Avoiding the Medicare “Advantage” Traps
A patient comes to you, says I have Medicare primary and then United Healthcare. You bill in that order, but are puzzled when Medicare denies the claim with the following reason code:
CO-109: CLAIM/SERVICE NOT COVERED BY THIS PAYER/CONTRACTOR.
Now what do I do?
You are a counselor or marriage and family therapist who cannot accept Medicare. A patient starts treatment and gives you an Aetna card. Aetna pays you – but a year later they claw back the money, stating you weren’t entitled to it because your license isn’t eligible for Medicare. But when you called to verify benefits, you were told you were in network and the patient had benefits to see you.
The patient had Aetna! What does Medicare have to do with anything?
You have several patients with BCBS and are in network. However, your claims come back paid at a different (lower) rate than usual, plus a small deduction marked “sequester.” Over time, it’s added up to hundreds of dollars. You try to figure it out and get nowhere.
No one seems able to explain it and they pass me around to different departments.
You are a Medicare provider. You’ve been seeing a patient with Medicare and a supplement for years. Suddenly, Medicare denies your claims, stating they aren’t the correct payer. You don’t understand.
How can someone have Medicare, stay retired, but then suddenly have something else for insurance?
WHY do they make this so confusing?
The one thing that all these scenarios probably have in common is that the patient may have what’s known as a “Medicare Advantage” policy.
The mental health community is often confused about what Medicare Advantage is and isn’t – so Your Billing Buddy is going to set you straight, because it often seems like no one else will.
In brief, without any technicalities, judgments, or public policy justifications/disputes for the existence of the Medicare Part C program (AKA Medicare Advantage) … these are alternative commercial plans that Medicare beneficiaries are allowed to choose. Once enrolled in Medicare Advantage, any claims to Original Medicare will deny with the above reason code that Medicare is not the correct payer.
(An exception – because there must always be one, right? – If your patient is hospice enrolled, you will go back to billing Original Medicare, with a hospice modifier).
In 2021, according to the Kaiser Family Foundation healthcare research, 42% of Medicare beneficiaries were enrolled in Medicare Advantage.
That was about 26 million people – so if you haven’t yet seen one of these common scenarios in your practice, you will. It’s only a matter of time, especially given the aging demographics of the population.
So how do I protect myself from denials, clawbacks, and fee erosion?
There are only two things you need to do to avoid the tricky trap of Medicare Advantage:
Get their Insurance Cards
After 24 years as a biller for mental health services, I’m still shocked by how many providers (and their EMR systems) do not feel it necessary to capture this information. Insurance cards have all sorts of logos on them that provide valuable information.
All Medicare Advantage cards are easily identifiable. Terms such as Medicare Advantage, A Medicare Private FFS Plan (fee for service), or [Payer name] Medicare are usually prominently displayed. Also, look out for cards marked Dual and/or SNP – these are Medicare Advantage plans for patients who are also eligible for Medicaid and combine both benefits into one policy.
Some examples (there are many)
Read the fine print of the section that shows you the funding source of the plan. (Although a card like the above would tell you all you need to know).
So ok, they have Medicare Advantage. Now what? Can I take this plan?
In order for you to be paid for your services, as of 2019 you must be an eligible, enrolled Original Medicare provider in order to be paid by a Medicare Advantage plan.
But: You do NOT have to participate in the network of the Medicare Advantage payer offering the benefits. If you aren’t, you will be paid 100% of the Medicare fee schedule. If you signed the CMS-460, you cannot balance bill. Non-participating providers may bill up to 115% of the Medicare allowable rate, just as they can with Original Medicare.
In fact, it may be preferable NOT to contract with Medicare Advantage plans. The Original Medicare allowed amount is typically anywhere from 10-40% MORE than you would be paid if you were a participating provider in a Medicare Advantage network.
The sequester applies to reimbursement from both Original Medicare and Medicare Advantage, so while it is not part of the reason why Medicare Advantage plans pay less, it is a clue that your patient with a commercial plan in fact has Medicare Advantage.
Caution: there are Medicare Advantage plans that do not offer out of network benefits – so you have to verify if there is out of network coverage. Medicare Advantage patients who have no out of network benefits have the same choice as any other patients with policies not featuring out of network coverage: self-pay or choose another provider.
Original Medicare providers are under no obligation to participate in Medicare Advantage plans.
Nor do they have to opt out in order to accept a Medicare Advantage patient who wishes to self-pay. Also, no ABN is required for Medicare Advantage patients.
Providers who are opted out from Original Medicare can NOT be paid by Medicare Advantage plans.
I find that the biggest trap of all with Medicare Advantage, is the fact that patients don’t always understand it. When they call for service, they give incorrect information, and busy practitioners without a lot of support tend to take patients at their word. Remember, your patient isn’t trying to deceive you – but this stuff is hard to understand, or you wouldn’t be reading this blog. So, understanding your patient’s plan type could save you hundreds if not thousands of dollars later in denied or clawed back claims.