THE MEDICARE PART B BENEFIT
Are routine physical exams covered under the Medicare Part B benefit?
Does Medicare Part B pay for the entire cost of Part B services?
For other information, follow one of the links below or scroll down the page.
INTRODUCTION
Part B of Medicare is intended to fill some of the gaps in medical insurance coverage left under Part A. After the beneficiary meets the annual deductible, Part B will pay 80% of the "reasonable charge" for covered services, the reimbursement rate determined by Medicare; the beneficiary is responsible for the remaining 20% as "co-insurance." Unfortunately, the "reasonable charge" is often less than the provider's actual charge. If the provider agrees to "accept assignment," he agrees to accept Medicare's "reasonable charge" rate as payment in full and the patient is only responsible for the remaining 20%. If the provider does not accept assignment, the patient will be responsible for paying a portion of the difference between Medicare's reimbursement rate (the reasonable charge) and the provider's actual charge.
Since 1972, individuals receiving Social Security retirement benefits, individuals receiving Social Security disability benefits for 24 months, and individuals otherwise entitled to Medicare Part A, are automatically enrolled in Part B unless they decline coverage. Others must enroll in Part B by filing a request at the Social Security office during certain designated periods.
The major benefit under Part B is payment for physicians' services. In addition, home health care, durable medical equipment, outpatient physical therapy, x-ray and diagnostic tests are also covered. Since January 1, 1998 home care is covered under Part B if the individual does not meet the Part A prior institutional requirements, received coverage under Part A for the maximum annual 100 visits, or only has Part B.
The following is a list of items and services which can be covered under Part B:
1. Physicians' services;
2. Home Health Care;
3. Services and supplies, including drugs and biologicals which cannot be self-administered, furnished incidental to physicians' services;
4. Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests;
5. X-ray therapy, radium therapy and radioactive isotope therapy;
6. Surgical dressings, and splints, casts and other devices used for fractures and dislocations;
7. Durable medical equipment;
8. Prosthetic devices;
9. Braces, trusses, artificial limbs and eyes;
10. Ambulance services;
11. Some outpatient and ambulatory surgical services;
12. Some outpatient hospital services;
13. Some physical therapy services;
14. Some occupational therapy;
15. Some outpatient speech therapy;
16. Comprehensive outpatient rehabilitation facility services;
17. Rural health clinic services;
18. Institutional and home dialysis services, supplies and equipment;
19. Ambulatory surgical center services;
20. Antigens and blood clotting factors;
21. Qualified pyschologist services;
22. Therapeutic shoes for patients with severe diabetic foot disease;
23. Influenza, Pneumococcal, and Hepatitis B vaccine;
24. Some mammography screening;
25. Some pap smear screening, breast exams, and pelvic exams;
26. Some other preventive services including colorectal cancer screening, Diabetes training tests, bone mass measurements, and prostate cancer screening.
Medicare Part B is fairly comprehensive but far from complete. There are certain items and services which are excluded from coverage. Excluded services include:
1. Services which are not reasonable or necessary;
2. Custodial care;
3. Personal comfort items and services;
4. Care which does not meaningfully contribute to the treatment of illness, injury, or a malformed body member;
5. Prescription drugs which do not require administration by a physician;
6. Routine physical checkups;
7. Eyeglasses or contact lenses in most cases (see update below);
8. Eye examinations for the purpose of prescribing, fitting, or changing eyeglasses or contact lenses;
9. Hearing aids and examinations for hearing aids; (see update below)
10. Immunizations except for influenza, pneumococcal and hepatitis B vaccine;
11. Cosmetic surgery;
12. Most dental services (but see update below, which contains a brief and hearing decision pertinent to coverage of medical-related dental services);
13. Routine foot care (see update below).
Part B Premium, Deductible and Co-pays
Medicare's Part B is optional and is financed largely by monthly premiums paid by individuals enrolled in the program. Participants may have this premium automatically deducted from their Social Security check. As of 2007, for the first time in the history of the Medicare program, the premium is income based.
The standard premium for 2008 is $96.40/month for individuals with incomes under $82,000.
2008 Medicare Part B Premiums
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount
Total monthly premium amount
Less than or equal to $82,000
Less than or equal to $164,000
$0.00
$96.40
Greater than $82,000 and less than or equal to $102,000
Greater than $164,000 and less than or equal to $204,000
$25.80
$122.20
Greater than $102,000 and less than or equal to $153,000
Greater than $204,000 and less than or equal to $306,000
$64.50
$160.90
Greater than $153,000 and less than or equal to $205,000
Greater than $306,000 and less than or equal to $410,000
$103.30
$199.70
Greater than $205000
Greater than $410,000
$142.90
$238.40
In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:
Beneficiaries who are married but file a separate tax return from their spouse:
Income-related monthly adjustment amount
Total monthly premium amount
Less than or equal to $82,000
$0.00
$96.40
Greater than $82,000 and less than or equal to $123,000
$103.30
$199.70
Greater than $123,000
$142.00
$238.40
Part B has an annual deductible requirement: $135 in 2008. Each year, before Medicare pays anything, the patient must incur medical expenses to equal the deductible, based on Medicare's approved "reasonable charge," not on the provider's actual charge.
