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Medicare Terms Glossary

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A | B | C | D | E | G | H | I | L | M | O | P | Q | R | S | T | U |

A

Ambulatory Surgical Center

An Ambulatory Surgical Center provides outpatient surgical services to patients not requiring hospitalization and whose expected stay does not exceed 24 hours.

Annual Enrollment Period

A set time each fall when members can change their health or drug plans or switch to Original Medicare. The Annual Enrollment Period is from October 15 until December 7.

Appeal

An appeal is something you do if you disagree with the plan’s decision to deny a request for coverage of health care services or prescription drugs, or payment for services or drugs you already received. You may also make an appeal if you disagree with the plan’s decision to stop services that you are receiving. For example, you may ask for an appeal if your plan doesn’t pay for a drug, item, or service you think you should be able to receive.

B

Benefit Period

The way your plan measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you go into 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. There is no limit to the number of benefit periods.

Brand Name Drug

A prescription drug that is manufactured and sold by the pharmaceutical company that originally researched and developed the drug. Brand name drugs have the same active-ingredient formula as the generic version of the drug. However, generic drugs are manufactured and sold by other drug manufacturers and are generally not available until after the patent on the brand name drug has expired.

C

Catastrophic Coverage Stage

The stage in the Part D Drug Benefit where you pay a low copayment or coinsurance for your drugs after you have spent $5,100 in covered drugs during the covered year.

Centers for Medicare & Medicaid Services (CMS)

The Federal agency that administers Medicare.

Coinsurance

An amount you may be required to pay for services or prescription drugs after you pay any deductibles. Coinsurance is usually a percentage (for example, 20%).

Copayment (or “copay”)

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 a prescription drug. A copayment is a set amount, rather than a percentage. For example, you might pay $10 for a doctor visit or prescription drug.

Cost sharing

Cost sharing refers to amounts that a member has to pay when services or drugs are received. Cost sharing includes any combination of the following three types of payments: (1) any deductible amount a plan may impose before services or drugs are covered; (2) any fixed “copayment” amount that a plan requires when a specific service or drug is received; or (3) any “coinsurance” amount, a percentage of the total amount paid for a service or drug, that a plan requires when a specific service or drug is received. A “daily cost-sharing rate” may apply if your doctor prescribes less than a full month’s supply of certain drugs and you are required to pay a copayment.

Coverage Determination

A decision about whether a drug prescribed for you is covered by the plan and the amount, if any, you are required to pay for the prescription. In general, if you bring your prescription to a pharmacy and the pharmacy tells you the prescription isn’t covered under your plan, that isn’t a coverage determination. You need to call or write to your plan to ask for a formal decision about the coverage.

Covered Drugs

The prescription drugs covered by your plan.

Covered Services

The health care services and supplies that are covered by your plan.

Custodial Care

Custodial care is personal care provided in a nursing home, hospice, or other facility setting when you do not need skilled medical care or skilled nursing care. Custodial care is personal care that can be provided by people who don’t have professional skills or training, 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. Medicare doesn’t pay for custodial care.

Customer Service

A department within your plan responsible for answering questions about your membership, benefits, grievances, and appeals.

D

Daily Cost-Sharing Rate

A “daily cost-sharing rate” may apply if your doctor prescribes less than a full month’s supply of certain drugs and you are required to pay a copayment. A daily cost-sharing rate is the copayment divided by the number of days in a month’s supply. For example: If your copayment for a one-month supply of a drug is $30, and a one-month’s supply in your plan is 30 days, then your “daily cost-sharing rate” is $1 per day. This means you pay $1 for each day’s supply when you fill your prescription.

Deductible

The amount you pay for health care or prescriptions before our plan begins to pay.

Disenroll or Disenrollment

The process of ending your membership in your plan.

Dispensing Fee

A fee charged each time a covered drug is dispensed to pay for the cost of filling a prescription. The dispensing fee covers costs such as the pharmacist’s time to prepare and package the prescription.

Donut Hole

The donut hole, or Coverage Gap, is one of four drug coverage stages you may encounter during the year while a member of a Part D prescription drug plan. You reach the donut hole when the total cost paid by you and the plan have reached the Initial Coverage Limit. If you enter the donut hole, you may have to pay a higher price for your medications until the following January 1, or until your out-of-pocket costs qualify you for another level of insurance called Catastrophic Coverage.

Durable Medical Equipment (DME)

Certain medical equipment that is ordered by your doctor for medical reasons. Examples include walkers, wheelchairs, crutches, powered mattress systems, diabetic supplies, IV infusion pumps, speech generating devices, oxygen equipment, nebulizers, or hospital beds ordered by a provider for use in the home.

