Glossary

Defines terms you may encounter when dealing with Medicare or with health care-related issues. Click on a letter below to view the list of words that start with that letter, or scroll down to browse all the words in the glossary.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Abuse: Incidents or practices that are inconsistent with sound and accepted medical, business, or fiscal procedures.
Activities of Daily Living (ADLs): Activities that display a person's level of dependence and type of care required. These activities include bathing, continence, dressing, eating, toileting, transferring (getting into and out of a bed or chair) and ambulating (walking).
Acute: A health condition that is short-term, following the onset of a disease or as a result of an injury that occurred over a brief time period.
Administrative Law Judge: An official who has responsibility for making a decision in matters of administrative law. Medicare administrative law judges are assigned to the federal Department of Health and Human Services and make decisions regarding Medicare Parts A, B, C, and D appeals that have passed the initial levels of consideration.
Adult Day Care (ADC): Daytime, community-based programs for adults with functional impairments or disabilities that provide a variety of health, social and related services. Most ADCs also offer meals. ADCs enable individuals to remain at home with supportive, structured day care, providing family members and other caregivers relief from constant care.
Adult Day Health Care (ADHC): Daytime care, often offered at a licensed community-based day care program. ADHCs are a type of Adult Day Care [see previous definition, above] that provide more intensive health, therapeutic and social services to those at risk of being placed in a nursing home. They also provide family members and other caregivers relief from constant care.
Advance Beneficiary Notice (ABN): A notice that a doctor or supplier should give a Medicare beneficiary to sign when the doctor or supplier believes that Medicare will not pay for a particular service. By signing the notice, the beneficiary agrees to pay for the service. If the doctor or supplier does not provide the beneficiary with a notice, and Medicare does not pay for the service, then the beneficiary does not have to pay for the service. The advance beneficiary notice applies only to Medicare fee-for-service, not in managed care plans.
Alzheimer's Disease: A progressive neurological disease of the brain that leads to irreversible dementia and the loss of neurons. Alzheimer's disease is characterized by progressive impairment in memory, judgment, decision-making, orientation to physical surroundings and language.
Amyotrophic Lateral Sclerosis (ALS): Often referred to as Lou Gehrig's Disease, ALS is a progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord. People diagnosed with ALS can receive Medicare the first month their Social Security Disability Insurance (SSDI) benefits begin.
Annual Election Period (Medicare Advantage Managed Care and Medicare Part D): The Annual Election Period (AEP) for Medicare beneficiaries runs from November 15 through December 31 each year. During this time beneficiaries may change prescription drug plans, change Medicare Advantage plans, return to original Medicare, or enroll in a Medicare Advantage plan for the first time. Enrollment changes take effect on January 1. This is the only period during which most people with Medicare can change prescription drug plans.
Appeal: An appeal is a complaint you may file if you disagree with any decision about your health care services. For example, if Medicare doesn't pay for a service you received, you may appeal. An appeal is sent in writing to your Medicare health plan or the Original Medicare plan. There is a formal process you must follow when filing an appeal. More info: Medicare appeals.
Approved Amount: The amount Medicare determines to be reasonable for a service that is covered under Medicare Part B. Medicare Part B will pay for 80% of these approved amounts and no more. If your doctor does not accept the approved amount, by law she or he can charge no more than 15% above this amount. The approved amount is sometimes called the "approved charge" or "allowable amount."
Assignment (for people in Original Medicare): If your doctor "accepts assignment," it means that the doctor will charge you the standard rates or "approved amount" that the federal government sets for medical services. Medicare Part B will pay for 80% of these standard charges and no more. If your doctor does not charge the standard rates, by law the doctor cannot charge more than 15% above these rates. You may want to choose doctors who accept assignment to keep your costs low. Doctors and other health care providers that "accept assignment" are referred to as "participating providers."
Assisted Living Facility (ALF): Residential care settings that provide personal care services, shopping, housekeeping and transportation to the elderly and some younger people with disabilities. An ALF may also help dispense medications. ALF staff is required to be available to provide such assistance 24 hours/day, 7 days/week, and a physician must be available on call at all times.
Attained Age Rating: This is the most common way that Medigap policies are priced in California. Attained age rated policies go up in price as a separate individual cost factor as one ages. In other words, the insurer charges each 75-year-old more than it charges each 70-year-old, instead of spreading that cost between all 70- and 75-year-olds. Typically, these plans appear less expensive at younger ages, but can cost considerably more in later years. In addition, the premium will likely go up each year due to rising health care costs, separately from the cost associated with age.
Authorized Representative: Someone who has the legal right to make health care decisions on your behalf (for example, through a power of attorney) or someone you designate to make decisions about enrolling or disenrolling from a Medicare prescription drug plan.

Basic Benefits: Medigap policies A through J must include "basic benefits." Basic Medigap benefits include coverage of the hospital charges required under Medicare Part A for hospital days 61-90 and 91-150 in a benefit period, the blood deductibles under Part A, and the 20% coinsurance under Part B.
Benchmark Plan: A basic Medicare Part D plan that has a premium below the average in California. The full Low-Income Subsidy (LIS) covers the premium and deductible of benchmark plans; if you receive the full LIS, you will not pay a premium or deductible if you enroll in a benchmark plan. You are, however, still responsible for copayments of $1.10-$6.30 for each covered medication. More info: benchmark plans.

Benefit Period (for Original Medicare): A benefit period is the way Medicare measures the time you spend in a hospital or skilled nursing facility. The benefit period begins the day you enter the hospital or skilled nursing facility and ends when you have not received Medicare-covered hospital or skilled nursing care for 60 days in a row. If you enter the hospital 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 you may have. (Note: benefits periods apply when you use Original fee-for-service Medicare. They do not apply if you are in a Medicare Advantage plan.)
Benefit Trigger: Certain conditions set by long-term care insurance policies that must be met before the benefits start and a person receives payment for his/her claims.

