Sounds a lot like Purgatory, as I understand that term.
I'm in protestant circles mostly, so that would be different than you, but the interpretation we place on it is about rewards....that there are varying rewards in heaven.
Our interpretation would be as follows: A man's WORK is tested by fire. As the scripture says, if his work survives that test of fire then he receives a reward. If a man's work is unworthy, then he does not receive a reward. My guess is that in the same way as there is a hierarchy of angels that there will be those lower and higher in heavens rewards, perhaps in hierarchy. However, as David said, "better to be a doorkeeper in the house of God than to dwell in the tents of wickedness"