Medicare Glossary

Understanding Medicare terminology can help you make better decisions about your healthcare coverage.

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

A

Abdominal Aortic Aneurysm (AAA) Screening: A one-time ultrasound exam covered by Medicare to detect bulging in the abdominal aorta. Coverage is available for men ages 65-75 with a smoking history or anyone with a family history of AAA.
Accepting Assignment: When a doctor or healthcare provider agrees to accept the Medicare-approved amount as full payment for a covered service. Providers who accept assignment cannot bill you for more than your deductible and coinsurance.
Accountable Care Organization (ACO): A group of doctors, hospitals, and other healthcare providers who voluntarily work together to provide coordinated, high-quality care to Medicare patients. The goal is to ensure patients get the right care at the right time while avoiding unnecessary services.
Activities of Daily Living (ADLs): Basic self-care tasks including bathing, dressing, eating, toileting, transferring, and grooming. The ability to perform ADLs is used to determine the level of care you need, including eligibility for certain Medicare benefits like home healthcare and skilled nursing facility care.
Acute Care: Short-term medical treatment for a serious illness, injury, or urgent medical condition. Acute care is typically provided in hospitals and is covered under Medicare Part A.
Advance Beneficiary Notice (ABN): A written notice a Medicare provider gives you before delivering a service or item they believe Medicare may not cover. It lets you decide whether to receive the service and accept financial responsibility if Medicare denies the claim.
Advance Coverage Decision: A notice from your Medicare Advantage plan that let's you know in advance whether a service will be covered or not.
Advance Directive: A written document that states how you want medical decisions to be made in the event you lose the ability to make decisions on your own. This can include important matters such as living will and durable power of attorney for your healthcare needs.
Alcohol Misuse Screening: An annual preventive screening covered by Medicare at no cost to detect harmful alcohol use patterns. If screening identifies a problem, Medicare also covers up to four brief counseling sessions per year with your primary care provider.
Allowed Amount: The maximum amount your health insurance plan will pay for a covered service. Also called "eligible expense," "payment allowance," or "negotiated rate." You may owe the difference between the allowed amount and your provider's actual charge.
Ambulance Services: Emergency and non-emergency medical transportation by ambulance, covered by Medicare when other forms of transportation could endanger your health. Medicare covers both ground and air ambulance services when medically necessary.
Ambulatory Surgical Center: A facility where certain surgeries which do not require hospital admission can be performed for patients who will likely need less than 24 hours of care.
Annual Election Period (AEP): The period from October 15 to December 7 each year when you can join, switch, or drop a Medicare Advantage or Medicare Part D plan. Changes made during this period take effect on January 1 of the following year.
Annual Notice of Changes (ANOC): A document your Medicare Advantage or Part D plan sends you each fall describing any changes to your coverage, costs, or service area for the upcoming year. Review this carefully during the Annual Election Period.
Appeal: An appeal is the process you can take if you disagree with your Medicare plan's denial of coverage or payments you believe you're entitled to.
Assignment: An agreement your doctor, medical provider, or medical supplier enter into which states they will be paid directly by Medicare. By entering the agreement, they commit to receiving payment based on Medicare's approved amounts, and will not bill you, the patient, more than your deductible and coinsurance.
Assisted Living: A residential facility that provides personal care assistance and some health services for people who need help with daily activities but do not require the level of care provided in a nursing home. Medicare generally does not cover assisted living costs.
Automatic Enrollment: The process by which Medicare automatically enrolls you in coverage when you become eligible, such as enrolling you in Part A and Part B when you turn 65 if you are already receiving Social Security benefits.

B

Balance Billing: When a healthcare provider bills you for the difference between their charge and the Medicare-approved amount. Providers who accept assignment cannot balance bill you. Non-participating providers are limited to charging no more than 15% above the Medicare-approved amount.
Behavioral Health: Healthcare services related to mental health conditions and substance use disorders. Medicare covers a range of behavioral health services including therapy, counseling, psychiatric care, and substance use treatment programs.
Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO): A type of Quality Improvement Organization that employs the help of doctors and healthcare professionals to review complaints and quality of care for Medicare beneficiaries, making sure there is consistency in the review process by taking into account local factors and needs.
Benefit Period: How Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. Your benefit period begins the day you are admitted for inpatient care, and ends when you've had 60 consecutive days without any inpatient care. If you are admitted to a hospital or skilled nursing facility after your benefit period has ended, a new period begins, and there is no limit to the number of benefit periods.
Benefits Coordination & Recovery Center (BCRC): The company that determines whether Medicare acts as the primary or secondary insurance by collecting and managing information on other types of insurance and coverage a Medicare beneficiary has. The Benefits Coordination and Recovery Center also doubles as a company that obtains payment on Medicare's behalf when Medicare makes a conditional payment, while the other insurance payer is determined to be primary.
Bone Mass Measurement: Also called a bone density test, this imaging exam detects osteoporosis and is covered by Medicare once every 24 months for people at risk, including women with estrogen deficiency, individuals with vertebral abnormalities, and those on long-term steroid therapy.
Brand-Name Drug: A prescription drug sold under a trademarked name given to it by the manufacturer. Brand-name drugs are usually more expensive than their generic equivalents, which contain the same active ingredients and work the same way.

