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  • Excess Charges – Should Your Medicare Supplement Clients Be Worried?

    Where Medicare Advantage plans have the question of balance billing, Medicare Supplements have excess charges. Medicare Supplement Plan Comparison ChartYou’ve likely noticed in the comparison charts for the different types of Medicare Supplement plans that plans F and G cover what they call “Part B excess charges.”
    For some clients, the idea of these unspecified excess charges can be intimidating, as they bring with them visions of crushing medical bills and the attendant financial ramifications. Even for some agents, it’s difficult to feel comfortable quantifying what excess charges are, how much they can be, and how concerned about them a client should be.

    The important things to remember are as follows:

    – Medicare participating providers are prohibited from billing Medicare beneficiaries for anything outside of their co-insurance or copayment, as determined by standard Medicare coverage rates and whatever Medicare Supplement plan the member may have.

    – Medicare Supplement plans F and G cover excess charges, so members with either plan should never run into excess charges directly, even when seeing non-participating providers.

    96% of providers who offer Medicare-covered services are participating providers. This means that Medicare beneficiaries are statistically unlikely to ever encounter a situation where excess charges are even potentially an issue. You can help members look up providers they may want to see by checking Physician Compare on Medicare.gov

    – Medicare non-participating providers can choose on a per-service basis whether or not to accept assignment, so a member who uses a non-participating provider may not necessarily see excess charges every time.

    – If a non-participating provider is going to bill for excess charges, the member will typically be required to pay for the entire service up front. The provider will then submit a claim to Medicare and the member will receive a reimbursement check for the amount covered by Medicare. The end cost to the member will likely be small, but for some people having to pay up front for the service and wait for reimbursement may be a concern.

    – Excess charges themselves are limited by Medicare. Non-participating providers who are not accepting assignment for a given service can charge up to the Medicare limiting charge of 115% of the non-participating provider reimbursement rate, which is 95% of the Medicare fee schedule amount. This works out to 109.25% of the Medicare fee schedule amount, which means the member would be liable for 9.25% of the Medicare amount, in addition to whatever usual cost-sharing may apply. For example, if the Medicare fee schedule amount for a particular office visit is $175, a non-participating provider can only be reimbursed by Medicare up to $166.25. This makes the Medicare limiting charge 115% of $166.25, or $191.19. A member with a Medicare Supplement plan that covers the cost-sharing for Part B services but does not cover excess charges (Plan A, B, C, D, or M) would be liable to pay the difference between the Medicare limiting charge and the Medicare fee schedule amount, which would be $16.19. Beneficiaries with Medicare Supplement plans that have some share of cost for Part B services and do not cover excess charges (Plan K, L, or N) would pay whatever their usual coinsurance or copayment amount is, plus the excess charges of $16.19. Beneficiaries with Plan F or G would pay nothing.

    – Excess charges only apply to services rendered by non-participating providers, not to services from providers who have completely opted-out of Medicare. Providers who have opted-out enter into a private contract with the individuals they treat, regardless of their Medicare eligibility, and patients must be notified before services are provided that they will be liable for the total cost of any services provided and informed that they may be able to have the same services covered by seeing a different provider.

    In many cases, the potential excess charges will be less than the premium difference between a plan that would cover them and one that wouldn’t. For clients whose doctors are Medicare participating, there’s likely minimal if any benefit to a plan that protects them from potential excess charges. For clients who have a Medicare Supplement plan primarily because of the flexibility it affords them in seeing whatever doctor they want, excess charges may be a more significant consideration, particularly if there’s a provider they would like to see consistently who is non-participating. Understanding the economics of excess charges and how to estimate them can help you and your clients decide how to balance premium cost and the cost of getting care to find a solution that works.

  • Balance Billing – What It Is and Why Your Medicare Advantage Clients Should Never See It

    Balance billing, in which a provider bills a member for the difference between what their carrier will pay for a service and that provider’s “retail” rate, is a relatively common practice in the medical industry and is allowable in certain circumstances for people enrolled in some types of individual and family plans. For Medicare beneficiaries enrolled in Medicare Advantage plans, however, the practice is explicitly forbidden by CMS except in a very narrow set of circumstances.

    With any Medicare Advantage HMO or PPO, including Point of Service HMOs and Regional PPOs, members are protected from paying more than their agreed upon cost sharing for any covered services. These kinds of patient protections are a key part of the Medicare system, and are agreed to by all providers who choose to treat Medicare beneficiaries, including non-contracted providers who agree to accept assignment on a case by case basis. While in some cases balance billing to the plan may be allowed, that should be handled between the provider and the plan and not involve the member. Unfortunately, if claims are processed incorrectly due to confusion or misinformation at a provider’s office, members may still end up billed for services for which, by law, they should not be liable. In the case of any confusion, members should be guided by the Explanation of Benefits provided to them by their carrier above bills sent to them by providers. It is not unusual to see a provider bill a patient before the claim has been processed and paid by the carrier, resulting in an incorrect amount shown due.

    It’s important to note that the restrictions on balance billing apply only to members in Medicare Advantage plans, and only to services covered by their MA plan and by Original Medicare. Members in Medicare Advantage plans that do not cover out-of-network providers, members seeking services that are outside the scope of their coverage (even through a Medicare participating provider), members who see providers who have opted out of Medicare entirely and are not contracted with their plan, and members with Medicare Supplement plans would all be subject to different charges and afforded different protections.

    As their agent, you are the first point of contact for questions or problems for many clients, so if a Medicare Advantage client calls you asking about a bill they received, refer to the following.

    If they saw a plan contracted provider – There is no balance billing paid by either the plan or the member. Member is responsible only for their share of cost as determined by their plan.

    If they saw a non-plan contracted, Original Medicare participating provider – There is no balance billing paid by either the plan or the member. Member is responsible only for their share of cost as determined by their plan, which may be higher than their share of cost when seeing a plan contracted provider. This situation applies only to members in plans with out-of-network benefits and does not apply to members in HMOs that do not cover out-of-network providers outside of emergencies.

    If they saw a non-plan contracted, non-Original Medicare participating provider – The Medicare Advantage plan may owe the provider the difference between the Medicare limiting charge and the member’s cost-sharing, but the member is only liable for their standard copay amount or their standard coinsurance percentage calculated using the Medicare limiting charge, not any higher amount billed to the plan by the provider. As in the above example, this only applies to members in plans with out-of-network benefits. For example, if a Medicare Advantage PPO member sees an out-of-network, non-participating provider, and the member has a 20% co-insurance for seeing out-of-network providers, that member would be liable for no more than 20% of the Medicare limiting charge, which is 109.25% of the Medicare fee schedule rate. The provider may bill the plan for any additional amount, but that should not involve the member.

    While members are of course still liable for their cost-sharing, including out-of-network charges, it’s important for agents to be aware of the potential for mistakes and to be able to help answer questions or reassure clients who may have concerns about billing, despite it being the primary responsibility of the carrier. After all, this is a service business, and even just a few pieces of information and the right phone number to call can make a client feel well taken care of, and that should always be the goal.