As described above, a major problem with Medicare Part B is the difference between the cost of medical items or services, particularly physicians' services, and the Medicare approved "reasonable charge." When an item or service is determined to be coverable under Medicare, it is reimbursed at 80% of the "reasonable charge" for that item or service, the patient is responsible for the remaining 20%. Unfortunately, the "reasonable charge," a rate set by Medicare, is often substantially less than the actual charge. The result of the "reasonable charge" reimbursement system is that Medicare payment, even for items and services covered by Part B, is often inadequate. The patient is left with out-of-pocket expenses.
When a physician accepts "assignment," he or she agrees to accept the Medicare approved amount as full payment. Medicare will pay 80% and the patient will pay the 20% co-payment. When a physician does not accept assignment the patient is liable for the co-payment plus a balance above the Medicare fee schedule amount. However, under federal law there is a set limit as to the amount a physician may balance bill. A physician may balance bill only 115% of the Medicare fee schedule amount. For example, assume that you go to a doctor who does not accept assignment; his actual charge may be $100, but the Medicare fee schedule is only $70. The doctor may only bill you 115% of the fee schedule amount or $80.50. If the doctor bills above $80.50 he is violating federal law.
Connecticut Information:
Many Connecticut senior centers and Social Security offices have lists of Connecticut physicians and medical equipment suppliers who accept Medicare assignment. Also, the State Department of Social Services, Elderly Services Division has a list and will assist in finding the names of physicians who accept assignment in specific areas. If the patient's physician is not on the list, encourage him or her to accept assignment.
Connecticut residents may be eligible for the State's mandatory Medicare assignment program, ConnMAP. This program requires Part B providers to accept assignment for Connecticut citizens of limited income. Applications are available at most senior centers and at the Connecticut Department of Social Services, Elderly Services Division in Hartford.
Connecticut citizens
who are at least 65 years old or who are disabled may also qualify for the
State's prescription drug program, ConnPACE. If they have quite low incomes, the
State of Connecticut will pay for part of the cost of eligible patient's
prescription drugs. Again, applications are available at most senior centers and
at the State Department of Social Services, Elderly Services Division in
Hartford. NOTE: Patients eligible for ConnPACE are automatically eligible for
ConnMAP.
AMBULANCE SERVICES (also see related articles and updates)
A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES
Medicare ambulance claims are suitable for coverage, and appeal if they have been denied, if they meet the following criteria:
1. Travel by ambulance must be the only safe means of transportation available. It is not sufficient that alternative transportation cannot be arranged. It is necessary to show that your health would have been jeopardized had you been transported any other way.
2. Transportation by ambulance must be:
a. from your home to a "local" hospital or skilled nursing facility, or if you are not in the locality or "service area" of an institution which has appropriate facilities, to the nearest institution that does;
b. to your home from a local hospital or skilled nursing facility, or from the nearest institution with appropriate facilities;
c. from a skilled nursing facility to a hospital or from a hospital to a skilled nursing facility if the discharging institution is within the service area of the admitting institution; if the discharging institution is outside the service area of the admitting institution, the admitting institution must be the nearest one with appropriate facilities;
d. from a skilled nursing facility to a skilled nursing facility, or from a hospital to a hospital, if the discharging institution was not an appropriate facility and the admitting institution is the closest one with appropriate facilities.
NOTE: Partial payment for ambulance services may be available even when the ambulance trip exceeds the distance limitations described above. For example, when a beneficiary is transported from a distant hospital or skilled nursing facility to his or her residence, payment may be based on the amount that would have been payable had the beneficiary been transported to his or her residence from the nearest institution with appropriate facilities.
3. The ambulance must be provided by a Medicare-certified provider.
4. Non-emergency transportation is covered only if the ambulance supplier obtains a physician’s written order certifying that the beneficiary must be transported in an ambulance because other means of transportation are contraindicated prior to the transportation or within 48 hours for unscheduled transportation.
OTHER IMPORTANT POINTS:
1. An "ambulance" is defined by Medicare as a vehicle specially designed for transporting the sick or injured, that contains a stretcher and other lifesaving equipment required by law, and is staffed with personnel trained to provide first aid treatment. Medicare does not consider a wheelchair van to be an "ambulance" and will therefore not cover transportation via wheelchair van or cover ambulance transportation for a patient who could have been safely transported by a wheelchair van.
