Glossary | AARP® Medicare Plans from UnitedHealthcare®
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Health care terminology can be confusing, especially if you're researching subjects that are new to you.



accept assignment - Term used to indicate a doctor’s agreement to take the Medicare-approved amount paid for a service as full payment. If your doctor accepts assignment, your share is limited to your co-insurance payment, usually 20% of the Medicare-approved amount.

accreditation - An evaluation process for determining the degree of compliance to a set of standards set by a range of stakeholders, including the industry.

activities of daily living (ADLs) - Activities performed as part of a person's daily routine of self-care, e.g., bathing, dressing, toileting, transferring to and from bed, and eating.

actuary - A statistician who computes insurance risks and premiums.

admission - A registered patient, usually admitted for at least 24 hours, to a hospital, skilled nursing facility or other health care facility.

aftercare - Services following hospitalization or rehabilitation, individualized for each patient's needs. Aftercare gradually phases the patient out of treatment while providing follow-up attention to prevent relapse.

allied health personnel - Specially trained and licensed (when required) health workers other than physicians, dentists, optometrists, chiropractors, podiatrists, mental health professionals and nurses. The term sometimes is used synonymously with paramedical personnel, all non-physician health workers, or health workers who do not usually engage in independent practice.

alternate care - Non-inpatient care received in a less intensive setting than a hospital or other inpatient facility (e.g., day-surgery center).

alternative delivery systems (ADS) - Historically, this term refers to all forms of health care delivery except traditional fee-for-service. ADS includes HMOs, PPOs, IPAs and other systems for delivering health care.

ancillary care - Additional services performed relating to a specific incident of care, for example, home health care, lab work, radiology and anesthesia.

appeal - A specific request to reverse a denial or adverse determination and potential restriction of benefit reimbursement.

approved health care facility or program - A facility or program that is licensed, certified or otherwise authorized according to state laws to provide health care and which is approved by a health plan to provide the care described in a contract.

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balance billing - In Medicare Part B, doctors who do not accept assignment may use this method to bill you for an additional payment. Balance billing is also known as “excess charges.” A doctor’s excess charges cannot be more than 15% of the Medicare approved amount. In some states balance billing may be limited to less than 15% or may not be allowed at all.

behavioral health care - Assessment and treatment of mental and/or psychoactive substance abuse disorders.

beneficiary - A person designated by an insuring organization or Medicare as eligible to receive insurance benefits.

benefit level - The limit or degree of services a person is entitled to receive based on the contract with a health plan or insurer.

benefit period - In Medicare Part A, a benefit period begins the day you go into a hospital or skilled nursing facility. It ends when you have been out for 60 days in a row. You may be in the hospital more than once during one benefit period. There is no limit on the number of benefit periods that Medicare will cover. Part A charges a deductible for each benefit period.

benefit plan - See health plan.

board certified - A physician who has completed an approved residency, passed an examination given by a medical specialty board, and who has been certified as a specialist in that medical area.

brand name drug - A prescription drug that is sold under a trademarked brand name.

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carrier - An entity that may underwrite, administer or sell a range of health benefit programs. May refer to an insurer or a managed health plan.

case management - The medical management process of identifying patients with specific health care needs and interacting with them and their physician(s) to assist with determining and coordinating a treatment plan that promotes optimal health outcomes and efficient use of health care resources.

case manager - A clinical professional (e.g., nurse, doctor or social worker) who works with patients, health care providers, physicians and insurers to determine and coordinate a plan of medically necessary and appropriate health care. Also referred to as care coordinator.

catastrophic coverage - A cost-sharing stage in a Medicare Part D during which you pay only a small co-pay or co-insurance for a covered drug and your plan pays the rest of the cost.

