• Being Kept “Under Observation” Can Matter More Than You Think

    It’s a common practice for doctors to keep a patient in the hospital “under observation” when their condition needs monitoring, but may not require an extended hospital stay to stabilize. Even a patient who stays overnight in the hospital may still technically be considered an outpatient under observation. But what does this mean for your clients?

    A few important things to know about the difference between being an outpatient under observation and an admitted inpatient.

    Costs for the same services over the same timeframe can vary significantly depending on patient status – Because patients under observation are still considered outpatients, their treatment is covered by Part B. Once admitted as an inpatient, Part A takes over coverage for any required services. Because the deductibles and coinsurance are separate, the cost can vary for clients who have certain Medicare Supplement plans. For example, a client with Plan G would pay nothing for an inpatient stay, since their plan covers both the Part A deductible and Part A coinsurance, but would pay Part B charges out-of-pocket until the Part B deductible is met. While Medicare Advantage plans may not mirror the same inpatient and outpatient deductibles in their coverage, their copays and deductibles likely still differ between inpatient and outpatient services.

    Outpatient observation days do not count towards a qualifying hospital stay for skilled nursing facility care – To be eligible to have skilled nursing facility care covered under Original Medicare and a Medicare Supplement plan, a member has to first have a qualifying hospital stay of at least three days. Time spent under observation, even preceding an inpatient stay, does not count towards the required hospital days. However, Medicare Advantage plans will vary and many do not require a previous inpatient stay.

    Only a specific doctor’s order can change a patient’s status from outpatient under observation to inpatient – Inpatient status is not a factor of the length of time spent in the hospital. A patient could theoretically go to the ER, spend hours in the ER being evaluated, then be moved to a regular hospital bed for another day or more for observation, and never officially be admitted to the hospital. Only once a doctor determines that a patient requires a full inpatient stay and writes an admitting order is someone considered an inpatient.

    Some Medicare Advantage plans will not charge an Emergency Room copay and a hospital copay for the same day – Under some MA plans, the ER copay is waived if you’re admitted to the hospital during the same visit, but this does not apply if you stay in the hospital under observation and are then released.

    It’s easy to assume that being in the hospital is enough to qualify as an inpatient, but it’s important to remember that there can be more to it than simply being in a hospital bed.

  • Medicare Coming to Disabled or Injured Beneficiaries for Reimbursement?

    Many Medicare beneficiaries expect, and usually rightly so, that once a Medicare claim has been paid, there’s no reason for them to think about it again. For beneficiaries with other coverage, however, or who may receive a settlement due to an accident or injury for which their employer or another person is liable, it’s important to understand when and how Medicare may pay, and when they may seek reimbursement from the beneficiary.

    The Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2012 establishes Medicare as secondary payer in cases where a beneficiary is covered by a designated primary payer — either a group health plan, liability insurance, no-fault insurance, or a worker’s compensation plan. If claims are paid with Medicare as the primary payer and it’s later determined that some other party should have been primary, Medicare will seek reimbursement either from the other responsible party or from the beneficiary directly. Medicare ultimately has the final say in whether the person or company liable for the claim or the beneficiary themselves is responsible for the reimbursement. While this can theoretically impact any of your clients who may find themselves with additional coverage or with an accident or injury settlement, it’s disproportionately likely to affect those who are Medicare eligible due to disability, as they’re more likely to have an insurance settlement or ongoing responsibility for medicals agreement. It’s easy for clients to see the potential to have Medicare come to them for reimbursement of claims that have already been paid as a source of great anxiety, but there is some basic information that you as their agent can offer to help them understand whether they may be asked to reimburse Medicare, and how the process may play out for them.

    Correct billing can save a lot of headaches – Most doctor’s offices are familiar with how to coordinate benefits for patients who have coverage through multiple sources, but it’s good to get your clients into the habit of reviewing and saving their Explanations of Benefits and any bills they receive from their doctor’s office. It’s also important that clients know to specify to their doctor’s office if particular coverage should be charged or the bill submitted to a particular company if it changes from visit to visit. For example, if a client has both a work related back injury and an unrelated ankle issue and seeks treatment through the same orthopedist, he or she will likely need to specify on each visit who to bill for treatment to avoid the potential to have to reimburse Medicare.

    Medicare will provide conditional payment for services – Medicare will pay claims presented for treatment on behalf of current beneficiaries without concern for whether the cost may later be found to be the responsibility of another party. Once Medicare determines that another payer has primary responsibility for the claim, they’ll seek reimbursement from whover is deemed the responsible party. What this means is that if a Medicare beneficiary needs to seek treatment as a result of an injury or illness that they believe will be determined to be the fault of another party, they should still seek treatment promptly and have the claim processed by Medicare if they have not yet received a judgement or do not yet know who the primary payer will be. Claims can be settled up later, the first concern should be to get the care they need.

    Medicare can provide information on reimbursement amounts to parties settling claims in advance – If a member is in the process of negotiating a settlement or having a judgement determined as a result of an injury or illness that is the fault of another party, they can request information on the amounts for which Medicare will seek reimbursement in advance, so that that can be taken into consideration.

    There is an appeals process – If an individual beneficiary is identified as the debtor for the purposes of reimbursement, they have a right of administrative appeal and judicial review. It can, understandably, be a lengthy process, but it’s important for people to know that the appeals process is there before they feel forced to pay a bill for which they believe they are not responsible.