2. The fact that a particular physician does not have staff privileges in a hospital is not a consideration in determining whether the hospital has appropriate facilities. Thus, ambulance service out of your locality to a distant hospital solely to obtain the services of a specific physician does not make the hospital in which the physician has staff privileges the nearest hospital with appropriate facilities.
3. Ordinarily, ambulance service to a physician's office is not covered. Coverage for transportation to a physician's office or other "outside supplier" may be allowed, however, when the patient makes a round trip from a hospital or skilled nursing facility to obtain medically necessary services not available where the beneficiary is an inpatient, or when the ambulance must make an emergency stop at the physician's office on the way to the hospital.
4. Round trip ambulance transportation for an ESRD beneficiary living at home to the nearest treatment facility capable of furnishing the necessary dialysis service is covered regardless of whether the dialysis facility is located at a hospital.
5. Ambulance services are payable under Medicare Part B. You must therefore be enrolled in Part B, and Medicare payment is subject to the Part B deductible and co-insurance requirement.
IMPORTANT INFORMATION REGARDING PARAMEDICS: Medicare usually does not pay for Paramedic Services unless they are provided by a Medicare-certified ambulance company while providing coverable transportation services. This means that if a patient is transported by a volunteer ambulance and paramedic services are provided by a professional, Medicare-certified company, Medicare will not pay for the paramedic services even if the ambulance transportation is clearly medically necessary and reasonable.
There is an exception
to this coverage limitation if the paramedic intercept services are provided in
a rural area. However, a number of conditions have to be met. The paramedic
intercept services have to be provided under a contract with one or more
volunteer ambulance companies. The volunteer ambulance company must be certified
and be prohibited by State law from billing for any service. The paramedic
services company must be Medicare certified and must bill all recipients of
their services regardless of whether or not those recipients are Medicare
beneficiaries. The payment made will be the difference between basic life
support services and advanced life support services or about $150.00.
(See related article titled "Emergency
Ambulance Services")
DIABETES SELF-MANAGEMENT TRAINING (DSMT)
WHEN SHOULD MEDICARE COVERAGE BE AVAILABLE FOR DIABETES SELF-MANAGEMENT TRAINING? A QUICK SCREEN FOR IDENTIFYING COVERABLE CASES
A beneficiary who has had any one of the following medical conditions within the twelve month period preceding the orders for the training:
New onset diabetes;
Poor glycemic control (HbA1C of $9.5 within 90 days of training);
Change in treatment regimen from no medication to medication or from oral medication to insulin;
High risk for complications based on poor glycemic control; documented acute episodes of severe hypo- or hyperglycemia within the past year necessitating third party assistance for emergency room visit or hospitalization;
High risk based on one of the following documented complications: lack of feeling in the foot or other foot complications; pre-proliferative or proliferative retinopathy, or prior laser treatment of the eye; kidney complications related to diabetes.
Note: Beneficiaries who are inpatients in a hospital, skilled nursing facility, hospice or nursing home are not eligible for services under this benefit, as it must be provided in an outpatient setting.
Initial Training: up to ten hours within 12 months to provide individuals with necessary skills (including skill to self-administer injectable drugs) and knowledge to participate in the management of his or her own condition.
Follow-up
Training: up to one hour each year.
CONDITIONS FOR COVERAGE
Physician's or qualified non-physician practitioner's orders.
Plan of care (POC) which includes content, number, frequency and duration of services.
Services reasonable and necessary for treatment of diabetes (certification on POC).
Group training if available within two months of doctor's orders.
Certified provider (may include physicians, individuals or entities that meet the applicable standards of the National Diabetes Advisory Board, or that are recognized by an organization that represents individuals with diabetes as meeting standards for furnishing the services).
PAYMENT AMOUNT DETERMINATIONS
Payment for DMST services will be made under the Medicare Part B physician fee schedule.
BLOOD GLUCOSE MONITORS AND BLOOD TESTING STRIPS
These will be covered without regard to whether the beneficiary has Type I or Type II diabetes or whether or not the beneficiary uses insulin. Blood testing strips and blood glucose monitors will be classified as durable medical equipment, and payment for the blood-testing strips will be reduced by 10 percent.
Monitors with voice synthesizers are covered for patients with bilateral best corrected visual acuity of 20/200 or worse.
The most regularly consumed supplies are the test strips and lancets used in conjunction with the glucose monitor. Generally, coverage is available for up to 100 lancets and 100 test strips every 3 months for a non-insulin dependent diabetic and 100 lancets and 100 test strips every month for an insulin dependent diabetic.
When greater than the usual quantities are required to assure appropriate glycemic control, the physician must document in the patient's medical record the reasons for the higher than usual testing frequency. The patient must forward to the supplier a log of test results corroborating higher testing frequency. Suppliers must receive a written order from the physician before they may submit claims to Medicare for reimbursement.
The physician must see and evaluate the patient within 6 months prior to ordering (and renewing prescriptions for) higher than usual quantities.
