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SeniorLAW Publications on Medicare Advantage [Medicare Part C]




SeniorLAW Publications on Medicare Part D



 
 
SeniorLAW
 
GLOSSARY OF
MEDICARE ADVANTAGE TERMS

Below are some words and phrases you may hear in connection with Medicare Advantage and a brief explanation of what they mean.

Accepting assignment: In traditional Medicare, this means that the doctor agrees to accept the Medicare approved amount as payment in full and not to bill the beneficiary anything over and above the co-pay (and deductible).

Balance Billing: The amount a provider can bill a beneficiary over and above what Medicare pays.   Generally this amount is limited to 115% of what Medicare approves.   In Medicare managed care plans, there should not be any balance billing.   However, in traditional Medicare and private fee-for-service plans, there may be balance billing unless a physician "accepts assignment".

Beneficiary: The person who is receiving Medicare benefits and services.

Capitated payment: A system of payment to insurance companies where the company is paid a set amount of money each year to take care of a beneficiary.   This involves a risk by the insurance company because there is no additional payment to the company if the services provided to that beneficiary cost more than the payment amount.   On the other hand, if the services cost less, the company makes a profit.   For Medicare Advantage plans, some of the savings, if there are any, must be passed on to beneficiaries in the form of additional services.

CMS: The federal Centers for Medicare and Medicaid Services is responsible for regulating and administering Medicare programs, managed care organizations like HMOs, Medicare Advantage and Medicare Part D plans.

Coinsurance (co-pay): The amount the beneficiary pays toward the cost of a particular service.   This can be expressed either as a percentage of the approved cost (20%) or as a set fee ($10 per visit). The coinsurance can vary based upon the type of insurance plan or even for different services within a plan itself.   This term is often used interchangeably with the term "co-pay".   However, a co-pay is generally limited to a set fee per service.

Copayment (coinsurance): The amount a beneficiary pays each time a service is received.

Coordinated care plans: This term is used to refer to a variety of managed care plans within the Medicare Advantage program including: Health Maintenance Organizations (HMOs); Preferred Provider Organizations (PPOs); and Provider-Sponsored Organizations (PSOs). This phrase describes plans where a beneficiary receives services from a fixed group of providers.   A coordinated care plan generally includes most health care services needed by a beneficiary.   Coordinated care plans may even include those services that are not covered by Medicare.

Deductible: The amount a beneficiary pays out-of-pocket before insurance benefits are paid.

Disenrollment: Cancellation of a beneficiary's enrollment in a health plan.

Fee-for-Service: The traditional method of paying providers for health care expenses on a service-by-service basis after services are performed. The method used in traditional Medicare is an "approved amount" based on usual, customary and reasonable charges or a set fee based upon a "fee schedule".   A similar process may be used by the private fee-for-service plans in Medicare Advantage.

Gatekeeper: A care provider who monitors a patient's care and decides whether or not tests, specialists, hospitalization, or other treatment is needed.   The gatekeeper also makes referrals if necessary.   Where the gatekeeper is a physician, (s)he can also be called the "primary care physician".

Grievance: Process where a Medicare Advantage enrollee can contest decisions made by the insurer that are not related to health care and treatment or payment.

HCFA: This acronym (for the federal Health Care Financing Administration) has been changed. See "CMS".

Health Maintenance Organization (HMO): A type of managed care plan where a beneficiary's "primary care physician" coordinates and controls access to care.   The beneficiary must receive medical services from an approved network of doctors, hospitals, skilled nursing facilities, and other providers included in the plan.

Independent Practice Association (IPA): A type of HMO that contracts with physicians who are in private practice (instead of groups) to provide services to patients in the physician's private office.

Lock-In: This is a provision of certain managed care plans.   A lock-in requires a beneficiary to receive all covered services through the HMO plan using its own network of providers.

Medical Savings Account (MSA): Under this type of plan, beneficiaries would combine tax-free contributions from CMS to an interest-bearing savings account with a high deductible health policy.  The policy would have to pay for at least all Medicare-covered items and services, after the beneficiary meets the annual deductible of up to $6,000.   The money in the account could be used for medical expenses, even if those expenses would not have been covered by Medicare.

