Ch. 11 Medicare

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Ch. 11 Medicare

• If you feel youve finally figured out
  Medicares rules, dont worry. The feeling will
  soon go away
• Medicare health insurance for the aged and
  disabled

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• Created in 1965 through Title XVIII of the Social
  Security Act
• See text p. 353 for categories of people covered
  by Medicare
• people who are at least 65 years old
• people who are disabled

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• People with permanent kidney failure
• DHHS has overall responsibility for administering
  the program
• Within DHHS, CMS runs the Medicare program

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• Covers over 38 million Americans
• Fiscal Intermediaries and Fiscal Agents
  non-government agencies that contract to serve as
  the claims processor between providers and the
  federal government.

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• Apply the Medicare coverage rules to determine
  the appropriateness of claims.
• Intermediaries process claims from hospitals,
  nursing facilities, home health, hospice and
  outpatient hospital claims

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• Carriers handle claims for services by
  physicians and medical suppliers
• PRO (Peer Review Organization /Quality
  Improvement Org.) is medical review entity under
  contract with HCFA to monitor the medical
  necessity, quality and

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• appropriateness of services provided to Medicare
  beneficiaries
• Hospital Insurance (Part A) covers institutional
  providers for inpatient, hospice, SNF and home
  health services

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• Supplementary Medical Insurance (SMI) Part B
  covers non-institutional health care providers of
  all outpatient services
• MedicareChoice (Part C) established by the BBA
  of 1997.

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• Expanded beneficiary options for participation in
  private sector health care plans.

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Medicare Program Financing

• Part A Hospital Insurance
• Mandatory payroll tax of 1.45 of employees
  earnings with employer match per employee
• Other sources

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• portion of income taxes levied on social security
  benefits of high income beneficiaries
• premiums from persons who are not otherwise
  eligible but choose to enroll
• reimbursement from general fund of U.S. Treasury

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• Interest earnings
• Part B Supplementary Medical Insurance
• Premium payments from beneficiaries
• Contributions from U. S. Treasury

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Medicare Part A

• Helps pay for care in hospitals (inpatient),
  skilled nursing facilities and hospice and some
  home health care
• Most people do not have to pay a monthly premium
  for Part A

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Medicare Part B

• Helps to pay for physicians services, outpatient
  hospital care, and some other medical services
  that Part A does not cover
• Premium of 54/month

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Medicare Part A

• Inpatient hospital care
• Benefit period the way Medicare measures a
  beneficiaries use of hospital and skilled nursing
  facility services

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• Benefit period starts the day of hospital
  admission and ends when the beneficiary has been
  out of the hospital or other facility primarily
  providing skilled care for 60 days in a row.

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• A inpatient hospital deductible must be paid for
  each benefit period.
• If a beneficiary is out of the hospital for at
  least 60 days in a row and then goes back in, a
  new

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• benefit period begins - coverage starts all over
  again and another deductible must be paid.
• Part A pays for up to 90 days during each benefit
  period

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• Part A pays for all covered services for first 60
  days (patient pays deductible)
• For days 61-90, Part A pays for all covered
  services except for daily coinsurance amount.

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• If more than 90 days of inpatient care are
  required during any benefit period, lifetime,
  nonrenewable reserve days can be used (note daily
  coinsurance amount) limit of 60 days

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• There is no limit to the number of benefit
  periods one can have

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Medicare Part B

• 100 annual deductible
• 20 coinsurance

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• Participating physician
• Assignment physician agrees to accept Medicare
  fee as full payment

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• May not request any added payments (beyond the
  initial annual deductible and coinsurance) from
  the beneficiary or insurer

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• If the provider does not take assignment, the
  beneficiary will be charged for the excess
• Limits exist on the excess that physicians or
  suppliers can charge

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• Limiting charge a percentage limit on fees,
  specified by legislation, that nonparticipating
  physicians may bill Medicare beneficiaries above
  the fee schedule amount.

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• Medicare Health Insurance Card
• Review p. 354
• Waiver of Liability a.k.a. Advance Beneficiary
  Notice a written statement signed by the
  beneficiary in which he/she indicates through

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• a signature that they were prospectively informed
  that Medicare does not reimburse for a particular
  health care service and that the beneficiary is
  responsible for payment of the health care
  service.

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• Two types of services that require a waiver
• noncovered services
• cases in which services are not medically
  necessary
• p. 371

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• Medicare Supplemental Insurance helps to pay
  some of the expenses that Medicare does not cover
• Medigap a health insurance policy offered by a
  private insurance company to persons on Medicare.

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• It is designed to supplement Medicare benefits
  and may pay deductibles, coinsurance amounts and
  some noncovered services.
• Benefits are predefined by federal government

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• Carriers transmit Medigap claims electronically
  for participating physicians
• Employer supplemental insurance a plan that a
  Medicare beneficiary has through a former employer

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• Medicare as primary or secondary payer
• p. 360
• see handout

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• Medicare/Medicaid relationship Medicare
  beneficiaries who have low incomes and limited
  resources may also receive help from Medicaid
  program

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• Medicare carrier will electronically transfer the
  Medicare claim and the payment information to
  Medicaid for processing.
• Can receive help with Medicare deductible and
  coinsurance and for

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• payment of services not covered by Medicare but
  covered by Medicaid