Chapter 3 -Lesson 8, 9, 10,  

Government Insurance Programs

We will cover Medicaid and Medicare and how the 2 programs work and how you will deal with their requirements in a future lesson. Medicaid, a state run program, is introduced in the first sections of this lesson, while later sections teach you about Medicare. Medicare is a federally funded program. Each of these government programs has specific requirements regarding claims, eligibility and reimbursement. We will show you those requirements throughout this lesson and explain how to follow those requirements.

Medicaid

Currently 49 states have some form of Medicaid. In California, Medicaid is called Med-Cal. Only Arizona does not have a true Medicaid program. Arizona has an alternative, prepaid medical assistance program for low-income persons.

Each state has its own requirements. You will need to contact the state Medicaid administration to get the requirements for the doctor(s) you are working with in a particular state.

According to federal law, each state must provide a certain level of care for eligible participants in the Medicaid program. These levels are called minimum standards, however, states are free to exceed those standards and provide more care. This is the main reason Medicaid programs vary widely from state to state.

Arizona has special permission from the federal government for its unique health care program, called Arizona Health Care Cost Containment System (AHCCCS). This program meets the minimum standards, but uses a different philosophy than traditional Medicaid.

Who is eligible for Medicaid?

There are generally two categories of Medicaid recipients: categorically needy and medically needy. Categorically needy people qualify for Medicaid because they also qualify for other government assistance programs. Many of them qualify for Aid to Families with Dependent Children (AFDC). Supplemental Security Income (SSI) or other assistance programs. AFDC helps low-income families and pregnant women to pay for living expenses. SSI helps the elderly, people who are blind or people who have permanent disabilities.

The second group of Medicaid recipients are classified as medically needy. Medically needy people cannot afford medical care. Medicaid for this group helps them meet medical costs. Medically needy persons must pay a deductible before receiving benefits, and some have to pay coinsurance for some services. Coinsurance is a condition under some health insurance programs that requires the insured to assume a percentage of cost for covered charges.

In addition to these large groups of people, there are some others eligible for Medicaid. These people include those who are in nursing facilities for long term care or perhaps in intermediate care facilities. Also low-income people who lose group health care through their employers may be eligible to purchase a low-cost Medicaid policy.

Regardless of who is eligible, federal minimum standards require Medicaid to cover specific medical situations.

Services Covered by Medicaid

There are eight basic services that must be covered by Medicaid. These services are shown in the following box.

Facts about Medicaid --- Required Services. Medicaid programs are required to cover eight basic services:

1. Laboratory and x-ray services

2. Inpatient hospital care

3. Outpatient hospital care

4. Physician's care

5. Family planning

6. Home health care

7. Care in a nursing facility

8. ESPDT (Early and Periodic Screening, Diagnosis and Treatment)

The preceding 8 services are required by federal law. States may choose to increase benefits and cover more services, but they aren't required to.

Facts About Medicaid -- Some Additional Services

Some states cover non-required services such as:

Ambulance Service

Dental care

Prescription drugs

Chiropractic care

Emergency room care

Optometry service, eyeglasses and eye refraction's

Prosthetic devices

Mental health care

Doctors who choose to participate in the Medicaid program agree to participate in the entire program of their particular state. They can't accept one Medicaid patient and not accept another. Doctors agree to accept as payment in full Medicaid reimbursement for covered services. Doctors must write off the difference between the fees normally charged and the amount reimbursed by Medicaid. However, doctors participating in Medicaid can bill patients for services not covered by Medicaid.

The first thing you need to know about Medicaid claims is which form to use.

The Claim Form

The claim form you use to file a Medicaid claim is the HCFA-1500. We will describe how to fill out this form later in the course. All you need to know now is the HCFA-1500 is a standard form, used by most insurance carriers. It is very important to be familiar with this form.

Although the HCFA-1500 form is the standard, there might be a few states that use a slightly different form. Although your state may be one of these, the form must conform to very strict standards, and it will appear very similar to the HCFA-1500.

After you have submitted a claim, you will receive an explanation of benefits from Medicaid.

Explanation of Benefits

When you receive a Medicaid payment, it will always be accompanied by an explanation of benefits (EOB). The explanation of benefits is a document explaining exactly what actions Medicaid took on a particular claim. This action includes approvals, denials, adjustments, suspends and audit/refunds.

There are other items you need to know about when dealing with Medicaid. Things such as identification cards, coinsurance, reciprocity, prior approval, time limits on claims and appeals of claims are all important.

The Medicaid Identification Cards

For everyone eligible for Medicaid, the state issues an identification card or coupon. In some states, these cards are good for one month. In other states the card can last two weeks, two months, three months or six months. If you are dealing with patients, be sure to check the expiration date on these cards every time the physician sees the patient. Photocopy the front and back of the card or coupon for each visit.

