Medicare Part B Medical Insurance

Medicare Part B Medical Insurance

Module 4:MEDICARE PART B MEDICAL INSURANCE

Objectives

Below are the topics covered in Module 4, Medicare Part B Medical Insurance. This module will ensure that counselors will attain an understanding of this Medicare benefit and the tools needed to assist their clients with problems relating to Medicare Part B.

At the end of this module are the Study Guide Tests and Answer Keys.

Medicare Part B

Medicare Part B is coverage of medical services such as doctor visits, outpatient care, ambulance services and durable medical equipment and supplies.

What does Medicare Part B Cost–Sharing mean?

Cost-sharing means that Medicare and the beneficiary will share the costs of health care.

The person with Medicare is responsible for the monthly Medicare Part B premium, annual deductible and the 20% coinsurance.

What are excess charges?

Difference between what Medicare approves for a service and what the provider of service bills.

Only providers who do not accept Medicare assignment are able to bill for these excess charges.

The excess charge is limited by law (Limiting Charge).

Note: The Limiting Charge only applies to Medicare providers (including doctors), not to suppliers (of medical equipment).

What are Medicare Part B covered services and supplies?

Physician services

Outpatient hospital services

Outpatient treatment of mental illness

Outpatient rehabilitation

Ambulance services

Durable medical equipment and supplies

Diagnostic tests

Certain preventive care services

What is Medicare Assignment?

An agreement between Medicare and a provider who agrees to accept the amount Medicare approves for a service or supply as payment in full.The person with Medicare is still responsible for the Part B deductible and 20% coinsurance. Participating providers always accept Medicare assignment.

What does “non-assigned” mean?

When a provider does not accept the amount Medicare approves as payment in full. However, a provider cannot charge whatever he or she chooses to Medicare beneficiaries. (This same protection does not apply to suppliers.) Nonparticipating providersdo not always accept Medicare assignment.

What is the Balance Billing Law?

New YorkState law limits the amount that Medicare non-participating physiciansmay charge. Non-participating physicianscannot charge beneficiaries more than 5% more than the Medicare approved amount for most services.

What is an Advance Beneficiary Notice of Noncoverage (ABN)?

This is a notice that a provider gives a person with Medicare if they do not think Medicare will pay for the service. If a beneficiary does not sign an ABN, they are not responsible to pay for servicesthat Medicare may deny as not medically necessary.

What is the Medicare Summary Notice (MSN)?

The notice is a form that explains Medicare payment and/or denial of services.

The notice is also a tool that one can use to keep records, appeal denials of service or detect and report fraud.

MEDICARE PART B MEDICAL INSURANCE

Medicare Part B is the medical coverage component of Medicare. Medicare Part B medical insurance helps to pay for medically necessary physician services, outpatient hospital services, ambulance services, prosthetic devices, medical equipment, and a number of other health services and supplies not covered by Medicare Part A hospital insurance. Module 4 considers the components of Medicare Part B coverage—physician services, outpatient hospital care, and durable medical equipment and supplies—and addresses the requirements for coverage, the extent of coverage, and the specific services that are and are not covered. It also considers what Medicare assignment means, and what a person with Medicare must know about balance billing, the Advance Beneficiary Notice of Noncoverage (ABN), and Medicare Summary Notice (MSN).

WHAT DOES MEDICARE PART B COST-SHARING MEAN?

Medicare Part B is the basis of payment, but Medicare will not pay all costs. It’s a cost-sharing program in which Medicare and the person with Medicare share the costs of health care. The person with Medicare will be responsible for five types of costs:

1. Premium - the monthly cost paid for the protection offered by Medicare Part B. The premium is deducted every month from one’s Social Security, Railroad Retirement or Civil Service Retirement check. If the person with Medicare is enrolled in Part B and does not receive a Social Security check, they will be billed every three months for their Medicare Part B premium. This premium represents 25% of the actual cost of providing Medicare Part B benefits to older and disabled Americans. All peoplepaying payroll and income taxes share the remaining 75% of the cost.

Note:American citizens and lawfully admitted aliens who are not covered by Social Security and are not eligible for premium-free Part A of Medicare still pay the same Part B premium as those who are eligible.

Note:People with Medicare with higher incomes pay higher Part B premiums. See chart in Appendix at end of this Modulefor details.

1. Part B deductible - the initial amount of medical expense for which the person with Medicare is responsible before Medicare or other insurance plans will pay.
2. Part B coinsurance –Beneficiaries’ share, usually 20%, of the Medicare approved charge. Medicare Part B pays the remaining 80% for Medicare-approved services and supplies.
3. Excess charges - the difference between what Medicare approves for the service and what the provider actually bills. Only doctors or other providers who do not accept Medicare assignment may bill these charges. And state and federal law limit the excess charge.
4. Services not covered by Medicare - services that Medicare does not cover such as dental care and routine eye care. The person with Medicare is completely responsible for these costs.