Centers for Medicare & Medicaid Services (CMS) - The federal government agency that runs the Medicare program and works with the states to manage their Medicaid programs.

certificate of coverage (COC) - A description of the benefits included in a carrier's plan. The certificate of coverage is required by state laws and represents the coverage provided under the contract issued to the employer. The certificate is provided to the employee, and also is known as their member certificate.

claim - Information submitted by a provider or a covered person that establishes the specific health services provided to a patient and requests reimbursement to the requestor.

cognitive impairment - Impairment in a person's memory, reasoning or orientation to a person; or an impairment requiring a person to be supervised to protect himself or herself or others from harm.

co-insurance - The portion of eligible health care costs that the covered person is financially responsible for, usually according to a fixed percentage. Co-insurance often is applied, according to a fixed percentage, after a deductible requirement is met.

In other words, a percentage of the cost for a service, which you split with your plan. For example, Medicare Part B might pay 80% of the cost of a medical service and you would pay 20%.

continuum of care - A range of clinical services provided to an individual or group, which may reflect treatment rendered during a single inpatient hospitalization, or care for multiple conditions over a lifetime. The continuum provides a basis for analyzing quality, cost and utilization over the long term.

coordinated care - In Medicare Advantage (Part C), this refers to a kind of health care plan that links providers and services to deliver efficient, cost-effective patient care. Plan members usually have to use doctors and hospitals that are within the plan’s network. These plans are also referred to as “managed care plans.”

co-payment (co-pay) - A cost-sharing arrangement in which a covered person pays a specified charge for a specified service, such as $10 for an office visit. The covered person usually is responsible for payment at the time the health care is rendered. Typical co-payments are fixed or variable flat amounts for physician office visits, prescriptions or hospital services. Some companies use the term "co-payment" to refer generically to both a flat dollar co-payment and co-insurance.

In other words, a pre-set, fixed amount that you pay for a service at the time you receive it. In a Medicare Part D plan, for example, you might pay a $7 co-payment for each prescription you fill. Also called a “co-pay.”

cost sharing - A term for the way Medicare shares your health care costs with you. The most common types of cost sharing are deductibles, co-pays and co-insurance.

coverage gap - The cost-sharing stage of a Medicare Part D plan in which you pay most of the plan’s discounted price for your covered medications. You enter the coverage gap when you, others on your behalf and the plan together have paid a pre-set amount for your drugs. This amount is determined by the plan, but Medicare establishes a maximum. You remain in the coverage gap stage until you have spent your plan’s out-of-pocket limit in a single year. Deductibles, co-pays, co-insurance and other payments count toward the out-of-pocket limit, but premiums do not.

Beginning in 2011, the Medicare Coverage Gap Discount Program provides manufacturer discounts on brand name drugs to Part D enrollees who have reached the coverage gap and are not already receiving "Extra Help." A 50% discount on the negotiated price (excluding the dispensing fee) is available for those brand name drugs from manufacturers that have agreed to pay the discount.

We will automatically apply the discount when your pharmacy bills you for your prescription and your Explanation of Benefits will show any discount provided. The amount discounted by the manufacturer counts toward your out-of-pockets costs as if you had paid this amount and moves you through the coverage gap.

credentialing - The process of reviewing a provider applicant to participate in a health plan's provider network. Specific criteria and prerequisites are applied in determining initial and ongoing participation in the health plan.

creditable coverage - Prescription drug coverage from a health plan other than a Medicare Part D standalone plan or a Medicare Advantage plan that includes prescription drug coverage and that meets certain Medicare standards.

custodial care - Medical or non-medical services that do not seek to cure, are provided during periods when the medical condition of the patient is not changing, or do not require continued administration by medical personnel.

In other words, care that provides help with the activities of daily living, like eating, bathing or getting dressed. Most long-term care is considered custodial care.

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date of service - The date health care services were provided to the covered person.

deductible - The amount of eligible expense a covered person must pay each year out of pocket before the plan will make payment for eligible benefits.