C

Cardiac Rehabilitation: A medically supervised program to help people recover from heart attacks, heart surgery, or other heart conditions. Medicare covers cardiac rehabilitation when ordered by your doctor, typically including exercise, education, and counseling.
Care Coordination: The process where healthcare providers communicate with each other to manage your care across different settings and services. Care coordination helps ensure you receive the right care at the right time and avoids duplicate tests or conflicting treatments.
Catastrophic Coverage: The stage in Medicare Part D where you pay minimal coinsurance or copayments for covered drugs after your total out-of-pocket costs reach a set amount for the year. Once you enter catastrophic coverage, your drug costs are significantly reduced for the remainder of the plan year.
Centers for Medicare & Medicaid Services (CMS): The federal agency within the U.S. Department of Health and Human Services that administers Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). CMS sets the rules and regulations for these programs.
CHAMPVA: A healthcare benefit program for dependents of qualifying veterans.
Chronic Care Management (CCM): A Medicare service for people with two or more chronic conditions expected to last at least 12 months. Your provider develops a comprehensive care plan and coordinates your care, including medication management, between office visits.
Claim: A payment request submitted to Medicare or other health insurance after you receive items or services you think are covered.
Clinical Breast Exam: Not to be confused with a mammogram, clinical breast exams are typically conducted by your doctor or other healthcare professional during your Pap test and pelvic exam, who check for breast cancer by feeling and looking at your breasts.
Clinical Trial: A research study that tests new treatments, drugs, or medical procedures to determine if they are safe and effective. Medicare may cover the routine costs of qualifying clinical trials, giving you access to cutting-edge treatments.
Coinsurance: A dollar amount, usually calculated as a percentage, for services you received that you may have to pay out-of-pocket after your deductible has been met.
Colonoscopy: A screening procedure to examine the colon for polyps or cancer. Medicare covers screening colonoscopies every 10 years for people at average risk (every 4 years for high-risk individuals), at no cost when no polyps are found during the procedure.
Comprehensive Outpatient Rehabilitation Facility: A medical facility that provides a number of services on an outpatient basis, which includes physician services, physical therapy, social services, psychological services, and rehabilitation.
Coordination of Benefits: The process used when you have more than one health insurance plan to determine which plan pays first (primary) and how much each plan pays. This helps avoid duplicate payments and ensures your costs are covered correctly.
Copayment: A dollar amount you may be required to pay as your share of the cost for medical services or supplies. Unlike coinsurance, copayments are usually a set amount, like $20, rather than a percentage of the total cost.
Cost Sharing: Your share of costs for covered healthcare services, calculated as a percentage (coinsurance) or a fixed amount (copayment). Cost sharing also includes your deductible. These are the amounts you pay out-of-pocket in addition to your monthly premium.
Coverage Determination (Part D): The initial decision made by your Medicare prescription drug plan about your drug benefits.
Coverage Gap (Medicare Prescription Drug Coverage): Also called Donut Hole, the coverage gap is a period in which you will be responsible for paying higher cost sharing for prescription drugs until you qualify for catastrophic coverage. The coverage gap starts when you and your plan have both paid a set dollar amount for prescription drugs during the year.
Creditable Coverage (Medigap): Previous health insurance that is, in some cases, can be used to shorten your waiting period for a pre-existing condition under your Medicare Supplement policy.
Creditable Prescription Drug Coverage: Prescription drug coverage that is expected, on average, to pay at least as much as Medicare's standard prescription drug coverage. If you are enrolled in a creditable prescription drug plan you are generally eligible to keep it without having to pay a penalty if you decide to enroll in Medicare prescription drug coverage at a later date.
Critical Access Hospital (CAH): Typically located in rural areas, critical access hospitals (CAH) provide limited inpatient and outpatient services to people.
Covered Services: Healthcare services, procedures, treatments, and supplies that your health insurance plan will help pay for. Services not listed as covered are your full financial responsibility.
Custodial Care: Non-skilled personal care for daily activities like bathing, getting dressed, and eating. Custodial care may also include health-related care people can do themselves, such as using eye drops. Although there are exceptions, for the most part, Medicare will not cover custodial care.

D

Deductible: The dollar amount that you need to pay out of your own pocket before your Medicare benefits begin to cover costs.
Demonstrations: Also known as pilot programs or research studies, demonstrations test improvements in all aspects of Medicare including coverage, payment, and quality of care. They are usually conducted on a smaller scale, operating only for a limited time for a select group of people in a specific area.
Depression Screening: A yearly screening test covered by Medicare at no cost to detect depression. The screening must be performed in a primary care setting where follow-up treatment and referrals can be provided if needed.
Diabetes Screening: Blood glucose tests covered by Medicare to detect diabetes or pre-diabetes. Medicare covers up to two screenings per year for people at risk, including those with high blood pressure, obesity, or a history of high blood sugar.
Diagnostic Test: A medical test or procedure used to identify or confirm a disease or condition after symptoms have appeared. Unlike preventive screenings, diagnostic tests may require cost-sharing such as copayments or coinsurance under Medicare.
Disenrollment: The process of ending your membership in a Medicare Advantage plan, Part D prescription drug plan, or other Medicare health plan. This can happen voluntarily or involuntarily if you move out of the plan's service area or lose eligibility.
Donut Hole: Also called the Coverage Gap. The period in Medicare Part D when you temporarily pay more for your prescriptions after you and your plan have spent a combined amount on covered drugs. Once your out-of-pocket costs reach a certain threshold, you enter catastrophic coverage where your costs drop significantly.
Drug List: Also called a formulary, a drug list refers to a list of prescription drugs covered by your Medicare prescription drug plan.
Dual Eligible: A person who qualifies for both Medicare and Medicaid benefits at the same time. Dual-eligible beneficiaries may receive additional help paying for Medicare premiums, deductibles, and copayments through Medicaid.
Durable Medical Equipment (DME): Certain medical equipment ordered by your doctor to be used in your home. For example, walkers, wheelchairs, and hospital beds may be considered durable medical equipment.
Durable Power of Attorney: A written, legal document, that gives someone else the right to make healthcare decisions on your behalf when you are no longer able to make decisions for yourself.