Requirements

Medicare Part B approves payment for services when the care received is considered reasonable and necessary and when a Medicare-certified doctor, therapist, supplier, laboratory, or hospital outpatient unit provides the care.

WHAT’S COVERED?

Medicare Part B covers a long list of health care services and supplies—doctorservices, outpatient hospital services, outpatient treatment of mental illness, outpatient rehabilitation therapy, ambulance services, durable medical equipment and supplies, diagnostic tests, and a number of preventive care services. Part B coverage, however, has very specific limits on the amount and type of care covered. An individual is free to choose whatever services he or she wishes, but will be responsible to pay for any services that go beyond the coverage limits established by Medicare.

DoctorServices - Care received from a doctor in his or her office, hospital, skilled nursing facility (SNF), or in the patient’s home. Medical, surgical and anesthesia services are covered under Part B. Doctorsinclude:

1. Doctors of medicine (M.D.) or osteopathy (D.O.)
2. Doctors of dental surgery or dental medicine
3. Chiropractors
4. Optometrists
5. Podiatrists

Please Note: Part B coverage of services by doctorsin all but #1 is limited.

Doctors Services Covered

Medical and surgical services including anesthesia

Diagnostic tests and procedures that are part of treatment

Radiology and pathology services (in or out of the hospital)

Certain drugs administered at the doctor’s office

Transfusions of blood and blood components (beginning with 4th pint)

Second surgical opinions

Doctors Services, Which May Be Partially Covered

Chiropractic Services - only for manipulative treatment to treat a subluxation of the spine demonstrated by X-ray or examination. Medicare will not pay for an X-ray taken by a chiropractor.

Podiatric Services - but not for routine foot care such as corn and callus removal, except when foot care is related to a serious medical condition, (e.g., diabetes with complications).

Ophthalmologic Services - treatment/diagnosis of eye disease and lenses following cataract surgery.

Dental Services - only when services are intended to correct fractures of the jaw or facial bones or involve care for facial tumors or oral cancer.

Doctors Services Not Covered

Routine physical examinations and tests related to such examinations (with limited exceptions)

Most routine foot care (with certain exceptions)

Examinations for fitting of a hearing aid

Examinations for eyeglasses except those required following cataract surgery

Most routine dental care and dentures

Acupuncture

Cosmetic surgery unless needed as a result of degenerative disease or damage from an accident

Experimental medical procedures and other services that Medicare does not consider medically reasonable or necessary

Services that are rendered by Christian Science practitioners

Other Services Covered

OutpatientHospital Services- care received in a hospital without staying overnight. Outpatient hospital services include emergency room or outpatient clinic, lab tests and X-rays billed by the hospital, medical supplies such as splints and casts, drugs which cannot be self-administered, and blood transfusions, beginning with the fourth pint, that are given as an outpatient.

Claims for outpatient hospital services are processed alongside other Medicare Part A claims although they are paid as a Medicare Part B benefit under the Outpatient Prospective Payment System (OPPS).

Under the OPPS, there are pre-set payments and pre-set copayments for each service a person with Medicare can have done in an outpatient hospital setting. For each service a person gets, the co-payment cannot be more than the Medicare Part A inpatient hospital deductible for the current calendar year. These pre-set amounts are based on different factors, such as the national median average and the hospital wage index for a particular area. The national median average is based on what it costs, on average, to provide a certain service to a patient.

The payment and co-payment amounts are subject to change annually

In areas where the hospital charges are lower than the national average, the pre-set copayment (which is based on the national average) may even be higher than what the hospital charged.

If a person with Medicare has a Medigap insurance policy, the insurer is mandated by law to pay that copayment amount, even if it is higher than the charges. However, if the person with Medicare has a retiree plan from a former employer, the insurer may or may not pay the full copayment amount. It depends on how the retiree insurance plan policy is written. If there are questions about the retiree plan payments, the person should call their retiree plan insurer.

See CMS publication entitled, “Quick Facts About Payment for Outpatient Services for People with Medicare Part B” (CMS 02118)

Outpatient Treatment of Mental Illness- For services provided prior to 2014, Medicare paid less than 80%, but now Medicare pays 80% of approved charges for mental health services, the same as for medical services. A provider such as a psychiatrist, a clinical psychologist, or a clinical social worker can provide outpatient treatment for a mental illness.

Outpatient Rehabilitation Therapy- covered if a doctor prescribes therapy and it is received either in a doctor’s office or as an outpatient of a Medicare-approved hospital, home health agency, clinic, rehabilitation or public health agency, or from an independent Medicare-certified physical or occupational therapist in his or her office or in a person’s home.

