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Medicare Basics
This document summarizes a webinar on Medicare Basics presented by J. Kevin West. It provides an overview of the history and structure of the Medicare program, including eligibility, covered benefits and services, and payment methods. It also discusses audits and investigations providers may face, potential sanctions like suspension, revocation and exclusion, and the option for providers to opt out of Medicare. The webinar aims to educate attendees on fundamental aspects of healthcare law as it relates to the Medicare program.
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Medicare Basics
- 1. Fundamentals in HealthcareLaw Curriculum 2021 – 2022 WEBINAR SERIES PA R S O N S B E H L E . C O M N AT I O N A L E X P E R T I S E . R E G I O N A L L AW F I R M . Medicare Basics Wednesday, March 16, 2022
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- 3. 3 Legal Disclaimer This webinaris based on available information as of March 16, 2022, but everyone must understand that this webinar is not a substitute for legal advice. This presentation is not intended and will not serve as a substitute for legal counsel on these issues.
- 4. 4 Presenter • J. KevinWest 208.562.4908 kwest@parsonsbehle.com
- 5. A. The MedicareProgram
- 6. 6 History of theMedicare Program • 1965 Social Security Act Amendments created: Medicare Part A (hospital insurance) Medicare Part B (medical insurance) Medicaid • 1997 Medicare Part C begins (Medicare Plus Choice Medicare Advantage) • 2003 Medicare Part D begins coverage for prescription drugs • 2010 Affordable Care Act • 2016 MACRA Reforms
- 7. 7 The Medicare program Healthand Human Services Centers for Medicare & Medicaid Services Medicare administrative contractors Medicare Advantage Companies State Medicaid Agencies Prescription drug contractors Parts A&B Part D Part C
- 8. 8 Medicare Terminology “PROVIDER” “SUPPLIER” an institutionalhealthcare provider which furnishes Part A services (e.g., hospitals, nursing homes, home health) Outpatient healthcare providers who furnish Part B services (e.g., physicians, ambulatory surgery centers, DME suppliers, dialysis)
- 9. 9 A/B MAC Jurisdictionsas of October 2017
- 10. 10 Medicare Program –3 key aspects 1. Eligibility: Who is covered? 2. Benefits: What is covered? 3. Payment: When and how much does Medicare pay?
- 11. 11 1. Who iseligible for Medicare? 85% of Medicare population • Receipt of SSDI for 24 consecutive months • Persons with ALS (Lou Gehrig’s disease) • Persons receiving treatment for end-stage renal disease (3 month waiting period) • Age 65 or older, and • US citizens • Legal alien admitted for permanent residence who has resided in US for 5 years • Has enough credits to be eligible for Social Security 15% of Medicare population
- 12. 12 Medicare Enrollees In 1967– 19.5 million enrollees; In 2000 – 39.5 million enrollees; In 2003 – 40.4 million enrollees; In 2010 – 47.2 million enrollees; In 2020 – 62.6 million enrollees; In 2040 – 83.8 million enrollees (est); In 2060 – 94 million enrollees (est); Ober, Kaler, Grimes & Shriver
- 13. 13 2. Benefits: Medicare“Parts” Part A • Covers physician services, outpatient care, lab services, diagnostic testing home health services • Monthly premium is scaled depending on income ($135 to $460/month) • Deductible and (20%) co-pay Part B • Hospital coverage • No premium, only deductible and co-pay (if you paid Medicare taxes for at least 10 years)
- 14. 14 Medicare “Parts” Part C •“Medicare Advantage Plans” • A private sector alternate coverage to Part A and B • Run by private companies (approved by govt.) • “Capitation”: Federal government pays a set amount to the plan (instead of paying directly for services) • Private company assumes the risk as to costs, but can offer lower premiums 22 million people enrolled as of 2020 (1/3 of all Medicare beneficiaries)
- 15. 15 Medicare “Parts” Part D PrescriptionDrug Coverage • began in 2003 • Coverage is optional; monthly premium and annual deductible (except for indigent) • provided by private insurance companies
- 16. 16 Medicare Supplemental InsurancePolicies • “Medigap” policies designed to cover Medicare deductibles, co-pays and services not covered by Medicare • Regulated by the Federal government
- 17. 17 Coverage – whatis not covered? Medicare Parts A and B • Cosmetic Surgery • Services Furnished by Immediate Relatives • Dental Services • Flat Foot Conditions, Routine Foot Care Ober, Kaler, Grimes & Shriver
- 18. 18 3. Payment • Hospitalservices: payment based on Diagnosis-Related Group (DRG) (i.e. the patient’s diagnosis, age, complications, co-morbidities) Hospital receives an estimate of what services cost (regardless of actual amount) • Physician services: a complex evolving formula
- 19. 19 Physician Payment • Eachservice assigned a value based on 1) physician work; 2) malpractice insurance costs; and 3) practice overhead, all of which are adjusted by geographic location • MACRA Reforms in 2016: added quality measures to the physician comp formula (payment adjusts up or down as much as 9%)
