Glossary of Important Medicare Terms
Ambulatory Care: This refers to all the health care services for which the prospect does not need to stay in hospital overnight.
Ambulatory Surgical Center: Is an institution that performs surgery on an outpatient basis, whereby the prospect stay for only a single night, or only for a few hours.
Annual Election Period: Refers to the only time that Medicare Advantage Plans accept new members. The Annual Election Period is November of every year, and enrollment starts in the January which follows.
Approved Amount: The amount that Medicare has approved as being a reasonable fee to be charged by a service provider for any particular health care service.
Baby Boom: A period of irregularly high birth rates that occurred around the end of the second World War until the mid-60′s.
Cash Basis: The fee for a service as at the time of payment as opposed to the period when the service was or will be rendered.
CMS: Centers for Medicare and Medicaid Services. The government organization in charge of the Medicare program and jointly responsible for Medicaid in conjunction with the States.
Certified Nursing Assistant: Someone who has been certified to help nurses provide health care services to seniors by administering non-medical assistance, such as helping them to get dressed. CNA for short.
Clinical Trials: Are research tests that are aimed at helping service providers find better ways to diagnose, prevent or eradicate illnesses.
Conditional Payment: When Medicare makes a payment for a service while another party is liable for the payment.
Cost Sharing: Mechanisms used to share the costs of a health care service between Medicare and the beneficiary, such as deductibles, copayments and coinsurance.
Creditable Coverage: Prior health insurance that is valid according to the program regulations and can therefore be used to shorten waiting periods or guarantee coverage by a new insurer.
Critical Access Hospital: Small facilities where people from rural areas can get access to certain hospital services.
Custodial Care: The type of care generally not covered by Medicare. Refers to non-skilled aid with daily activities such as help with getting dressed or bathing.
Deductible: The value of services for which the beneficiary has to pay before Medicare will start paying its share.
Disability: Any condition that is expected to last for at least twelve months and because of which the beneficiary is unable to perform any activities related to work or gaining an income.
Dual Eligibility: When a prospect who is eligible both for Medicare and Medicaid.
Durable Power of Attorney: A legally valid document that gives someone else the authority to act and make decisions for the prospect if they should become unable to do so themselves.
Election: The decision of a prospect to join or leave a Medicare plan.
ESRD: End-Stage Renal Disease. A term that means permanent kidney failure. Persons with ESRD require a kidney transplant or regular dialysis to stay alive.
Excess Charges: The amount that a service provider charges above the amount that has been approved by Medicare for any specific service.
Formulary Drugs: A list of prescription drugs that are covered by the plan.
Gaps: Costs and benefits that are not covered under Original Medicare. This is the purpose for which Medigap was designed.
Generic Drugs: Prescription medication with the same active ingredient as the more expensive brand-name drug.
Grievance: A formal complaint about the way you are treated by your plan. This is different from an appeal, which involves a long process to dispute the decision for whether or not to cover a certain service.
Guaranteed Issue Rights: There are certain situations in which a Medigap insurer is not allowed to decline your request for a Medigap policy, regardless of pre-existing conditions.
HMO: Health Maintenance Organization. A type of MA plan featuring a network of service providers.
Hospice Care: Special care for people who are terminally ill, including physical and emotional care (counseling).
Hospital Insurance: Covered by Medicare Part A. Pays for inpatient services, including care in skilled nursing facilities as well as hospice care.
Inpatient Care: When a prospect is admitted to and treated in hospital.
ICD: International Classification of Diseases. Maintained by the World Health Organization, a set of codes used to classify diseases mainly for the purpose of determining cause of death.
Lifetime Reserve Days: The 60 days for which Medicare will pay when prospects have exceeded a 90-day consecutive stay in hospital. As the name suggests, a prospect can only use these reserve days once in their entire lifetime.
Long Term Care: Refers to various services, such as custodial care, that prospects need on a daily basis for a long period of time.
Medicare Plus (or +) Choice: The early name used for a Medicare Advantage Plan.
Managed Care Plan: Plans such as an HMO that covers health care services in which the prospect has? to make use of the plan’s network.
Maximum Benefit Coverage: For additional benefits, the maximum dollar value that the plan will insure in any given period.
Medicaid: A federal and State-run program to help prospects with limited income and resources to pay for some of their medical costs.
Medical Insurance: Covered by Medicare Part B. Pays for doctors fees and other outpatient services.
Medicare: The federal program to provide health insurance to citizens receiving social security benefits.
Medicare Handbook: The official guide to Medicare featuring pertinent information for beneficiaries such as how to file claims and which services are provided for. All beneficiaries get a copy when they initially join the program.
MSA: Medical Savings Account (plan). A Medicare Advantage option consisting of a savings account and a health plan.
Medicare SELECT: A type of Medigap policy featuring the requirement that the prospect make use of the plan’s network for full coverage.
Medicare Supplement Insurance: A Medigap Policy
Medicare-Approved Amount: This is the amount that Medicare has agreed to pay for any particular service covered under Part A or Part B.
Medigap: A type of insurance policy that can be sold to a Medicare-eligible prospect to supplement (cover) the gaps in Original Medicare (Part A and Part B).
Nursing Facility: A facility that has skilled nursing care as its primary function.
Original Medicare: The basic Medicare coverage under Part A and Part B.
POS: Point of Service. An option included on certain managed care plans that allows beneficiaries to use out-of-network service providers at a higher or extra cost.
PPO: Preferred Provider Organization. Like an HMO because it features a plan network, but differs in that beneficiaries may choose to use out-of-network providers for a higher cost.
Premium Surcharge: The 10% increase that is applied to the prospect’s Medicare Part B premium after every 12 month period in which they could have but did not elect to join Medicare Part B.
PFFS: Private Fee For Service. A Medicare Advantage Plan that provides coverage on a case by case basis.
PACE: Programs of All-inclusive Care for the Elderly. Medical and long-term care provided to seniors who are very frail.
Second Payer: The insurance or other health program that pays after the first insurer has paid their portion.
TTY: A teletypewriter. A device used for communication by deaf people and those with other hearing or speaking problems.
WHO: The World Health Organization.
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