In other words, a pre-set, fixed amount that you pay for your medical care and services first, before Medicare or other insurance starts to pay. Deductibles are generally charged annually.

dependent - An individual who relies on a member for financial support and/or obtains health coverage through a spouse, parent or grandparent who is the member.

disability - Any condition resulting in functional limitations that interfere with an individual's ability to perform his/her customary work and that results in substantial limitation of one or more major life activities.

discharge planning - The evaluation of patients' medical needs in order to arrange for appropriate care after discharge from an inpatient setting. Discharge planning also is associated with identification of treatment alternatives to prevent hospitalization and to transition patients from one level of care to another.

drug formulary - A list of prescription medications preferred for use by the health plan and dispensed through contracted pharmacies to covered persons. This list is subject to periodic review and modification by the health plan. Formularies are a fluid process subject to strict scrutiny of a pharmacy and therapeutic committee. A plan that has adopted an "open or voluntary" formulary allows coverage for both formulary and nonformulary medications. A plan that has adopted a "closed, select or mandatory" formulary limits coverage to those specific drugs listed in the formulary often subject to an exceptions process. Also known as preferred drug list.

In other words, a list of the prescription drugs that are covered by a specific Medicare Part D plan.

duel eligible - A person who is eligible for both Original Medicare (Parts A and B) and Medicaid.

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effective date - The date a contract becomes active.

eligibility date - The defined date a covered person becomes eligible for benefits under an existing contract.

employee assistance program (EAP) - Services designed to assist employees, their family members, and employers in finding solutions for workplace and personal problems. Services may include assistance for family/marital concerns, legal or financial problems, elder care, child care, substance abuse, emotional/stress issues and other daily living concerns. EAPs may address violence in the workplace, sexual harassment, dealing with troubled employees, transition in the workplace and other events that increase the rate of absenteeism or employee turnover, or lower productivity. The EAP addresses issues that affect employee morale or an employer's productivity or financial success. EAPs also can provide the voluntary or mandatory access to behavioral health benefits through an integrated behavioral health program.

employer contribution - the amount an employer contributes toward the premium costs of the contract. This amount varies widely among employers and is a critical variable in any risk analysis. Employer contributions can be based on dollar amounts, percentages, employment status, length of service, single or family status, other variables, or combinations of the above.

End Stage Renal Disease (ESRD) - Permanent kidney failure requiring dialysis or a kidney transplant.

enrollee - An individual who is enrolled for coverage under a health plan contract and who is eligible on his/her own behalf (not by virtue of being an eligible dependent) to receive the health services provided under the contract. Also known as subscriber.

enrollment - the total number of enrollees or covered persons in a health plan. The term also refers to the health plan process of signing up groups and individuals for membership.

evidence of coverage - See certificate of coverage.

excess charges - The amount a provider who does not accept Medicare assignment may charge you over and above the Medicare-approved amount—generally 15%.

exclusions - Specific conditions or circumstances listed in the contract or employee benefit plan for which the policy or plan will not provide coverage or reimbursement.

explanation of benefits (EOB) - The coverage statement sent to covered persons listing services rendered, amount billed and payment made.

extended care facility - A nursing home or nursing center that is licensed to operate in accordance with all applicable state and local laws and provides 24-hour nursing care. Such a facility may offer skilled, intermediate or custodial care, or any combination of these levels of care.

extension of benefits - A provision of many insurers' policies that allows medical coverage to continue past the termination date of the policy for employees not actively at work and for dependents hospitalized on that date. Such extended coverage usually applies only to the specific medical condition which has caused the disability and continues only until the employee returns to work or the dependent leaves the hospital. Not as common since the implementation of COBRA regulations.

Extra Help - A Medicare program that helps people with limited income and resources pay for Medicare prescription drug plan costs, such as premiums, deductibles and co-insurance.

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facility - A physical location where health care/services are provided, such as a hospital, clinic, emergency room or ambulatory care center.

flexible spending account - A mechanism by which an employee may pay for eligible dependent care or uninsured health care expenses using pre-tax dollars. Through pre-tax payroll deduction, a portion of the employee's salary is set aside for future reimbursement to the employee.

formulary - See drug formulary.

