Medicare Terms Glossary

In Original Medicare, providers may issue an advance beneficiary notice (ABN) to a beneficiary before furnishing an item or service if the provider expects that Medicare may deny coverage. The ABN notifies the beneficiary that they may be financially responsible for the costs of those items or services.

A communication provided in advance by a Medicare Advantage plan to inform a beneficiary whether a particular healthcare service or procedure will be covered according to the terms of the beneficiary’s plan.

An agreement by a medical practitioner, healthcare provider, or supplier to accept direct payment from Medicare and not charge the patient for any amounts beyond what is covered by the Medicare deductible and coinsurance.

Original Medicare evaluates a beneficiary’s use of hospital and skilled nursing facility (SNF) services through a benefit period framework. A benefit period commences on the date an individual receives inpatient care at a hospital or SNF. The benefit period concludes after 60 consecutive days without receiving such services. There is no limit to the number of benefit periods a beneficiary may accrue.

A claim is a request for payment submitted to Medicare or other health insurance when items or services have been received that are believed to be covered by the plan.

A copayment is a fixed amount an individual may be required to contribute as their portion of the cost for benefits following payment of any deductibles.

The initial coverage determination by your Medicare prescription drug plan regarding your pharmacy benefits. The plan is required to render a prompt decision (72 hours for standard requests, 24 hours for expedited requests). Should you disagree with the plan’s coverage determination, the subsequent step is an appeal. Such decisions include:

• Whether a specific medication is covered
• Whether you have satisfied all criteria for obtaining a requested medication
• The amount you are responsible for paying for a medication
• Whether to grant an exception to a plan policy upon your request

Previous health insurance coverage that may be used to reduce a pre-existing condition waiting period under a Medigap supplemental insurance policy.

A prescription drug plan that is anticipated to provide coverage comparable to, or greater than, the average benefits offered under Medicare Part D. Acceptable alternative sources of drug coverage may include employer-sponsored or union-sponsored plans, TRICARE, coverage through the Indian Health Service or Department of Veterans Affairs, or individual health insurance policies.

Deductible refers to the amount an individual is required to pay for health care or prescriptions before Medicare, a Medicare Advantage Plan, a Medicare drug plan, or other insurance will begin covering costs.

Certain medical equipment, such as walkers, wheelchairs, or hospital beds, ordered by a physician for in-home use.

The balance billing amount refers to the difference between a physician or other healthcare provider’s legal charge and the Medicare-approved reimbursement rate. This concept applies to patients enrolled in Original Medicare plans.

Medigap protections, which are also known as guaranteed issue rights, outline the legal requirements for insurance companies to sell or offer supplemental Medicare plans in certain situations. Specifically, the law prohibits insurance carriers from denying supplemental health coverage, imposing conditional restrictions such as exclusions for pre-existing medical issues, or charging increased premiums based on an applicant’s prior or present health status when guaranteed issue rights apply.

Under Original Medicare, Medicare will provide additional coverage for hospital stays exceeding 90 days. Specifically, Medicare beneficiaries have access to 60 lifetime reserve days that may be utilized to receive coverage for hospitalization. For each day classified as a lifetime reserve day, Medicare will cover all associated costs deemed eligible for reimbursement as determined by the program, with the exception of a daily coinsurance for which the beneficiary is responsible.

In Original Medicare, a limiting charge is the maximum amount that can be charged for covered services provided by physicians and other healthcare suppliers who do not accept assignment of benefits.

A notice received after a doctor, healthcare provider, or supplier submits a claim for services covered under Medicare Part A or Part B. The notice details the billed charges, Medicare approved payment amount, amount paid by Medicare, and beneficiary responsibility.

The payment amount that Original Medicare establishes for a covered service or item. When a provider accepts payment under the terms of an assignment, Medicare pays its portion and the beneficiary pays their portion of said established amount.

A healthcare provider, such as a home health agency, hospital, nursing home, or dialysis facility, that has received approval from Medicare. To become approved, commonly referred to as “certified,” providers undergo an inspection conducted by the corresponding state government agency to ensure they meet the required standards. Only care received from providers that have achieved certified status will be covered by Medicare.

A one-time, six-month period during which federal law permits individuals to select from any Medigap policy option available in their state of residence. This period initiates in the first month an individual obtains Medicare Part B coverage and reaches the age of 65 or older. Throughout this period, insurance providers cannot deny Medigap coverage or adjust premium costs based on an applicant’s prior or current medical conditions or state of health.

A periodic payment made to Medicare, an insurance company, or a healthcare plan for health or prescription drug coverage.

Prior authorization refers to approval that must be obtained from a Medicare Part D prescription drug plan before a prescription can be filled and covered by that plan. Certain drugs in Medicare drug plans may require prior authorization, where the plan conducts a review to determine medical necessity of the prescribed medication before agreeing to provide coverage.

A monthly benefit administered by the Social Security Administration that provides financial assistance to individuals with limited income and resources who are aged 65 or older, as well as those who are blind or have a disability. It is important to note that SSI benefits differ from Social Security retirement and disability benefits, as eligibility for SSI is based on financial need.

Medicare health plans must cover emergency care received outside of their service area for sudden, non-life-threatening illnesses or injuries that require immediate medical attention. If waiting until returning home to seek care from an in-network provider is unsafe, the health plan is financially responsible for the care received.