CalCOBRA: A California law that provides protections similar to those in COBRA to employees of smaller firms (2-19 employees), their spouses, dependents and domestic partners. CalCOBRA benefits last up to 36 months; CalCOBRA can also be used to extend COBRA if its benefits run out before 36 months. Premiums are generally up to 110% of the premium paid by current employees on the same policy.
California Prescription Drug Discount Program for Medicare
Recipients: Provides people with Medicare who have no other coverage for prescription drugs a discounted price on their prescription drugs when they ask for the Medi-Cal price at a Medi-Cal pharmacy. This program cannot be used for drugs that are covered by someone's Medicare prescription drug plan and it is not a substitute for a Medicare prescription drug plan. More info: California Prescription Drug Discount.
California State Disability Insurance (SDI): California administers the State Disability Insurance (SDI) program. It is a public disability insurance program that pays a benefit every other week.
Carrier: A health insurance company under contract with the federal government to handle claims processing for Medicare Part B services.
Catastrophic Coverage: This refers to the Part D drug benefit. Once your Part D countable out-of-pocket costs reach $4,550 (in 2010), you pay a small coinsurance (such as 5%) or copayment for covered drug costs until the end of the calendar year. (Note: Expenses that count toward this catastrophic coverage are also referred to as your "true out-of-pocket" costs, or (TrOOP). Catastrophic coverage also refers to coverage for high-cost medical conditions or emergencies, usually after a large deductible is met.
Centers for Medicare and Medicaid Services (CMS): The agency of the federal government that administers the Medicare, Medicaid, and state Children's Health Insurance programs. Formerly known as the Health Care Financing Administration (HCFA).
CHAMPUS: The Civilian Health and Medical Program run by the Department of Defense. CHAMPUS gives medical care to the dependents of active duty military members and to retired military members. (Now called TRICARE.)
Claim: A written or electronic request that medical services be paid by Medicare or some other insurance company, such as a Medigap policy.
COBRA: Consolidated Omnibus Budget Reconciliation Act, or COBRA, legally requires an employer to continue coverage under the employer's group health plan for a period of time after: the death of your spouse, the loss of your job, the reduction of work hours, or getting a divorce. You may have to pay both your share and the employer's share of the premium. Cal-COBRA provides California protections which, in certain circumstances, broaden and extend the continuation of coverage of employees beyond the federal COBRA law.
Cognitive Impairment: Decreased function in language, attention, reasoning, judgment and memory to the point of requiring supervision and/or assistance to maintain safety.
Coinsurance: The amount you may be required to pay for services after you pay any plan deductibles. In Original Medicare, this is a percentage (like 20% for some Part B covered services) of the Medicare approved amount. You have to pay this amount after you pay the deductible for some Part A and/or Part B benefits. In a Medicare Part D prescription drug plan, the coinsurance will vary depending on how much you have already paid out-of-pocket in a given year.
Community Rating (Medigap pricing): In a Community Rating plan, sometimes referred to as a No Age Rating plan, the premium is the same for all people regardless of age. No matter how old you are, the plan costs the same, e.g., whether you are 60 or 85 years old. The premium can only increase if it is raised for all similar plans in the state.
Comprehensive Outpatient Rehabilitation Facility (CORF): A non-residential facility that allows beneficiaries to receive multidisciplinary rehabilitation services at a single location in a coordinated fashion, by or under the supervision of a physician.
Continuing Care Retirement Communities (CCRCs): Also known as life care communities, CCRCs are communities in which older people can "age in place." CCRCs often have large campuses that include separate housing for those who live independently, assisted living facilities that offer more support, and nursing homes for those who need skilled nursing care. As a result, people who are relatively active and those who have serious physical and mental disabilities live in close proximity. Residents can move from one housing choice to another as their needs change.
Coordination of Benefits (COB) Period: A period of time that applies to people who have end-stage renal disease (ESRD) and employer or union-sponsored health coverage. Once a person becomes eligible for Medicare because of ESRD, they have a 30-month COB period during which the employer or union-sponsored plan is the primary payer for their health coverage and Medicare is the secondary payer. Learn more: Medicare and People with ESRD (PDF).
Copayment: A copayment is a fixed dollar amount that you pay when a covered medical service or benefit is received. In Original Medicare, there are copayments for inpatient hospital and skilled nursing facility stays. In some Medicare Advantage plans, you may have a copayment for doctor visits or emergency care. Some prescription drug plans charge copayments for most of their drugs.
Cost Sharing: Payments that include deductibles, coinsurance, and copayments.
Coverage Determination (Medicare Prescription Drug Coverage): You can request this from your Medicare Drug Plan if your pharmacist tells you that your drug plan will not cover a drug you think should be covered or wants to charge you a higher price than you think you should pay. More info: Coverage Determinations.
Creditable Coverage: 1) Any previous health coverage that can be used to shorten the pre-existing condition waiting period for a Medigap policy. 2) Any prescription drug coverage you may have that is considered at least as good as the standard Medicare prescription drug plan. If you have creditable coverage, you can choose not to get Medicare Prescription Drug Coverage when you are first eligible for it and you will not have to pay a penalty if you decide to enroll later.
Custodial Care: Non-skilled personal care services, such as assistance with bathing, cooking, walking, and dressing. Custodial care is usually referred to as "long-term care" and is not generally covered by Medicare.