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generic drug - A chemically equivalent form of a brand-name drug for which the patent has expired. A generic typically is less expensive and sold under a common or "generic" name for that drug. Also called generic equivalent.

Generic prescription drugs are lower-cost alternatives to brand name drugs. They use the same active ingredients as their brand name counterparts and work the same way. According to the FDA, generic drugs are the same as brand name drugs in safety, strength, quality, the way they work, how they’re taken and the way they should be used.

grievance - Any issue or concern expressing dissatisfaction with products, services, operations and/or protocol made to a health plan from a customer, state insurance department or other party on behalf of a customer.

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health benefits package - The services and coverage a health plan offers a group or individual.

Health Care Financing Administration (HCFA) - Previous name for the federal agency responsible for administering Medicare and overseeing states' administration of Medicaid. Now known as the Centers for Medicare and Medicaid Services (CMS).

health coverage - The payment of benefits for covered sickness or injury. This may include dental, medical and vision care, as well as other benefits.

Health Insurance Portability and Accountability Act (HIPAA) - A federal law intended to improve the availability and continuity of health insurance coverage that, among other things, places limits on exclusions for pre-existing medical conditions; permits certain individuals to enroll for available group health care coverage when they lose other health coverage or have a new dependent; prohibits discrimination in group enrollment based on health status; guarantees the availability of health coverage to small employers and the renewability of health insurance coverage in the small and large group markets; and requires availability of non-group coverage for certain individuals whose group coverage is terminated.

Health Maintenance Organization (HMO) - An entity that provides, offers or arranges for coverage of designated health services for its plan members for a fixed, prepaid premium. There are four basic models of HMOs: group model, individual practice association, network model and staff model. Under the Federal HMO Act and National Association of Insurance Commissioner's Model HMO Act, state and federal standards have been established to define and regulate HMO practices.Under the Federal HMO Act, an entity must have three characteristics to call itself an HMO:

  1. An organized system for providing health care or otherwise assuring health care delivery in a geographic area;
  2. An agreed upon set of basic and supplemental health maintenance and treatment services;
  3. A voluntarily enrolled group of people.

In other words, a type of Medicare Advantage plan in which you must use doctors and hospitals in the plan’s network for your care. If you go outside the network for services other than emergency care, urgent care or out-of-area renal dialysis, you are responsible for paying for your own care.

See also network model and staff model.

health plan - Health maintenance organization, preferred provider organization, insured plan, self-funded plan or other entity that covers health care services.

high-deductible Medicare Advantage plan - A health insurance plan in which you pay a significant deductible (usually more than $1,000) before the plan begins to help with your costs.

Home Health Agency (HHA) - A facility or program licensed, certified or otherwise authorized according to state and federal laws to provide health care services in the home.

home health care - In Original Medicare, skilled nursing care and therapy, such as speech therapy or physical therapy, provided on a part-time or intermittent basis to those who cannot leave the home.

hospice - A facility or program engaged in providing palliative and supportive care of the terminally ill, and licensed, certified or otherwise authorized according to the law of jurisdiction in which services are received. Hospice care typically focuses on controlling symptoms and managing pain. In Part A, hospice care also includes support services for both patient and caregivers. Part A covers hospice care received at home and care received in a hospice outside the home.

human risk management - A service designed to reduce the demand for treatment by identifying, assessing, and managing individuals' medical or behavioral health risks before treatment becomes imperative. Human risk management is designed to respond to employee risk areas and to address problems/issues before they become psychological, medical or financial crises.

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impairment - Any loss or abnormality of psychological, physiological or anatomical structure or function (e.g., hearing loss).

in-area services - Health care received within the authorized service area from a contracted provider that is contracted with the health plan. Also called in-network services.

Initial Enrollment Period (IEP) - When you first become eligible to enroll in Medicare or a Medicare plan. For most, it’s the seven-month period that begins three months before the month you turn 65 and ends three months after the month you turn 65.

iInpatient care - Care you receive in a hospital when you are admitted by doctor’s order. You can be in the hospital--even overnight--and not be an inpatient. For example, you may be in for observation. It’s important to ask your doctor or a hospital staff member if you have been admitted. If you are not, some of the care and services you receive may not be covered by Part A.

