit fraud, or fail to pay your premiums. As of 1992, all Medigap policies are guaranteed renewable.

An individual or organization that is licensed to give health care services. Examples of healthcare providers include doctors, nurses and hospitals.

A federal law designed to provide data privacy and security to protect sensitive information known as Personal Health Information (PHI).

Health services or part-time skilled nursing care that a doctor decides you may receive in your home under a plan of care established by your doctor. Medicare only covers home health care on a limited basis as ordered by your doctor. The care may include occupational therapy, medical social services, physical therapy, durable medical equipment, and other services.

Care and support provided for people who are terminally ill. Hospice care addresses the physical, medical, social, emotional and spiritual needs of the patient. Hospice care providers also support the family and caregiver(s) of the patient.

Providers or health care facilities that are part of a health plan's network of providers that has a negotiated discount. Some insurance plans will cover services from in-networks doctors, hospitals, pharmacies and other health-care providers and others will pay at least some of the claim.

An organization that contracts independently with Medicare to review an appeal you make against the Medicare plan's coverage or payment decision. Your case is also reviewed if the plan does not respond with an appeal decision in a timely manner.

The plan's out-of-pocket maximum that you reach before you enter your plan's coverage gap (also known as the "donut hole"). Your maximum is reached after you have paid your yearly deductible, copayment, or coinsurance.

Health care services provided in a hospital or skilled nursing facility. An inpatient rehabilitation facility is a hospital or facility that provides an intensive rehabilitation program.

Generally, a group health plan that covers employees of a company or employee organization that has at least 100 employees.

An amount you owe if for any continuous period of 63 days or more after your initial enrollment period is over, you go without one of these:

• A Medicare Prescription Drug Plan (Part D)

• A Medicare Advantage Plan (Part C)

• Another Medicare health plan that offers Medicare Prescription drug coverage

• Creditable prescription drug coverage

The amount owed is added to you Medicare Part D monthly premium.

Under Original Medicare, there are 60 additional days that Medicare will pay for when you are in the hospital for longer than 90 days. The 60 reserve days can only be used once during a lifetime. For each lifetime reserve day, Medicare will pay for all covered costs however, you are responsible for the daily coinsurance.

Under Original Medicare, the highest amount of money that you can be charged for a covered service by doctors or other health care providers who don't accept assignment. The limiting charge is 15% over Medicare's approved amount and only applies to certain services. It does not apply to supplies or equipment. Some Medigap policies do offer benefits that will pay the excess charge.

Care that includes both medical and non-medical care provided to those who are unable to perform basic activities of daily living, such as dressing or bathing. Support and services can be provided at home or in the community, nursing homes or assisted living. Individuals may require long-term support and services at any age, however Medicare and most health insurance don't pay for long-term care.

Acute care hospitals that provide treatment for patients who stay, on average, more than 25 days. Most patients are typically transferred to a long-term care hospital from an intensive or critical care unit. They provide services such as comprehensive rehabilitation, respiratory therapy, head trauma treatments, and pain management.

An independent support/advocate for nursing home and assisted living facility residents. They work to solve problems of residents of nursing homes, assisted living facilities, or other similar-type facilities. They may also be able to provide information about home health agencies in the area of the patient.

A joint federal and state program that helps with the medical costs for some people with limited income and resources. Medicaid programs vary from state to state. However, most health care costs are covered if you qualify for both Medicare and Medicaid.

A health care provider that has been approved by Medicaid. Examples of providers include a home health agency, hospital, nursing home or dialysis center. Providers are approved or "certified" if they've passed an inspection conducted by a state government agency.

The federal health insurance program that is available to:

• people who are 65 or older

• certain younger people with disabilities

• people with End-Stage Renal Disease (ESRD), which is permanent kidney failure requiring dialysis or a transplant

A certain type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits and they include:

• Health Maintenance Organizations (HMOs)

• Preferred Provider Organizations (PPOs)

• Private Fee-for-Service Plans (PFFS)

• Medicare Medical Savings Account Plans (MSA)

• Special Needs Plans (SNPs)

If you are enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and services aren't paid for by Original Medicare. Some plans offer prescription drug coverage as part of their benefits packages. They may also include other benefits including routine vision/dental, hearing, and wellness programs.