E

Emergency Care: Healthcare services provided to evaluate and stabilize a medical emergency. Medicare covers emergency care anywhere in the U.S., regardless of whether you use an in-network or out-of-network provider.
End-Stage Renal Disease (ESRD): Permanent kidney failure that will require a regular course of dialysis, or even a kidney transplant.
Entitlement: Your right to receive Medicare benefits based on meeting eligibility requirements such as turning 65, having a qualifying disability, or being diagnosed with End-Stage Renal Disease (ESRD).
Evidence of Coverage (EOC): A document from your Medicare Advantage or Medicare Part D plan that explains your benefits, what the plan covers, how much you will pay, and your rights as a plan member. Plans send this document each year before the Annual Election Period.
Exception: A Medicare prescription drug plan's decision to provide coverage for a drug not on its formulary, or waive its coverage rule. A tiering exception is a Medicare prescription drug plan's decision to reduce the cost for a drug that is covered, but in a non-preferred drug tier. In order to get an exception, you must make a request with a supporting statement and reason from your doctor.
Excess Charge: The difference between what your doctor or healthcare provider is legally allowed to charge and the Medicare-approved amount.
Explanation of Benefits (EOB): A statement sent by your health insurance plan after a claim is processed that describes what medical services were provided, what the plan paid, and what portion of costs you may owe. An EOB is not a bill.
Extra Help: A Medicare program specific to prescription drug coverage that helps individuals with limited income and resources pay costs like premiums, deductibles, and coinsurance.

F

Federal Poverty Level (FPL): Income thresholds set annually by the federal government and used to determine eligibility for certain programs and benefits, including Medicaid, Extra Help, and Medicare Savings Programs. The FPL varies based on family size and is updated each year.
Federally Qualified Health Center (FQHC): A community-based health center that receives federal funding to provide primary care services to underserved areas. FQHCs accept Medicare and often offer services on a sliding fee scale based on your ability to pay.
Five-Star Special Enrollment Period: A special enrollment opportunity allowing Medicare beneficiaries to switch to a Medicare Advantage or Part D plan that has earned a five-star quality rating from Medicare. This enrollment period is available from December 8 through November 30 each year.
Formulary: Also called a drug list, a formulary is a list created by your Medicare prescription drug plan that outlines which prescription drugs will be covered under your benefits.

G

General Enrollment Period (GEP): An annual enrollment window from January 1 through March 31 for people who missed their Initial Enrollment Period to sign up for Medicare Part A and/or Part B. Coverage begins July 1, and late enrollment penalties may apply.
Generic Drug: A prescription drug that has the same active ingredients as a brand-name drug and works the same way, but usually costs less. Generic drugs must meet the same quality and safety standards set by the FDA as brand-name drugs.
Glaucoma Screening: An eye exam to detect glaucoma, a condition that can lead to vision loss. Medicare covers glaucoma screenings once every 12 months for people at high risk, including those with diabetes, a family history of glaucoma, or African Americans age 50 and older.
Grievance: Not to be confused with an appeal, a grievance is a complaint about how you were treated or given care by your Medicare health or prescription drug plan. For example, if you were treated poorly by an employee of your Medicare plan, you can file a grievance with the company. However, if you don't agree with payment or coverage decisions, that would be considered an appeal.
Group Health Plan: A health insurance plan offered by an employer or employee organization that provides health coverage for employees and their families.
Guaranteed Issue Rights (Medigap Protections): Also called Medigap protections, guaranteed issue rights refer to certain situations in which health insurance companies are required to sell or offer you Medicare Supplement Plans by law. In these situations, you can't be denied coverage by a Medigap provider, or have any conditions placed on your policy or charge you more for coverage based on medical history.
Guaranteed Renewable Policy: An insurance policy that can't be terminated by a health insurance company with few exceptions including false information provided, fraud, or failure to pay premiums. All Medicare Supplemental Plans issued since 1992 are considered guaranteed renewable.

H

Health Maintenance Organization (HMO): A type of health insurance plan that usually requires you to use doctors and hospitals within its network and get a referral from your primary care doctor before seeing a specialist. HMO plans typically have lower premiums and out-of-pocket costs but less flexibility in choosing providers.
Health Savings Account (HSA): A tax-advantaged savings account available to individuals enrolled in a high-deductible health plan (HDHP), used to pay for qualified medical expenses. Contributions, earnings, and withdrawals for eligible expenses are all tax-free. Note: You cannot contribute to an HSA once you enroll in Medicare.
Healthcare Provider: A person or organization that is licensed and approved to provide healthcare to people. Examples include doctors, nurses, and hospitals.
Hepatitis B Screening: A blood test to detect hepatitis B infection, covered by Medicare for people at high risk. Medicare also covers the hepatitis B vaccine at no cost under Part B for people at medium to high risk.
Hepatitis C Screening: A blood test to detect hepatitis C infection. Medicare covers this screening for adults born between 1945 and 1965, people with a history of injection drug use, and those who received a blood transfusion before 1992.
HIV Screening: A blood test to detect HIV infection, covered by Medicare as a preventive service. Medicare covers one screening every 12 months for all Medicare beneficiaries, or up to three screenings during pregnancy.
Home Health Aide: A caregiver who provides personal care services such as bathing, dressing, and grooming in your home, typically under the supervision of a skilled nurse or therapist. Medicare covers home health aide services as part of a home health plan of care.
Home Health Agency: An organization that provides home healthcare services and supplies.
Home Healthcare: Healthcare services and supplies your doctor decides you can get in your home. Home healthcare is only covered by Medicare on a limited basis as ordered by your doctor.
Homebound Status: A condition where leaving your home requires considerable effort due to illness or injury, and you generally need the help of another person or medical equipment to leave. Being homebound is a requirement to qualify for Medicare home health services.
Hospital Readmission: An admission to a hospital within 30 days of being discharged from a previous hospital stay. Medicare tracks readmission rates as a quality-of-care measure, and hospitals with high readmission rates may face payment reductions.
Hospice: Care involving a team-oriented approach that addresses the medical, physical, social, emotional, and spiritual needs of a terminally ill patient. Hospice also extends its support to the family or caregiver of the patient.