For information on Connecticut education programs recognized by the American Diabetes Association, click here.
For
additional information on diabetes from the American Diabetes
Association, click here.
MEDICAL NUTRITION THERAPY SERVICES (MNT) FOR BENEFICIARIES WITH DIABETES OR RENAL DISEASE
What type of services are covered for medical nutrition therapy?
Is medical nutrition therapy covered for individuals undergoing maintenance dialysis?
Is medical nutrition therapy covered for an individual with both renal disease and diabetes?
Pursuant to § 105 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), as of January 1, 2002, medical nutrition therapy services are available for beneficiaries with diabetes or renal disease.
WHO’S COVERED
A beneficiary
with renal disease, which is defined as having chronic renal insufficiency
[and the medical condition of a beneficiary who has been discharged from the
hospital after a successful renal transplant within the last 6 months.]
Chronic renal insufficiency means a reduction in renal function not severe
enough to require dialysis or transplantation (glomerular filtration rate (GFR)
13-50 ml/min1.73m2).
A beneficiary with diabetes, which is defined as diabetes mellitus Type I (an autoimmune disease that destroys the beta cells of the pancreas, leading to insulin deficiency) and Type II (familial hyperglycemia). The diagnostic criterion for a diagnosis of diabetes is a fasting glucose greater than or equal to 126 mg/dl. These definitions come from the Institute of Medicare 2000 Report, The Role of Nutrition in Maintaining Health in the Nation’s Elderly.
An initial visit
for an assessment; follow-up visits for interventions; and reassessments as
necessary during the 12 month period beginning with the initial assessment
("episode of care") to assure compliance with the dietary plan.
A specific,
maximum number of hours will be reimbursable in an episode of care. The
maximum number of hours will be set forth in a future Center for Medicare
and Medicaid Program Memorandum.
The number of hours covered for diabetes may be different than the number of hours covered for renal disease.
CONDITIONS FOR COVERAGE
The treating physician must make a referral and indicated a diagnosis of diabetes or renal disease.
Services may be
provided either on an individual or group basis without restrictions.
When follow-up
Diabetes Self-management Tranining (DSMT) and Medical Nutrition Therapy (MNT)
services are provided within the same time period, hours from both benefits
will be counted toward the maximum number of covered hours allowed during
the episode of care.
MNT services must be provided by a professional as defined below.
MNT services are
not covered for beneficiaries receiving maintenance dialysis for which
payment is made under § 1881 of the Act.
If a beneficiary
has both renal disease and diabetes, they may receive only the number of
hours covered under this benefit for either renal disease or diabetes,
whichever is greater.
A beneficiary
cannot receive MNT if they have received an initial DSMT within the last 12
months unless the need for reassessment and additional therapy has been
documented by the treating physician as a result of a change in diagnosis or
medical condition or the beneficiary receiving DSMT is subsequently
diagnosed with renal disease.
If a beneficiary diagnosed with diabetes has been referred for both follow-up DSMT and MNT services, the number of hours the beneficiary may receive is limited to the number of hours covered under either follow-up DSMT or MNT services annually, whichever is greater.
CERTIFIED PROVIDER
For Medicare Part B coverage of MNT, only a registered dietitian or nutrition professional may provide the services. This must be an individual licensed or certified in a State as of December 21, 2000; or an individual whom, on or after December 22, 2000:
Holds a
bachelor’s or higher degree granted by a regionally accredited college or
university in the united States (or an equivalent foreign degree) with
completion of the academic requirements of a program in nutrition or
dietetics, as accredited by an appropriate national accreditation
organization recognized for this purpose;
Has completed at
least 900 hours of supervised dietetics practice under the supervision of a
registered dietitian or nutrition professional; and
Is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed. In a State that does not provide for licensure or certification, the individual will be deemed to have met this requirement if he or she is recognized as a "registered dietitian" by the Commission on Dietetic Registration or its successor organization, or meets the requirements of the first two bullets of this section.
PAYMENT FOR MEDICAL NUTRITION THERAPY
Payment
will be made under the Medicare Part B physician fee schedule for
dates of service on or after January 1, 2002, to a registered
dietitian or nutrition professional that meets the above
requirements. Part B deductible and co-insurance rules apply. As
with the DSMT benefit, payment is only made for MNT services
actually attended by the beneficiary and documented by the provider
and for beneficiaries that are not inpatients of a hospital or
skilled nursing facility.
DURABLE MEDICAL EQUIPMENT
What is durable medical equipment and when will Medicare pay for it?
I have chronic obstructive pulmonary disease. Will Medicare reimburse me for an air conditioner?
