Medicare is a federal government's health insurance program authorized by Congress and administered by the Centers for Medicare and Medicaid Services (CMS formerly HCFA). CMS is responsible for the operation of the Medicare program and for selecting Medicare Admistrative Contractors to process Medicare fee-for-service The Medicare program is divided into four parts: Part A, Part B, Part C and Part D.
To be enroll in Medicare program
- Person must be 65 or older
- Retired on Social Security benefits, the spouse of a person paying into Social Security System
- Those having Social Security Disability Benefits for 24 months
- Special eligibility provides coverage those diagnosed with end-stage renal disease (ESRD)
- Medical expenses of kidney donors to person with ESRD
- Spouses and dependent children of workers who paid into Social Security
- Retired federal employees of Civil Service Retirement System (CSRS) and their spouses
Everyone eligible for Social Security Benefits is automatically enrolled in Part A, which covers hospitalization care, although Part B coverage must be elected and paid for addition premiums. Beneficiaries are responsible for deductible, co-payments, and monthly premiums for Part B.
Part A - Medicare called Hospital Insurance
The Part A covers Aged and Disabled for institutional providers inpatient services, hospice and home health services.
Individuals who did not pay Medicare taxes while working and those individuals having less than 30 quarters of coverage must pay a monthly premium to obtain Part A benefits. The monthly premiums for 2015 is $407/month (less than 30 quarters of Medicare covered employment).
* This 60-reserve-days benefit may be used only once in a lifetime.
** Neither Medicare nor private Medigap insurance will pay most long-term nursing home care.
*** To the extent of the blood deductible is met under Part B of Medicare during the calendar year, it does not have met under Part A.
Part B - Medical and Preventive Services
Part B of Medicare is Supplementary Medical Insurance (SMI) benefits for the aged and disabled. Funds for program comes from those who sign up Part B and federal government. A premium is automatically deducted from monthly checks receiving Social Security benefits, Railroad Retirement benefits, or Civil Service annuity. If a person is eligible for Medicare Part B and Medicaid some states pay for the Part B monthly premium.
Part B Coverage and Preventive Benefits Services are as follows:
Ambulance Services Ambulatory Surgery Center
Blood Transfusion Bone Mass Measurement
Cardiovascular Screening Chiropractice services
Clinical Laboratory services Clinical Trials
Doctor services DME
Emergency Department Services Eyeglasses
Flu Shots Foot Exam and Treatment
Glaucoma screening Hearing and balance exam
Hepatitis B shots HIV ScreeningHome Health Services
Kidney dialysis services and supplies Mammogram screening
Medical nutrition therapy services Mental Health care (outpatient)
Occupational Therapy Papanicolaou (Pap) test/pelvic
Physical Exam and Therapy Pneumococcal Pneumonia Vaccine (PPV)
Prescription Drugs Prostate Cancer
Second Surgical Opinion Smoking Cessation Counseling
Speech-language pathology services Surgical Dressing
Transplant Services Travel
Colorectal Cancer Screening (Fecal occult blood test, Flexible sigmoidoscopy, screening colonoscopy and Barium enema)
Diabetes Screening (Diabetes self-management screening, Diabetic Supplies)
a. Medicare/Medicaid
These patients are qualified for Old Age, Survivors and Disability Insurance (OASDI) assistance benefits older than 65 y/o, severely disabled and blind.
b. Medigap
A policy designed to supplement coverage under a fee-for-service Medicare plan. It may cover prescription drug, deductible and copayment that are typically patient's responsibility. These plans are offered by private insurance to Medicare beneficiaries and they pay monthly premiums for this supplemental coverage as shown in this image.
Each letter represents benefits policy plus other coverage. Policy sale are not available in all states, persons in some states have fewer options than others.
Medicare Secondary Payer
a. Group Health Plans:
c.Federal Black Lung Program (FECA)
Individuals who did not pay Medicare taxes while working and those individuals having less than 30 quarters of coverage must pay a monthly premium to obtain Part A benefits. The monthly premiums for 2015 is $407/month (less than 30 quarters of Medicare covered employment).
** Neither Medicare nor private Medigap insurance will pay most long-term nursing home care.
*** To the extent of the blood deductible is met under Part B of Medicare during the calendar year, it does not have met under Part A.
Part B - Medical and Preventive Services
Part B of Medicare is Supplementary Medical Insurance (SMI) benefits for the aged and disabled. Funds for program comes from those who sign up Part B and federal government. A premium is automatically deducted from monthly checks receiving Social Security benefits, Railroad Retirement benefits, or Civil Service annuity. If a person is eligible for Medicare Part B and Medicaid some states pay for the Part B monthly premium.
