Confused? Here are some definitions of commonly used terms
In the world of Medicare, adults eligible for benefits may find that some of the terms used can be overwhelming or confusing.
Below are definitions of commonly used Medicare coverage terms from The United States Department of Health and Human Services' Centers for Medicare and Medicaid Services.
• Appeal: An action you can take if you disagree with a coverage or payment decision made by Medicare, your Medicare health plan, or your Medicare Prescription Drug Plan.
You can appeal if Medicare or your plan denies your request for a health care service, supply, or prescription that you think you should be able to get; payment for health care or a prescription drug you already got; to change the amount you must pay for a prescription drug; or you're already getting coverage and Medicare or your plan stops paying.
• Assignment: An agreement by your doctor, provider or supplier to be paid by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance.
• Benefit period: The way that Original Medicare measures your use of hospital and skilled nursing facility services. A benefit period begins the day you're admitted as an inpatient in a hospital or skilled nursing facility.
The benefit period ends when you haven't received any inpatient hospital care 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. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods.
• Claim: A request for payment that you submit to Medicare or other health insurance when you get items and services that you think are covered.
• Coinsurance: An amount you may be required to pay as your share of the cost for services after you pay any deductibles. Coinsurance is usually a percentage (for example, 20 percent).
• Copayment: An amount you may be required to pay as your share of the cost for a medical service or supply. A copayment is usually a set amount, rather than a percentage.
• Doughnut hole: A coverage gap in prescription drug plans where you will pay a discounted price on brand-named prescription drugs if you and your drug plan already spent a predetermined amount on drugs.
• Deductible: The amount you must pay for health care or prescriptions before Original Medicare, your prescription drug plan, or your other insurance begins to pay.
• Lifetime reserve days: In Original Medicare, these are additional days that Medicare will pay for when you're in a hospital for more than 90 days. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance.
• Medically necessary: Services or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.
• Medicare-approved amount: In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It may be less than the actual amount a doctor or supplier charges. Medicare pays part of this amount and you're responsible for the difference.
• Premium: The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.
• Preventive services: Health care to prevent illness or detect illness at an early stage, when treatment is likely to work best.
• Referral: A written order from your primary care doctor for you to see a specialist or get certain medical services. If you don't get a referral first, the plan may not pay for the services.
For an expanded list of definitions, visit http://www.medicare.gov/glossary.
Source: The United States Department of Health and Human Services' Centers for Medicare and Medicaid Services official government guide.