A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES
Medicare claims for durable medical equipment are suitable for coverage, and appeal if they have been denied, if they meet the following criteria:
1. The equipment has been prescribed as medically necessary by your physician. Most items require a Certificate of Medical Necessity (CMN) filled out by a physician; and
2. It must be able to withstand repeated use. Medicare expects a piece of equipment to last 5 years and will not usually pay for like or similar equipment within that time frame; and
3. It must be primarily and customarily used for a medical purpose; and
4. It must generally not be useful to a person in the absence of illness or injury; and
5. It must be appropriate for use at home. Under a provision of federal law, a skilled nursing facility is not considered home; and
6. The durable medical equipment supplier must be a Medicare-certified provider.
ADDITIONAL HINTS:
1. The attending physician is ALWAYS the key to obtaining Medicare benefits; obtain a statement from the beneficiary's physician stating that the durable medical equipment prescribed is medically necessary, is part of his course of treatment, and explaining its therapeutic value to the beneficiary.
2. The equipment must not only be medically necessary for the beneficiary, it must also generally be used for medical purposes. Thus, an air conditioner, while perhaps medically necessary for the individual patient, is not generally considered to be for medical purposes and is, therefore, not covered. (Water mattresses, now used for non-medical purposes but originally created for patients, will be coverable if medically necessary.)
3. Iron lungs, oxygen tents, hospital beds, and wheelchairs are included in Medicare's definition of durable medical equipment.
4. Some prosthetic devices, braces, artificial limbs and eyes are covered by Medicare Part B as "medical and other health services," not as durable medical equipment.
5. A seat lift chair mechanism will be covered by Medicare as durable medical equipment if:
a. It is prescribed by a physician; and
b. it is included in the physician's course of treatment; and
c. it is likely to effect improvement OR arrest or retard deterioration of the patient's condition; and
d. the alternative would be chair or bed confinement; and
e. the seat lift is the type which can be controlled by the patient and effectively assist him in standing up and sitting down without other assistance. (Seat lifts which operate by a spring release mechanism with a sudden, catapult-like motion will NOT be covered.)
6. Durable medical equipment costs are payable under Medicare Part B. You must therefore be enrolled in Part B and Medicare payment is subject to the Part B deductible and co-insurance requirements.
Please note: There are several potential changes to this section as a result of the Deficit Reduction Act, however there is a distinct possibility that this law will be repealed, and the changes will not be permanent. Read about the possible changes HERE.
For inexpensive
or customized items, Medicare pays 80% of its approved charge.
Wheelchairs, hospital beds, some walkers, etc., are considered capped rental items. The capped rental policy allows one to rent for 10 continuous months followed by either a rental option or a purchase option as follows:
Rental Option: After the initial 10 month rental, Medicare pays 5 more months of rental payments (total of 15) then pays for lifetime use of the equipment with only a maintenance/service assessment every six months thereafter. The equipment remains the property of the supplier.
Purchase Option: After the initial 10 month rental, Medicare pays for 3 more months of rental payment (total of 13) followed by 80% of the purchase price and any subsequent maintenance. The equipment belongs to the beneficiary.
Payment may also be made for repairs, maintenance, and delivery as well as for expendable and non-reusable items essential to the effective use of the equipment. However, routine periodic servicing such as testing, cleaning, regulating, and checking of the beneficiary's equipment is not covered. More extensive maintenance as recommended by the manufacturer and performed by authorized technicians is covered as repairs. This might include breaking down sealed components and performing tests that require specialized testing equipment not available to the beneficiary.
Note: Suppliers must give beneficiaries entitled to electric wheelchairs the option of purchasing at the time the supplier first furnishes the item. No rental payment will be made for the first month until the supplier notifies the carrier that the beneficiary has been given the option to either purchase or rent. If the beneficiary chooses to purchase, payment will be made on a lump sum purchase basis.
In making a decision to rent or purchase the equipment, beneficiaries should know that, for purchased equipment, they are responsible for 20% of the service charge each time the equipment is actually serviced and, for unassigned claims, the balance between the Medicare allowed amount and the supplier's charge. However, for equipment that is rented for 15 months, the beneficiary's responsibility for such service is limited to 20% coinsurance on maintenance and servicing fee payments twice per year, whether or not the equipment is actually serviced.
COMPETITIVE ACQUISITION - COMPETITIVE BIDDING PROGRAM FOR DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS) - JULY 2008
NOTE: This program was delayed by the passage of HR 6331, the Medicare Improvements for Patients and Providers Act (MIPPA), in July 2008. MIPPA terminates all contracts and requires CMS to rebid the initial 10 areas, and it extends the timeline for expansion to 80 areas until 2011. For 2009, Medicare payment for items that were to have been subject to this program will be cut 9.5%.