Integrated Provider Organization (IPO) - A corporate umbrella for the management of a diversified health care delivery system. The system may include one or more hospitals, a large group practice and other health care operations. Physicians practice as employees of the organization or in a closely affiliated physician group.

Intermediate Care Facility (ICF) - A facility providing a level of care that is less than the degree of care and treatment that a hospital or skilled nursing facility (SNF) is designed to provide, but greater than the level of room and board.

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lifetime reserve days - In Medicare Part A, a set number of covered hospital days you can draw on if you are in the hospital longer than 90 days in a benefit period. You have 60 lifetime reserve days. A lifetime reserve day cannot be replaced. When it is used up, it is gone.

long-term care - Assistance and care for people with chronic disabilities. Long-term care's goal is to help people with disabilities live as independently as possible. It is focused more on caring than on curing. Long-term care is needed by a person who requires help with the activities of daily living (ADLs) or who suffers from cognitive impairment.

In other words, care that helps with the activities of daily life, like eating, dressing and bathing, over a long period of time.

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managed care - A system of health care delivery that monitors utilization, quality of care, cost of services and measures performance. The goal is a system that delivers value by providing access to cost-effective health care services. Also known as managed health care.

managed health care plan - An entity that integrates financing and management with an employed or contracted organized provider network that delivers services to an enrolled population and uses an information system capable of monitoring and evaluating patterns of use of medical services and the appropriateness and cost of those services.

maximum out-of-pocket costs - The limit on total member co-payments, deductibles and co-insurance under a benefit contract.

Medicaid - A medical assistance program for certain individuals and families with limited incomes and resources. Medicaid is jointly funded by the federal and state governments and managed by the states. It includes programs that help pay Medicare premiums and cost-sharing.

Medical Savings Account (MSA) - A type of Medicare Advantage plan that combines a special bank savings account with a high-deductible Medicare Advantage plan. The money in the savings account can be used only for medical expenses.

medically-necessary care - Services or supplies that are needed to diagnose or treat a medical condition, according to the accepted standards of medical practice.

Medicare - A nationwide, federally-administered health insurance program that covers the costs of hospitalization, medical care, and some related services for eligible people, principally individuals age 65 and older, disabled individuals under age 65, and people of all ages with End Stage Renal Disease (ESRD).

Medicare Advantage - A type of plan offered by a private company that provides all the coverage offered by Medicare Parts A and B plus other benefits. Many Medicare Advantage plans also include prescription drug coverage.

Medicare Advantage Disenrollment Period - The period each year from January 1 to February 14 when you can leave a Medicare Advantage plan. You will return to Original Medicare automatically when you disenroll from the Medicare Advantage plan. If your Medicare Advantage plan included prescription drug coverage, you can enroll in a Medicare Part D prescription drug plan during this time.

Medicare approved amount - The amount Medicare determines to be reasonable for a covered service. Providers who “accept assignment” agree to accept this amount as payment in full. Providers who accept Medicare but not assignment can charge up to 15% above this amount.

Medicare assignment - Medicare assignment refers to the Medicare-approved amount for payment in full for a medical service. Doctors can choose to accept assignment or not. If they do not accept assignment, then they may charge more than the Medicare-approved amount for a service. This means you may pay more.

Medicare beneficiary - A person designated by Social Security as entitled to receive Medicare benefits.

Medicare+Choice plans [was "risk contract"] - An agreement between CMS and a Medicare+Choice organization (may be an HMO, PPO, PSO or Insurer) to provide one of several Medicare+Choice plans allowed under Medicare Part C. These plans include three managed care plans - HMO, PPO and POS; a Private Fee-for-Service plan; and a Medical Savings Account plan

All plans require the Medicare+Choice organization to furnish at a minimum all Medicare-covered services to Medicare-eligible enrollees for an annually determined, fixed monthly payment rate from the government and a monthly premium paid by the enrollee. Often there is no additional premium to the member. The Medicare+Choice organization then is liable for all covered services.