Deductible: A fixed dollar amount that you pay for covered benefits before Medicare, a Medicare Advantage (MA) plan, or prescription drug plan begins to pay. In the case of Medicare Part A, there is a deductible for each benefit period. Medicare Part B has an annual deductible as do many Part D prescription drug plans. Some MA plans that cover prescription drugs have a separate annual deductible for prescription drugs. These deductible amounts can change every year.
Dementia: The progressive decline in cognitive function due to damage or disease in the body beyond what is expected in normal aging.
Donut Hole: The gap phase of Part D prescription drug coverage during which you are responsible for paying 100% of your drug costs ($3,520 in 2010). Drugs included on your plan's formulary that you purchase through your plan's pharmacy or network count toward your donut-hole costs. Once you've reached $3,520 in out-of-pocket expenses, you will be eligible for catastrophic coverage.
Drug Categories: Drugs in the same class that are used to treat a specific condition or illness such as high blood pressure, high cholesterol, heartburn or depression.
Durable Medical Equipment (DME): Medical equipment that is ordered by a doctor for use in the home. These items may be reusable, such as walkers, wheelchairs, or hospital beds. DME is paid for under Medicare Part B, and you pay 20% coinsurance under Original Medicare.

Elder Law: The area of law that impacts the lives of older Americans and their families. Elder law includes planning issues, such as access to medical and personal care; coordinating private and public resources to finance the cost of care; counseling and planning for incapacity with medical directives, advanced directives and other alternative decision-making documents, as well as for possible long-term care planning issues including home health care, nursing home care, hospice and respite care, and eligibility for the Medi-Cal program. To find an Elder Law attorney, visit the California State Bar website.
Election Periods: The time when you may choose to join or leave Original Medicare or a Medicare managed care plan. There are four periods during which you may join or leave Medicare managed care plans: Annual Election Period, Initial Coverage Election Period, Special Election Period, and Open Enrollment Period.
End-Stage Renal Disease (ESRD): Kidney failure that is severe enough to require lifetime dialysis or a kidney transplant. See our fact sheet Medicare and People with End Stage Renal Disease (ESRD) (PDF).
Enhanced Coverage (Medicare Prescription Drug Coverage): Drug plans that offer more benefits (often covering more drugs on their formularies) and often charge higher premiums (and lesser cost-sharing) than standard drug plans.
Exception (Medicare Prescription Drug Coverage): A request for a coverage determination that requires you to submit a supporting statement from your doctor explaining why you need the drug you are requesting. More info: Drug Coverage Appeals.
Excess Charge (for people in Original Medicare): The difference between the Medicare-approved amount and the actual charge for services or goods you receive. Non-participating doctors cannot charge more than 15% above the Medicare-approved amount. Some Medigap policies offer benefits that will pay the excess charges.
Expedited Appeal: An appeal of a health care decision (where a medical service is at issue) for Medicare Advantage, Original Medicare, or Medicare Prescription Drug Coverage enrollees that is expedited, or decided quickly. This type of appeal can be a verbal or written request. More info: Medicare appeals.
Explanation of Benefits (EOB): The monthly notice Part D plans are required to provide to each enrollee after he/she uses the plan to obtain prescription drugs. The notice is sent at the beginning of the month following the month in which prescription drugs are obtained. The EOB may also include information about formulary changes. Note: EOB also refers to a notice that Medigap and retiree plans send to their enrollees that tells them how much their plan paid towards their Medicare claim(s).

Fair Hearing (for Medi-Cal): An administrative process that allows you to appeal an adverse decision ("Notice of Action") made by Medi-Cal (California's Medicaid program). Federal regulation requires all state Medicaid programs to have this type of process available. A fair hearing is not a court proceeding; it is a formal proceeding in which you may present and refute evidence, examine and cross-examine witnesses, and show why you think the decision Medicaid made was incorrect. A Hearing Officer presides over the proceeding and issues a written decision based on both evidence presented during the hearing, and federal regulation and state policy governing the Medicaid program. If required, you can request language assistance for this type of hearing. More info: Medi-Cal Fair Hearings.
Fast-Track Appeal: An appeal process available to Medicare HMO members if their coverage for care in a hospital, skilled nursing facility, home health care agency or a comprehensive rehabilitation facility is about to end. This appeal differs from an expedited appeal in that an outside organization, California's Quality Improvement Organization (QIO), Health Services Advisory Group (HSAG), reviews your appeal instead of the HMO. More info: Medicare appeals.
Fee Schedule: A complete list of fees used by health plans to pay doctors or other providers.
Fee-for-service: A payment system by which a doctor, hospital, or other health care provider is paid a specific amount for each service performed as it is provided and identified by a claim for payment.
Fiscal Intermediary: A private insurance company that has a contract with Medicare to pay Part A and some Part B bills. Also known as an "intermediary."
Formulary: A list of the drugs covered by a Medicare prescription drug plan (PDP) or Medicare Advantage Prescription Drug plan (MA-PD).
Fraud: An intentional deception or misrepresentation that someone makes, knowing it is false, that could result in the payment of some unauthorized benefit.

General Enrollment Period

The General Enrollment Period (GEP) is January 1 through March 31 of each year. If you enroll in Medicare Part B or Part A (if you don't get it automatically without paying a premium) during the GEP, then your coverage starts on July 1.

Grievance

A complaint about the way your Medicare Advantage plan or Medicare prescription drug plan is providing care. For example, you may file a grievance if you have problems with:

The cleanliness of a health care facility
Telephone customer service
Staff behavior
Operating hours
You have to wait too long for your prescriptions

A grievance is not the same as an appeal. An appeal is the way to file a complaint about a treatment decision or a service that is not covered. A beneficiary may file a grievance at the same time an appeal is filed. More info: Medicare appeals.

Group Health Plan (GHP)

A health plan supported by an employer or employee organization that provides coverage to employees, former employees and their families. GHP coverage is usually the primary insurance and Medicare is secondary for people who are over age 65, eligible for Medicare and work at a company with 20 or more employees. More info: Coverage While You and/or Your Spouse Works.

