Medicare Part C

Medicare Part C: Medicare Advantage

As noted earlier, Medicare Parts A and B are often referred to as Original Medicare. Beginning in 1999, an alternative to Original Medicare became available. In many states Medicare recipients now have the choice of enrolling in Original Medicare or one of several options under Part C. The availability and costs associated with each type of plan depend generally on the area of the country in which a Medicare Recipient lives.

Medicare Managed Care Plans

Medicare managed care plans contract with a network of approved doctors, hospitals, and other health care professionals who agree to provide services to Medicare recipients. The network receives a set monthly payment from Medicare covering all enrollees. The health care providers receive the same amount every month, regardless of the services they actually provide. This arrangement encourages health care providers to carefully consider the balance between financial concerns and providing appropriate medical care.

An advantage of the Medicare managed care plans is that older individuals can expect to receive all of their health care through a single source. One disadvantage is that plan enrollees may not be able to select their doctors or hospitals of choice. Another is that the plans offer coverage outside of their service areas for emergency and urgently needed care only. This may present problems accessing nonemergency care for snowbirds and others who are away from their homes for extended periods of time.

Medicare managed care plan sponsors enter agreements with Medicare to provide all covered Part A and Part B services to beneficiaries who enroll. Thus, individuals who select Medicare managed care plans are entitled to all the services provided under Original Medicare, plus additional benefits such as outpatient prescription drugs. You should recognize that those clients who are covered under Medicare managed care plans do not need to acquire Medicare supplement insurance.

Types of Managed Care Plans

Several type of Medicare managed care plans operate today, including HMOs and preferred provider organizations (PPOs). Some HMOs and most PPOs offer point-of-service options, under which members may use, providers outside the network in exchange for additional fees or reductions in benefit percentage amounts paid.

Private Fee-for-Service Plans

Private fee-for-service (PFFS) plans are generally more expensive than managed care plans. PFFS plans offer Medicare-approved private insurance coverage. Medicare pays the plans for Medicare-covered services, while each PFFS determines, within limits, how much to charge for the care received. A recipient is then generally responsible for the difference between the amount Medicare pays and the amount PFFS plan charges.

Notices from Medicare

The Medicare Summary Notice (MSN) is an easy-to-read monthly statement that clearly lists beneficiaries’ health insurance claims information. It replaces the Explanation of Your Medicare Part B Benefits (EOMB), the Medicare Benefit Notice (Part A), the Explanation of Medicare Benefits (Part A), and Benefit Denial letters.

The MSN lists all the services or supplies that were billed to Medicare for a 30-day period of time. Beneficiaries should check this notice to be sure they got all the services, medical supplies, or equipment that providers billed to Medicare. Medicare beneficiaries are not expected to pay anything based on this form until and if the provider bills them. The form includes instructions on how to file an appeal.

Medicare Appeals

When Medicare denies payment for a service or item that is otherwise covered by Medicare, an appeal may be in order. Payment denials can result from mistakes, insufficient information to support a claim, or subjective interpretations of Medicare coverage criteria. A waiver of liability rule sometimes protects Medicare beneficiaries from financial liability for denied claims. The rule applies when the senior did not know or could not be expected to know that Medicare would deny payment for lack of medical necessity. Normally, this means that unless a provider issues a written notice of noncoverage, they cannot bill the patient for any costs associated with a denied claim.

Even when a waiver of liability does not apply, however, beneficiaries can – and probably should – appeal denied claims. Coverage denials are not unusual for home health, ambulance, and durable medical equipment claims. It is important to note, however, that a provider-issued notice of noncoverage or Advance Beneficiary Notice (ABN) does not constitute an official Medicare coverage decision. When asked, providers must submit a bill to Medicare, even if they think that Medicare will not pay for service.  This is called a demand bill. After the Medicare fiscal intermediary or carries issues a denial, the senior can request reconsideration or review of the adverse decision. As noted above, instructions for filing an appeal request appear on the MSN. The MSN also contains notes that describe the reasons for the denial. A senior should read these carefully.

The deadline for requesting review of a coverage denial in the Original Medicare program is 120 days following the issue date of the MSN. The deadline for requesting review of a coverage denial in a Medicare Advantage plan is 60 days from the date that the MA plan issues an organizational determination. Medicare Advantage plans must offer an expedited review procedure when the standard time frame would seriously jeopardize the enrollee’s life, health, or ability to regain maximum function. In these cases, the MA plan must issue a decision within 72 hours. These plans also must offer a fast-track appeal to review decisions to terminate hospital, SNF, and home health services. In both Original Medicare and Medicare Advantage, additional appeal levels exist, including hearings before administrative law judges (ALJ) when certain amounts of money are at stake (Gottlich, 2002).