Medicare Open Enrollment - The time period each year during which you may enroll in Medicare prescription drug plans (Part D) and Medicare Advantage (Part C) plans. Medicare Open Enrollment is October 15 through December 7 every year.

Medicare Savings Account plan (MSA) - A type of Medicare Advantage plan that combines a high-deductible health plan with a savings account. You use money from the savings account to pay your health care costs.

Medicare Savings Program - Medicare program that helps eligible people pay some or all of their Medicare premiums. In some cases, the program may also help with deductibles, co-payments and co-insurance.

member - A person who has been enrolled in a health plan during the reporting period. Members include all people directly enrolled (enrollees/subscribers) and their eligible dependents. Also known as covered person and plan participant.

mental health provider - A psychiatrist, licensed consulting psychologist, social worker, hospital or other facility duly licensed and qualified to provide mental health services under the law of the jurisdiction in which treatment is received.

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network - The group of health care providers, such as hospitals, doctors and pharmacies, that agrees to provide care to the members of a Medicare Advantage coordinated care plan or Medicare Part D prescription drug plan. These providers are called “network providers” and “network pharmacies.”

network model HMO - A health maintenance organization which contracts with more than one physician group, and may contract with single- and multi-specialty groups. Physicians work out of their own offices.

network provider - A provider who has contracted with the health plan to deliver medical services to covered persons. The provider may be a physician, hospital, pharmacy, other facility or other health care provider who has contractually accepted the terms and conditions set forth by the health plan. Also known as network or participating provider.

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out-of-area (OOA) - Coverage for treatment obtained by a covered person temporarily outside the network service area.

out-of-network (OON) - Coverage for treatment obtained from a non-contracted provider. Typically, it requires higher co-payments and co-insurance than for treatment from a contracted provider. Some health plans do not offer benefits for out-of-network treatment, except in emergencies.

out-of-pocket costs/expenses (OOPs) - The portion of payments for covered health services required to be paid by the enrollee, including co-payments, co-insurance and deductibles.

out-of-pocket limit - A limit that Medicare Advantage plans set on the amount of money you will have to spend out of your own pocket in a plan year. In Medicare Part D plans, this is the maximum amount of money you will have to spend out of your own pocket before catastrophic coverage begins for the remainder of the year.

outpatient care - Care you receive in a clinic, hospital or health care facility when you are not admitted for an inpatient stay.

over-the-counter (OTC) drug - A drug product that does not require a prescription under federal or state law.

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Part A - The part of Original Medicare that provides help with the cost of hospital stays, skilled nursing services following a hospital stay and other kinds of skilled care.

Part B - The part of Original Medicare that provides help with the cost of doctor visits and other medical services.

Part C - Known as Medicare Advantage, this part of Medicare allows private insurance companies to offer plans that combine help paying for hospital costs (Part A) with coverage for doctor visits and other medical services (Part B) all in one plan. Many Medicare Advantage plans also include prescription drug coverage (Part D).

Part D - This part of Medicare allows private insurance companies to offer plans that help with the cost of prescription drugs. You can get Medicare Part D coverage as a standalone prescription drug plan or as part of a Medicare Advantage plan.

participating provider - A provider who has contracted with the health plan to deliver medical services to covered persons. The provider may be a physician, hospital, pharmacy, other facility or other health care provider who has contractually accepted the terms and conditions set forth by the health plan. Also known as network or in-network provider.

payer - An organization that pays for health care expense coverage.

physician - Any doctor of medicine (M.D.) or doctor of osteopathy (D.O.) who is duly licensed and qualified under the law of the jurisdiction in which treatment is received.