I

Immunization: A vaccine given to prevent a specific disease. Medicare Part B covers flu shots, pneumonia vaccines, COVID-19 vaccines, and hepatitis B vaccines at no cost. Most other vaccines, such as shingles and Tdap, are covered under Part D.
In-Network: Doctors, hospitals, pharmacies, and other healthcare providers that have a contract with your health insurance plan to provide services at negotiated rates. Using in-network providers usually results in lower out-of-pocket costs for you.
Income-Related Monthly Adjustment Amount (IRMAA): An additional amount added to your Medicare Part B and Part D premiums if your modified adjusted gross income exceeds certain thresholds. IRMAA is based on your tax return from two years prior and is recalculated annually.
Independent Reviewer: Also called an Independent Review Entity or IRE, an independent reviewer is an organization with no connection to your Medicare health or prescription drug plan which is contracted to review your case if you appeal your plan's coverage decision or your plan is taking too long to make a decision.
Initial Coverage Stage: The first stage of Medicare Part D prescription drug coverage after you have met your deductible. During this stage, you pay a copayment or coinsurance for each covered drug until your total drug costs reach a set limit, at which point you may enter the coverage gap.
Initial Coverage Election Period (ICEP): The period when you are first eligible to enroll in a Medicare Advantage plan. It typically coincides with your Initial Enrollment Period for Medicare Part B and is the first opportunity to choose a Medicare Advantage plan instead of Original Medicare.
Initial Enrollment Period (IEP): The 7-month period when you first become eligible for Medicare. It starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after. If you miss this window, you may face late enrollment penalties and delayed coverage.
Initial Preventive Physical Exam (IPPE): Also called the Welcome to Medicare Visit, this is a one-time preventive exam available during your first 12 months of Part B coverage. It includes a review of your health history, measurements, vision test, and referrals for preventive screenings.
Institutional Special Needs Plan (I-SNP): A type of Medicare Advantage Special Needs Plan designed for people who live in a long-term care facility such as a nursing home for 90 days or longer. I-SNPs tailor benefits to the needs of institutionalized individuals.
Insurance Counseling: Free, unbiased help understanding your Medicare options, offered through your State Health Insurance Assistance Program (SHIP). Counselors can help you compare plans, understand benefits, and resolve billing issues.
Inpatient Rehabilitation Facility: A hospital, or part of a hospital, that provides intensive rehabilitation services to inpatients.

J

Job Lock: A situation where workers remain in a job primarily to keep their employer-sponsored health insurance, even though they might prefer to change jobs, retire, or reduce their hours. Understanding Medicare eligibility can help individuals approaching 65 avoid job lock.

K

Kidney Dialysis: A medical treatment that filters waste and excess fluid from your blood when your kidneys can no longer do so adequately. Medicare covers dialysis treatments for people diagnosed with End-Stage Renal Disease (ESRD), regardless of age.

L

Lab Services: Diagnostic laboratory tests including blood work, urinalysis, and tissue analysis used to diagnose, monitor, or treat medical conditions. Medicare Part B covers lab services ordered by your doctor at no cost when performed by a participating lab.
Large Group Health Plan: A group health insurance plan that provides coverage for employees of an employer or employee organization that has at least 100 employees.
Late Enrollment Penalty: An amount added to your monthly premium for Medicare Part B or Part D if you did not sign up when you were first eligible and do not qualify for a Special Enrollment Period. The penalty is typically permanent and increases the longer you go without coverage.
Lifetime Reserve Days: Additional days that Original Medicare pays for you when you're in a hospital for over 90 days, with the exception of your coinsurance. Throughout your lifetime, you have 60 reserve days that can be used.
Limiting Charge: The highest amount of money you can be charged for Medicare covered services by a doctor or healthcare professional who doesn't accept assignment. Currently, the limiting charge is 15% more than Medicare's approved amount. Limiting charge doesn't apply to supplies or equipment, and only applies to certain services.
Living Will: Also called a medical directive or advance directive, a living will is a legal written document that usually comes into effect when you are no longer conscious. It outlines the type of treatments you do or don't want in the event you can't speak for yourself, such as whether you want to be put on life support or not.
Long-Term Care: Services provided at home, communities, assisted living, or nursing homes for individuals who are unable to perform basic day to day activities on their own, such as dressing or bathing. Medicare, along with most health insurance plans, doesn't pay for long-term care.
Long-Term Care Hospital: An acute hospital that provides treatment and other medical services for patients who stay longer than 25 days on average. The majority of patients are usually transferred from an intensive or critical care unit.
Long-Term Care Ombudsman: An independent advocate for residents of nursing home and assisted living facility residents who works to solve problems, and also provide information about home health agencies in the area.
Low Income Subsidy (LIS): A Medicare program, also called Extra Help, that helps people with limited income and resources pay for Medicare prescription drug plan costs including premiums, deductibles, and copayments. You may qualify automatically or by applying through Social Security.
Lung Cancer Screening: An annual low-dose CT scan covered by Medicare for people ages 50-77 who have a significant smoking history and currently smoke or have quit within the past 15 years. This screening can detect lung cancer early when treatment is most effective.