Replacement OF ITEMS NOT UNDER COMPETITIVE BIDDING
A capped rental item, which has been in continuous use, on either a rental or purchased basis, may be replaced if it is lost or irreparably damaged within 5 years, which is considered the "useful lifetime." The useful lifetime is based upon when the equipment is delivered to the patient, not the age of the equipment. If the patient elects to obtain a new piece of equipment, payment is made on a rental or purchase basis or a lump-sum purchase basis if a purchase agreement has been entered into. Expenses for replacement equipment required because of loss or irreparable damage will be reimbursed without a physician's order, if the equipment as originally ordered still fills the patient's needs. However, claims involving replacement equipment necessitated because of wear or a change in the patient's condition must have a new physician's order.
Payment will not be made for the replacement of rental equipment except capped rental items. However, replacement of purchased equipment can be made for:
Inexpensive or routinely purchased items
Customized items
Items available under the capped rental policy (some examples include wheelchairs, hospital beds and some walkers.)
Certain prosthetic devices (which replace all or part of an internal body organ, or replace all or part of the function of a permanently inoperative or malfunctioning internal body organ. Some examples include Parenteral and Enteral Nutrition (PEN), insertion trays, catheters, drainage bags, skin barriers, lumbar-sacral orthosis (LSO), prostheses (leg, foot, breast, knee, ankle), cardiac pacemakers, prosthetic lenses, maxillofacial devices, and devices which replace all or part of the ear or nose.)
Limited orthotic devices (items used for the correction or prevention of skeletal deformities. Some examples include a shoe that is an integral part of a leg brace or special shoe and inserts used for the prevention or management of foot ulcers in diabetics.)
Payment will not be made for the purchase and replacement of:
Frequently serviced items
Oxygen equipment
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
Will Medicare pay for fixing a fractured hip on an outpatient basis or only on an inpatient basis?
Are there limits on the amount Medicare will pay for outpatient therapy?
As of August 1, 2000, Medicare changed the way it pays for outpatient hospital and community health center services. This system, called the outpatient prospective payment system (OPPS), changed how much Medicare beneficiaries pay and how much Medicare pays for outpatient services, such as emergency room visits or one day surgery services. This payment system was one of the many changes made by the Balanced Budget Act of 1997 (BBA).
Under OPPS, the beneficiary must continue to pay the Part B deductible ($110 per year in 2005) and, depending upon the service received, either a 20% coinsurance amount (as before the BBA) or a fixed co-payment amount for each service. The fixed co-payment amount is determined by taking into account a number of factors including the national median charge for the particular service received and the hospital wages in which the service was provided.
Depending upon what service was received and what hospital provided the service, the beneficiary’s out-of-pocket costs may be higher than they were before the BBA for the same service. Hospitals may choose to lower the fixed co-payment amount for a particular service to a minimum of 20% but if they do, they must keep the lower co-payment for one calendar year and they must charge all Medicare patients that lower amount.
The Medicare, Medicaid and SHIP Benefit Improvement and Protection Act of 2000 (BIPA) places a cap of 57% on the fixed co-payment amount for services received after April 1, 2001. That cap will be incrementally lowered each year until it reaches 40% for services received in the year 2006 and thereafter. Medigap insurance will still cover co-insurance amounts. If the beneficiary has a Medigap policy that covered out-of-pocket costs before the BBA changes, the same policy should also cover the out-of-pocket costs under the new payment system.
Medicare does not pay for all outpatient department services under the new prospective payment system. For example, Medicare continues to pay for clinical diagnostic laboratory services, ambulance services, dialysis and outpatient therapy under the old system. In addition, Medicare will not pay at all for some surgical procedures if they are given on an outpatient basis (for example, fixing a fractured hip). Even if the beneficiary can get these services on an outpatient basis, Medicare considers them inpatient services and will not pay for them on an outpatient basis. Beneficiaries should check with their hospital or doctor to make sure that Medicare will pay for the procedure they are receiving on an outpatient basis.
MEDICARE COVERAGE OF HOME OXYGEN THERAPY
Medicare provides for coverage of home oxygen therapy under the Part B durable medical equipment benefit. This coverage includes the rental of the oxygen delivery system and the cost of oxygen itself, including portable units. On October 1, 1985, the Health Care Financing Administration (HCFA) established rigid coverage criteria requiring patients to demonstrate medical necessity through specific laboratory evidence. HCFA requires that medical necessity be established through arterial blood gas (ABG) studies. When ABG studies are not available or medically contraindicated, oxygen saturation levels may be determined by ear oximetry readings. However, HCFA and Medicare Part B carriers discourage the use of oximetry testing.
The coverage criteria creates three categories:
1) An ABG-PO2 at or below 55 or oxygen saturation at or below 88%, is presumed to establish coverage,
2) An ABG-PO2 at 56-59 or oxygen saturation at 89% will establish coverage if one of three specified conditions are also shown, these include:
• Dependent edema suggesting congestive heart failure, or
• Pulmonary hypertension, or cor pulmonale, or
• Erythrocythemia with a hematocrit › 56%
3) An ABG-PO2 at 60 or above or oxygen saturation at or above 90% creates a presumption that oxygen is not medically necessary.
