Medicare Glossary

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Term Definition

See Program of All-Inclusive Care for the Elderly

Part A

Medicare Part A is an entitlement program which covers hospital and hospital-related costs.

Part B

Medicare’s insurance program which covers physician services, prescription benefits, home health, outpatient laboratory, durable medical equipment and other predefined services.

Part C

Created under the Balanced Budget Act of 1997, it includes the Medicare Advantage program (formerly called Medicare+Choice), through which beneficiaries can enroll in additional types of health plans, including managed care plans

Part D

The Medicare Prescription Drug Benefit set forth in the Medicare Modernization Act

Patient Protection and Affordable Care Act (PPACA)

The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed into law in March, 2010. This Act, which addresses a wide range of issues, and the Health Care and Education Reconciliation Act of 2010 (signed into law on March 30, 2010) address various health care reform provisions that take effect over a phased-in timeline.


See Medicare Prescription Drug Plan


Private Fee-for-Service Plan

Physician Care Groups

A classification system to be used to determine payment for physician services. Ambulatory patient groups serve as a classification system for the facility component for outpatient reimbursement, and the PCGs constitute the professional component. PCGs are expected to combine historical charges and relative value units.

Physician Incentive plan

For Medicare purposes: any compensation arrangement at any contracting level between an MCO and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services furnished to Medicare or Medicaid enrollees in the MCO. MCOs must disclose physician incentive plans between the MCO itself and individual physicians and groups and, also, between groups or intermediate entities (e.g., certain IPAs, Physician-Hospital Organizations) and individual physicians and groups.

Physician Payment Review Commission

Created by Congress in 1986 to recommend changes in current reimbursement procedures and policies for physicians receiving payments from Medicare. The Commission prepares an annual report to Congress.

Physician Quality Reporting System

The 2006 Tax Relief and Health Care Act required the establishment of a physician quality reporting system, including an incentive payment for eligible professionals who satisfactorily report data on quality measures for covered professional services furnished to Medicare beneficiaries CMS named this program the Physician Quality Reporting Initiative (PQRI). The PQRI was further modified as a result of the Medicare, Medicaid, and SCHIP Extension Act of 2007 and the Medicare Improvements for Patients and Providers Act of 2008 In 2011, the program name was changed to Physician Quality Reporting System. For each program year, CMS implements Physician Quality Reporting through an annual rulemaking process published in the Federal Register.

Pioneer ACO Model

The Pioneer ACO Model is an initiative launched by the CMS Innovation Center designed: 1) to show how particular ACO payment arrangements can best improve care and generating savings for Medicare; 2) to test alternative program designs to inform future rulemaking for the Medicare Shared Savings Program; 3) for organizations with experience operating as ACOs or in similar arrangements, with a requirement that participating ACOs engage in similar arrangements with commercial and other payers. The Pioneer ACO Model is separate and distinct from the Medicare Shared Savings Program and other ACO initiatives.


See Preferred Provider Organization.


See Prospective Payment System