M

Mammogram: An X-ray exam of the breast used to screen for or diagnose breast cancer. Medicare covers one screening mammogram every 12 months for women age 40 and older at no cost. Diagnostic mammograms for women with symptoms or abnormal results are also covered.
Managed Care: A healthcare delivery system that organizes doctors, hospitals, and other providers into a network to coordinate your care, control costs, and improve quality. Medicare Advantage plans are a common form of managed care in Medicare.
Maximum Out-of-Pocket (MOOP): The most you have to pay for covered services in a plan year. After you reach this amount, your health plan pays 100% for covered benefits for the rest of the year. All Medicare Advantage plans have a maximum out-of-pocket limit.
Medicaid: A joint federal and state health program that helps cover the costs of qualifying individuals and families with limited income and resources.
Medicaid-Certified Provider: A healthcare provider that has been approved by Medicaid, meaning they have passed an inspection conducted by a state government agency.
Medical Loss Ratio (MLR): A federal requirement that Medicare Advantage and Part D plans must spend at least 85% of their premium revenue on healthcare services and quality improvement rather than administrative costs or profits.
Medical Nutrition Therapy (MNT): Nutritional counseling by a registered dietitian or nutrition professional, covered by Medicare for people with diabetes, kidney disease, or who have had a kidney transplant within the past 36 months.
Medical Underwriting: A thorough process in which health insurance companies review an applicant's medical history (if state law allows) to determine whether or not to accept or deny the applicant for coverage. Medical underwriting is also used to determine waiting periods for pre-existing or chronic health conditions, and how much to charge for coverage.
Medically Necessary: Healthcare services or supplies that are needed in order to diagnose or treat any illness, injury, or symptoms that meet the accepted standards of medicine.
Medicare: A federally managed health insurance program for American seniors over 65 years old, certain younger people with disabilities, and people living with ESRD.
Medicare Advantage Open Enrollment Period (MA OEP): A period from January 1 through March 31 each year when people already enrolled in a Medicare Advantage plan can switch to a different Medicare Advantage plan or return to Original Medicare and join a Part D plan.
Medicare Advantage Plan (Part C): A type of Medicare plan offered by private health insurance companies that contract with Medicare to cover all the benefits covered under Parts A and B.
Medicare Beneficiary: A person who is enrolled in Medicare and eligible to receive covered healthcare services. Also referred to simply as a "beneficiary."
Medicare Beneficiary Identifier (MBI): The unique 11-character number on your Medicare card that identifies you for Medicare services. The MBI replaced the old Health Insurance Claim Number (HICN) that was based on Social Security numbers.
Medicare Cost Plan: A type of Medicare plan that covers your emergency or urgently needed services, however, services outside of the plan's network without a referral will be paid for by Original Medicare.
Medicare Health Maintenance Organization (HMO) Plan: A type of Medicare Advantage Plan (Part C) that offers a wide range of healthcare services, but only through doctors, specialists, and hospitals on the plan's list except for emergency situations. Most HMO plans require you to get a referral from your primary care physician to see a specialist or other healthcare professional.
Medicare Medical Savings Account (MSA) Plan: A Medicare plan that combines high deductible Medicare Advantage Plans and a designated bank account. The plan allows you to deposit money from Medicare into the account, and use the funds to pay for Medicare-covered expenses towards your deductible. The deposited amount is typically less than your deductible amount, so there is a chance you will have to pay out-of-pocket before your coverage kicks in.
Medicare Outpatient Observation Notice (MOON): A written notice hospitals are required to give you if you are receiving outpatient observation services for more than 24 hours. The notice explains your status and how it may affect your costs and coverage for follow-up care.
Medicare Part A (Hospital Insurance): Part of Original Medicare, Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice, and some home healthcare services.
Medicare Part B (Medical Insurance): Part of Original Medicare, Part B covers certain doctor services, outpatient care, medical supplies, and preventive services.
Medicare Plan: Any Medicare plan, other than Original Medicare, in which you receive health and prescription coverage. This includes Medicare Advantage, Medicare Supplement, and Medicare prescription drug plans.
Medicare Preferred Provider Organization (PPO) Plan: A type of Medicare Advantage Plan (Part C) that reduces your medical costs if you use doctors, hospitals, and other healthcare providers within its network. You can still seek out attention and services outside the plan's network, but you will have to pay additional costs.
Medicare Prescription Drug Coverage (Part D): An optional prescription drug plan offered by private health insurance companies approved by Medicare.
Medicare Private Fee-For-Service (PFFS) Plan: A type of Medicare Advantage Plan (Part C) that, for the most part, gives you the ability to seek out treatment from any doctor or hospital you would have been able to under Original Medicare, assuming the doctor or hospital agrees to treat you. Just like Original Medicare, the plan predetermines how much it will pay towards your medical costs, and how much you will have to pay out-of-pocket. Private Fee-For-Service differs from Original Medicare in that you must follow plan rules more carefully when seeking out healthcare services.
Medicare SELECT: A specialized Medigap plan that requires you to use hospitals or, in some cases, doctors within its network to be eligible for full medical benefits.
Medicare Savings Program: A Medicaid program for individuals and families with limited income and resources that helps pay for some or all of their Medicare costs.
Medicare Special Needs Plan (SNP): A special Medicare Advantage Plan (Part C) that offers more focused and specialized care for certain groups of people. Groups commonly include people enrolled in both Medicaid and Medicare, living in nursing homes, or who have chronic health conditions.
Medicare Summary Notice (MSN): A notice that you receive after your healthcare provider or supplier files a claim for services covered by Original Medicare. It is a detailed explanation of what your healthcare provider or supplier is billing for, and outlines the Medicare-approved amount, and what you'll need to pay out-of-pocket.
Medicare-Approved Amount: The dollar amount determined under Original Medicare that a doctor or supplier that accepts assignment can be paid, regardless of what the doctor or supplier actually charges. Medicare pays a portion of the amount and you are responsible for the remaining balance.
Medicare-Certified Provider: A Medicare-approved healthcare provider, such as hospital, nursing home, or dialysis facility. Providers are certified by Medicare when they pass inspections conducted by a state agency. Medicare only covers care administered by certified providers.
Medigap Open Enrollment Period: Specific to individuals, Medigap Open Enrollment is a one-time only, 6 month period in which you can enroll in any Medigap policy offered in your state without fear of being denied or charged more based on medical history and pre-existing conditions. The period starts the first month you are covered under Medicare Part B and over 65 years old.
Medigap Policy: Also called Medicare Supplement, Medigap plans are sold by private health insurance companies to fill in the 'gaps' left by Original Medicare coverage.