Point of Service (POS) plan - A type of Medicare Advantage HMO plan that allows members the ability to visit doctors and hospitals outside their network for some covered services, usually for a higher co-payment or co-insurance. Some POS plans do not require referrals for specialty services.

portability - Benefits that can be easily accessed throughout a national provider network. Relative to HIPAA, the ability to reduce or eliminate pre-existing condition limitations when an individual changes health plans by providing proof of previous continuous coverage under other recognized health plans.

practice guidelines - Systematically developed statements on medical practice that assist a practitioner and a patient in making decisions about appropriate health care for specific medical conditions. Managed care organizations frequently use these guidelines to evaluate appropriateness and medical necessity of care. Terms used synonymously include practice parameters, standard treatment protocols, and clinical practice guidelines.

pre-existing condition - Any medical condition that has been diagnosed or treated within a specified period immediately preceding the covered person's effective date of coverage. Pre-existing conditions may not be covered for some specified amount of time as defined in the certificate of coverage (usually six to 12 months). As a result of HIPAA, an individual can be required to satisfy a pre-existing waiting period only once, so long as they maintain continuous group health plan coverage with one or more carriers.

In other words, when you are applying for an insurance plan, a name for an illness or medical condition that you have already been diagnosed with.

Preferred Provider Organization (PPO) - A program that establishes contracts with providers of medical care. Providers under such contracts are referred to as preferred providers. Usually, the benefit contract provides better benefits and lower member cost for services received from preferred providers. Covered persons generally are allowed benefits for non-contracted providers' services, usually on a reimbursement basis.A PPO arrangement can be insured or self-funded. Providers may be, but are not necessarily, paid on a discounted fee-for-service basis.

preferred providers - Physicians, hospitals, and other health care providers who contract to provide health services to persons covered by a particular health plan. See also preferred provider organization.

premium - The amount paid by member to a carrier for providing coverage under a contract. Premiums typically are set in coverage classifications such as: individual, two-party and family; employee and dependent unit; employee only, employee and spouse, employee and child, and employee, spouse and child.

In other words, a fixed amount you have to pay to participate in a plan or program, usually as a monthly payment.

Prescription Drug Plan (PDP) - A standalone Medicare Part D insurance plan that helps with the cost of prescription drugs.

prescription medication - A drug that has been approved by the Food and Drug Administration and which can, under federal or state law, be dispensed only according to a prescription order from a duly licensed physician or other practitioner with dispensing authority.

preventive care - Care that is meant to keep you healthy or to find illness early when treatment is most effective. Examples of preventive care are flu shots, screening mammograms and diabetes screenings.

primary care - Basic or general health care, traditionally provided by family practice, pediatrics and internal medicine practitioners. See also secondary care.

Primary Care Provider (PCP) - A physician, the majority of whose practice is devoted to internal medicine, family/general practice and pediatrics. An obstetrician/gynecologist sometimes is considered a primary care provider for women.

Private Fee-for-Service plan (PFFS) - A Private Fee-for-Service (PFFS) plan is a Medicare Advantage plan that can be a network or non-network plan. Non-network PFFS plans offer the freedom to use any Medicare-eligible doctor, specialist and hospital who agrees to accept the plan's terms and conditions of payment, and no networks, referrals or prior authorizations are required for covered services. For network PFFS plans, you must choose from a list of approved doctors or hospitals in your plan’s network.

Program of All Inclusive Care for the Elderly (PACE) - Helps individuals over the age of 55 live independently in their communities for as long as possible by providing them with a combination of medical, social and long-term care services. PACE is available only in states that have chosen to offer it as part of their Medicaid program.

provider - A physician, hospital, group practice, nursing home, pharmacy or any individual or group of individuals that provides a health care service.

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qualified Medicare beneficiary (QMB) - A person whose income falls below 100% of federal poverty guidelines, for whom the state must pay the Medicare Part B premiums, deductibles and co-payments.

qualifying disability - A medical or physical condition that has lasted, or is expected to last, more than 12 calendar months and that prevents you from working.