A Medicare Advantage (Part C) plan that includes both prescription drug (Medicare Part D) coverage and Original Medicare. MA-PD plans are offered by private companies that contract with Medicare to provide Part A, Part B and Part D benefits.

With this plan, if you get services outside of the plan's network without at referral, your Medicare-covered services will be paid for under Original Medicare. Your Cost Plan pays for emergency or urgently needed services. This type of plan is only available in some areas.

A type of Medicare Advantage Plan (Part C) where most of the time, you can only go to doctors, specialists, or hospitals on the plan's list except in the event of an emergency. This type of plan is available in some areas of the country and they also require you to get a referral from a primary care physician.

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. Types of Medicare health plans include all Medicare Advantage Plans, Medicare Cost Plans, and Demonstrations/Pilot Programs. PACE (Programs of All-inclusive Care for the Elderly) organizations are special types of Medicare health plans.

An MSA plan combines a high deductible Medicare Advantage Plan with a bank account. The plan deposits money from Medicare into the account and you can use the money to pay for health care costs. However, only Medicare-covered expenses count toward your deductible. The amount deposited into the account is typically less than your deductible amount so you most likely will have to pay out-of-pocket before your coverage begins.

The part of Original Medicare that covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and limited home health care.

The part of Original Medicare that covers certain doctors' services, medical supplies, outpatient care, and preventive services.

A plan other than Original Medicare that you can obtain your Medicare health or prescription coverage. This includes all Medicare health plans and Medicare Prescription Drug Plans.

A type of Medicare Advantage Plan (Part C) in which you pay less if you use doctor's, hospitals, and other health care providers that belong to the plan's network. You can use doctors, hospitals, and providers outside of the network but it will be an additional cost.

Optional benefits for prescription drugs available to all those with Medicare for an additional charge. Coverage is offered by insurance companies and other private companies approved by Medicare.

A type of Medicare Advantage Plan (Part C) where generally you can go to any doctor or hospital you could go to if you had Original Medicare. The doctor or hospital just needs to agree to treat you. The plan determines how much it will pay the doctors and hospitals, and how much you must pay when you receive any care. A PFFS plan is different than Original Medicare, and you must follow the plan rules carefully when you go to receive health care services. In a PFFS plan, you may pay more or less for Medicare-covered benefits than in Original Medicare.

Medicare Savings Programs are federally funded program administered by each individual state. The programs are intended for people with limited income and help them pay for some or all of their Medicare premiums, deductibles, copayments and coinsurance. The four Medicare Savings Programs include:

• Qualified Medicare Beneficiary (QMB)

• Specified Low-Income Medicare Beneficiary (SLMB)

• Qualifying Individual (QI or QI-1)

• Qualified Disabled and Working Individuals (QDWI)

A type of Medicare supplement (Medigap) plan that is sold in some states. It can be any of the standardized Medigap plans (A through N) but it requires the policy holder to receive services from within a defined network of hospitals and sometimes doctors in order to be eligible for benefits.

A notice that people with Original Medicare receive in the mail once every 3 months for their Medicare Part A and Part B covered services. The notice shows all your services and supplies billed to Medicare during the 3 month period, what Medicare paid, and the maximum amount you may owe to the provider. It is not, however, a bill.

In Original Medicare, the amount that a doctor or supplier that accepts assignment will be paid. In some cases, it may be less than the actual amount the doctor or supplier charges. Medicare pays part of the amount and you are responsible for the remaining difference.

The 6-month period that starts the month in which you turn 65 and enrolled in Medicare Part B. After this enrollment period, you may not be able to buy a Medigap policy.

An insurance policy sold by private insurance companies that is meant to fill any gaps in Original Medicare coverage. Medigap policies help pay for some of the medical expenses that Original Medicare Plan does not cover.

A pharmacy that offers covered drugs to members at a lower cost than what the member would pay at a non-preferred network pharmacy. 

A pharmacy that is part of the Medicare drug plan’s network but you may pay a higher out of pocket cost for prescription drugs because it is a non-preferred pharmacy.