N

National Coverage Determination (NCD): A nationwide decision by Medicare about whether a particular item or service is covered under Medicare. These decisions are based on whether the item or service is considered reasonable and necessary for the diagnosis or treatment of an illness or injury.
Network: The group of doctors, hospitals, pharmacies, and other healthcare providers that have agreed to work with your health insurance plan, usually at negotiated rates. Using providers within your network typically costs less than going out-of-network.
Network Pharmacy: A pharmacy that has a contract with your Medicare Part D or Medicare Advantage plan to fill prescriptions at negotiated prices. Using a network pharmacy typically results in lower out-of-pocket costs than using an out-of-network pharmacy.
Non-Participating Provider: A doctor or other healthcare provider who has not signed an agreement with Medicare to accept the Medicare-approved amount as full payment. Non-participating providers may charge up to 15% more than the Medicare-approved amount, known as the limiting charge.
Non-Preferred Drug: A covered prescription drug that is not on your plan's preferred drug list. Non-preferred drugs typically have higher copayments or coinsurance than preferred drugs on your plan's formulary.
Nursing Home: A residential facility that provides 24-hour skilled nursing care, personal care, and other services for people who need ongoing medical supervision. Medicare only covers short-term skilled nursing facility stays following a qualifying hospital stay, not long-term nursing home care.

O

Observation Stay: When you are in a hospital bed receiving care, but you have not been formally admitted as an inpatient. Observation stays are classified as outpatient services, which affects your costs and may impact your eligibility for Medicare-covered skilled nursing facility care afterward.
Occupational Therapy: Therapy that helps you perform everyday activities such as dressing, cooking, and bathing after an illness or injury. Medicare covers occupational therapy when prescribed by your doctor as medically necessary.
Open Enrollment Period (Medicare): The Medicare Open Enrollment Period runs from January 1 to March 31 each year. During this time, you can switch from a Medicare Advantage plan back to Original Medicare (with or without a Part D plan), or switch from one Medicare Advantage plan to another.
Organization Determination: A decision made by your Medicare Advantage plan about whether a service, item, or prescription drug is covered and how much you will pay. If you disagree with the determination, you have the right to appeal.
Original Medicare: A federally managed fee-for-service health insurance plan for seniors and some living with disabilities that is comprised of two parts, Part A and Part B. Original Medicare pays its share of Medicare-approved amounts after you reach your deductible, though you will still need to pay your share of out-of-pocket costs.
Out-of-Network: Doctors, hospitals, and other healthcare providers that do not have a contract with your health insurance plan. Using out-of-network providers usually costs you more, and some plan types (like HMOs) may not cover out-of-network care at all except in emergencies.
Out-of-Pocket Costs: Medical or prescription drug costs not covered by Medicare or other insurance plans, that you have to pay on your own. Common out-of-pocket costs include deductibles, copayments, and coinsurance.
Outpatient Care: Medical services you receive without being formally admitted to a hospital as an inpatient, including doctor visits, lab tests, imaging, and same-day surgeries. Outpatient care is generally covered under Medicare Part B.
Outpatient Surgery: A surgical procedure performed without requiring an overnight hospital stay. Medicare covers outpatient surgery in hospital outpatient departments and ambulatory surgical centers under Part B.

P

Palliative Care: Specialized medical care focused on relieving pain, symptoms, and stress from a serious illness. Unlike hospice, palliative care can be received at any stage of illness alongside curative treatments, and is covered by Medicare.
Pap Test: A test conducted by removing cells from a woman's cervix, and viewing them under a microscope to check for cancer of the cervix (the opening to the uterus).
Partial Hospitalization Program (PHP): A structured outpatient mental health treatment program that provides intensive therapy during the day while allowing you to return home in the evening. Medicare covers PHPs as an alternative to full inpatient psychiatric hospitalization.
Participating Provider: A doctor, hospital, or other healthcare provider who has signed an agreement with Medicare to always accept the Medicare-approved amount as full payment. Participating providers cannot charge you more than the deductible and coinsurance amounts.
Pelvic Exam: An exam conducted by a medical professional that checks if internal female organs are normal by feeling shape and size.
Penalty: A dollar amount added to your Medicare Part B and Part D plans if you opted not to join when you first became eligible. While there are some exceptions, you will pay more for your premiums as long as you have Medicare.
Physical Therapy: Treatment to help you move better, strengthen muscles, and reduce pain after an injury, surgery, or illness. Medicare covers physical therapy when prescribed by your doctor as medically necessary.
Pilot Programs: Also referred to as demonstrations or research studies, pilot programs are used to test improvements in certain Medicare aspects. Pilot programs usually test coverage, payment, and quality of care, and are conducted on a small scale in a specific area, with a limited group of people, and short duration.
Point-of-Service Option: A provision in Health Maintenance Organization (HMO) plans that gives you the option to use medical professionals outside the plan for an added cost.
Power of Attorney: A document used to appoint a trusted individual to make decisions about your healthcare. Also called a healthcare proxy, appointment of healthcare agent, or durable power of attorney for healthcare.
Pre-Existing Condition: Health problems or chronic conditions you had before the date your coverage kicks in.
Preferred Drug: A prescription drug on your plan's formulary that has been designated as a lower-cost option. Preferred drugs typically have lower copayments or coinsurance compared to non-preferred alternatives.
Preferred Pharmacy: A pharmacy in your Part D plan's network that offers covered prescription drugs at lower out-of-pocket costs than standard network pharmacies. Not all plans have preferred pharmacies.
Preferred Provider Organization (PPO): A type of health insurance plan that gives you lower costs when you use providers within its network, but still provides coverage for out-of-network care at a higher cost. PPO plans generally do not require referrals to see specialists.
Premium: A periodic payment made to Medicare or other insurance companies in exchange for health or prescription drug coverage and benefits.
Prescription Drug Benefit Manager (PBM): A company that manages prescription drug benefits on behalf of health insurance plans. PBMs negotiate drug prices, manage formularies, and process prescription claims.
Prescription Drug Plan (PDP): A standalone Medicare Part D plan that adds prescription drug coverage to Original Medicare. PDPs are offered by private insurance companies approved by Medicare and cover a specific list of drugs (formulary) with varying cost-sharing tiers.
Preventive Services: Routine services that help prevent or detect illness early on, when treatment has a better chance of success.
Primary Care Doctor: The doctor you are designated to see for most of your health needs, who is also responsible for making sure you get the proper care which may require referring you to a specialist. Most Medicare Advantage plans require you to see your primary care doctor before you see any other healthcare provider.
Prior Authorization: Approval you need to get from your Medicare prescription drug plan before your benefits will kick in and cover the cost. Some plans and drugs require prior authorization while others do not.
Programs of All-inclusive Care for the Elderly (PACE): A healthcare plan that provides both Medicare and Medicaid services, along with medically necessary care and services based on your needs which are determined by an interdisciplinary team. PACE is designed for the elderly who require nursing home services, but are capable of living in a community environment, and combines medical, social, and long-term care services in addition to prescription drug coverage.
Prostate Cancer Screening: Tests to detect prostate cancer, including a Prostate Specific Antigen (PSA) blood test covered annually at no cost for men age 50 and older, and a digital rectal exam covered annually with 20% coinsurance.
Pulmonary Rehabilitation: A medically supervised program for people with chronic lung diseases such as COPD or emphysema. Medicare covers pulmonary rehabilitation including exercise training, breathing techniques, and education.