Guaranteed-Issue Rights

A situation where an insurance company is required by law to issue you a Medigap policy.

Guaranteed Issue Protections

Medigap "guaranteed issue" protections are special rights you have in certain situations to buy a Medigap policy. During these certain situations, an insurance company cannot deny you insurance, place conditions on a policy, or charge you more for a policy because of past or current health problems. More info: Your rights to buy a Medigap policy.

Guaranteed Renewable

This applies to Medigap policies where the benefits cannot change. As long as you pay your premium, guaranteed renewable policies are automatically renewed each year. You still must pay your monthly Medicare Part B premium.


Health Insurance Counseling and Advocacy Program (HICAP): A program that provides free health insurance counseling and assistance to people with Medicare and their families. Paid professional and community volunteers provide the counseling and assistance. HICAP is a California State Health Insurance and Assistance Program (SHIP) financed by the federal government and the California Department of Aging.
Health Maintenance Organization (HMO): A group of doctors, hospitals, and other health care providers that provide health care. In an HMO (also known as a Medicare Advantage plan, formerly known as a Medicare managed care plan or Medicare+Choice plan), you typically get all your care from the providers who are part of the plan. If you go outside the plan to see a doctor, you will be charged more for the care.
Health Screening: Also known as medical underwriting, this is the process an insurance company uses to decide, based on your medical history, whether to accept your application for insurance, whether to add a waiting period for pre-existing conditions, and how much to charge you for insurance.
High-deductible Option (Medigap): A few insurance companies offer a Medigap high-deductible option for policies F and J. The high-deductible option offers the same benefits as the standardized Medigap policies F and J, plus a deductible of $1,900 in 2008. The deductible increases annually.
Home Health Agency (HHA): An organization that provides health care services in the home, like skilled nursing care, physical therapy, occupational therapy, speech therapy, and care by home health aides.
Home Health Care: Skilled health care and custodial health aide services provided in the home on a part-time basis for the treatment of an illness or injury. Home health care is covered under Medicare Part A and Part B. Durable medical equipment is also covered when provided by a home health agency.
Hospice: A special program in which a Medicare-approved public or private organization provides pain relief, symptom management, and supportive services to people who are dying and to their families. Some home care is also covered under the Medicare Part A hospice benefit.

Initial Coverage Election Period (ICEP): The ICEP is the period where individuals newly eligible for Medicare can join a Medicare Advantage plan. This period begins 3 months before the person is eligible for Medicare and ends the last day of the month one’s Medicare benefits begin.
Independent Review Entity (IRE): The entity that performs the second review in the Medicare prescription benefit appeals process and in the Medicare Advantage appeals process. The request for it must be in writing and sent directly to the IRE. More info: Medicare appeals.
Inflation Protection: A feature of long-term care insurance policies that allows benefits to increase over time to offset the higher costs associated with the inflationary cost of care.
Initial Enrollment Period (IEP): The IEP for individuals who are turning age 65 is a 7-month period, which begins on the first day of the 3rd month before the month in which they turn 65, includes the month of their 65th birthday, and ends on the last day of the 3rd month after their 65th birthday. During this 7-month period, Medicare beneficiaries can enroll in Medicare Part A, Part B, and a Medicare drug plan (Part D). See “Initial Coverage Election Period” for Medicare Advantage plans (Part C), above.
Inpatient: An individual who is admitted to a hospital or other health facility overnight for the purpose of receiving a diagnosis, treatment, or other health services.
Issue Age Rating: A Medigap policy premium that is based on the age of the person when the policy is purchased. The policy does not increase automatically as the person ages. The premium can only increase if it is raised for all similar policies in the state.

Large Group Health Plan (LGHP): A health plan supported by an employer or employee organization with 100 or more employees that provides coverage to employees, former employees and their families. If you are younger than age 65, eligible for Medicare because of a disability (except end-stage renal disease) and your spouse or designated family member works for an employer with 100 or more employees, the employer must offer you the same health coverage as other workers, their spouses and dependents. LGHP coverage is usually primary and Medicare is secondary. More info: Coverage While You and/or Your Spouse Works.
Lifetime Reserve Days: In Original Medicare, you are given 60 extra days covered by Medicare when you are in a hospital more than 90 days during a benefit period. Once these 60 reserve days are used, you will not get any more during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except a daily coinsurance.
Limiting Charge (for people in Original Medicare): The highest dollar amount that can be charged by doctors and other providers who do not accept Medicare assignment. The limit is 15% over Medicare's approved amount. See "Non-participating Provider," or "Assignment," or "Excess Charge."
Long-term Care (LTC): Personal care services, previously called custodial care, given at home or in a skilled nursing facility for people with chronic disabilities and lengthy illnesses. Medicare does not generally cover long-term care.
Long-term Care Ombudsman: A long-term care ombudsman is an advocate who resolves disputes between residents of skilled nursing homes or residential care facilities (also known as board and care, or assisted living facilities) and the facility management. An ombudsman also works to inform residents and their family members of their rights and protections while residing in a facility.
Low-Income Subsidy (LIS): This benefit helps low-income people with Medicare to pay for Medicare Prescription Drug Coverage. More info: Extra Help.

Mediation

A method of conflict resolution between beneficiaries and providers regarding quality of care concerns. A professional mediator facilitates a meeting between the two parties to promote reconciliation, settlement or compromise. Health Services Advisory Group (HSAG), California's Quality Improvement Organization (QIO), administers the mediation program.

Medicaid

A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Most health care costs are covered if you qualify for both Medicare and Medicaid. In California, Medicaid is known as Medi-Cal. More info: Medi-Cal.

