1. CHAPTER © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9 Medicare

2. Learning Outcomes When you finish this chapter, you will be able to: 9.1 List the eligibility requirements for Medicare program coverage. 9.2 Differentiate among Medicare Part A, Part B, Part C, and Part D. 9.3 Contrast the types of medical and preventive services that are covered or excluded under Medicare Part B. 9.4Apply the process that is followed to assist a patient in completing an ABN form correctly. 9.5Calculate fees for nonparticipating physicians when they do and do not accept assignment. 9-2

3. Learning Outcomes (continued) When you finish this chapter, you will be able to: 9.6Outline the features of the Original Medicare Plan. 9.7Discuss the features and coverage offered under Medicare Advantage plans. 9.8Explain the coverage that Medigap plans offer. 9.9Discuss the Medicare, Medical Review (MR), recovery auditor, and ZPIC programs. 9.10Prepare accurate Medicare primary claims. 9-3

4. Key Terms advance beneficiary notice of noncoverage (ABN) annual wellness visit (AWV) carrier Clinical Laboratory Improvement Amendments (CLIA) Common Working File (CWF) cost sharing 9-4 fiscal intermediary Health Professional Shortage Area (HPSA) incident-to services initial preventive physical examination (IPPE) Internet Only Manuals limiting charge local coverage determination (LCD)

5. Key Terms (continued) Medical Review (MR) Program Medical Savings Account (MSA) Medicare administrative contractor (MAC) Medicare Advantage Medicare card Medicare health insurance claim number (HICN) 9-5 Medicare Integrity Program (MIP) Medicare Learning Network (MLN) Matters Medicare Modernization Act (MMA) Medicare Part A (Hospital Insurance [HI]) Medicare Part B (Supplementary Medical Insurance [SMI]) Medicare Part C Medicare Part D

6. Key Terms (continued) Medicare Summary Notice (MSN) Medigap national coverage determination (NCD) notifier Original Medicare Plan Physician Quality Reporting System (PQRS) 9-6 recovery auditor program roster billing screening service United States Preventive Services Task Force (USPSTF) urgently needed care waived tests Zone Program Integrity Contractor (ZPIC)

7. 9.1 Eligibility for Medicare 9-7 Individuals eligible for Medicare are in one of six categories: –Age sixty-five or older –Disabled adults –Disabled before age eighteen –Spouses of deceased, disabled, or retired employees –Retired federal employees enrolled in the Civil Service Retirement System (CSRS) –Individuals of any age diagnosed with end-stage renal disease (ESRD)

8. 9.2 The Medicare Program 9-8 Medicare Part A (Hospital Insurance [HI])— program that pays for hospitalization, care in a skilled nursing facility, home healthcare, and hospice care Medicare Part B (Supplementary Medical Insurance [SMI])—program that pays for physician services, outpatient hospital services, durable medical equipment, and other services and supplies

9. 9.2 The Medicare Program (continued) 9-9 Medicare Part C—managed care health plans under the Medicare Advantage program –Medicare Modernization Act (MMA)—law with a number of Medicare changes, including a prescription drug benefit Medicare Part D—voluntary Medicare prescription drug reimbursement plans

10. 9.3 Medicare Coverage and Benefits 9-10 Common Working File (CWF)—Medicare’s master patient/procedural database Medicare card—Medicare insurance identification card received by each member Medicare health insurance claim number (HICN)—Medicare beneficiary’s identification number Fiscal intermediary—prior name for government contractor that processes claims Carrier—prior name for health plan that processes claims from providers

11. 9.3 Medicare Coverage and Benefits (continued) 9-11 Medicare administrative contractor (MAC)— contractor who handles claims and related functions Cost sharing – participating in deductible and coinsurance payment Medicare Part B covers: –Physician services –Diagnostic X-rays and laboratory tests –Outpatient hospital visits –Durable medical equipment –Other nonhospital services

12. 9.3 Medicare Coverage and Benefits (continued) 9-12 Medicare Part B does not cover: –Most routine and custodial care –Examinations for eyeglasses or hearing aids –Some foot care procedures –Services not ordered by a physician –Cosmetic surgery –Healthcare received while traveling outside the United States –Procedures deemed not reasonable and medically necessary