The card should note whether the patient has other insurance, must make a copayment, or has restrictions on the type of services he or she is eligible to receive.

Pre-authorization

Pre-authorization for specific services is required by some states.

Pre-authorization is the review of proposed treatment by Medicaid in order to determine whether or not the treatment is appropriate. The process varies from state to state. Some states require telephone pre-authorization while others require a written pre-authorization form. If you do not get pre-authorization for a procedure that requires it, benefits will be denied or reduced.

Time Limits And Appeals

Whether you are filing a claim or appealing an action taken by Medicaid, you have a limited time. Depending on the state in which you live, you will have to file a claim. When you appeal an action by Medicaid, whether it is an adjustment or a flat denial of benefits, you only have between 30 and 60 days (usually, depending on the state) to file your appeal.

Both time limits are designed to prevent "stale" claims and long, drawn-out appeals.

Reciprocity

We know Medicaid is a state administered program. So what happens if a Medicaid participant requires medical attention in another state? Let's say George Mason, who is 47 and meets the categorically needy criteria to qualify for Medicaid, has traveled outside his home state to look for a job. While he is in the other state, he gets ill. Who pays? Well, the answer is his home state Medicaid program pays. It is up to the medical claims and billing specialist to request the proper forms from George's home state. Usually you contact the Medicaid intermediary to arrange for payment under these circumstances.

The process of a home state paying a claim for a medical situation that occurred in another state is known as reciprocity. Most Medicaid programs have reciprocity provisions.

When A Person Has Other Insurance

When you come across a bill for a person who qualifies for Medicaid, but also has other insurance or another third-party payer, you first bill the other insurance program. You bill Medicaid after receiving an EOB (explanation of benefits) from the primary carrier. Medicaid is the secondary carrier.

This process applies to CHAMPUS/CHAMPVA (two programs you'll learn about in the next lesson).You first bill the primary carrier, then attach the EOB to your Medicaid claim.

Now that we've covered Medicaid, take a deep breath and relax for a moment. We're about to jump into the other government program-Medicare.

Medicare

Medicare is a federally administered, federally funded health insurance program. People covered by Medicare are called Medicare beneficiaries. Medicare beneficiaries are people who meet one or more of the following criteria.

Facts About Medicare -- Who Qualifies?

People who qualify for Medicare must meet one or more of the following criteria:

Persons eligible for Medicare must apply to HCFA for benefits. They do this through their local Social Security Administration office. All persons who meet one of the above criteria are eligible for Medicare Parts A and B.

Medicare Part A

Part A of Medicare coverage helps pay for hospital coverage, care in a nursing home facility, home health care and hospice care. It is free for persons who meet one of the criteria listed in the above Fact Box. There are some guidelines that apply to Medicare Part A.

For hospitalization, Medicare Part A covers the first 60 days fully, except for a deductible paid by the patient. After 60 days, that changes. For days 61 through 90, Part A covers all but a set per day charge. The patient must pay the initial charge. For days 91 through 150, two things can happen.

The first thing to happen is the patient uses their 60 reserve days. Reserve days are 60 days a patient can use to supplement a long hospital stay. They begin with the 91st day of a hospital stay. These days can be used only once. This means, the patient who is in the hospital for 150 days has used up his reserve days. This is important because Medicare Part A covers some of the per day charge for reserve days.

If the patient has no more reserve days, then Medicare Part A coverage ends. There is no coverage for such a patient who stays in the hospital for more than 90 days.

Part A also covers skilled nursing facility care (nursing home). It pays 100 percent of its approved costs for care and 80 percent of durable medical equipment for periodic care for terminally ill patients diagnosed with less than six months to live.

As you can see Medicare Part A provides no coverage for physician visits. This is included in Medicare Part B.

Medicare Part B

Medicare Part B is an optional insurance coverage plan that eligible persons can receive. They receive Part B coverage by paying coinsurance as well as an annual deductible. The deductible must be paid before Medicare benefits will be paid. The plan covers physician services and supplies. The following box shows what Part B covers.

Facts About Medicare --- Part B Coverage

Currently, Part B covers the following services:

For medical expenses -- including doctor visits, inpatient and outpatient medical services.(including surgery), ambulance, diagnostic tests and physical therapy -- Part B covers 80% of the approved amount after the patient pays a $100 deductible. The patient must pay the additional 20%.

In cases of laboratory and clinical services such as blood tests, Part B pays 100% of approved amounts. The patient pays nothing.

For outpatient hospital treatment and blood work, Part B pays 100%of the approved amount, if the procedure is medically necessary.