Q

Qualified Medicare Beneficiary (QMB) Program: A Medicare Savings Program that helps pay for Part A premiums, Part B premiums, deductibles, coinsurance, and copayments for people with limited income and resources. Providers are not allowed to bill QMB individuals for Medicare cost-sharing.
Qualified Independent Contractor (QIC): An independent organization that reviews Medicare appeals at the second level (reconsideration) when you disagree with a decision about your Medicare coverage or payment.
Quality Improvement Organization (QIO): A group of health quality experts, practicing doctors, and other healthcare professionals paid by the federal government to monitor and improve the quality of care delivered to Medicare beneficiaries in each state.
Quantity Limits: A management tool used by Medicare prescription drug plans that limits the amount of a drug you can get over a certain period of time, such as a set number of pills per month. If you need more than the limit allows, you can request an exception from your plan.

R

Reconsideration: The second level of the Medicare appeals process, where a Qualified Independent Contractor reviews your case if you disagree with a redetermination decision. You have 180 days to request a reconsideration.
Redetermination: The first level of the Medicare appeals process in Original Medicare, where your claim is reviewed by someone who was not involved in the initial decision. You have 120 days to file a redetermination after receiving a Medicare Summary Notice.
Referral: A written order from your primary care physician approving you to seek medical attention from a specialist or get certain medical services. Most Health Maintenance Organizations (HMOs) require a referral before covering any costs outside of your primary care physician.
Rehabilitation Services: Healthcare services that help patients regain, or improve skills and functioning for daily living that were lost or impaired because of illness or injury. Services typically include physical therapy, occupational therapy, speech-language pathology, and psychiatric services.
Religious Nonmedical Healthcare Institution: A facility that offers nonmedical healthcare services and items to people who are seeking out hospital or skilled nursing facility care, but for whom that care would go against their religious beliefs.
Respite Care: Temporary care provided through nursing homes, hospice inpatient facilities, or hospitals so that family and friends who are caregivers can rest or take time off.
Risk Adjustment: A process Medicare uses to adjust payments to Medicare Advantage plans based on the health status of their enrolled members. Plans receive higher payments for sicker patients and lower payments for healthier ones, helping to ensure fair compensation across plans.
Rural Emergency Hospital: A facility that provides emergency department services, observation care, and certain other outpatient medical and health services to patients who generally stay less than 24 hours. Rural emergency hospitals help ensure access to emergency care in rural communities.
Rural Health Clinic (RHC): A Medicare-certified clinic located in a medically underserved rural area that provides primary care services. RHCs must employ at least one nurse practitioner or physician assistant to expand access to care.