Although it is stated that the presumption is rebuttable, in practice HCFA automatically denies coverage for anyone who does not meet the ABG or oximetry standards.
The oxygen coverage
criteria have been established as a national coverage determination
which is codified at Section 60-4 of the Medicare Coverage Issues
Manual (HCFA Pub.-6). This means that the restrictive coverage
criteria are binding on all coverage determinations from the initial
decision through an ALJ hearing. See, 42 U.S.C. § 1395ff(b)(3)(A).
What criterion makes therapy services suitable for coverage and appropriate for appeal?
Will Medicare cover therapy to maintain function if the condition will not improve?
Is there a limit to what Medicare will pay for outpatient therapy?
A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES
Physical, Speech and Occupational Therapy services are suitable for Medicare Part B coverage, and appeal if they have been denied, if they meet the following criteria:
1. The services were ordered, and the orders are periodically reviewed, by the patient’s treating physician.
2. The services are "medically necessary". This means that the services provided are considered a specific and effective treatment for the patient’s condition under accepted standards of medical practice.
3. The services are sufficiently complex, or the condition of the patient is such, that the services required can be safely and effectively performed only by, or under the supervision of, a qualified therapist. (Services which do not require the performance or supervision of a skilled therapist are not coverable, even if they are in fact performed or supervised by a skilled therapist.)
OTHER IMPORTANT POINTS
Many Medicare denials are based on the lack of expectation of a significant
improvement in the patient’s condition within a reasonable and predictable
period of time. However, "restoration potential" is not required by law and
a maintenance program can be covered if skilled services are necessary to
prevent further deterioration or preserve current capabilities.
Services that can
ordinarily be performed by non-skilled personnel should be considered
skilled services if, because of medical complications, a skilled therapist
is required to perform or supervise the services.
The doctor is the patient’s most important ally. If it appears that Medicare coverage will be denied, ask the doctor to write stating that the standards described above are met. Attach this statement to any Medicare claim submission or appeal. (Keep a copy for your records.)
Don't be satisfied
with a Medicare determination unreasonably limiting care or coverage; appeal
for the benefits the patient deserves. It will take some time, but you
will probably win your case.
IMPORTANT NOTE ABOUT PAYMENT: The Balanced Budget Act of 1997 instituted an annual Medicare payment cap on outpatient physical, speech, and occupational therapy services. This cap quickly became a problem for many beneficiaries with long term conditions. A moratorium was placed on the cap, and extended through December 31, 2002 by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 placed another 2-year moratorium on the Medicare payment cap on outpatient physical, speech, and occupational therapy services. HOWEVER, because no legislation was passed to address the caps prior to the end of 2005, the THERAPY PAYMENT CAPS ARE IN PLACE. For 2008, the cap amounts are $1810.00 for physical therapy and speech therapy, and another $1810.00 for occupational therapy.
The cap does not apply to therapy services furnished in hospital-based outpatient departments, and there is a therapy cap exceptions process in place until December 31, 2009.
PHYSICIANS' FEES: MEDICARE LIMITS ON CHARGES
When an item or service is determined to be coverable under Medicare Part B, it is reimbursed at 80% of a payment rate approved by Medicare, known as the "approved charge." The patient is responsible for the remaining 20%. Unfortunately, the "approved (or "reasonable") charge," is often substantially less than the actual charge. The result of this reimbursement system is that Medicare payment, even for items and services covered by Part B, is often inadequate. The patient is left with out-of-pocket expenses. When a physician accepts "assignment," he or she agrees to accept the Medicare approved charge as full payment for the services provided. Medicare pays 80% of the approved charge. Either the patient or supplemental insurance pays the remaining 20% co-payment. No further payment is due to the physician.
When a physician does not accept assignment, however, he or she may "balance bill" the patient above the Medicare approved charge. "Balance bill" refers to a physician's charge above the Medicare approved rate. Federal law sets a limit known as the "Limiting Charge" on the amount a physician may balance bill. The Limiting Charge is based upon a percentage of the Medicare approved charge for physician services.
Generally, a physician who does not accept assignment may not charge a total of more than 115% of the Medicare approved amount. The patient's Explanation of Medicare Benefits (EOMB), the written notice which is sent to patients after a Medicare claim is processed, will state the approved charge for the doctor's services. The Limiting Charge should be listed on the EOMB; if it is not the patient can calculate it by multiplying the Medicare approved charge by 115%.
For example, assume the patient goes to a doctor who does not accept assignment. The doctor's actual charge is $600, but the Medicare approved charge allows only $349.37. The doctor's total bill may not exceed $401.89 (115% x $349.47); this is the Limiting Charge. Medicare will pay $279.50 (80% of the $349.37 approved charge). The physician cannot charge the patient more than $122.39 ($401.89 minus Medicare payment of $279.50). If the doctor bills above $401.89 he is billing above the Limiting Charge and is violating federal law.
