Medicare Terms and Definitions (From the Official Medicare and You 2012 Booklet)
Assignment—An agreement by your doctor, other health careprovider, or supplier to be paid directly by Medicare, to accept the
payment amount Medicare approves for the service, and not to bill
you for any more than the Medicare deductible and coinsurance.
Benefit Period—The way that Original Medicare measures your
use of hospital and skilled nursing facility (SNF) services. A benefit
period begins the day you are admitted as an inpatient in a hospital
or skilled nursing facility. The benefit period ends when you haven’t
received any inpatient hospital care (or skilled care in a SNF) for 60
days in a row. If you go into a hospital or a skilled nursing facility
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.
Coinsurance—An amount you may be required to pay as your
share of the cost for services after you pay any deductibles.
Coinsurance is usually a percentage (for example, 20%).
Copayment—An amount you may be required to pay as your
share of the cost for a medical service or supply, like a doctor’s visit,
hospital outpatient visit, or prescription. A copayment is usually a
set amount, rather than a percentage. For example, you might pay
$10 or $20 for a doctor’s visit or prescription.
142 Section 8—Definitions
Creditable Prescription Drug Coverage—Prescription drug
coverage (for example, from an employer or union) that’s expected to
pay, on average, at least as much as Medicare’s standard prescription
drug coverage. People who have this kind of coverage when they
become eligible for Medicare can generally keep that coverage
without paying a penalty, if they decide to enroll in Medicare
prescription drug coverage later.
Critical Access Hospital—A small facility that provides outpatient
services, as well as inpatient services on a limited basis, to people in
rural areas.
Custodial Care—Nonskilled personal care, such as help with
activities of daily living like bathing, dressing, eating, getting in or
out of a bed or chair, moving around, and using the bathroom. It
may also include the kind of health-related care that most people do
themselves, like using eye drops. In most cases, Medicare doesn’t pay
for custodial care.
Deductible—The amount you must pay for health care or
prescriptions before Original Medicare, your prescription drug plan,
or your other insurance begins to pay.
Extra Help—A Medicare program to help people with limited
income and resources pay Medicare prescription drug program costs,
such as premiums, deductibles, and coinsurance.
Formulary—A list of prescription drugs covered by a prescription
drug plan or another insurance plan offering prescription drug
benefits.
Inpatient Rehabilitation Facility—A hospital, or part of a hospital,
that provides an intensive rehabilitation program to inpatients.
Institution—For the purposes of this publication, an institution is a
facility that provides short term or long term care, such as a nursing
home, skilled nursing facility (SNF), or rehabilitation hospital. Private
residences, such as an assisted living facility or group home, aren’t
considered institutions for this purpose.
Lifetime Reserve Days—In Original Medicare, these are additional
days that Medicare will pay for when you’re in a hospital for more
than 90 days. You have a total of 60 reserve days that can be used
during your lifetime. For each lifetime reserve day, Medicare pays all
covered costs except for a daily coinsurance.
Long‑Term Care—A variety of services that help people with their
medical and non‑medical needs over a period of time. Long‑term
care can be provided at home, in the community, or in various
other types of facilities, including nursing homes and assisted living
facilities. Most long‑term care is custodial care. Medicare doesn’t pay
for this type of care if this is the only kind of care you need.
Long‑Term Care Hospital—Acute care hospitals that provide
treatment for patients who stay, on average, more than 25 days.
Most patients are transferred from an intensive or critical care unit.
Services provided include comprehensive rehabilitation, respiratory
therapy, head trauma treatment, and pain management.
Medically Necessary—Services or supplies that are needed for the
diagnosis or treatment of your medical condition and meet accepted
standards of medical practice.
Medicare‑Approved Amount—In Original Medicare, this is the
amount a doctor or supplier that accepts assignment can be paid.
It may be less than the actual amount a doctor or supplier charges.
Medicare pays part of this amount and you’re responsible for the
difference.
Medicare Health Plan—A plan offered by a private company that
contracts with Medicare to provide Part A and Part B benefits to
people with Medicare who enroll in the plan. Medicare Health
Plans include all Medicare Advantage Plans, Medicare Cost Plans,
Demonstration/Pilot Programs, and Programs of All-inclusive Care
for the Elderly (PACE).
Medicare Plan—Refers to any way other than Original Medicare
that you can get your Medicare health or prescription drug
coverage. This term includes all Medicare health plans and Medicare
Prescription Drug Plans.
Premium—The periodic payment to Medicare, an insurance company,
or a health care plan for health or prescription drug coverage.
Preventive Services—Health care to prevent illness or detect
illness at an early stage, when treatment is likely to work best (for
example, preventive services include Pap tests, flu shots, and screening
mammograms).
Primary Care Doctor—Your primary care doctor is the doctor you see
first for most health problems. He or she makes sure you get the care
you need to keep you healthy. He or she also may talk with other doctors
and health care providers about your care and refer you to them. In
many Medicare Advantage Plans, you must see your primary care doctor
before you see any other health care provider.
Quality Improvement Organization (QIO)—A group of practicing
doctors and other health care experts paid by the Federal government to
check and improve the care given to people with Medicare.
Referral—A written order from your primary care doctor for you
to see a specialist or to get certain medical services. In many Health
Maintenance Organizations (HMOs), you need to get a referral before
you can get medical care from anyone except your primary care doctor.
If you don’t get a referral first, the plan may not pay for the services.
Service Area—A geographic area where a health insurance plan accepts
members if it limits membership based on where people live. For plans
that limit which doctors and hospitals you may use, it’s also generally the
area where you can get routine (non‑emergency) services. The plan may
disenroll you if you move out of the plan’s service area.
Skilled Nursing Facility (SNF) Care—Skilled nursing care and
rehabilitation services provided on a continuous, daily basis, in a skilled
nursing facility. Examples of skilled nursing facility care include physical
therapy or intravenous injections that can only be given by a registered
nurse or doctor.
TTY—A teletypewriter (TTY) is a communication device used by people
who are deaf, hard-of-hearing, or have a severe speech impairment.
People who don’t have a TTY can communicate with a TTY user
through a message relay center (MRC). An MRC has TTY operatorsavailable to send and interpret TTY messages.