Medicare Administrative Contractor (MAC)

A company under contract with the federal government to handle claims processing for Medicare services. There are 3 different MACs:

A/B MAC: Processes both Part A and B claims. California's A/B MAC is Palmetto GBA.
DME MAC: Processes durable medical equipment (DME) claims. California's DME MAC is Noridian Administrative Services (NAS).
HH&H MAC: Processes home health and hospice claims. Noridian Administrative Services (NAS) is also California's HH&H MAC.

Medi-Cal

In California, Medicaid is known as Medi-Cal. Medicaid is a joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Most health care costs are covered if you qualify for both Medicare and Medicaid. More info: Medi-Cal.

Medi-Cal Dual Eligibles

Medicare beneficiaries who are entitled to Medicare Part A and/or Part B and who are also eligible for full Medi-Cal benefits. More info: Medi-Cal.

Medical Benefits Package

A standard enhanced health benefits plan available to all veterans who enroll in the Veterans Affairs (VA) health system. The plan emphasizes preventive primary care that includes a full range of outpatient and inpatient services within the VA health care system. It works independently of Medicare, Medi-Cal and other insurance programs. More info: Medicare and Veterans Administration Medical Benefits Package (PDF).

Medically Necessary

Services or supplies required for the diagnosis or treatment of a beneficiary's medical condition, which meet the standards of good medical practice in the local area, and aren't just for the convenience of a beneficiary or his/her doctor.

Medicare

The federal health insurance program for people 65 years of age and older, some younger people with disabilities, people with amyotrophic lateral sclerosis (ALS) (also known as Lou Gehrig's disease), and people with end-stage renal disease (ESRD).

Medicare Advantage Plans

Formerly known as Medicare + Choice plans, Medicare Advantage plans include: health maintenance organizations (HMOs), preferred provider organizations (PPOs), special needs plans (SNPs), private fee-for-service (PFFS) plans, and Medical Savings Account (MSA) plans. Private insurance companies offer these plans. To join, you must continue to pay Part B premiums but receive all Medicare-covered benefits through the private plan chosen. More info: Medicare Advantage.

Medicare Advantage Managed Care Plan

One type of Medicare Advantage plan. Medicare Advantage Managed Care plans (formerly known as Medicare managed care or Medicare+Choice) are primarily health maintenance organizations (HMOs) but also include Preferred Provider Organizations (PPOs) or any other plan that requires you to use a certain group of doctors and hospitals, known as a network, to provide and coordinate the care you receive. If you are enrolled in a Medicare Advantage managed care plan, you generally must use only the plan's providers. If you want to see a doctor or get other services outside of the plan's network, you will be charged more, or possibly all, of the costs of your care. This is in contrast to Medigap policies that supplement Original Medicare and allow you to choose any doctor or other provider who accepts Medicare's payment.

Medicare Advantage Prescription Drug Plan (MA-PD)

Medicare prescription drug plans offered by Medicare Advantage programs, usually a voluntary add-on to the Medicare Advantage plan that costs an additional premium.

Medicare Appeals Council (MAC)

The entity that performs the fourth review in all the Medicare appeals processes. The request must be in writing and sent directly to the MAC. More info: Medicare appeals.

Medicare Managed Care Plan

See above, "Medicare Advantage Managed Care Plan."

Medicare Medical Savings Account (MSA) plan

A Medicare health plan option made up of two parts. One part is a Medicare MSA Health Insurance Policy with a high deductible. The other part is a special savings account where Medicare deposits money to help you pay your medical bills.

Medicare Prescription Drug Coverage (Medicare Part D)

Prescription drug benefit added to Medicare as part of the 2003 Medicare Modernization Act (MMA). Benefits began January 2006 and are offered by private companies through prescription drug plans (PDPs) or Medicare Advantage prescription drug plans (MA-PDs). Drug coverage is limited to drugs on a plan's formulary. More info: Medicare Prescription Drug Coverage.

Medicare Savings Programs

Medicare Savings Programs help people with low income and asset levels pay for health care coverage: Qualified Medicare Beneficiary (QMB), Specified Low-income Medicare Beneficiary (SLMB), Qualified Individual (QI), and Qualified Disabled Working Individual (QDWI). You must meet certain income and asset limits to qualify for these programs. More info: Medicare Savings Programs.

Medicare Select

A type of Medigap plan that may require you to use doctors and hospitals within its network to be eligible for full benefits. Medicare Select plans also offer standard benefits offered under Medigap policies A through J, and may have lower premiums.

Medicare Summary Notice (MSN)

A notice sent by the Medicare carrier to the Medicare beneficiary following a health care visit or hospital stay. The MSN provides information about how the doctor or other health care provider was paid. The MSN used to be called the Explanation of Medicare Benefits (EOMB). People enrolled in Medicare managed care plans do not receive a Medicare Summary Notice.

Medigap

Medigap is private insurance that supplements Original Medicare by paying the Medicare deductibles and coinsurance. There are 10 nationally standardized Medigap policies (plans A, B, C, D, F, G, K, L, M and N). Policies provide coverage for Medicare cost-sharing amounts and some services not covered by Medicare, such as care while traveling outside the United States. More info: Medigap.

No Age Rating (for Medigap pricing of policies): In a No Age Rating plan, more commonly referred to as a Community Rating plan, the premium is the same for all people regardless of age. No matter how old you are, the plan costs the same, e.g., whether you are 60 or 85 years old. The premium can only increase if it is raised for all similar plans in the state.
Nonparticipating Provider (for people in Original Medicare): A doctor or supplier who does not accept assignment on all Medicare claims.
Non-Tax Qualified (NTQ): A type of long-term care insurance policy in which the premiums are not tax deductible (as opposed to tax-qualified policies). NTQ policies may pay benefits using a more generous threshold than tax-qualified policies, or include additional ways to trigger benefits. For example, an NTQ policy can begin paying benefits when a person is unable to perform 2 out of 7 activities of daily living (ADLs). Tax-qualified policies only pay if a person is unable to perform 2 out of 6 ADLs. More info: Long-Term Care Insurance: An Overview.