    Medicare does not need proof that the claim was as a result of a particular injury or incident to seek reimbursement – The wording of the statute does not require Medicare to have proof that a claim is for treatment of a particular injury or illness that is the fault of another party. Medicare is only required to demonstrate proof that another party has primary payment responsibility. Especially in the case of insurance settlements where ongoing responsibility for medicals is included, there may be some room for interpretation of whether a particular claim should be covered by Medicare as the primary payer or not.

    Medicare paying second doesn’t mean they won’t pay at all – Medicare being the secondary payer doesn’t mean they won’t pay any claims. It simply means that they’ll pay after the primary payer has covered whatever they’re responsible for, essentially the same way that a Medicare Supplement plan pays after Original Medicare has picked up their share. If there are things that Medicare would cover that for whatever reason the primary payer won’t, those services would still be covered by Medicare.

    While this isn’t a situation that you can probably expect to see very often amongst your clients, if at all, it is something to be aware of. Having Medicare asking for reimbursement of claims that have already been paid can cause a lot of stress and worry for your clients, and knowing enough to help them understand the process can go a long way towards keeping them happy and, for that matter, keeping them as clients.

  • Clarifying The “Improvement Standard” for Skilled Nursing Care

    It’s common to hear Medicare’s standard for covering skilled nursing care described in part as the patient needing to show a reasonable expectation of improvement. However, it’s important to note that that is not always accurate per the specifics of the Medicare guidelines. The 2012 settlement of the Jimmo v. Sibelius suit, in which Glenda Jimmo challenged her denial for skilled nursing care due to a “lack of improvement”, requires CMS to undertake education campaigns aimed at clarifying how long term care and skilled nursing care claims are to be adjudicated, and to allow for review and redetermination of cases where coverage has been denied due to lack of potential for improvement. However, it’s important to note that CMS is very clear to point out that this is not an expansion or modification of benefits, but a clarification of the standard that has always been in place.

    What you need to know:

    • If the treatment goal is maintenance to prevent or slow further deterioration, as in the case of a chronic and progressive illness, NO improvement standard should be applied. If care is reasonable and necessary and requires skilled nursing or skilled therapy services, it should be approved. However, if the care can be effectively provided by non-skilled personnel, coverage would not be available.
    • If the treatment goal is restorative, as in after an illness or injury, the improvement standard can be applied to evaluate whether the care being requested is reasonable and necessary.
    • In all cases, coverage determinations should be based on whether the care is medically indicated, and whether the specific services requested are reasonable and necessary.
    • The CMS education program is ongoing, so some providers may initially not believe a service will be covered because they’ve previously had it denied in similar circumstances.
    • Original Medicare’s limits on days of skilled nursing care covered are not changed, however this ruling can potentially help clients with Medicare Supplement plans or Medicare Advantage plans access the additional coverage they’re entitled to through those plans.

    It’s important to remember that the specific CMS guidelines are sometimes differently worded than the coverage guidelines of specific carriers, and that the Medicare appeals process is there in the instance of what a client believes is an incorrect denial of coverage, whether by a carrier or by Medicare itself.

  • Social Security Numbers to Be Removed From Medicare IDs

    More than a decade after the initial recommendation from the Government Accountability Office, a non-partisan agency designed to monitor the processes and spending of Congress and provide recommendations for improvements, the federal government has made the first moves towards removing Social Security numbers from Medicare numbers and identification cards. The existing numbers, which typically consist of a member’s SSN followed by a letter indicating why the individual is eligible for benefits, will be replaced over the next several years with a random member number similar to what private insurance carriers have been required to use for some time. New Medicare enrollees over the next four years will receive the new numbers, while Medicare administrators have an additional four years to issue new numbers to existing beneficiaries.

    While the recommendation to disassociate Social Security numbers from Medicare numbers has been made numerous times over the past decade, it hasn’t been acted on until now both due to the resources required to switch over the millions of current and upcoming Medicare beneficiaries, and because of the demands put on HHS by the implementation of the Affordable Care Act and the health insurance exchanges for which the legislation called.

    However, in the wake of the recent rash of high profile security breaches, including insurance giant Anthem, there’s an increasing focus on limiting the exposure of beneficiaries’ personal information, particularly Social Security numbers (and Medicare numbers by extension), to security lapses, theft, and fraud. By removing Social Security numbers from Medicare numbers, beneficiaries would no longer need to carry that information in their wallet, hand it over to reception and billing at every doctor’s office they visit, or have it on file with their local pharmacy. Depending on how individual carriers implement the change, they may not even need to have their SSN on file with their Medicare Advantage or Medicare Supplement plan at all. As a society we’re coming to understand that there’s no way to entirely prevent the kind of breaches suffered at Anthem and other companies, but we can develop strategies to limit what information is given out and when, and thereby limit the long term negative effects of any potential breaches. Unauthorized access to a member’s name, address, and randomly generated Medicare number and carrier ID number would still certainly have ramifications, but nothing close to what it would under the current Medicare number system. Social Security numbers are still the key to unlock identity theft, and for the already vulnerable population of Medicare beneficiaries, this is an important step towards helping them keep their identities, and by extension their financial and emotional well being, safe and secure.

  • 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 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.