Category: Medicare Changes
Articles/updates regarding Medicare costs and coverage.
Change will save millions by preventing fraudulent claims
Prior authorization will now be necessary before Medicare will cover medical equipment such as wheelchairs and prosthetics. Prior authorization has always been required, but now it will be earlier in the process.
Why?
Fraudulent billing for these types of equipment costs Medicare millions. They expect to save big: $10 million in the first year, $200 million within five years and $580 million within ten years. In 2014, “the error rate among durable medical equipment billing was 53.1%, which accounted for $5 billion in improper payments that year.” Not all of those were intentionally fraudulent, but this new rule intends to correct many of those cases.
What is prior authorization?
Before an insurance company will cover something- a prescription or procedure- they will need to talk to your doctor and determine if they will cover it. If not, they could cover a substitute, change the dosage, or provide an alternative.
In this case, before Medicare will cover a piece of medical equipment, they will need to talk to your doctor earlier in the process than they previously had.
What equipment is affected?
The Master List of equipment that requires prior authorization includes items with “a high rate of fraud or unnecessary utilization.” They are also items that have an average purchase cost over $1,000 or an average rental cost over $100.
After 10 years, items are removed from the list. They will also be removed if the prices fall before then. In addition to wheelchairs and prosthetics, equipment like oxygen supplies, orthotics, and braces are listed.
Are there any concerns with this plan?
Some groups are concerned that the new rule will increase wait times for equipment that patients need ASAP.
To read the Centers for Medicare and Medicaid Services’ press release on the change, click here.
For more information on the prior authorization process, see this article from Healthcare Finance.
In addition to other Social Security changes in the budget, Congress targeted methods that permitted beneficiaries to increase their own Social Security benefits while collecting their spouse’s checks. Waiting to collect benefits yields a larger payout- after full retirement age (currently 66), benefits increase 8 percent per year until age 70.
Losing this option could be costly for seniors- some couples can make up to $60,000 filing this way. But for the government, the cost is even greater: if everyone took advantage of these loopholes, the cost to the Social Security Administration would be over $9 billion.
These are the two main strategies outlawed by the budget rules:
File-and-suspend: This loophole allowed a person to file for benefits and suspend those benefits right away. Their benefits would grow by a small percentage while they collected their spouse’s benefits.
Restricted application: Filing a restricted application at age 66 (or full retirement age) would let a person collect their spouse’s benefits while their own benefits grow untouched.
The law will go into effect May 1, 2016. After this date, these strategies will not be available. If you will be 66 before May 1, 2016, you have time to take advantage of these strategies before they are longer an option. The law will mostly affect new retirees, who will not have the strategy available to them.
Budget will end options that allowed married couples to maximize benefits
To read more about File-and-Suspend, see this Forbes article.
Part B premiums may increase for some beneficiaries
What is a COLA?
A Cost-of-Living-Adjustment is an increase in Social Security payments based on an increase in the cost of living. It is determined using the Consumer Price Index, which measures rates of inflation.
Since 1975, Cost-of-Living-Adjustments have been calculated annually, and result in an increase in Social Security payments. For the third time, the COLA will not increase. Each time has been during the Obama administration.
Why won’t there be an increase?
This year, there won’t be an increase because the cost of living didn’t increase. It actually decreased, according to the Consumer Price Index, because of falling gas prices.
Economists say that even though the price of medical care has increased, “consumer prices for a range of goods from food to housing have not risen enough overall to produce an increase in benefits, and have dropped from a year ago,” the Washington Post reported.
What does it mean?
Social Security’s benefit will remain the same for the next year.
If you saw our newsletter on the Medicare Part B premium increase, you know that the increase was dependent on a COLA adjustment. Now that we know there won’t be COLA adjustment, we know that Part B premiums won’t increase for 70% of Medicare beneficiaries. We also know that they could increase substantially for the other 30%, including those new to Medicare in 2016, those whose Part B is not paid through Social Security, and those with single incomes over $85,000 or joint incomes over $170,000. This issue of our newsletter has more detailed information about the premium increases.
The White House commented that they were concerned about the “unintended policy consequence resulting from the formula of calculating cost of living adjustments,” and has reached out to Congress in search of a solution.
