Approved Charge (Allowable Charge)
The approved or allowable charge is the amount Medicare or other insurers use as a basis for determining how much they will pay for a service or piece of equipment.
The physician or supplier who “accepts assignment” under Medicare Part B agrees to accept Medicare’s approved charge as payment in full. That means that after Medicare pays 80% of the approved amount, a doctor who accepts assignment can only bill the patient for the remaining 20% of the approved charge.
The benefit period is the number of days covered by Medicare as an inpatient in a medical facility. Each benefit period has a new deductible.
A claim is a summary of provided medical services sent to your insurance company.
Coinsurance is the amount you may be required to pay for services after you pay any plan deductibles. In Original Medicare, this is a percentage of the Medicare-approved amount and must be paid after you pay the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan, the coinsurance will vary depending on how much you have spent.
Continuous coverage means that there is no gap in medical coverage for more than 63 days. This allows beneficiaries to overcome waiting periods set by Medicare Supplement plans.
Some Medicare health and prescription drug plans require a copayment, which is a set amount you must pay for each medical service; for example, a doctor’s visit or a filled prescription may require a copay of $10 or $20. Copayments are also used for some hospital outpatient services in Original Medicare.
Cost sharing is a term that covers payments you make towards healthcare services and prescriptions, such as copayments, coinsurance, or deductibles.
Creditable coverage is prescription drug coverage from a prior or current healthcare plan that is equal to or better than Medicare coverage.
Dual eligible beneficiaries are eligible for both Medicare and Medicaid benefits.
Durable Medical Equipment (DME)
Durable medical equipment is medical equipment that is ordered by a doctor for use in the home, including walkers, wheelchairs, or hospital beds. DME is paid for under both Medicare Part B and Part A for home health services.
End-Stage Renal Disease (ESRD)
ESRD indicates permanent kidney failure, requiring a regular course of dialysis or a kidney transplant.
The excess charge (or “balance billing”) is the amount that a bill exceeds the Medicare-approved charge. Doctors are limited to 15%. Medical suppliers have no limit.
A formulary is a plan’s list of covered prescription medications, tiers, and restrictions.
Guarantee Issue Opportunity
Guarantee issue opportunities are certain times when Medicare Supplement Insurance will provide an insurance policy will be issued to anyone, regardless of health.
Home Health Care
Home health care includes limited part-time or intermittent skilled nursing care, home health aide services, physical therapy, occupational therapy, speech-language pathology services, medical social services, durable medical equipment, and medical supplies.
Hospice is care, usually pain relief, symptom management, and supportive services, given to terminally ill people and their families, usually by a public agency or private organization.
Inpatient refers to patients who are admitted to a hospital or other medical facility for care.
Lifetime Reserve Days
Original Medicare provides 60 lifetime reserve days for use after the first 90 days of a benefit period. Once you use them, they are not available for future benefit periods.
A service, treatment, or procedure that is required for your health is deemed “medically necessary” by your physician. Medicare and other insurance policies will only pay for services that are medically necessary. Medicare or your insurance company may not agree with your doctor’s opinion.
Medicare Advantage Plan
The Medicare Advantage Plan is offered by a private company contracting with Medicare to provide Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or private fee-for-service plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plans, and are not paid for under Original Medicare.
Non-participating providers have contracted with Medicare, but they do not have to accept Medicare assignment as payment in full. They bill Medicare directly, but the payment will be sent to the beneficiary to pay the provider.
Outpatient refers to patients who receive care at a hospital or other health facility without being admitted. Outpatient care also refers to care given in other locations, such as outpatient clinics.
Participating providers have contracted with Medicare to accept Medicare assignment. They are required to obtain a Medicare number and to work with Medicare directly.
A pre-existing condition is a condition for which medical advice was given or treatment recommended within the past six months.
Primary Care Doctor
Your primary care doctor is the doctor you see first for most health problems. He or she makes sure that you get the basic care that you need to stay healthy. He or she may talk with other doctors and healthcare providers about your care and refer you to them. In many HMOs, you must see your primary care doctor before you can see any other healthcare provider.
A provider is an individual or organization who provides medical services or supplies, such as a physician, hospital, x-ray company, home health agency, or pharmacy.
A referral is a written order from your primary care doctor directing you to see a specialist or receive specialized treatment. In many HMOs, you need to get a referral before you can get care from anyone other than your primary care doctor. If you don’t get a referral first, the plan may not pay for your care.
Rehabilitation is the process of recovery following an illness or injury. Rehabilitative services are ordered by your doctor and administered by nurses and physical, occupational, and speech therapists.
The service area is a geographic region where a health plan accepts members. For plans that require you to use their doctors and hospitals, it is also the area where services are provided. The plan may disenroll you if you move out of the plan’s service area.
Skilled Nursing Facility (SNF)
A skilled nursing facility is a nursing facility with the staff and equipment to give skilled nursing care, skilled rehabilitative treatment, and other related health services.
A specialist is a doctor who treats only certain parts of the body, certain health problems, or certain age groups. For example, some doctors are specialists in hearth problems (cardiologists), some doctors are specialists in cancer (oncologists), and some doctors specialize in healthcare for the elderly (geriatrics).
Speech-language therapy is a treatment used to regain and strengthen speech skills after illness or injury.
Underwriting is part of the process of insuring an individual, allowing companies to look at health history, medical records, and pre-existing conditions.