A fee-for-service health plan that is comprised of two main parts:

• Part A (Hospital Insurance)

• Part B (Medical Insurance)

Physicians, hospitals or other healthcare providers who do not participate in an insurer’s provider network. They do not have a signed contract agreeing to accept the insurer’s negotiated prices.

This option allows you to use doctors and hospitals outside of the plan for an additional cost, if you have an HMO (Health Maintenance Organization).

A document that allows you to assign someone you trust to make decisions about your medical care if you are not fit to do so. This is a type of advance directive that is also called a health care proxy, durable power of attorney for health care or appointment of health care agent.

A health condition that an individual had before the date that coverage starts.

A recurring, periodic payment to your Medicare, Medicare Supplement, or Medicare Advantage program for continued coverage.

Health care services that are meant to prevent or detect illness at an early stage. Preventive services include flu shots, mammograms and Pap tests.

A doctor or physician that provides the first contact for an individual with a health concern and provides ongoing care. In many Medicare Advantage Plans, you may need to see your primary care doctor before you see another type of health care provider.

Approval that you must obtain from your Medicare drug plan in order for your prescription to be covered by your plan. Prior authorization must be obtained before you fill your prescription.

PACE services older adults who need nursing home services but are capable of living in the community. It is a special type of health plan that provides care and services that are covered by Medicare and Medicaid in addition to medically necessary care and services based on the individual’s needs. It serves to combine medical, social and long term care services and prescription drug coverage.

One of the four Medicare Savings Programs (MSP) that is administered by each state’s Medicaid program. It allows individuals to get help from the state to pay for Medicare Part A premiums. To qualify you must be under 65, have a disabling impairment, continue to work, and are not eligible for Medicaid.

One of the four Medicare Savings Programs (MSP) that helps pay for Medicare Part B premiums and qualifies you for the Extra Help prescription drug program. You cannot get QI benefits if you qualify for Medicaid. To qualify for QI benefits, you must meet certain income requirements.

One of the four Medicare Savings Programs that helps to pay for Part A and Part B premiums, deductibles, copayments, and coinsurance. To qualify for QMB benefits you must meet certain income requirements.

A large federal program that is dedicated to improving healthcare quality for Medicare beneficiaries. It is made up of a group of health quality experts, clinicians, and consumers organized to improve the quality of care delivered to individuals with Medicare. There are two types of QIOs that work under the direction of the Centers for Medicare and Medicaid Services: Beneficiary and Family Centered Care (BFCC)-QIOs and Quality Innovation Network (QIN)-QIOs.

A QIO program that brings Medicare beneficiaries, providers and communities together in data-driven initiatives to improve patient safety, create healthier communities, improve post-hospital care and clinical quality.

A private company that is contracted with Medicare to pay for hospice and home health care bills under the guidelines of Original Medicare. A RHHI also investigates the quality of home health care services.

A facility that provides nonmedical care items and services to individuals that need hospital or skilled nursing facility care, but whose religious beliefs prohibit conventional and unconventional medical care. Medicare Part A (hospital insurance) covers inpatient non-religious, nonmedical care when the following conditions are met:

• The RNHCI is certified to participate in Medicare

• The RNHCI Utilization Review Committee agrees that the individual would require hospital or SNF care if they weren’t in the RNHCI

• The individual has a written election with Medicare showing that their need for RNHCI care is based on both eligibility and religious beliefs.

Temporary relief for primary caregivers that are taking care of a sick, elderly, or disabled person. Respite care can be arranged for a few hours, days or weeks depending on the needs.

An option available through Medicare that allows employers and unions to continue providing their Medicare-eligible retirees and dependents with employer-sponsored drug coverage.

A term that is used when another entity has the responsibility for paying before Medicare. An example of this type of scenario includes when an individual aged 65 or older is covered by an employer group health plan and the employer has 20 or more employees. In this case, the group health plan pays first and Medicare pays secondary.

An area where some services provided by your health plan are limited to the defined area. For some Medicare plans, if you move out of the service area you will be automatically disqualified from that plan.