Members of Congress have submitted bills aimed at halting the Part B premium increase, and dozens of groups representing seniors have been lobbying for their passage.
What can I do?
If you don’t want the Medicare Part B premium increase, call your congressman.
Cost-of-Living-Adjustments over the past decade. This chart was made with information from SSA.gov.
For more on the details of this year’s COLA, see this informative article from the Washington Post.
Here are the highest and lowest-rated plans for the upcoming year
The criteria for ratings is slightly different for each plan, as shown on MedicareInteractive.org.
Medicare Advantage Plans:
- Staying Healthy: Screenings, Tests and Vaccines
- Managing Chronic Conditions
- Plan Responsiveness and Care
- Member Complaints, Problems and Leaving the Plan
- Customer Service
Prescription Drug Plans:
- Customer Service
- Member Complaints, Problems and Leaving the Plan
- Member Experience with Plan
- Drug Pricing and Patient Safety
Plans are rewarded for high scores and penalized for recurring low ratings. If a plan has 4 or more stars, Medicare pays them an extra 5% per member in their monthly payments. If a plan is rated with 5 stars, the plan can enroll new customers year round- a coveted bonus.
If plans have less than 3 stars for three years, the Medicare Prescription Drug Plan Finder will flag them with a caution sign, and won’t allow beneficiaries to enroll on the Medicare website.
These are the highest-performing Medicare Advantage- Prescription Drug (MA-PD) Plans for 2016:
These are the highest and lowest-rated local Prescription Drug Plans for 2016. The highest-rated are in green, and the lowest-rated are in red.
For more information on Star Ratings, see this page from Medicare.gov.
The updated codes were implemented Oct. 1, adding over 50,000 new options.
When you go to the doctor with an illness, Medicare uses a set of codes called the International Classification of Diseases to categorize it, as well as surgeries and other procedures, when the bill is prepared.
The International Classification of Diseases, or ICD, is used by the World Health Organization. As a member of the WHO, the United States uses the ICD. Many industrialized nations have already switched to ICD-10.
This month in the U.S., ICD-10 went into effect with 69,000 codes. It replaced ICD-9, which had 17,000. ICD-9 had been used since 1979. Many argued it was time for an update.
Medical providers have been anticipating the change for months, but the switch to ICD-10 requires nothing from patients.
Seniors should look forward to greater detail in the codes. The new codes contain more detailed entries, and “specify the types, locations and severity of conditions and injuries.” The codes will also grow from 3-5 digits to 7, allowing for greater specificity.
Before, there were no differences in codes to describe which side of the body has a pain, or had a procedure. Now, more than 40% of the new codes contain that distinction. The implementation of ICD-10 could bring slight changes in payments and coverage, so be sure to check with your doctor if you have any questions.
This image shows the differences in categorizing a femur fracture using ICD-9 and ICD-10. From Roadto10.org.
Click here for Medicare’s ICD-10 page.
For a list of FAQ’s on ICD-10, see this helpful list
from Humana’s website.
We want to clarify Guideline 2 written in yesterday’s email newsletter.
You are free to make any decision, we just ask that you are prepared to make it during your scheduled appointment.
Thank you, and we look forward to working with you during the Enrollment Period.
If a patient isn’t admitted, Medicare won’t cover observation care, and won’t cover nursing home care after the patient leaves the hospital. The patient will incur all costs.
What is observation care?
When patients are not sick enough to be admitted to the hospital, but are sick enough to prevent them from going home, they receive observation care.
Under observation care, seniors often don’t know that they haven’t been admitted, because they are receiving care, medicine and treatments. Observation care is considered an outpatient service, though patients stay in the hospital, often overnight, sometimes for days.
What is the new law?
The U.S. Senate passed the NOTICE Act, (officially the Notice of Observation Treatment and Implication for Care Eligibility Act), which requires hospitals nationwide to inform Medicare patients if they are receiving observation care, but have not been admitted. This will allow patients to know up-front that they will have to pay for all of the costs.
President Obama signed the bill last week. The national law will become effective in August 2016.
What about Virginia?
Virginia was the fifth state to pass a version of this law on a state level. During the 2015 General Assembly session, the body passed a law requiring Virginia hospitals to inform patients of their status.