13. 9.3 Medicare Coverage and Benefits (continued) 9-13 Initial preventive physical examination (IPPE)—preventive visit for new beneficiaries Screening services—tests or procedures performed for a patient with no symptoms, abnormal findings, or relevant history United States Preventive Services Task Force – develops recommendations for primary care clinicians and health systems Annual wellness visit (AVP) – preventive service providing health risk assessment and personal prevention plan

14. 9.4 Medicare Participating Providers 9-14 Participating providers agree to accept assignment for all Medicare claims and to accept Medicare’s fee as payment in full for services –Responsible for informing patients when services will not, or are not likely to be, paid by the program –Must comply with numerous billing rules such as global periods Internet-Only Manuals – operating instructions, policies, and procedures based on statutes and regulations, guidelines, models, and directives

15. 9.4 Medicare Participating Providers 9-15 Medicare Learning Network (MLN) – online collection of articles that explain all Medicare topics Health Professional Shortage Area (HPSA)— geographical area offering participation bonuses to physicians Physician Quality Reporting System (PQRS) – quality reporting program in which physicians or other eligible professionals collect and report their practice data

16. 9.4 Medicare Participating Providers (continued) 9-16 Advance beneficiary notice of noncoverage (ABN)—form used to inform patients that a service is not likely to be reimbursed Local coverage determination (LCD)—notices sent to physicians with information about the coding and medical necessity of a service National coverage determination (NCD)— policy stating whether and under what circumstances a service is covered Notifier—provider who completes the header on an ABN

17. 9.5 Nonparticipating Providers 9-17 Nonparticipating providers choose whether to accept assignments on a claim-by-claim basis –NonPAR providers are allowed five percent less than PAR providers on assigned claims –On unassigned claims, nonPAR providers are subject to Medicare’s limiting charges Limiting charge—highest fee nonparticipating physicians may charge for a particular service

18. 9.6 Original Medicare Plan 9-18 The Original Medicare Plan is a fee-for-service plan that provides maximum freedom of choice when selecting a provider or specialist –Patients are responsible for an annual deductible, a premium, and a small portion of the bills –Patients receive a Medicare Summary Notice (MSN)—remittance advice from Medicare to beneficiaries detailing their services and charges

19. 9.7 Medicare Advantage Plans 9-19 Medicare Advantage—group of managed care plans other than the Original Medicare Plan Medicare Advantage offers three major types of plans: 1. Medicare coordinated care plans (CCPs) 2. Medicare private fee-for-service plans 3. Medical Savings Accounts (MSAs)— Medicare health savings account program Urgently needed care—beneficiary’s unexpected illness or injury requiring immediate treatment

20. 9.8 Additional Coverage Options 9-20 Medigap—plan offered by a private insurance carrier to supplement coverage –Pays for services not covered by Medicare –Coverage varies, but all provide coverage for patient deductibles and coinsurance –Some also cover excluded services such as prescription drugs and limited preventive care

21. 9.9 Medicare Billing and Compliance 9-21 Medicare Integrity Program – identifies and addresses fraud, waste, and abuse Medical Review (MR) Program—payer’s procedures for ensuring patients are given appropriate care in a cost-effective manner Medicare recovery auditor program is a postpayment claim review program Zone Program Integrity Contractor (ZPIC) – antifraud agency that conducts both prepayment and postpayment audits

22. 9.9 Medicare Billing and Compliance (continued) 9-22 Clinical Laboratory Improvement Amendments (CLIA)—law establishing standards for laboratory testing Waived tests—low-risk laboratory tests that physicians perform in their offices

23. 9.9 Medicare Billing and Compliance (continued) 9-23 Incident-to services – services of allied health professionals provided under the physician’s direct supervision that may be billed under Medicare Roster billing—simplified billing for vaccines

24. 9.10 Preparing Primary Medicare Claims 9-24 Electronic claims are faster than paper claims Medical insurance specialists must be aware of the required data elements when submitting Medicare claims

25. Summary