E

Emergency

A medical emergency is when you believe that you have medical symptoms that require immediate medical attention to prevent loss of life, loss of a limb, or loss of function of a limb. The medical symptoms may be an illness, injury, severe pain, or a medical condition that is quickly getting worse.

Evidence of Coverage (EOC)

This document explains your coverage, what your plan must do, your rights, and what you have to do as a member of our plan.

Exception

A type of coverage determination that, if approved, allows you to get a drug that is not on your plan’s formulary (a formulary exception), or get a non-preferred drug at a lower cost-sharing level (a tiering exception). You may also request an exception if your plan requires you to try another drug before receiving the drug you are requesting, or the plan limits the quantity or dosage of the drug you are requesting (a formulary exception).

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.

G

Generic Drug

A prescription drug that is approved by the Food and Drug Administration (FDA) as having the same active ingredient(s) as the brand name drug. Generally, a “generic” drug works the same as a brand name drug and usually costs less.

Grievance

A type of complaint you make about your plan or pharmacies, including a complaint concerning the quality of your care. This type of complaint does not involve coverage or payment disputes.

H

Home Health Aide

A home health aide provides services that don’t need the skills of a licensed nurse or therapist, such as help with personal care (e.g., bathing, using the toilet, dressing, or carrying out the prescribed exercises). Home health aides do not have a nursing license or provide therapy.

Hospital Inpatient Stay

A hospital stay when you have been formally admitted to the hospital for skilled medical services. Even if you stay in the hospital overnight, you might still be considered an “outpatient.”

I

Income-Related Monthly Adjustment Amount (IRMAA)

If your income is above a certain limit, you will pay an income-related monthly adjustment amount in addition to your plan premium. For example, individuals with income greater than $85,000 and married couples with income greater than $170,000 pay a higher Medicare Part B (medical insurance) and Medicare prescription drug coverage premium amount. This additional amount is called the income-related monthly adjustment amount. Less than 5% of people with Medicare are affected, so most people will not pay a higher premium.

Initial Coverage Limit

The maximum limit of coverage under the Initial Coverage Stage.

Initial Coverage Stage

This is the stage before your total drug costs including amounts you have paid and what your plan has paid on your behalf for the year have reached $3,820.

Initial Enrollment Period

When you are first eligible for Medicare, the period of time when you can sign up for Medicare Part A and Part B. For example, if you’re eligible for Medicare when you turn 65, your Initial Enrollment Period is the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

L

List of Covered Drugs (Formulary or “Drug List”)

A list of prescription drugs covered by your plan. The drugs on this list are selected by your plan with the help of doctors and pharmacists. The list includes both brand name and generic drugs.

Low Income Subsidy (LIS)

M

Maximum Out-of-Pocket Amount

The most that you pay out-of-pocket during the calendar year for in-network covered Part A and Part B services. Amounts you pay for your plan premiums, Medicare Part A and Part B premiums, and prescription drugs do not count toward the maximum out-of-pocket amount.

Medicaid (or Medical Assistance)

A joint Federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Medically Necessary

Services, supplies, or drugs that are needed for the prevention, diagnosis, or treatment of your medical condition and meet accepted standards of medical practice.

Medicare

The Federal health insurance program for people 65 years of age or older, some people under age 65 with certain disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant). People with Medicare can get their Medicare health coverage through Original Medicare or a Medicare Advantage Plan.

Medicare Advantage Open Enrollment Period

A set time each year when members in a Medicare Advantage plan can cancel their plan enrollment and switch to Original Medicare or make changes to your Part D coverage. The Open Enrollment Period is from January 1 until March 31, 2019.

Medicare Advantage (MA) Plan

Sometimes called Medicare Part C. A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. A Medicare Advantage Plan can be an HMO, PPO, a Private Fee-for-Service (PFFS) plan, or a Medicare Medical Savings Account (MSA) plan. When you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan, and are not paid for under Original Medicare. In most cases, Medicare Advantage Plans also offer Medicare Part D (prescription drug coverage). These plans are called Medicare Advantage Plans with Prescription Drug Coverage. Everyone who has Medicare Part A and Part B is eligible to join any Medicare health plan that is offered in their area, except people with end-stage renal disease (unless certain exceptions apply).

Medicare Coverage Gap Discount Program

A program that provides discounts on most covered Part D brand name drugs to Part D members who have reached the Coverage Gap Stage and who are not already receiving “Extra Help.” Discounts are based on agreements between the Federal government and certain drug manufacturers. For this reason, most, but not all, brand name drugs are discounted.

Medicare-Covered Services

Services covered by Medicare Part A and Part B. All Medicare health plans, including our plan, must cover all of the services that are covered by Medicare Part A and B.