Ombudsman: An advocate for nursing home and residential care facility residents. An ombudsman works to solve problems between residents and facility management. Also called a "Long-term Care Ombudsman."
Open Enrollment Period (Medicare Advantage Managed Care): The Open Enrollment Period (OEP) provides you with one opportunity to enroll in, disenroll from, or change a Medicare Advantage plan between January 1st through March 31st. To make a change, you must have Medicare Parts A and B and live in the MA plan’s service area. You cannot drop Part D coverage or pick up Part D coverage during the OEP.
Open Enrollment (for Medigap policies): If you enroll in Medicare Part B and you are 65 years old or older, there is a one-time, 6-month period called Open Enrollment. During this period, you are guaranteed that an insurer will sell you any Medigap policy and not charge you extra because of your health history. If you are younger than 65, blind or disabled, and on Medicare, you have an Open Enrollment period for 6 months when you are first eligible for Medicare Part B, but you may buy only one of 5 Medigap policies. However, this Open Enrollment period does NOT apply to people who have kidney failure, also known as end-stage renal disease (ESRD). When you are 65, regardless of whether you have end-stage renal disease, you qualify for a new Open Enrollment period, and you will have the opportunity to buy 1 of the 10 Medigap policies.
Organization Determination: A Medicare Advantage (MA) plan's response to your request to provide or pay for a service or item you think should be covered or continued. More info: If Your Medicare Part C (Medicare Advantage) Claim is Denied.
Original Medicare: Medicare is the federal health insurance program. It covers most people age 65 or older, some people under age 65 who are disabled, and people with end-stage renal disease. Original Medicare is divided into two parts: Part A: Hospital Insurance, and Part B: Medical Insurance. (Note: Part C and Part D are both offered by private insurance companies. Original Medicare (Parts A and B) is provided by the government.
The term ‘Original Medicare’ also refers to having fee-for-service Medicare, meaning having just Medicare and possibly a supplement insurance such as a Medigap, and not being enrolled in a Medicare Advantage plan.
Out-of-area Care: Health care received while outside the geographic service area of a Medicare Advantage managed care plan. Typically, prior approval is needed from the primary care provider before the plan will pay for out-of-area care, except in emergencies.
Out-of-Network Providers: Doctors and other health care providers who are not contracted to offer services with a specific Medicare HMO or PPO plan. Also referred to as non-preferred providers.
Outpatient: An individual who receives treatment at a hospital or clinic but does not require an overnight stay.

Part A

The hospital insurance part of Original Medicare that covers inpatient hospital stays, hospice care, home health care, and care provided in skilled nursing facilities.

Part B

The medical insurance part of Original Medicare that covers doctors' services and outpatient care. Some of the other services covered include X-rays, medical equipment, and limited ambulance service.

Part C

See Medicare Advantage.

Part D

See Medicare Prescription Drug Coverage.

Participating Provider (for people in Original Medicare)

A doctor or supplier who agrees to accept assignment on all Medicare claims. These doctors and suppliers may bill you only for Medicare deductibles and/or coinsurance amounts.

Patient Assistance Programs

Discount programs offered by pharmaceutical companies to low-income people who take some of the drugs that they manufacture.

Peer Review Organization (PRO)

Now known as Quality Improvement Organization (QIO). See "Quality Improvement Organization" for information.

Penalty (Medicare Prescription Drug Coverage)

Amount added to the premium of a Medicare prescription drug plan if you wait to enroll in one after your initial enrollment period and you do not have prescription coverage that is considered at least as good as the standard Medicare drug coverage (creditable coverage). The penalty is 1% per month for every month you were eligible for coverage and did not sign up. The penalty will be added to your premium each year for as long as you have Medicare prescription drug coverage.

Point-of-Service (POS) Option

An HMO option that allows you to use doctors and hospitals outside the plan for an additional cost.

Pre-existing Condition

A health problem discovered and treated before health insurance is bought. Usually, treatment must have been received sometime during the last six months for the condition to be considered pre-existing.

Preferred Provider Organization (PPO) Plans

A type of Medicare Advantage managed care plan in which you use doctors, hospitals, and providers that belong to a network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

Premium

A periodic or monthly payment made to Medicare, an insurance company, or health care plan for health care coverage.

Prescription Drug Plans (PDPs)

Plans offered by commercial companies for Medicare Prescription Drug Coverage (also known as Part D). Plans differ in monthly premiums, drugs covered, cost-sharing amounts and participating pharmacies.

Preventative Benefits

Preventive benefits help keep you healthy by providing early detection of certain health conditions. Medicare covers several preventive services, such as cancer screenings, bone mass measurements, flu shots, and a “Welcome to Medicare” physical exam.

Primary Care Physician (PCP) (for people in Medicare Advantage plans)

The main doctor to whom you go for care. This doctor is the first to check on your health problems and will coordinate your health care with other doctors, specialists, and therapists. In many Medicare managed care plans, you must see your primary care physician before you may see any other health care providers or specialists. Also known as a "gatekeeper."

Primary Payer

An insurance policy, plan or program that pays first on a claim for medical care. In most cases, Medicare is the primary payer for Medicare beneficiaries. However, in some situations, such as when a beneficiary is still working and covered by their employer's health plan, Medicare may be the secondary payer.