S

Secondary Payer: An insurance policy, plan, or program whose benefits only kick in secondary to your primary coverage. Medicare, Medicaid, or any other health insurance policy may be your secondary payer depending on the situation.
Service Area: The area in which a health insurance plan accepts members, assuming membership is limited by geographic location. Health plans will usually limit which doctors and hospitals you can use based on the service area, with the exception of emergency services. You may be disenrolled from a plan if you move out of the service area.
Skilled Nursing Facility (SNF): A facility where skilled nursing care and rehabilitation services are provided on a daily basis, including physical therapy or intravenous injection that can only be administered by a registered nurse (RN) or doctor.
Skilled Nursing Facility (SNF) Care: Skilled nursing care and therapy services provided on a daily basis in a skilled nursing facility. Examples include physical therapy, intravenous injections, and other treatments that can only be given by a physical therapist, registered nurse, or doctor.
Specialty Drug: A high-cost prescription drug used to treat complex or chronic conditions. Specialty drugs are typically placed on the highest cost-sharing tier in your Part D formulary and may require special handling or administration.
Special Enrollment Period (SEP): A time outside the regular enrollment periods when you can sign up for or change your Medicare coverage due to certain qualifying life events, such as moving to a new area, losing other health coverage, or qualifying for Extra Help.
Speech-Language Pathology: Therapy services to help people with communication disorders, swallowing difficulties, or cognitive impairments. Medicare covers speech-language pathology when prescribed by your doctor as medically necessary.
Spend Down: A process by which individuals whose income is above Medicaid limits become eligible for Medicaid by spending their excess income on medical bills and healthcare expenses until they reach the Medicaid eligibility threshold.
Star Ratings: A quality rating system used by Medicare to measure how well Medicare Advantage and Part D plans perform. Plans receive 1 to 5 stars based on factors including customer service, member complaints, drug pricing, and patient safety. Higher-rated plans may offer additional benefits.
State Health Insurance Assistance Program (SHIP): A federally funded state level program that offers free local health insurance counseling for Medicare beneficiaries.
State Insurance Department: A state level agency that helps regulate and inform individuals about Medicare Supplement (Medigap) policies along with other private health insurance options.
State Medical Assistance (Medicaid) Office: A state or local agency that provides information and help with applications for financial assistance programs for those who need help paying medical bills, such as Medicaid.
State Pharmaceutical Assistance Program (SPAP): A state program that helps pay for drug coverage to eligible individuals. Eligibility is based on financial need, age, or medical conditions.
State Survey Agency: A state level agency that oversees participating Medicare and Medicaid healthcare facilities to ensure health and safety standards are met.
Step Therapy: A coverage rule used by some Medicare Advantage and Part D (prescription drug plans) providers that require you to try lower tier drugs to treat a condition before the plan will cover higher tier prescription drugs.
Substance Use Disorder Treatment: Medical and behavioral health services for alcohol or drug addiction, covered by Medicare. Coverage includes screening, counseling, medication-assisted treatment through opioid treatment programs, and both inpatient and outpatient rehabilitation.
Supplemental Security Income (SSI): Monthly benefits paid by Social Security to people with limited income and resources who are disabled, blind, or over the age of 65 years old. Note that SSI benefits are not the same as Social Security retirement or disability benefits.
Supplier: Any company, person, or agency that provides you with medical services or supplies, with the exception of when you are an inpatient in a hospital or skilled nursing facility.
Swing Bed: An arrangement that allows small rural hospitals to use their beds for either acute care or skilled nursing facility care depending on patient needs. This gives rural patients access to skilled nursing services without transferring to another facility.

T

Telemedicine: Medical and health services administered virtually through communications systems (computer, phone, or television) by a healthcare professional in a different location.
Terminal Illness: A medical condition that is expected to result in death within six months if the disease runs its normal course. A terminal illness diagnosis is required to qualify for Medicare hospice benefits.
Therapy Cap: A limit on the amount Medicare will pay for outpatient therapy services, including physical therapy, occupational therapy, and speech-language pathology, in a calendar year. Exceptions may apply if services are medically necessary.
Three-Day Hospital Stay Requirement: A Medicare rule requiring you to be admitted as a hospital inpatient for at least three consecutive days before Medicare will cover a subsequent stay in a skilled nursing facility. Days spent in observation status do not count toward this requirement.
Tiers: Medicare tiers refer to groups of drugs that differ in price depending on the group they are assigned to. Lower tier drugs tend to be less expensive than higher tier drugs.
Tobacco Use Counseling: Counseling sessions to help you quit smoking or using tobacco products. Medicare covers up to eight counseling sessions per year at no cost for beneficiaries who use tobacco.
TRICARE: A health care program serving active-duty and retired military service members and their families. TRICARE for Life provides supplemental coverage that works alongside Medicare for eligible military retirees who have both Medicare Part A and Part B.
Transitional Care: Coordinated healthcare services designed to ensure continuity of care when a patient moves between different healthcare settings, such as from a hospital to a skilled nursing facility or from a hospital to home care.
True Out-of-Pocket Costs (TrOOP): The actual amounts you pay for prescription drugs that count toward your annual out-of-pocket spending threshold in Medicare Part D. Once your TrOOP costs reach a certain level, you qualify for catastrophic coverage where your drug costs drop significantly.
TTY: TTY stands for teletypewriter, and is a communication device for people with hearing or speech impairments. If someone doesn't have a TTY, they can communicate with a TTY user through a message relay center (MRC).

U

Urgent Care: Medical care for an illness or injury that is not life-threatening but needs prompt attention, such as a high fever or minor fracture. Medicare covers urgent care visits, though costs may vary depending on whether you visit an in-network or out-of-network provider.
Urgently Needed Care: Medical care that you receive outside of your Medicare plan's service area for a sudden illness or injury. Although not life threatening, your health plan will have to pay for the medical services you received if it is deemed unsafe to wait until you get home.
Utilization Management: Techniques health insurance plans use to manage costs and ensure appropriate use of healthcare services. Common utilization management tools include prior authorization, step therapy, and quantity limits on prescription drugs.

V

Value-Based Care: A healthcare delivery model that focuses on the quality and outcomes of care rather than the quantity of services provided. Under value-based care, providers are rewarded for keeping patients healthy and managing chronic conditions effectively.
Veterans Benefits: Health care benefits available to eligible military veterans through the U.S. Department of Veterans Affairs (VA). Veterans may be eligible for both VA health benefits and Medicare, and can choose to use either or both for their healthcare needs.

W

Wellness Visit (Annual): A yearly preventive care appointment covered by Medicare at no cost to you. During the visit, your doctor creates or updates a personalized prevention plan based on your current health status and risk factors, and may recommend screenings or other preventive services.
Workers' Compensation: An insurance plan that most employers are required to have in place that provides coverage for employees in the event they get sick or injured while on the job.

This content is for educational purposes only and does not constitute a recommendation of any specific Medicare plan. Benefits, costs, and availability vary by plan and location. For complete information about your Medicare options, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), TTY: 1-877-486-2048, available 24 hours a day, 7 days a week.