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rate - The amount of money per enrollment classification paid to a carrier for medical coverage. Rates usually are charged on a monthly basis.

rebate - A monetary amount that is returned to an entity from a prescription drug manufacturer based upon utilization by a covered person or purchases by a health care provider.

reciprocity - Allows an HMO member to use an affiliated HMO's network while out of their service area and receive in-network benefits.

referral - The recommendation by a physician and/or health plan for a covered person to receive care from a different physician or facility. Sometimes required for treatment by specialists and for out-of-network treatment.

referral provider - A health care provider who renders a service to a patient who has been referred by a contracted provider or health plan.

reinsurance - Insurance purchased by an HMO, insurance company, or self-funded employer from another insurance company to protect itself against all or part of the losses that may be incurred in the process of honoring the claims of its contracted providers, policy holders, or employees and covered dependents. Also called risk control insurance or stop-loss insurance.

retiree benefits - Provided by employers to their retirees. Usually designed to supplement Medicare for Medicare-eligible retirees.

retiree health coverage - Group health insurance coverage offered through an employer or other plan sponsor to retired employees.

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second opinion - A medical opinion obtained from another health care professional, relevant to clinical evaluation, prior to the performance of a medical service or a surgical procedure. May relate to a formalized process, either voluntary or mandatory, used to help educate a patient regarding treatment alternatives and/or to determine medical necessity.

secondary care - Services provided by medical specialists, such as cardiologists, urologists and dermatologists, who generally do not have first contact with patients. See also primary care.

service area - The geographic area serviced by the health plan as approved by state and/or federal government(s), regulatory agencies and/or as detailed in the health plan’s certificate of authority. A service area is typically a county, state or region.

single-payer system - A health care financing arrangement in which money, usually from a variety of taxes, is funneled to a single entity (usually the government) that takes responsibility for the financing and administration of the health system. Single payer systems can be regional, statewide or nationwide. (This has been proposed but not implemented in the United States.)

skilled nursing care - Nursing care that should be provided only by a licensed nurse.

skilled nursing facility (SNF) - A facility, either freestanding or part of a hospital, that accepts patients in need of rehabilitation and medical care that is of a lesser intensity than that received in a hospital.

Special Election Period (SEP) - Specific times when people who qualify due to special circumstances may enroll in Medicare outside their Initial Enrollment Period or the General Enrollment Period. Usually, you don’t pay a late enrollment penalty if you sign up during a Special Election Period.

Special Needs Plans (SNP) - Health plans tailored to meet the needs of people who are eligible for Medicare and are also living on a limited income (eligible for Medicaid), reside in a long-term care facility, or have certain chronic or disabling conditions.

In other words, a type of Medicare Advantage plan that serves people with special health care needs.

staff model HMO - A health care model that employs physicians to provide health care to its members. All premiums and other revenues accrue to the HMO, which compensates physicians by salary and incentive programs.

standard benefit package - A set of specific health care benefits that is offered by delivery systems. Benefit packages could include all or some of the following: preventive care; hospital and physician services; prescription drugs; mental health and substance abuse services.

step therapy - In Medicare Part D, a special procedure you and your doctor must follow before you can use certain drugs. You must first try a less expensive drug to see if it works for you. You may try a more expensive drug that treats the same condition only if you and your doctor can show that the less expensive drug didn’t work for you.

subscriber - See enrollee.

summary plan description - A description of the entire benefits package available to an employee as required (under the Employee Retirement Income Security Act, or “ERISA”) to be given to people covered by self-funded plans.

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tiered formulary - In Medicare Part D, a drug plan formulary that divides drugs into groups. Each group, or tier, has a different level of cost sharing. For example, a generic version of a drug may have a lower co-pay than a brand name version of the drug. The details of the cost sharing vary from plan to plan.

treatment facility - A residential or non-residential facility or program licensed, certified or otherwise authorized to provide treatment of substance abuse or mental illness according to the law or jurisdiction in which treatment is received.

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urgent care - An alternative to hospital emergency department care for use in non-emergencies. Used when health conditions are urgent, but are not health- or life-threatening.

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