Senator Richard Black (R-Loudoun), the bill’s patron, said to the Richmond Times-Dispatch, “The reason it was brought to my attention was because people are getting some nasty surprises when they discover that they’ve got a bill that’s not covered by insurance, or they think they are moving into a skilled nursing home and they discover that they have not met the requirements for that.”
The law became effective July 1, 2015.
Why is this issue getting so much attention?
Observation care is becoming an increasingly popular option for hospitals. Since 2006, observation care claims have risen 91%. Observation stays of 48 hours or longer are up 450% in the same time period, according to this study.
The reason? Medicare won’t pay for admitted patients that could have been in observation care. So hospitals have begun using observation care more frequently to ensure they are reimbursed.
If the federal government doesn’t prevent it, the rate increase will take effect in 2016. Find out if you will be affected.
Three groups will likely see higher premiums:
- Those new to Medicare in 2016
- Those whose Part B is not paid through Social Security
- Those with single incomes over $85,000 (or joint incomes over $170,000)
Why might premiums increase?
Medicare’s guidelines require that the prices of Part B premiums cover 25% of Part B expenses. The majority of Medicare beneficiaries pay their Part B premiums through Social Security. There’s a rule that prevents Medicare beneficiaries who pay the lowest amount for Part B from being charged more unless their Social Security is given a Cost of Living Adjustment. This year, a Cost of Living Adjustment is not expected due to low levels of inflation. 70% of Medicare beneficiaries fall into this category, and their premiums can’t be increased. The remaining 30% face a price hike to reach the necessary quota.
What are the chances that the increases won’t occur?
No one can say for sure, but the U.S. Department of Health and Human Services can intervene until this October, when the rates will be finalized. The HHS Secretary has expressed that she would like to prevent an increase of this scope, and could lower the rates if there is enough money in Medicare’s program funds.
Seniors new to Medicare with incomes…
Less than $85,000 ($170,000 if joint)
Could see premiums rise from…
$104.90 to $159.30
Seniors already in Medicare with incomes from…
$85,000 – $107,000 ($170,000 – $214,000 if joint)
$107,000 – $160,000 ($214,000 – $320,000 if joint)
$160,000 – $214,000 ($320,000 – $428,000 if joint)
$214,000 and up ($428,000 and up,
if joint)
Could see premiums rise from…
$146.90 to $233.00
$209.80 to $318.60
$272.20 to $414.20
$335.70 to $507.80
For more information on the potential premium increases, click here.
Starting in 2020, the Medicare Supplement Plan C and Plan F will no longer be available for those NEW to Medicare.
What happened: With broad bipartisan support, Congress passed the Medicare “doc fix” in April. The bill focused on fixing the way Medicare pays physicians, and included big changes to the current Medicare system.
Why: The bill’s primary purpose was to prevent doctors from getting a 21% pay cut, and to overhaul the physician payment formula that Medicare uses. By 2020, Medicare beneficiaries will pay for the Part B deductible on their own.
When: The bill was passed in April. It will go into effect in 2020, but Part B premiums will likely see a small rise next year.
What does it mean: There are three major changes for Medicare beneficiaries:
Those will higher incomes will pay higher premiums. This is expected to affect only 2% of Medicare users– individuals with current incomes of $133,500 or higher, and couples with current incomes of $267,000 or higher.
Everyone will pay higher Part B premiums. The Medicare “doc fix” will increase all program costs. Medicare users’ premiums are required to cover 25% of Part B costs, so Part B premiums have to increase to fill that quota.
Supplemental Medicare Plans will no longer cover Part B deductibles. The C plan and the F plan are the only plans that cover the Part B deductible, so they will no longer be offered in current form to NEW Medicare users.
If you have the C or F plan, you do not need to change your plan just yet. You will not lose your current plan. The C and F plans will not be available to NEW beneficiaries in 2020.
“Specifically, if it decides that Congress exceeded its constitutional authority in enacting the part of the law that requires most Americans to either have health insurance starting in 2014 or pay a penalty, does that invalidate the rest of the law? And if not, how much, if any, of the rest of the law should it strike down?…”
read the full article at: http://www.npr.org/blogs/health/2012/03/27/149497762/court-looks-at-whether-mandate-can-separate-from-rest-of-health-law