Participating Physicians

A physician who agrees to accept payment from Medicare signs a Medicare-participating agreement and agrees to accept assignment on all claims. The physician is assigned a unique physician identifier number (UPIN) by the HCFA. The UPIN must appear on all claim forms to properly identify the physician.

Medicare payments are based on specific criteria, including approved charges. Approved charges are the lowest of the following three charges.

	Customary charge. The amount a physician would normally charge for a specific service.
	Prevailing charge. An amount based on customary charges of physicians in the same geographical area.
	Actual charge. The amount the physician actually charges on the Medicare claim.

Physicians who accept assignment agree to the approved charge as payment in full for the procedure or service. The physician may bill for coinsurance and deductibles, as well as for services not covered by Medicare. However ,the physician may not collect excess charges, defined as any charges higher than the amount allowed by Medicare for a specific covered service.

Physicians do not currently have to accept assignment for Medicare. They may choose to accept assignment on a case-by-case basis, or for certain services and not others. Regardless of the physician's acceptance or non acceptance, Medicare will pay only the allowable charge.

How do you go about filing a claim with Medicare? To find out, read the next section.

Filing A Medicare Claim

When you file with Medicare, you use the HCFA-1500 form. This common form, which we will cover later in this course, is used extensively in the medical billing field.

You must file the Medicare claim by the end of the year in which service was performed. This means that if Mary receives services in 1998,then you must file with Medicare by the deadline, or the claim will be denied. Additionally, the physician is liable for civil penalties up to $2,500 for failing to file a Medicare claim.

In addition to claim deadlines, Medicare has some other requirements for claims. One of these is the use of three-level Medicare coding. Three-level coding is similar to the coding procedures you learned in the previous two lessons, but there are some differences. Here's a description.

Facts About Medicare -- Three-Level Coding

Three-level Medicare coding requires that you use:

1. CPT codes from the Current Procedural Terminology Code Book (except for anesthesia).

2. HCFA's Common Procedure Coding System, called HCPCS ("hick-picks"). HCPCS codes those services, materials, drug and procedures that are not in the CPT book. It is a separate book. These codes are combination of alpha/numeric codes ranging from A0000 to V59999. It is a national code standard used by all regional fiscal agents.

3. Level 3 codes. These are alphanumeric codes assigned by each Medicare fiscal agent. These codes range from W0000 through Z9999. Special alpha modifiers are used that range from -WA through -ZZ to explain certain services.

These codes help Medicare track procedures because some procedures are limited in how many times they can be billed during the year, a limitation referred to as Medicare mandated prepayment screens.

Fiscal Agents

Fiscal agents are organizations under contract with Medicare to handle claims from physicians and other suppliers of services covered under Medicare Part B.

How do you know who has Medicare coverage and what kind of coverage they have? Well, as is the case with Medicare, Medicare beneficiaries have an identification card.

The Medicare Identification Card

The Medicare patient identification card lists all the information you, as a claims specialist, need from the patient.

This card lists the type of coverage (Part A, Part B or both) and the length of time the patient has been covered. It also lists a claim number. The claim number must be copied exactly to the patient's insurance claim form, otherwise, the claim will be rejected.

Physician Identification Numbers

As we already discussed, in 1992 HCFA assign physicians a unique physician identifier number (UPIN). Remember the UPIN is required on all Medicare claim forms. When you work with physicians, you must find out each physician's UPIN number to put on claim forms. This is a six-digit alphanumeric number that stays with the physician as long as that doctor is affiliated with Medicare and stays in the same state.

Supplements To Medicare Insurance.

Medicare coverage is often not enough for many patients. Because of this, people sometimes buy supplemental insurance for Medicare. This coverage is usually purchased from a third-party, private insurance company and, because it fills the gaps in Medicare, it is called Medigap. Medigap insurance pays the percentage Medicare doesn't, and sometimes it pays for services Medicare won't.

When a patient has Medigap insurance, you still bill Medicare as the primary carrier. From there, Medicare is supposed to send the claim on to the Medigap carrier. When the Explanation of Medicare Benefits (EOMB) arrives, it usually has a note that states the claim has been sent to the supplemental carrier for any additional benefits.

Many times, you will bill Medicare as the primary carrier. However, there are times when Medicare is considered a supplemental carrier. Here are some situations that indicate that Medicare is the supplemental, rather than the primary, carrier.

Facts About Medicare As a Supplemental Carrier: - Medicare is the supplemental carrier when:

The patient is covered by an employer's group health plan or spouse's insurance.

The services or treatments are for a work related illness or injury covered by worker's compensation.

No-fault or liability insurance covers the services or treatments (in the case of an automobile accident, for example).

A patient with permanent kidney failure is covered by an employer group health plan

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