Medically Necessary: This phrase is used to describe medical treatment given in accordance with generally accepted standards of medical practice.

Opt-out: This is an option available in some HMOs, (also known as a point-of-service program) which allow the beneficiary to "opt" to receive services from a provider outside of the HMO's plan, for which the beneficiary pays higher out of pocket costs.

Point-of-Service Program (POS): An option offered by an HMO in which beneficiaries can choose to go outside of the plan of network providers to receive medical care.   Beneficiaries, however, will most likely have to pay a higher amount for the service.

Precertification (see prior authorization): Approval required before either admission to a hospital or for a surgical procedure.

Pre-existing condition limitation: The time after initial enrollment in an insurance plan where policy holders are not covered for conditions that existed before enrollment in the plan.   Medicare Advantage plans cannot have a pre-existing condition limitation.

Preferred Provider Organization (PPO): A health care delivery system in which an insurer or employer negotiates price discounts with certain providers.

Primary Care Physician: A doctor or other health care professional who provides regular basic care to the enrollee of a managed care plan.  The primary care physician is usually a family or general practitioner, pediatrician, internist, or obstetrician/gynecologist. The primary care physician is also responsible for making referrals to specialists, ordering tests, or seeking authorization for hospitalization or surgery.

Prior Authorization: Approval required in advance of providing particular services to a beneficiary.

Private fee-for-service plans: These new Medicare Advantage plans will reimburse providers on a fee-for-service basis similar to traditional Medicare.   The plan's providers   may require beneficiaries to pay per-service costs in addition to co-insurance and deductibles, up to 115% of the plan's payment schedule.   For example: if a doctor charges $120 for a service and the private fee-for-service plan approves $100, the doctor could then charge the beneficiary another $15 over what the plan approved (for a total payment of $115), but not the $20 that would add up to the doctor's full charge.  The plan's rates may be different from the Medicare fee schedule.

Provider: Individual (doctor, nurse, therapist, etc.) or institution (hospital, nursing facility, etc.) providing medical care.

Provider Sponsored Organization (PSO): A PSO is defined as a public or private entity established by health care providers, which provide a substantial proportion of health care items and services directly through affiliated providers who share, directly or indirectly, substantial financial risk.

Reconsideration: The process of requesting a review of the provider's determination (or what is called Medicare's determination in traditional Medicare) that a service is not covered, that a beneficiary cannot receive a service, or that a service is no longer medically necessary.

Referral: The process in most HMOs where the patient's primary care physician authorizes special tests, treatment from a specialist, or other non-routine services.

Religious fraternal benefit society plans: These are health plans which may restrict enrollment to members of the church, convention, or group with which the society is associated.

Risk Contract: This type of managed care plan receives a set fee from the sponsoring group (such as an insurer or employer) in exchange for providing all covered care.   Once enrolled, the beneficiary is "locked-in" to using the plan's network of providers in order to have the plan cover the costs of care.

Service Area: The geographical area defined by a managed care plan within which it will provide health care services to its beneficiaries.

Utilization review: The process in which a team of doctors and other professionals regularly review treatment given to a patient in order to determine whether the treatment is appropriate and necessary.  For example, a utilization review committee could review a request for admission to a hospital and determine that the admission is either necessary or not and therefore, it is either covered or not covered by the insurance or Medicare.   Medicare utilization review committee decisions can be appealed by a beneficiary.

Waiting period: The time period after initial enrollment in an insurance plan in which policy holders are not covered at all or they are not covered for conditions that existed before enrollment in the plan (also known as a "pre-existing condition limitation").   Medicare Advantage plans cannot have a waiting period after they become effective and they cannot have a pre-existing condition limitation.

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Important! The information on this website is not intended as legal advice or representation.   No attorney-client relationship is created between SeniorLAW / Legal Action of Wisconsin and any person obtaining information from this website.   Public benefits laws change frequently.   We strive to keep this website up to date but cannot provide a guarantee that this information is accurate as of the time you are reading it.
 
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