Again, a Medicare beneficiary is usually correct in assuming that the Limiting Charge is 115% of the approved charge noted on the EOMB; the actual limiting charge will be stated on the EOMB. In a few instances it will be more or less than 115% of the approved charge. If this seems to be the case, or if other questions arise, you can obtain specific Limiting Charge information by calling United Health Care at 1-800-982-6819. If you have any questions or trouble obtaining Limiting Charge information, please call the Center for Medicare Advocacy at 1-800-262-4414.
Important Note: As of
September 1990 all Medicare Part B providers must submit claims directly to
Medicare on behalf of their Medicare patients.
PREVENTIVE BENEFITS INCLUDED IN THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003
§611- coverage of an initial physical exam (it does not cover lab tests) performed within 6 months of a beneficiary enrolling in Part B. If a beneficiary never enrolls in Part B (and many don't because they have other duplicative coverage) they never get this exam. Also, this provision is effective 1/1/05 and is not applied retroactively so only Medicare Part B enrollees after that date will get the exam.
§612- coverage of
cardiovascular screening blood tests covers a cholesterol (lipids and
triglycerides) test once every two years at most. It does provide for the
addition of other tests within the Secretary's approval but may be limited
to only certain individuals and only with the recommendation of the U.S.
Preventive Services Task Force. This section is effective 1/1/05.
§613 - coverage
of diabetes screening tests provides for a fasting plasma glucose test
(other tests as the Secretary deems appropriate) and is limited to
individuals at high risk for diabetes. This is defined as having any of the
following risk factors - htn, dyslipidemia, obesity (BMI>30), previous
identified impaired glucose tolerance, OR at least two of the following:
overweight (BMI 25 - 30), family history of DM, history of gestational DM or
delivery of baby > 9 lbs., age 65 or older. Frequency covered is no more
than twice per year. This section is effective 1/1/05.
§614 - improved payment for certain mammography services. This excludes payment for mammography services from the fee schedule. For screening mammograms this provision becomes effective upon enactment. For diagnostic mammograms it's effective 1/1/05.
Medicare will cover annual mammograms for female beneficiaries age 40 and over. The Part B annual deductible is waived for these services.
SCREENING PAP SMEAR AND PELVIC EXAM
Medicare will cover one pelvic exam, including a clinical breast exam, and pap test every two years. Women who are at high risk for cervical cancer can have these tests covered on an annual basis. The Part B annual deductible is waived for these services.
Medicare will cover the following colorectal cancer screening tests:
one screening
fecal-occult blood test every year for individuals over age 50;
one screening
flexible sigmoidoscopy every 4 years for individuals over age 50;
one screening
colonoscopy every 2 years for high risk individuals, and
other tests, procedures and modifications as Medicare finds appropriate.
COLONOSCOPY SCREENING
Certain colonoscopy screening once every 10 years or within 4 years of screening flexible sigmoidoscopy.
DIABETES SELF-MANAGEMENT TRAINING
Medicare will cover outpatient diabetes self-management training services if the physician who is managing the individual's diabetic condition certifies that the services are needed under a comprehensive plan of care to provide the individual with necessary skills and knowledge to participate in the management of the individual's condition.
DIABETES SCREENING TESTS
Medicare will provide coverage for home blood glucose monitors and testing strips for all diabetics without regard to a person's use of insulin. Medicare does not cover syringes or insulin.
BONE MASS MEASUREMENT
Medicare will cover bone mass measurement procedures for the following high-risk persons:
an
estrogen-deficient woman at clinical risk for osteoporosis;
an individual
with vertebral abnormalities;
an individual
receiving long-term glucocorticoid steroid therapy;
an individual
with primary hyperparathyroidism;
an individual being monitored to assess the response to, or efficacy of, an approved osteoporosis drug therapy.
PROSTATE CANCER SCREENING TESTS
Medicare will cover an annual prostate cancer screening test for men over age 50. The test could consist of any (or all) of the following procedures:
a digital rectal
exam;
a
prostate-specific antigen blood test; and
other procedures as Medicare finds appropriate for the purpose of early detection of prostate cancer.
GLAUCOMA SCREENING
Glaucoma Screening for persons at risk of glaucoma (includes those with family history of glaucoma or with diabetes).
MEDICAL NUTRITION THERAPY
Medical Nutrition therapy services for patients with diabetes or kidney disease.
COVERAGE CONTINUES TO BE AVAILABLE FOR:
Influenza
vaccines;
Pneumococcal
vaccines;
Hepatitis B vaccine.
Note about payment:
While Medicare coverage is available for the
above services, payment may not cover all the costs due to
the Medicare Outpatient Payment System. Contact your provider
for specific details.
Copyright © 2008 Center for Medicare Advocacy, Inc.