Know about Medicare Part 2
Medicare Deductibles
Deductible is a pre-determined amount that the beneficiary should pay before the medical benefits come into force.
The Part A annual deductible is $776 per benefit period. A benefit period is the period beginning with the day the patient is giving inpatient hospital treatment and ends with the day when he is out of the hospital or skilled nursing facility for 60 consecutive days.
The Part B annual deductible is $100.
Medicare Co-insurance
Co-insurance is part of the Medicare allowed amount that the patient is responsible to pay.
Co-insurance for Part B is as follows:
20% of Medicare’s approved amount, or 50% of Medicare’s approved amount for outpatient psychiatric services. After the patient has met the annual deductible, Medicare pays 80% of the approved amount (except for psychiatric services).
Medigap Coverage
This is a policy provided by private carriers to supplement Medicare’s coverage to cover services not covered by Medicare, deductibles and co-insurance. If a patient has such a supplementary coverage, it is necessary to get the details of such coverage and store it in the patient’s file.
The Medicare ID Card
This is a red, white and blue card. It gives the patient name exactly as it appears in the Social Security records. The Health Insurance Claim Number (HICN) (This is generally the beneficiary’s nine-digit Social Security Number followed by an alphabetic character say 123-45-6789A), Patient’s sex, Effective date of coverage and type of benefits is given in the card.
Participation & Non-participation
Participation means that the physician agrees to accept assignment for all Medicare claims (Assignment is an agreement between the practice and the patient wherein the patient transfers his right to receive benefits to the physician and the physician requests direct payment from Medicare); agrees to accept Medicare’s allowed charge as payment-in-full for his services; agrees to complete and file claims forms for the patient at no charge to the patient and agrees not to bill the patient for services determined by Medicare to be not reasonable and necessary (unless he provided advance written notice and the patient agreed to pay). However the physician may bill the patient for other non-covered services.
Non-participation means physicians do not sign the Medicare contract. The physician has a choice on a claim-by-claim basis to accept assignment. Payment for assigned claims to these physicians is five percent less than for participating physicians.
Medicare Fee Schedule – The Resource Based Relative Value Scale (RBRVS)
The Omnibus Budget Reconciliation Act of 1989 (OBRA, later amended in 1990) changed the way physicians were paid by Medicare. Under the Act, the payment for each service is the product of three factors: (1) A nationally uniform relative value; (2) A geographical adjustment factor; and (3) A National uniform conversion factor.
The relative value for each service is the sum of relative value units (RVUs) that reflect the resources involved in furnishing the three components of a physician’s service: (1) Work; (2) Practice Expenses; and (3) Cost of Malpractice insurance.
The geographical adjustment factor (GAF) for a geographical area is equal to the weighted average of the individual geographic practice cost indices (GPCIs) for each of the three components of the service.
The conversion factor (CF) is a national dollar value that converts RVUs into payment amounts.
Medicare as a Secondary Payer (MSP)
Medicare can be secondary to another insurance plan in the following cases:a)Patient is above 65 and is still working and is covered by an Employer Group Health Plan (EGHP) or spouse who is above 65 is employed with coverage by an EGHPb)Disability beneficiariesc)Automobile no-fault insurance or other liabilityd)Patient is covered under workers’ compensation
For individuals of age 65 and above, if either they are working or their spouses are working, Medicare can act as secondary insurance provided the benefits of the coverage with their employer is still valid and the employer has 20 or more employees. If either of these conditions is not satisfied, Medicare remains the primary payer. The employer health plan cannot supplement Medicare coverage.
For disabled beneficiaries who are covered by a large group health plan (an employer with 100 or more employees) as a current employee or as a family member of a current employee, Medicare acts as secondary. When an employee or a member of the employee’s family becomes disabled, the large group health plan is primary.
For automobile accident, fall or other liability, Medicare will make payment on conditional basis. If the liability is settled by the no-fault carrier, then Medicare needs to be reimbursed for the payment made.
Similarly for work-related injuries, Medicare will make payment on conditional basis. The primary responsibility vests with workers compensation and Federal Black Lung carriers. Once they make payment, Medicare’s payment should be refunded.
Medicare is also secondary to an EGHP for self-employed individuals who are former employees if the employer provides coverage for such individuals.