“Why Aren’t I Considered Homebound?”

Consider the following complaint: “My wife took me to the mall in the winder because my doctor said I should walk to regain my strength after my stroke. I could never have left the house on my own. So how come I’m not considered homebound?” In the home health context, a provider-issued notice of noncoverage or an MSN might state that Medicare coverage is ending because the beneficiary is no longer homebound. If a senior is able to show that she can leave home only with difficulty, a request for reconsideration stands a good change of succeeding, when accompanied by information about the specific effort involved in leaving home – assistance from a family member or the use of a walker, for example. A letter from a physician that specifically addresses the senior’s situation in light of Medicare’s coverage rules is also very helpful.

Regardless of whether a senior is enrolled in Original Medicare or a Medicare Advantage plan, the rules that govern coverage decisions are the same.

To file an appeal, send to:
Departmental Appeals Board
Civil Remedies Division, Mail Stop 6132
Cohen Building, Room G-644
330 Independence Ave. S.W.
Washington, DC 20201

Medicare Supplement (Medigap) Insurance

A disadvantage of the Original Medicare program is that it covers only 57 percent of seniors’ medical expenses. Original Medicare is designed with deductibles, coinsurance charges, limits on covered days, and numerous exclusions. You should examine the Medicare Supplement (Medigap) coverage of your clients enrolled in the original Medicare program and recommend purchasing Medigap insurance if none is in place.

The front page of a Medigap policy must clearly identify it as Medicare supplement insurance. Medigap policies are health insurance policies sold by private insurance companies to fill the gaps in Original Medicare Plan coverage.

Insurance companies can only sell you a “standardized” Medigap policy. These Medigap policies must all have specific benefits so you can compare them easily.

You may be able to choose from up to 12 different standardized Medigap policies (Medigap Plans A through L). Medigap policies must follow Federal and State laws designated to protect the senior. A Medigap policy must be clearly identified on the cover as “Medicare Supplement Insurance.” Each plan, A through L, has a different set of basic and extra benefits.

It’s important to compare Medigap policies because costs can vary. The benefits in any Medigap Plan A through L are the same for any insurance company. Each insurance company decides which Medigap policies it wants to sell.

Generally, when you buy a Medigap policy, you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium. In addition, you will have to pay a premium to the Medigap insurance company.

You and your spouse must each buy separate Medigap policies. Your Medigap policy won’t cover any health care costs for your spouse (www.medicare.gov, updated March 2008).

A beneficiary who buys a Medigap policy pays premium to the insurance company selling the plan. As long as a beneficiary pays the premiums, the policy is guaranteed renewable, meaning coverage will continue year after year as long as the premium is paid. Medigap policies cover only the health care costs of the purchaser. They do not cover health care costs for spouses or other family members.

In some states, an insurance company may refuse to renew a Medigap policy bought before 1990. At the time these policies were sold, state law was not required to say the Medigap policies had to be renewed automatically each year.

Medigap policies help pay health care costs only if a beneficiary is enrolled in the Original Medicare program. They were not designed to cover to co-payments common to Medicare Advantage plans, such as Medicare HMOs.

Beneficiaries never need more than one Medigap policy. In fact, it is illegal to sell a second Medigap policy to a senior who already has one. It is also illegal in most situations to see Medigap policies to anyone who has Medicaid. As a CSA you can provide valuable assistance to seniors by making sure they do not have more than Medigap policy.

A senior generally must have both Medicare Part A and Part B in order to buy a Medigap policy. Most people may not buy a policy until they turn 65, although many states now require insurance companies to sell Medigap insurance to those who are eligible for Medicare through a disability.

Many Medigap policies offer a useful feature called crossover claims. The Medicare fiscal intermediary (for Part A claims) or carrier (for Part B claims) electronically shares with the Medigap insurer its claim and payment information. The Medigap insurer then pays the provider for deductibles or coinsurance charges that the beneficiary otherwise would owe. The benefit for seniors is that a crossover claim eliminates paperwork because there are no claims forms to file with the Medigap insurer.

“What If I Needed Skilled Nursing Facility Care for More than 100 Days?”

Mr. Reed received daily physical therapy and nursing services in a skilled nursing facility and this qualified for Medicare coverage for the entire stay. His strength and balance are improving and the doctor expects that he will be ready to return home in three weeks. Mrs. Reed wonders, however, if they will have to pay privately for his continued stay in the SNF. The answer may depend on when Mr. Reed purchased his Medigap insurance. Some of the nonstandardized Medigap policies sold before 1991 (some are still effect) offered coverage for SNF stays beyond Medicare’s 100 days. None of the 10 standard plans after 1991 (described below) offer extended SNF coverage.