Therapy Caps -Unlike other covered services,Medicare has a financial limitation on physical, speech and occupational therapy. In 2015, there is a limit of $1,940for physical therapy (including speech therapy) and a separate limit of $1,940for occupational therapy. The $1,940limit applies to the Medicare allowance for the therapy services and is subject to the Part B deductible and 20% coinsurance. Therefore, the maximum benefit in 2015would be 80% of $1,940or $1,552.

The cap applies to therapy done in a provider’s office, in the patient’s home (if they do not receive Medicare covered home health care) andfor services done in the outpatient department of a hospital.

Note:People with Medicare may qualify for automatic exceptions to the cap based on their diagnosis or circumstances – such as a person who received two periods of physical therapy during the calendar year for two different conditions. This therapy cap exceptions process is currently available through December 2017.

Note: People with Medicare are responsible for 100% of the providers’ usual fees for therapy services above the $1,940limit, if they do not qualify for an automatic exception and they had signed an Advance Beneficiary Notice (ABN).

Ambulance Services - covered only in a Medicare-certified ambulance, if transportation in another vehicle would endanger one’s health, and only ambulance service from one’s home to the nearest hospital or skilled nursing facility or from the hospital or SNF to his or her home.Ambulance providers must always accept assignment.

Home Health Care- Part A pays for home health care until the number of Part A days in a benefit period is exhausted. Part B commences coverage of Medicare-approved home health care after the patient no longer has any Part A covered days left. (See Module 3 (Medicare Part A Hospital Insurance) for details of Medicare coverage of home health care.)

Diagnostic Tests by Medicare certified independent laboratories - The lab must always accept assignment for clinical diagnostic lab tests, which are covered at 100%, not subject to the Part B deductible or 20% coinsurance.

Portable Diagnostic X-ray services - when received at home from a Medicare-certified supplier and when ordered by the beneficiary’s physician.

Oral CancerDrugs – covers some cancer drugs you take by mouth if the same drug is available in injectable form. As new oral cancer drugs become available, Part B may cover them.

Drugs Not Usually Self-Administered

Medicare covers certain injectable drugs that are deemed to be not self-administered by the majority of the Medicare population that is using the drug. The drug must be administered “incident to” a physician’s services. “Incident to” the service means that the physician or nurse practitioner be personally present for the administration of the drug. In addition, the physician must purchase the drug. If purchased by the person with Medicare and then administered by the physician, the drug will not be covered under Medicare Part B.

Drugs NOT Usually Self-administered include drugs delivered intravenously and drugs delivered intramuscularly
Drug Usually Self-administered include drugs delivered subcutaneously or by other routes of administration such as oral, suppositories, and topical medications

Note:Doctors are required to accept assignment for the cost of these drugs.

COVERAGE: HOW MUCH? HOW LONG?

Except for the services and supplies specifically limited in dollar amounts (physical, speech and occupational therapy) or specifically excluded from coverage, as long as the service is medically necessary, Medicare Part B has no payment cap or time limit for covered services. After a person with Medicare has satisfied a yearly Part B deductible, Medicare usually pays 80% of the total approved charge for the provided health care service or supply. The approved charge for a particular service or item is a fixed amount calculated on the basis of a national Medicare Fee Schedule, a price list for hundreds of different health care procedures. The person with Medicare is then responsible for the remaining 20% of the approved charge.

Payment

Medicare Administrative Contractors (MACs) make payments for covered services and supplies according to a national Medicare Fee Schedule. Reimbursements are based on a“relative value scale,” which considers the time, and resources a doctor devotes to each procedure. The payment also considers the doctor’s overhead according to the area of the country where the doctor practices. Providers are required by law to send the person with Medicare’s claims to the Medicare Administrative Contractor (MAC) who handles Medicare payments for a specific area. The Medicare Part A and Part B MAC for all of New YorkState is National Government Services.

Note: The MAC who handles the Medicare provider claims is determined by where the service is done, NOT where the person lives. So, if a person with Medicare who lives in New Jersey has a service in New York City, the claim would be handled by National Government Services.

Palmetto GBA processes Part B claims for Railroad Retirees from all states.

NHICis theDurable Medical Equipment Medicare Administrative Contractor (DME MAC) for all of New YorkState.

Payment from the MAC goes directly to a doctor who accepts assignment. The person with Medicare will receive a Medicare Summary Notice(MSN) explaining the payment made to his or her doctor. Payment from the MAC for a claim from a doctor who does not accept assignment is sent with the MSN to the person with Medicare. When a doctor does not accept assignment, they will usually expect payment from the person with Medicare at the time of service.

Caution: A doctor of a person with Medicare has a legal responsibility to submit claims to Medicare. The doctor is not permitted to charge for this service. (Refer to Module 10 for a detailed description of the Medicare Part A and Part B claims process).