Medicare Glossary

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Term Definition
ESRD Network

All Medicare approved ESRD facilities in a designated geographic area specified by CMS.

ESRD Network Organization

The administrative governing body of the ESRD Network and liaison to the Federal Government.

ESRD Patient

A person with irreversible and permanent kidney failure who requires a regular course of dialysis or kidney transplantation to maintain life.

ESRD Services

The type of care or service furnished to an ESRD patient. Such types of care are transplantation; dialysis; outpatient dialysis; staff assisted dialysis; home dialysis; and self-dialysis and home dialysis training.

Fiscal Intermediary

See Intermediaries.


A listing of drugs chosen by an MCO, hospital or provider organization that indicates the specific drug(s) of choice applicable prescriptions. MCOs often tie drug benefit coverage to formulary use. See Open Formulary, Closed Formulary and Restricted Formulary.


See Hierarchical Condition Categories


See Health Care Financial Administration.


See Healthcare Common Procedural Coding System.

Health Care Finance Administration

The former name for the federal agency that administers Medicare and monitors state administration of Medicaid. The Agency is now called the Centers for Medicare and Medicaid Services (CMS.)

Health Maintenance Organization

Health Maintenance Organizations (HMOs) function much like an insurance company. They offer policies, collect premiums and bear financial risk. So how are HMOs different than regular insurance companies? Insurance companies are a third party to patients and providers. HMOs are also the provider. HMOs usually sub-contract out to provider organizations but also share financial risk with providers. HMOs require care to be delivered only by HMO providers, except in emergencies or under special benefit plans. HMOs, as the full name implies, emphasize preventive medicine.

Health Plan

A plan of benefits offering medical coverage from an insurance organization or a group with self-insurance .

Hierarchical Condition Categories (HCC)

The CMS hierarchical condition categories (CMS-HCC) model, implemented in 2004, adjusts Medicare capitation payments to Medicare Advantage health care plans for the health expenditure risk of their enrollees using a methodology involving 70 chronic disease categories and 3,100 diagnoses.


See Health Maintenance Organization.

Hospital Insurance (HI) Trust Fund

The Medicare Hospital Insurance (HI) Trust Fund is one of two trust fund accounts held by the U.S. Treasury which pay for Medicare. The HI Trust Fund pays for Medicare Part A (Hospital Insurance) benefits, such as inpatient hospital care, skilled nursing facility care,home health care, and hospice care as well as Medicare Program administration, such as costs for paying benefits, collecting Medicare taxes, and combating fraud and abuse. It is paid for through Payroll taxes paid by most employees, employers, and people who are self-employed as well as other sources, such as income taxes paid on Social Security benefits, interest earned on the trust fund investments, and Part A premiums from people who aren’t eligible for premium-free Part A.