Medigap Plan Coverage

If you have Original Medicare and already have a Medigap policy without prescription drug coverage, you can join a Medicare Prescription Drug Plan without changing your Medigap policy. New Medigap policies can’t include prescription drug coverage. This is because Medicare offers prescription drug coverage to everyone with Medicare (Choosing a Medigap Policy 2009). Table 19.1 shows some of the Medicare gaps that Medigap plans cover.

Providers and Medigap Polices

A beneficiary in Original Medicare who has a Medigap policy can go to any doctor, hospital, and other health care provider who accepts Medicare. However, a senior who has they type of policy called Medicare SELECT must use specific hospitals and, in some cases, specific doctors to get full insurance benefits.

Medigap Plans A through L

As mentioned previously, 12 types of Medigap policies are typically available for sale today. Table 19.1 provides you with an overview of these policies. They range from minimal supplemental coverage to policies with increasingly comprehensive coverage and higher cost.

Table: What Medigap Plans A through L Cover

This table gives you a quick look at the standardized Medigap Plans A through L and their benefits.  Every insurance company must make Medigap Plan A available if it offers any other Medigap policy.  Not all types of Medigap policies may be availble in each state.  If you need more information, call the State Insurance Department or State Health Insurance Assistance Program.

If a X mark appears in a column of this table, this means that the Medigap policy covers 100% of the described benefit.  If a column lists a percentage, this means that Medigap policy covers that percentage of the described benefit.  If no percentage appears or if a column is blank, this means the Medigap policy doesn't cover that benefit.  Note: The Medigap policy covers coinsurance only after yu have paid the deductible (unless the Medigap policy also covers the deductible).

Medigap Benefits A B C D E F* G H I   J* K L
Medicare Part A Coinsurance and all costs after hospital benefits are exhuasted X X X X X X X X X X X
Medicare Part B Coinsurance or Copayment for other than preventative sevices X X X X X X X X X X 50% 75%
Blood (First 3 Pints) X X X X X X X X X X 50% 75%
Hospice Care Coinsurance or Copayment                     50% 75%
Skilled Nursing Facility Care Coinsurance     X X X X X X X X 50% 75%
Medicare Part A Deductible   X X X X X X X X X 50% 75%
Medicare Part B Deductible     X     X       X    
Medicare Part B Excess Charges           X 80%   X X    
Foreign Travel Emergency (Up to Plan Limits)**     X X X X X X X X    
At-home Recovery (Up to Plan LImits)       X     X   X X    
Medicare Preventative Care Part B Coinsurance X X X X X X X X X X X X
Preventative Care not Covered by Medicare (up to $120)         X         X    

* Medigap Plans F and J also offer a high deductible option.  You must pay for Medicare-covered costs up to the high deductible amount ($2,000 in 2009) before your Medigap pays anything.
** You must also pay a sparate deductible for foreign travel emergency ($250 per year).

Medicare Select Policies

Medicare SELECT plans offer the benefits of traditional Medicare supplements but cost less. They are a hybrid of regular fee-for-service Medicare, Medigap policies, and managed care. A Select policy must pay the same benefits as any of the standard A through L policies. If the beneficiaries use hospitals (and sometimes doctors) inside the network, the policy pays the full benefit. If they use providers outside the network it does not cover the full benefit.

TRICARE

Military retirees, their family members and survivors, and some former spouses are eligible for medical coverage through TRICARE for Life (TFL) and TRICARE Senior Pharmacy Program. TFL, in effect since 2001, operates as a comprehensive wraparound plan for Medicare. It covers both Part A and Part B deductibles, the Part A hospital and skilled nursing facility coinsurance charges, the Part B 20 percent coinsurance charge (except for chiropractic services), the first three pints of blood, and more. TFL covers care outside the United States at 75 percent of an allowable charge (while beneficiaries pay 25 percent). Those who are eligible for TFL pay no premium for the coverage. It is funded by federal payments into the Department of Defense Medicare-Eligible Retiree Health Care Trust Fund. Seniors who are enrolled in TFL have excellent Medicare wraparound coverage and need not purchase additional Medigap insurance (Politi, 2002).

The information above is reprinted from Working with Seniors: Health, Financial and Social Issues with permission from Society of Certified Senior Advisors® . Copyright © 2009. All rights reserved. www.csa.us