With the expansion of Medicare has also come a rise in Medicare Advantage plan enrollment by American seniors. Older patients are attracted to these “replacement plans” due to savings on premiums and the convenience of one-stop shopping for coverage. However, misinformation and a lack of education on the details of these plans is causing headaches for enrollees and healthcare organization reimbursement departments alike.
Elderly patients are rarely informed about the difference between original Medicare and Medicare Advantage plans, and are experiencing provider access problems and coverage denials for medical services. This creates issues within the reimbursement departments of hospitals and medical practices, who are being asked to bill original Medicare or Medigap plans that the patient no longer has access to.
Educating your patients on the difference between these plan types can reduce billing confusion and denials, and improve the efficiency of your reimbursement department.
What is a Medicare Advantage plan?
Medicare Advantage plans are replacement coverage for original Medicare, sold by private insurance companies that provide Medicare benefits. They do not provide additional coverage to a patient’s original plan. Patients who opt for one of these plans are still in the Medicare program, and still receive the same Part A and Part B benefits as on original Medicare, but they no longer have access to their original plan. Once a patient has enrolled in an Advantage plan, their original Medicare plan cannot be charged as primary or secondary insurance.
Medicare pays a fixed amount per patient each month to the private companies offering Advantage plans, so the plans must follow the rules and regulations set by Medicare, but they can charge different out-of-pocket costs and place different requirements on how patients access services (i.e. requiring a referral to see a specialist). These rules are subject to change each year. Additionally, if the plan stops participating in Medicare, patients must choose another replacement plan or return to original Medicare.
Patients who opt for a Medicare Advantage plan pay their Medicare premium as well as a separate plan premium. The private plans set their own deductibles and co-pays, which are usually a fixed cost for each office visit. This differs from the Medicare structure, which typically charges 20% of the Medicare-cost for outpatient care. Also unlike original Medicare, Advantage plans must have an out-of-pocket maximum and the plan pays for the full cost of care after the patient reaches his or her annual limit. This is beneficial for patients with high-cost care, as Medicare places no cap on out-of-pocket costs.
Replacement plans are most typically HMOs, PPOs or PFFs. Under these plans, patients are usually required to find physicians within a local network, and do not have access to any Medicare provider across the country as they did under their original plan. Providers can join or leave a plan’s network at any time during the year, and if this happens patients must find a new provider.
Prescription Coverage & Supplemental Insurance
A large draw for many elderly patients to a replacement plan is the prescription coverage. Most Advantage plans include Part D drug coverage, but if the patient’s particular plan does not, they are unable to get supplemental insurance. Advantage plan members do not have access to Medigap policies to help pay out-of-pocket costs as original plan members do.
Educate your Reimbursement Staff & Your Patients
Educate your medical office staff and your patients on the difference among these plan types. A better understanding of their coverage will help your patients make better care decisions, and can reduce staff time spent on denial management.
Is your staff struggling to manage your practice’s reimbursements? It may be time to consider outsourcing your back office.
If you are ready to discuss customized outsourcing solutions for your healthcare organization, contact us today.
Written by Ali Bechtel, Public Relations Coordinator
This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.