Part B Coverage and Preventive Benefits Services are as follows:
Ambulance Services Ambulatory Surgery Center
Blood Transfusion Bone Mass Measurement
Cardiovascular Screening Chiropractice services
Clinical Laboratory services Clinical Trials
Doctor services DME
Emergency Department Services Eyeglasses
Flu Shots Foot Exam and Treatment
Glaucoma screening Hearing and balance exam
Hepatitis B shots HIV ScreeningHome Health Services
Kidney dialysis services and supplies Mammogram screening
Medical nutrition therapy services Mental Health care (outpatient)
Occupational Therapy Papanicolaou (Pap) test/pelvic
Physical Exam and Therapy Pneumococcal Pneumonia Vaccine (PPV)
Prescription Drugs Prostate Cancer
Second Surgical Opinion Smoking Cessation Counseling
Speech-language pathology services Surgical Dressing
Transplant Services Travel
Colorectal Cancer Screening (Fecal occult blood test, Flexible sigmoidoscopy, screening colonoscopy and Barium enema)
Diabetes Screening (Diabetes self-management screening, Diabetic Supplies)
Part C - Medicare Advantage Plan (MA Plan)
MA Plan Formerly called Medicare+Choice created by the Balance Budget Act of 1997. It is formed to increase the number of health options in addition to those that are available under Parts A and B. Plans available under this program may include the following:
- Health Maintanance Organization (HMO)
- Point-of-Service (POS) Plan
- Private Fee-For-Service (PFFS) plan
- Provider-Sponsored Organization (PSO)
- Religious Fraternal Benefit Society (RFBS)
- Medicare Medical Savings Account (MSA)
Part D - Medicare Prescription Drug
This program provides seniors and people living with disabilities with a prescription drug benefit. It covers prescription drug not usually covered already by Parts A and Part B. Offered by insurance companies and other private carriers in providing drug benefits that meets Medicare standards.
Two ways to get Part D Medicare Prescription Drugs:
1. Join a Medicare Prescription Drug plan that adds drug benefits to the original Medicare
2. Join an MA Plan, such as HMO or PPO that includes
When a patient has Part D plan, obtain a photocopy of either the patient's (Part B) Medicare supplemental or (Part C) MA plan. Check whether the drug that patient needs is covered by the plan, which generic drug are available and drug that needs prior authorization, to do this call the telephone number listed on the card.
Additional Medicare Programa. Medicare/Medicaid
These patients are qualified for Old Age, Survivors and Disability Insurance (OASDI) assistance benefits older than 65 y/o, severely disabled and blind.
b. Medigap
Each letter represents benefits policy plus other coverage. Policy sale are not available in all states, persons in some states have fewer options than others.
Medicare Secondary Payer
a. Group Health Plans:
- Aged workers under an employer with more than 20 covered employees
- Disabled individuals (64 and younger) under an employer with more than 100 employees
- EGHP that have ESRD during the first 18 months of the patient eligibility to Medicare
c.Federal Black Lung Program (FECA)
d. CHAMPVA
e. Automobile Insurance
f. Third-party Liability Cases
Payment Fundamentals
Preauthorization
e. Automobile Insurance
f. Third-party Liability Cases
Payment Fundamentals
Participating Provider (PAR)
1. The physician agrees to accept assignment. A physician agrees to accept payment from Medicare (80% of approved charges + 20% payment from patient) after the Medicare annual deductible based on the calendar year (January 1 to December 31) has been met.
2. The physician must complete and submit CMS-1500 (v02/12) claim or electronic claim v5010 to fiscal intermediary.
Attention: Providers and suppliers who fail to submit claim manually or electronically are penalize up to $2,200 per claim.
Nonparticipating Provider (NonPAR)
1. NonPAR receives only 95% of Medicare approved amount. NonPAR services are reduce 5% of the Medicare Physician Fee Schedule (MPFS) and NonPAR requires to charge patient not more than the difference between Medicare approve amount and the limiting charge.
If providers decides to accept assignment in a case by case basis Medicare pays 80% of nonPAR Medicare approved amount directly to physician then physician collects 20% from the patient.
2. If NonPAR does not accept assignment on a specific claim, the physician can "balance bill" the patient 115% of NonPAR rate then Medicare sends payment to patient. Even the provider are required to submit claim for the patient and the carrier pays the patient directly, the physician must collect the entire fee from patient. So the physician must "chase the money".
Attention: The physician must carefully evaluate if they have the ability to "balance bill" and collect higher fee from the patient, because some states are prohibited or limit balance billing. So physician must look if these restrictions apply before Medicare participation or nonparticipation decision will be made.2. The physician must complete and submit CMS-1500 (v02/12) claim or electronic claim v5010 to fiscal intermediary.
Attention: Providers and suppliers who fail to submit claim manually or electronically are penalize up to $2,200 per claim.
Nonparticipating Provider (NonPAR)
1. NonPAR receives only 95% of Medicare approved amount. NonPAR services are reduce 5% of the Medicare Physician Fee Schedule (MPFS) and NonPAR requires to charge patient not more than the difference between Medicare approve amount and the limiting charge.
If providers decides to accept assignment in a case by case basis Medicare pays 80% of nonPAR Medicare approved amount directly to physician then physician collects 20% from the patient.
2. If NonPAR does not accept assignment on a specific claim, the physician can "balance bill" the patient 115% of NonPAR rate then Medicare sends payment to patient. Even the provider are required to submit claim for the patient and the carrier pays the patient directly, the physician must collect the entire fee from patient. So the physician must "chase the money".
Payment Illustration Examples
Patients who have additional insurance from group plans and MCO senior plans require prior approval for surgery services, diagnostic test and referral to specialists. Here are the list the mandatory list of procedure that needs authorization:
Bunionectomy Carotid Endarterectomy
Cataract extraction Cholecystectomy
CABG Hysterectomy
Complex peripheral revascularization Inguinal Hernia Repair
Joint replacement (hip, shoulder, knee) Transurethral Prostatectomy
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