Private Fee-for-Service (PFFS) Plans

A type of Medicare Advantage plan. Unlike HMOs, you are not required to use a network of providers. You can see any provider who accepts Medicare and agrees to accept payment from the PFFS plan. In this type of plan your providers do not bill Medicare for services. Instead, they must bill the PFFS plan, which then pays the bills using the funds they receive from Medicare on a monthly basis. Services covered by the plan usually require a copayment, and in some cases, require you to pay a percentage of the Medicare-approved amount, at times up to 35 percent.

Program for All-Inclusive Care for the Elderly (PACE) organization

PACE combines medical, social and long-term care services to help older people stay independent and living in their community as long as possible, while getting the high-quality care they need. To be eligible, you must be:

Age 55 or over
A resident of the PACE program service area
Certified as eligible for nursing-home care by the appropriate state agency
Able to live safely in the community

Provider

An individual or facility, such as a doctor or hospital, that is licensed and certified by the State of California to provide health care services.

Provider Sponsored Organization (PSO)

This is a type of managed care plan in which a group of doctors, hospitals, and other health care providers agree to give health care to people with Medicare for a set amount of money from Medicare every month. These plans are run by the doctors and providers themselves, and not by an insurance company.

Qualified Disabled Working Individual (QDWI): An assistance program available to people who had Social Security and Medicare because of disability, but who have lost their Social Security benefits and free Medicare Part A because they returned to work and their earnings exceed the limit allowed. QDWI pays the Part A premium if an individual meets certain qualifying criteria.
Qualified Independent Contractor (QIC): The entity that performs the second review in the Medicare Part A and B appeals process. The request for it must be in writing and sent directly to the QIC. More info: Medicare Part A and B appeals.
Qualified Individual (QI): An assistance program that pays Medicare Part B premiums for individuals who have a low monthly income and have Medicare Part A.
Qualified Medicare Beneficiary (QMB): An assistance program for people who have low monthly incomes and who qualify for Medicare. QMB pays the Medicare Part A premiums, Part B premiums, and Medicare deductibles and coinsurance amounts for Medicare services provided by Medicare providers.
Qualifying Event: An event (such as loss of job or divorce) that triggers your legal right to continue employer group health benefits when they might otherwise end. This continuation coverage is referred to as COBRA – the Consolidated Omnibus Budget Reconciliation Act. Learn more: COBRA and CalCOBRA.
Quality (Health Care): Measurements of how well the health plan and care providers are doing at keeping their members healthy or treating them when they are sick. High-quality health care means doing the right thing at the right time, in the right way, for the right person — and getting the best possible results.
Quality Assurance: The process of looking at how well a medical service is provided. The process may include formally reviewing health care given to a person, or group of persons, locating the problem, correcting the problem, and then checking results to see if the treatment or therapy was successful.
Quality Improvement Organization (QIO): Groups of practicing doctors and other health care experts who have a contract with 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. For California, Health Services Advisory Group (HSAG) is the Quality Improvement Organization.

Railroad Retirement: A social insurance program administered by the Railroad Retirement Board (RRB) that provides retirement benefits to the country's railroad workers.
Reconsideration: The second step in the appeals process for denied Medicare Part A, B, C and D claims. This step is reviewed by the Qualified Independent Contractor (QIC) for Part A and B claims (California's QIC is First Coast Service Options). This step is reviewed by the Independent Review Entity (IRE) for Part C and D claims (California's IRE is MAXIMUS Federal Services). Note: The first step in the appeals process for Part C claims is also called a Reconsideration, but it is performed by the Medicare Advantage plan, not an independent reviewer. More info: Medicare Appeals.
Redetermination: The first step in the appeals process for denied Medicare Part A, B or D claims. If you don't agree with Medicare's initial determination for your Part A or B claim (stated on your Medicare Summary Notice, also known as an MSN), you must submit a written, signed request to appeal within 120 days of the determination. The MSN will direct you where and how to file the request. If you don't agree with your plan's coverage determination for your Part D claim, you must submit a written request to appeal within 60 days of the determination. More info: Medicare Appeals.
Residential Care Facility for the Elderly (RCFE): Facilities licensed as RCFEs provide residents with care, supervision and assistance with activities of daily living, [link to ADL definition] such as bathing and grooming. RCFEs may also provide incidental medical services under special care plans. All assisted living facilities have RCFE licenses, as do certain retirement homes and board and care homes that provide these services.

RCFEs provide services to people age 60 and over, and people younger than age 60 with compatible needs. RCFEs can range in size from 6 or fewer beds to more than 100 beds. The residents in these facilities require varying levels of personal care and protective supervision. Because of the wide range of services offered by RCFEs, you should review the programs of each facility to be sure the services meet your needs.
Respite Care: Short-term care intended to give the caregiver (usually a family member) of a beneficiary in hospice some needed rest. Respite care must be provided in a Medicare-approved facility, such as a hospice inpatient facility, hospital or nursing home.

