Medicare Glossary

Learn all the Medicare terms so you will be empowered to find the best care for you.

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.

Ambulatory Surgical Center

A facility where certain surgies which do not require hospital admission can be performed for patients who will likely need less than 24 hours of care.


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.


An agreement your doctor, medical provider, or medical supplier enter into which states they 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 you deductible and coinsurance.

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 qualify of care for Medicare beneficiaries, making sure there is consistency in the review process by taking into account local factos 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 si not 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 compay that obtains payment on Medicare's behalf when Medicare makes a conditional payment, while the other insurance payer is dtermined to be primary.


A healthcare benefit program for dependents of qualiyfing veterans.


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.


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.

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.


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.

Coverage Determination (Part D)

The initial decision made 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'sstandard prescription drug coverage. If you are enrolled in a creditable prescription drug plan you are generally elgiible 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 hospials (CAH) provide limited inpatient and outpatient services to people.

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 wll not cover custodial care.


The dollar amount that you need to pay out of your own pocket before your Medicare benefits begin to cover costs.


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.

Drug List

Also called a formulary, a drug list refers to a list of prescription drugs covered by your Medciare prescripiton drug plan.

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 druable 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.

End-Stage Renal Disease (ESRD)

Permanent kideny failure that will require a regular course of dialysis, or even a kidney transplant.


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 prescripiton drug plan's decision to reduce the cost for a drug that is covered, but in a non-preffered drug tier. In order to get an exception, you must make a request witha . 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.

Extra Help

A Medicare program specific to prescription drug coverage that helps indivdiuals with limited income and resources pay costs like premiums, deductibles, and coinsurance.


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.


Not to be confused with an appeal, a grievence 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 grievence 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 your more for coverage based on medical history.

Guaranteed Renewable Policy

An insurance policy that can't be terminated by a helath 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.

Healthcare Provider

A person or organization that is licensed and approved to provide healthcare to people. Examples include, doctors, nurses, and hospitals.

Home Health Agency

An organization that provides home healthcare services and supplies.

Home Healthcare

Healthcare services and supplies your doctor decides you can get for your home. Home health care is in only covered by Medicare on a limited basis as ordered by your doctor.


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.

Independent Reviewer

Also called an Indpendent 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.

Inpatient Rehabilitation Facility

A hosptial, or part of a hospital, that provides intensive rehabilitation services to inpatients.

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.

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 coinsurnace. 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 acitivites 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.


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's been approved by Medicaid, meaning they have passed an inspection conducted by a state government agency.

Medical Underwriting

A thorough process in which health insurance companies review and 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 sandards of medicine.


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 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 Cost Plan

A type of Medicare plan that covers your emergency or urgently needed services, however, services outsided of the plan's network without a referral will be paid for by Original Medciare.

Medicare Health Maintenance Organization (HMO) Plan

A type of Medicare Advantage Plan (Part C) that only 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 referal 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's a chance you will have to pay out-of-pocket before your coverage kicks in.

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 hopspital 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 medcial 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 crefully 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 nurseing 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 assingment 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 balanace.

Medicare-Certified Provider

A Medicare-approved heatlhcare 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 individulas, 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 Medciare 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.

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-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 includes deductibles, copayments, and coinsurance.

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 openeing to the uterus).

Pelvic Exam

An exam conducted by a medical professional that checks if internal female organs are normal by feeling shape and size.


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.

Pilot Programs

Also referred to as demonstrations or research studies, pilot programs are used to test improvements in certain Medciare 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 decision 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 you coverage kicks in.


A periodic payment made to Medicare or other insurance companies in exchange for health or prescription drug coverage and benefits.

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're 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 get from you Medicare prescription drug plan before you benefits will kick in and cover the cost. Some plans and drugs require prior authorization while others don't.

Programs of All-inclusive Care for the Elderly (PACE)

A healthcare plan that provides bother 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 environement, and combines medical, social, and long-term care services in addition to prescription drug coverage.


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 referal 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 impared becuase 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 beleifs.

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.

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.

State Health Insurance Assistance Program (SHIP)

A federally funded state level program taht offers free local health insurance counseling for Medicare beneficiaries.

State Insurance Department

A state level agency that helps regulate 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 infomartion 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.

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 retierment or disability benefits.


Any company, person, or agency that provides you with medical services or supplies, with the exception of when you're an inpatient in a hospital or skilled nursing facility.


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).


Medical and health services administered virtually through communications systems (computer, phone, or televeision) by a healthcare professional in a different location.


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.

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.

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.

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