Medicare Glossary

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Term Definition
PQRS See Physician Quality Reporting System
Preferred Provider Organization

The term Preferred Provider Organization (PPO) can be used to describe several different things: A plan of benefits that has a dual option: a higher preferred level when PPO providers are used, and a lower standard level when non-participating providers are used; or a provider organization that contracts with purchasers to be the preferred provider under their dual option plan; or an administrative organization that contracts with providers, and brokers these contracts with PPO purchasers.

Primary Care Case Management

A program where the State contracts directly with primary care providers who agree to be responsible for the provision and/or coordination of medical services to Medicaid recipients under their care. Currently, most PCCM programs pay the primary care physician a monthly case management fee in addition to reimbursing services on a fee-for-service basis.

Primary Care Physician

The physician responsible for the direct general care of each member in an MCO, and the overall coordination of any specialty care required for their patients. Also referred to as the “gatekeeper”.

Prior Authorization

In the Prospective Review process for Utilization Management, specified services require an advance approval before they are deemed to be a covered benefit.

Private Fee-For-Service Plan

A Private Fee-For-Service (PFFS) plan is a Medicare Advantage (MA) health plan, offered by a State licensed risk bearing entity, which has a yearly contract with the Centers for Medicare & Medicaid Services (CMS) to provide beneficiaries with all their Medicare benefits, plus any additional benefits the company decides to provide. The PFFS plan: Pays providers on a fee-for-service basis without placing the providers at financial risk; Varies provider payment rates only based on the specialty or location of the provider or to increase utilization of certain preventive or screening services; Does not restrict members' choices among providers that are lawfully authorized to furnish services and accept the plan's terms and conditions of payment; and Does not permit the use of prior authorization or notification.

Program of All-Inclusive Care for the Elderly

The Program of All-Inclusive Care for the Elderly (PACE) is a capitated benefit authorized by the Balanced Budget Act of 1997 (BBA) that features a comprehensive service delivery system and integrated Medicare and Medicaid financing. The program is modeled on the system of acute and long term care services developed by On Lok Senior Health Services in San Francisco, California. The PACE model was developed to address the needs of long-term care clients, providers, and payers.

Prospective Payment Assessment Commission

In 1983, the Congress created the Prospective Payment Assessment Commission to advise the secretary of the Department of Health and Human Services on Medicare's diagnosis related group-based prospective payment system. Its members are appointed by the director of the Office of Technology Assessment. The Commission's main responsibilities include recommending an appropriate annual percentage change in DRG payments; recommending needed changes in the DRG classification system and individual DRG weights; collecting and evaluating data on medical practices, patterns, and technology; and reporting on its activities.

Prospective Payment System

Medicare's acute care payment method for inpatient care. Prospective payment rates are set at a level intended to cover operating costs for treating a typical inpatient in a given diagnosis-related group. Payments for each hospital are adjusted for differences in area wages, teaching activity, care to the poor, and other factors. Hospitals may also receive additional payments to cover extra costs associated with atypical patients (outliers) in each DRG. Capital costs were phased into the system.

Provider Network

An MCO’s list of participating providers is often referred to as its network or panel of providers.

Provider Sponsored Organization

A PHO arrangement typically involving capitated risk and sometimes direct contracting with purchasers.


See Provider Sponsored Organization.


Medicare Recovery Audit Contractors


See Risk Adjustment Data Validation


See Resource-based relative value scale.