Service Area: The geographic 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.
Secondary Payer: An insurance policy, plan or program that pays after the primary payer on a claim for medical care. This could be Medicare (for example, when a beneficiary is still working and has employer-sponsored health coverage), Medi-Cal (California's Medicaid program) or other insurance, depending on the situation.
Share of Cost (Medi-Cal): The amount of money a person must pay in a given month before receiving Medi-Cal benefits. A share of cost is like an insurance deductible. People on Medi-Cal with a share of cost meet the resource limits for Medi-Cal ($2,000 for an individual and $3,000 for a couple) but have incomes above the monthly income limits. More info: Medi-Cal with a Share of Cost.
Skilled Nursing Care: A level of care including services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse).
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.
Social Security Administration (SSA): This federal government agency determines whether an individual is eligible for Medicare Parts A and B and is responsible for the enrollment process in Parts A and B. SSA distributes Medicare cards to beneficiaries and is responsible for administering the Low Income Subsidy ("extra help") available to people with low incomes and assets to help pay for Medicare Prescription Drug Coverage. SSA website.
Social Security Credits: For each $1,050 in earnings you have (in 2008), Social Security awards you one credit, up to a maximum of four credits for each year. The amount of earnings needed to obtain one credit increases each year. Most people require 40 credits (which takes 10 years to accumulate) to be eligible for benefits, although disability or survivor benefits may require fewer credits.
Social Security Disability Insurance (SSDI): Social Security Disability Insurance (SSDI) benefits are cash payments issued by the Social Security Administration to individuals who are unable to do any kind of work for which they are suited and whose disability is expected to last 12 months or longer, or who are terminally ill. Therefore, a person may have a disabling condition, but not meet the Social Security definition of disabled because he or she is still able to work. Individuals under age 65 may qualify for Medicare if they have been eligible for SSDI benefits for at least 24 months. People with end-stage renal disease (ESRD) are eligible for Medicare generally within three months of beginning dialysis. People with amyotrophic lateral sclerosis (ALS) (also known as Lou Gehrig's disease) are eligible for Medicare beginning with the first month of their eligibility for Social Security benefits.
Special Election Period: A set time period triggered by certain events when a beneficiary can change health plans or return to Original Medicare. These events include when you move outside the service area, or your Medicare managed care plan violates its contract with you, or the plan does not renew its contract with the federal government, or other exceptional conditions. The Special Election Period is different from the Special Enrollment Period (SEP).

Note: There are also several SEPs for Medicare Part D, Contact your local HICAP for more information.
Special Enrollment Period (SEP): A set time when you can sign up for Medicare Part B if you did not take Part B during the Initial Enrollment Period because you or your spouse was currently working and had group health plan coverage through an employer or union. You can sign up for Medicare Part B at any time while you are covered under the group plan. If the employment or group health coverage ends, you have eight months to sign up. The eight-month SEP starts the month after the employment ends or the group health coverage ends, whichever comes first. The Special Enrollment Period is different from the Special Election Period.
Special Needs Plan (SNP): A type of Medicare Advantage (MA) plan designed for certain populations. For example, an SNP may limit its enrollment to people in certain long-term care facilities (like a nursing home), people who are eligible for both Medicare and Medi-Cal ("dual eligibles"), or people with certain chronic or disabling conditions. The goal of these plans is to provide health care and services to those who can benefit the most from the expertise of the plans' providers and focused care management. All SNPs must provide Medicare prescription drug coverage.

Specified Low-income Medicare Beneficiaries (SLMB): An assistance program that pays for Medicare Part B premiums for individuals who have Medicare Part A, a low monthly income, and limited resources. These individuals have higher incomes than Qualified Medicare Beneficiaries (QMBs).
Standard Coverage (Medicare Prescription Drug Coverage): The basic coverage offered by Medicare prescription drug plans, which includes a set deductible, formulary, and copayment structure. More info: Medicare Prescription Drug Overview.
Standardized Plans: These are Medigap plans A-L. Each plan type (designated by a letter) has the same benefits, regardless of which company sells it. More info: Chart of standardized Medigap plans A-L.
Suppliers: Individuals or agencies (aside from doctors or hospitals) that provide medical equipment or services. Some examples are ambulance companies, medical equipment rental businesses, and laboratories.
Supplemental Security Income (SSI): Administered through Social Security, SSI provides monthly payments to people who are blind or disabled and have limited income and resources. A person can be eligible for SSI even if s/he has never worked or paid taxes. A person can also be eligible for SSI while receiving social security benefits. How much SSI a person receives depends on where s/he lives. Generally, to be eligible for SSI payments a person must be a U.S. citizen or meet certain requirements for non-citizens. A person with SSI automatically qualifies for full Medi-Cal. More info: Medi-Cal.

Tax Qualified (TQ): A type of long-term care insurance policy in which the premiums are tax deductible (as opposed to non-tax qualified policies). Individuals can deduct their TQ premiums from their federal and state income taxes as medical expenses, up to a specified amount. The amount that can be deducted is based on age, combined with any medical expenses that exceed 7.5% of the individual's adjusted gross income. Benefits paid under these policies aren't taxed as income. Note: Benefit triggers for these policies are more restrictive than those for non-tax qualified policies. More info: Long-Term Care Insurance: An Overview.
TRICARE: TRICARE is the health care program for members of the military, eligible dependents, and military retirees. TRICARE was formerly called the CHAMPUS program.
True Out of Pocket (TrOOP) Costs: Expenses that count toward your Part D out-out-pocket threshold ($4,550 in 2010) and trigger catastrophic coverage. More Info: TrOOP

Veterans Affairs (VA): A department of the federal government that provides benefits to US military veterans and their families. More info: VA health benefits.
Voluntary Enrollee: Voluntary enrollees are individuals who do not qualify for Medicare under the main categories (being 65 or older and receiving Social Security or Railroad Retirement benefits or being under 65 and receiving disability benefits for more than 24 months). Voluntary enrollees must be 65 or older and U.S. citizens or immigrants who have been in this country for 5 years (you must be a legal immigrant when you apply). As a "voluntary enrollee," you can buy into Medicare Part A and Part B, but you will have to pay a high monthly premium, which increases annually.

Waiting Period (for Medigap policies): A waiting period is the time during which an insurance company selling Medicare supplemental insurance (Medigap policies) is not required to pay benefits for a pre-existing condition. It begins on the effective date of your policy and cannot last longer than 6 months.

back to Home page

Updated June 15, 2010

Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Learn more about…

Get Help with Free
Medicare Counseling

1-800-434-0222

Get Our E-Newsletter

Donate to CHA

Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Learn more about…

Get Help with FreeMedicare Counseling

1-800-434-0222

Get Our E-Newsletter

Donate to CHA

Get Help with Free
Medicare Counseling