Medicare Prescription Drug Coverage (Medicare Part D)

Insurance to help pay for outpatient prescription drugs, vaccines, biologicals, and some supplies not covered by Medicare Part A or Part B.

“Medigap” (Medicare Supplement Insurance) Policy

Medicare supplement insurance sold by private insurance companies to fill “gaps” in Original Medicare. Medigap policies only work with Original Medicare. (A Medicare Advantage Plan is not a Medigap policy.)

O

Observation

Observation services are hospital outpatient services given to help the doctor decide if the patient needs to be admitted as an inpatient or can be discharged. Observation services may be given in the Emergency Department (ED) or another area of the hospital.

Organization Determination

The Medicare Advantage plan has made an organization determination when it makes a decision about whether items or services are covered or how much you have to pay for covered items or services. Organization determinations are also called “coverage decisions”.

Original Medicare (“Traditional Medicare” or “Fee-for-service” Medicare)

Original Medicare is offered by the government, and not a private health plan like Medicare Advantage Plans and prescription drug plans. Under Original Medicare, Medicare services are covered by paying doctors, hospitals, and other health care providers payment amounts established by Congress. You can see any doctor, hospital, or other health care provider that accepts Medicare. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share. Original Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance), and is available everywhere in the United States.

Out-of-Pocket Costs

See the definition for “cost sharing” above. A member’s cost-sharing requirement to pay for a portion of services or drugs received is also referred to as the member’s “out-of-pocket” cost requirement.

P

Part C

see “Medicare Advantage (MA) Plan.”

Part D

The voluntary Medicare Prescription Drug Benefit Program.

Part D Drugs

Drugs that can be covered under Part D. (See your formulary for a specific list of covered drugs.) Certain categories of drugs were specifically excluded by Congress from being covered as Part D drugs.

Part D Late Enrollment Penalty

An amount added to your monthly premium for Medicare drug coverage if you go without creditable coverage (coverage that is expected to pay, on average, at least as much as standard Medicare prescription drug coverage) for a continuous period of 63 days or more. You pay this higher amount as long as you have a Medicare drug plan. There are some exceptions. For example, if you receive “Extra Help” from Medicare to pay your prescription drug plan costs, you will not pay a late enrollment penalty.

Premium

The monthly payment you make to your plan for health or prescription drug coverage.

Primary Care Provider (PCP)

Your primary care provider is the doctor or other provider 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 health plans, you must see your primary care provider before you see any other health care provider.

Prior Authorization

Approval in advance to get services or certain drugs that may or may not be on our formulary. Some in-network medical services are covered only if your doctor or other network provider gets “prior authorization” from our plan. Some drugs are covered only if your doctor or other network provider gets “prior authorization” from your plan. Covered drugs that need prior authorization are marked in the formulary.

Prosthetics and Orthotics

These are medical devices ordered by your doctor or other health care provider. Covered items include, but are not limited to, arm, back and neck braces; artificial limbs; artificial eyes; and devices needed to replace an internal body part or function, including ostomy supplies, and enteral and parenteral nutrition therapy.

Provider

“Provider” is a general term for doctors, health care professionals, hospitals, and health care facilities that are licensed or certified by Medicare and by the State to provide health care services.

Q

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 Medicare patients.

Quantity Limits

A management tool that is designed to limit the use of selected drugs for quality, safety, or utilization reasons. Limits may be on the amount of the drug that your plan covers per prescription or for a defined period of time.

R

Referral

An approval from a member’s PCP to seek care from another health care professional, usually a specialist, for treatment or consultation.

Rehabilitation Services

These services include physical therapy, speech and language therapy, and occupational therapy.

S

Service Area

A geographic area where a health plan accepts members if it limits membership based on where people live. The plan may disenroll you if you permanently 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.

Special Enrollment Period

A set time when members can change their health or drug plans or return to Original Medicare. Situations in which you may be eligible for a Special Enrollment Period include: if you move outside the service area, if you are getting “Extra Help” with your prescription drug costs, if you move into a nursing home, or if your plan violates their contract with you.

Step Therapy

A utilization tool that requires you to first try another drug to treat your medical condition before your plan covers the drug your physician may have initially prescribed.

Supplemental Security Income (SSI)

A monthly benefit paid by Social Security to people with limited income and resources who are disabled, blind, or age 65 and older. SSI benefits are not the same as Social Security benefits.

T

Tier

Every drug on the list of covered drugs is in one of 5 tiers. In general, the higher the tier, the higher your cost for the drug.

U

Urgently Needed Services

Urgently needed services are provided to treat a non-emergency, unforeseen medical illness, injury, or condition that requires immediate medical care. Urgently needed services may be furnished by network providers or by out-of-network providers when network providers are temporarily unavailable or inaccessible.