Nursing and therapy care that can only be safely and effectively performed by, or under the supervision of, professionals or technical personnel. Medicare Part A covers skilled nursing care in a facility for a limited time if the following conditions are met:

• You have Part A and have days left in your benefit period

• You have a qualifying hospital stay

• Your doctor has designated that you need daily skilled care.

• You need skilled services for a medical condition that is either a hospital-related condition, or a condition that started when you were getting care in a skilled nursing facility.

An insurance plan that is more expensive but offers more services than Original Medicare. The range of coverage and benefits include:

• Personal care services

• Hearing aids

• Dental care

• Eyeglass

• Prescription drug and chronic care benefits

• Short-term nursing home care

• Medical transportation services

A time during which Medicare beneficiaries can change their Medicare Advantage or Part D coverage when certain events happen in their life. This allows you to make changes outside of the annual open enrollment period and after your initial enrollment period has ended. These special events include a change of address, losing current coverage, are offered coverage by an employer and more. Also known as a Special Election Period.

A type of Medicare Advantage plan that limits membership to individuals with specific disease or characteristics. SNPs design their benefits, provider options and drug formularies to best meet the specific needs of the groups that they service. Eligibility for an SNP requires that you meet the following conditions:

• You are enrolled in Medicare Part A and Part B

• You live in the plan’s service area

• You have one or more of a list of severe or disabling chronic conditions, you live in an institution or require home nursing care, or you have both Medicare and Medicaid.

One of the four Medicare Savings Programs that helps to pay for Medicare Part B premiums only. In order to qualify you must meet certain income requirements that change each year.

An independent program funded by federal agencies. It is a free health insurance counseling service for Medicare beneficiaries and their families or caregivers. Its mission is to help individuals make informed healthcare benefit decisions.

An agency within each state that regulates insurance and provides information about health coverage within its state.

A state agency that runs the state’s Medicaid program and gives information about its state's program that help pay medical bills for people with limited income and resources.

A state program that offers to help pay drug plan premiums and/or other drug costs. Each state runs their program differently and coordinates with Medicare’s prescription drug benefit (Part D).

A state-level agency that oversees health care facilities that participate in Medicare and/or Medicaid programs and collaborate with local emergency entities to develop effective policies and procedures. They inspect health care facilities and investigate complaints to ensure that health and safety standards are met.

A type of prior authorization where you must try a less expensive drug on the Medicare Part D plan’s drug list that has been effective for most people with your condition before you can be given a more expensive drug. Generally speaking, this means trying a more affordable generic version of a drug. The name brand drugs are known as Step 2 drugs and Medicare will not cover the cost of those until Step 1 drugs are tried first for treatment.

A federal income supplement program designed to help low income individuals who are aged, blind and/or disabled pay for basic needs, such as food, clothing and shelter. This program is funded by general tax revenues, not Social Security taxes.

A method of improving patient health by utilizing two-way, real time communication between an individual and their physician or practitioner without having to go into the doctor’s office. It is a cost-effective alternative to in person treatment and states can choose to cover the cost under Medicaid.

In Medicare Part D, drug formularies categorize brand name and generic drugs into cost-sharing tiers and each plan can divide its tiers in different ways. An example of a plan’s tiers is as follows:

• Tier 1 - lowest copayment with mostly generic drugs

• Tier 2 - medium copayment with preferred, brand-name drugs

• Tier 3 - high copayment with non-preferred, brand-name drugs

• Speciality Tier - highest copayment with high cost drugs

A health care program that provides civilian health benefits for U.S. Armed Forces personnel, military retirees, and their dependents. It is formerly known as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

A communication device used by deaf/hard-of-hearing people or those with a severe speech impairment. Someone without a TTY can communicate with someone with a TTY via a message relay center (MRC) that has operators that send and interpret TTY messages.

If you are enrolled in a Medicare plan that is not Original Medicare and you need immediate care and are out of the service area of your plan, your health plan will pay for urgently needed care.

Everyone that is eligible for Social Security Disability Insurance is also eligible for Medicare after a 24 month qualifying period. This 2 year period is known as the waiting period.

A state-administered program that pays for health care and other claims for on-the-job injuries. In the event of a claim, workers compensation pays rather than medicare for expenses related to the injury.