- 20. 20 Medicare Advantage • Administeredby private insurance companies • Must provide all Medicare benefits, but may provide additional benefits • More restrictive provider networks • Provider rights differ from those with traditional Medicare
- 21. B. Medicare Auditsand Investigations
- 22. 22 Medicare Audits andInvestigations • Healthcare providers who participate in the Medicare Program must accept significant regulatory and oversight burdens • Audits and investigations are common
- 23. 23 Types of Audits Government Federal Coding& Billing MAC RAC CERT ZPIC Medicare Suspension and Revocation OCR HIPAA Meaningful Use PQRS MIPS OSHA ADA/Civil Rights Quality Improvement Organization (QIO) State Medicaid State Licensure Board Non-Government Commercial Insurance Medical Review Special Investigations Unit (SIU) Revocation/Termination Actions Managed Care Organizations Medicare Advantage Revocation/Termination Actions Medicaid Managed Care
- 24. 24 Types of Audits Government Federal Coding& Billing MAC RAC CERT ZPIC Medicare Suspension and Revocation OCR HIPAA Meaningful Use PQRS MIPS OSHA ADA/Civil Rights Quality Improvement Organization (QIO) State Medicaid State Licensure Board
- 25. 25 Impact of EHR •Has caused decrease in quality of medical records • Not being used properly • More time consuming to do it right • Higher risk of cloning • Use of “medical scribes” - How to document use of scribes
- 26. 26 War Stories –Strange but True • “I feel your pain” • Big Brother is watching • Who are those guys in orange vests hiding in the bushes? • Everything but the kitchen sink
- 27. 27 War Stories –Strange but True • A 40-hour day • “I see dead people” • Photocopier medical records
- 28. C. Suspension, revocation,exclusion, preclusion and other horrors
- 29. 29 • The Federalgovernment has an array of administrative sanctions it may use against health care providers • Providers often have limited due process rights in challenging these sanctions.
- 30. 30 Suspension • CMS mayplace reimbursements in a suspense account while a provider is being audited/investigated • Purpose is to accrue funds which the government can apply (offset) to an overpayment • Typically lasts 6 months, but can be extended • Requires only “credible evidence of fraud” • A provider can submit a rebuttal, but has no other appeal rights
- 31. 31 Revocation • A sanctionby which a provider’s Medicare participation status is revoked • Providers have appeal rights, but judges give great deference to CMS
- 32. 32 Reasons for Revocation 1.Failure to comply with Medicare enrollment requirements 2. Certain criminal convictions (felonies) 3. Providing false information on Medicare enrollment application 4. On-site review shows provider is not operational 5. Misuse of billing number 6. Abuse of billing privileges Billing for services where the beneficiary is deceased A pattern or practice of submitting claims that do not meet CMS requirements
- 33. 33 Reasons for Revocation 7.Failure to provide CMS contractors with access to medical records 8. Improper prescribing practices 9. Failure to pay a debt owed to CMS 10.“Affiliation” that poses an undue risk to the Medicare program
- 34. 34 Exclusion • Provider isbarred from participating in Medicare program • Grounds for exclusion: Permissive exclusion Mandatory exclusion • Provider is listed on OIG databank • Period of exclusion: from 1 to 10 years
- 35. 35 Grounds for Exclusion A.Mandatory 1. Conviction related to the Medicare program 2. Conviction related to patient abuse 3. Felony conviction related to health care fraud 4. Felony conviction related to controlled substances
- 36. 36 Grounds for Exclusion B.Permissive Exclusion 1. Any conviction related to fraud 2. Any conviction related to obstructing an investigation 3. Misdemeanor conviction related to controlled substances 4. License revocation or suspension 5. Failure to grant access to CMS
- 37. 37 Preclusion • Beginning April1, 2019, all providers who are excluded or revoked by Medicare are placed on the “Preclusion List” • Providers on the Preclusion List cannot receive reimbursement from Medicare Advantage Plans
- 38. 38 The Domino Effectof Medicare Sanctions • Providers who are excluded or revoked by Medicare may be – Precluded from Medicare Advantage Barred from Medicaid Barred from commercial insurance plans Disciplined by state licensure boards
- 39. D. “Opting Out”of Medicare
- 40. 40 Opting Out • Providersends notice to Medicare • Opt out period is two years; you can renew for successive two-year periods • Must notify patients in writing that Medicare cannot be billed for any part of charges • “Private Contract” between doctor and each patient must be signed
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- 42. 42 Thank You • J.Kevin West 208.562.4908 kwest@parsonsbehle.com