Glossary of terms

Glossary of terms

You may hear some unfamiliar terms as you go through the access and reimbursement process, so here is a convenient glossary that quickly explains some of the most common phrases.


Ancillary Services:

Additional or supporting services provided by a hospital or other inpatient health program during a patient’s hospital stay. These may include, but are not limited to, laboratory, radiology, and postoperative recovery.


An action taken if reconsideration is sought after a request for coverage of healthcare services is denied by the patient’s health plan. Appeals may also address matters other than coverage.



The healthcare items or services covered under a health insurance plan. In a health plan, benefits may refer to the healthcare services you receive or the funding that is provided for these services.


Centers for Medicare & Medicaid Services (CMS):

The federal agency that runs Medicare, Medicaid, and several other federal healthcare programs.


Explanation of Benefits (EOB):

A summary statement that explains the claim and the amount that is the responsibility of the member, or the reason for non-payment.



A list of specific drugs and their proper dosages, usually reviewed and approved for use by health plan members. Coverage for “nonformulary” drugs may be denied or limited. In some Medicare health plans, beneficiaries only receive coverage for formulary drugs.


Healthcare Claim:

A request for payment of healthcare services received by the plan member. Claims are also called bills for all Part A and Part B services administered by Medicare Administrative Contractors, or MACs. “Claim” is the word used for Part B physician/supplier services billed to MACs.

Health Maintenance Organization (HMO):

An HMO provides care through a defined network of physicians, hospitals, and other providers. People enrolled in an HMO generally cannot receive covered services outside the provider network. They typically select a primary care physician, who makes referrals to specialists when necessary. The HMO usually does not pay for visits to specialists without a referral, or for non-emergency care received from providers that are not designated by the HMO.



Introduction of a solution directly into the bloodstream for therapeutic purposes.



A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most healthcare costs are covered if you qualify for both Medicare and Medicaid.


The federal health insurance program for people 65 years of age or older, certain younger people with disabilities, and people with end-stage renal disease (permanent kidney failure with dialysis or a transplant, sometimes called ESRD) and kidney transplant.

Medicare Part A (Hospital Insurance):

Coverage for Medicare beneficiaries that pays for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home healthcare.

Medicare Part B (Medical Insurance):

Coverage for Medicare beneficiaries that helps pay for physicians’ services, outpatient hospital care, durable medical equipment, and some medical services that are not covered by Part A.

Medicare Part C:

Coverage for Medicare beneficiaries that replaces Part A and Part B coverage and may replace Part D coverage.

Medicare Part D (Medicare Drug Benefit):

Coverage for Medicare beneficiaries that pays for prescription drugs not covered by Part B. Coverage is offered only through private plans that contract with Medicare.

Medicare Savings Programs:

Medicaid programs that help people with limited income and resources pay some or all Medicare premiums and deductibles.

Medicare Summary Notice (MSN):

A summary of Medicare Part A- and Part B-covered services paid on behalf of the beneficiary, and the amount that the beneficiary must pay.

Medigap (Medicare Supplemental Health Insurance):

A supplemental insurance to Medicare, sold by private companies, that pays for some costs that are not covered by Original Medicare.


Out-of-pocket Costs:

Expenses for medical care that are not reimbursed by an insurance carrier and are the sole responsibility of the patient. These include co-pay, deductible, or co-insurance payments.



The procedure by which some services and/or equipment are reviewed prior to being performed or ordered. This is a service offered so the patients are aware of their costs prior to services being rendered or ordered.

Preferred Provider Organization (PPO):

A managed care plan in which you use physicians, hospitals, and other providers that belong to the network. You can usually use providers outside of the network for an additional cost.

Prior Authorization (PA):

The process of getting services approved by reviewing related documentation, verifying benefits and medical necessity, and ensuring the right provider will provide those services.

Private Fee for Service (PFFS):

A Medicare PFFS plan is a type of Medicare Advantage plan (Part C) offered by a private insurance company. PFFS plans aren’t the same as Original Medicare or Medigap. The plan determines how much it will pay doctors, other healthcare providers, and hospitals, and how much you must pay when you get care.


Specialty Pharmacy:

A pharmacy that provides additional resources that may be needed for certain types of medications, like high-cost products, biologics, those that may require extra help or counseling, and those that must be handled and/or stored carefully. A specialty pharmacy provides additional resources to manage these special requirements.


Usual, Customary, and Reasonable Charge (UCR):

Charges for services that may be based on rates usually charged by physicians and providers in your area. Charge rates are compiled by independent rating services, or by the insurer that is paying a claim.