Chapter 9: Conquering Medicare’s Challenges



Chapter 9: Conquering Medicare’s Challenges

I. Medicare program

a. Medicare: comprehensive federal insurance program; established in 1966 to provide individuals age 65 and older financial assistance with medical expenses; in 1972, it was expanded to include certain categories of disabled people younger than 65 and those who have end-state renal disease (ESRD); administered by CMS

b. Federal Insurance Contributions Act (FICA): financed by Social Security Taxes; hospital insurance is funded from taxes withheld from employees wages and employers must match that contribution

II. Medicare Program Structure

a. Medicare Part A: hospital insurance—does not cover custodial or LTC

i. Beneficiary: an individual who has health insurance through the Medicare or Medicaid program

ii. Application is automatic: when a person applies for Social Security benefits

iii. Medicare Part A fiscal intermediary: contract with Medicare to pay Part A and some Part B bills

b. Medicare Part B: medical (physician’s care) insurance—original Medicare

i. Funding: through government and beneficiary premiums

ii. “Welcome to Medicare” physical: for beneficiaries eligible after 1/1/05; one time physical and has to be performed within the first 6 months of coverage; also helps pay for those things not covered under Part A and home healthcare; monthly premiums are deducted from Social Security benefits

iii. Medicare Part B Carrier: determines payment of Part B covered items

iv. Enrollment: before a person reaches 65, he/she must decide whether to enroll in Medicare Part A or Part B or both

v. Premiums and Cost-sharing requirements

1. Part B requires a monthly premium: the amount is subject to change every year; also requires an annual deductible; after deductible is met, Medicare pays 80% of allowable charges

2. Benefit period: duration of time during which a Medicare beneficiary is eligible for Part A benefits for services incurred in a hospital, or SNF or both

c. Medicare Part C (Medicare Advantage Plans): prepaid healthcare plans that offer regular Medicare Parts A and B coverage in addition to coverage for other services; can be in the form of HMO, PPO, FFS or MSA

d. Medicare Part D (Medicare Prescription Drug Plan): all Medicare beneficiaries must choose a prescription drug plan to help offset the cost of prescription drugs; if enrolled in Medicare Part D, there is an additional premium

e. PACE (Program of All-Inclusive Care for the Elderly): provides community-based acute and LTC services; only available in areas where PACE organization is under contract to deliver services

III. Medicare Combination Coverages

a. Medicare/Medicaid Dual Eligibility: have both Medicare and Medicaid (usually for low-income elderly and individual’s younger than 65 with disabilities)

b. Medicare Supplement Policies

i. Medigap Insurance (supplemental policies)

ii. Standard Medigap policies: 12 standard policies developed by the National Association of Insurance Commissioners and Incorporated into state and federal law

iii. Where the gaps are: see Box 9-1 p. 156

iv. What Medigap plans cover: pay most, if not all of the Medicare coinsurance amounts and may provide coverage for Medicare’s deductibles

v. Eligibility

1. open enrollment period: 6 months after an individual turns 65 and is enrolled in Part B, by law, they cannot be denied eligibility for Medigap policies

c. Medicare Secondary Payer (MSP): Medicare is not responsible for paying first because the beneficiary is covered under another insurance policy

IV. Medicare and Managed Care: HMO or PPO that uses Medicare to pay for part of its services for eligible beneficiaries

a. Medicare HMOs: maintain a network of physicians and other healthcare providers; can only receive care from providers except in emergencies; least expensive and most restrictive Medicare managed care plan

b. Medicare HMO with POS option: member is allowed to see providers who are not in the network and receive services from specialists without seeing PCP first (self-referring); a little more expensive

c. PPO: who much the same as the Medicare HMO with POS

d. PSO (provider sponsored organization): group of medical providers that skips the insurance company middleman and contracts directly with patients; member pays premiums and copayments at TOS

e. Advantages and Disadvantages of Medicare HMOs

i. Advantages

1. HMOs often don’t health screen(you can’t be denied)

2. HMOs may cover services that traditional Medicare doesn’t cover

3. enrollees don’t need Medigap insurance

4. paperwork is limited

5. enrollees don’t have to pay the Medicare deductibles and coinsurance

ii. Disadvantages

1. limited choice of providers

2. members are only covered for care received through network

3. prior approval is usually needed from PCP

4. enrollees who travel out of the HMOs service area don’t receive coverage

5. if enrollee decided to switch from HMO to traditional Medicare, there is a wait period (usually doesn’t take effect until the 1st day of the next month)

V. Preparing For the Medicare Patient

a. Medicare’s Lifetime Release of Information Form: keep a current release of information form for every patient; with Medicare they can sign a lifetime release

b. Determining Necessity (criteria p. 161)

c. Local medical review policies (LMRPs): pure medical-necessity documents; focus on whether a service is reasonable and necessary according to the icd-9 code for that CPT (procedure code)

d. Advanced beneficiary notice (ABN): if it is likely Medicare will not pay or a particular service, you should have the patient sign an ABN; they can choose to have the service and be responsible or not have the service; either way, a signature is required

e. Health insurance claim number and Identification card: (HICN); nine numeric characters (usually SSN) followed by one alpha character (see example p. 165)

VI. Medicare Billing

a. Physician fee schedule: RBRVS-resource based relative value system (example, p. 166)

b. Medicare Participating and Nonparticipating Providers

i. PAR provider: has signed a contract with Medicare; agree to accept Medicare’s payment as payment in full; Medicare usually pays 80% of allowed fees

ii. nonPAR providers: do not contract with Medicare; may choose whether to accept Medicare amount or not and patient is responsible for balance, but amount cannot exceed 115% of Medicare’s allowed amount

VII. Completing the CMS-1500 Form for Medicare Claims (see p. 167-170 and table 9-8 and see p. 172 for Medigap claim)

a. Insurance primary to medicare: use when

i. Group health plan coverage

ii. No fault or other liability

iii. Work-related illness/injury

b. Completing Medicare secondary policy claims: include copy of primary insurers EOB

c. Deadline for filing claims: should be filed no later that the end of the calendar year (Dec. 31); if not, a 10% reimbursement penalty is assessed

VIII. Medicare summary notice (MSN): monthly statement that lists Part A and Part B claims information; it is not a bill

IX. Medicare Audits and Appeals

a. Audits: to prevent downcoding=reporting lower level E & M codes

i. Prepayment audits: review claims before Medicare pays the provider

ii. Postpayment audits: analyze claims after Medicare reimbursement

b. Appeals: request for reconsideration; Medicare ensures that correct payment was made or that a clear explanation is given supporting nonpayment

c. Telephone review requests: for appeals requests that are less complex

d. Written Part B Determination: must be filed within 4 months after the date of the notice of the initial determination; any party can file

X. Quality Review Studies

a. Quality Improvement organizations: work with consumers, physicians, hospital and other caregivers to refine care delivery systems

b. Medicare beneficiary protection program: help protect the safety and heath of Medicare beneficiaries; respond to complaints; review medical records, etc.

c. Peer review organizations (PROs): each state has its own PRO; they review items or services provided to Medicare beneficiaries

d. Physician review of medical records: to determine if the care received was appropriate

e. Payment error retention program: payment error rate is the number of dollars found to be paid in error out of the total of all dollars paid for inpatient services

f. Healthcare quality improvement program: created to improve health outcomes of all medicare beneficiaries

g. Clinical laboratory improvement amendment (CLIA): regulates quality standards for all lab tests done on humans to ensure safety, accuracy, reliability, and timeliness

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