Definitions – Medicare & Medicaid

Definitions – Medicare & Medicaid

Advance Beneficiary Notice
A written notice given to Medicare beneficiaries by providers (physicians, outpatient service providers, and others paid under Medicare Part B) to inform the beneficiary that Medicare is not likely to cover a specific medical item or service.  The notice must be provided  in advance of receiving the item or service in order to give the beneficiary time to consider other options.

Coordination of Benefit (COB) Rules
Regulations which determine which insurance is to be billed first (primary) for services when the patient is covered by more than one insurance. These rules are established by state and federal government guidelines.

A jointly-funded, Federal-State health insurance program for certain low-income and needy people. It covers approximately 36 million individuals including children, the aged, blind, and/or disabled, and people who are eligible to receive federally assisted income maintenance payments.  It is “need-based” not “age-based.”

A federal health benefit program for people over 65, certain disabled individuals under 65 and people of any age who have permanent kidney failure. The program covers 35 million Americans – or about 14% of the population.

Medicare Benefits Notice
A notice you get after your doctor files a claim for Part A (hospital) services in the Original Medicare Plan. It says what the provider billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay. You may also get an Explanation of Medicare Benefits (EOMB) for Part B (medical) services or a Medicare Summary Notice (MSN).

Medicare Coverage
Includes Hospital Insurance (Part A) and Medical Insurance (Part B).  Also see:  Medicare Part C and Part D.

Medicare Part A (Hospital Insurance)
Hospital insurance that pays for in-patient hospital stays, some care in a skilled nursing facility, hospice care and some home health care.  Beneficiaries are responsible for deductibles and co-payments.

Medicare Part B (Medical Insurance)
The part of Medicare that covers doctors’ services and outpatient hospital care. It also covers other medical services that Part A does not cover, like medical supplies, physical and occupational therapy.  Beneficiaries are responsible for monthly premiums, co-payments, deductibles and balance billing.

Medicare Part C  (Medicare Advantage Plans – Similar to an HMO)
This gives patients a choice to receive their Medicare benefits through private health insurance plans.  Out of pocket expenses vary by plan. Plans may include coverage for items such as dental or vision care not included as benefits in the traditional Medicare Part A .  In exchange for these benefits, enrollees may be limited to “in-network” providers they can use without paying anything extra. Going outside the network may require permission, extra fees or may not be covered.  

Medicare Part D (Prescription Coverage)
For this benefit, a person with Medicare must enroll in a stand-alone Prescription Drug Plan. These plans are approved and regulated by Medicare but designed and administered by private health insurers. Unlike Medicare Part A and B, Part D coverage isn’t standardized. Plans choose which drugs they will cover and at what level, if at all.  Part D excludes certain drugs from coverage, but for beneficiaries eligible for both Medicaid and Medicare, Medicaid may pay for drugs not covered by Part D of Medicare.

Medicare Secondary Payer
Required by law, the Medicare Secondary Payer (MSP) provisions protect the Medicare Trust Fund by ensuring Medicare doesn’t pay for services that other health insurance has primary responsibility for paying.  A provider (doctor, hospital, health care center) is obligated to determine who is the primary payer when delivering treatment/services to a Medicare patient in order to ensure appropriate billing. Click here for more on “Secondary Payer.”

Medicare Supplement Policy (Med Supp)
For an additional premium, the insurance may pay a policyholder’s Medicare co-insurance, deductible and co-payments for Medicare Part A and B and may provide additional supplemental benefits according to the policy selected.


Page last updated on Mar. 03, 2010