Part B of Medicare is intended to fill some of the gaps in medical insurance coverage left under Part A. After the beneficiary meets the annual deductible, Part B will pay 80% of the “reasonable charge” for covered services, the reimbursement rate determined by Medicare; the beneficiary is responsible for the remaining 20% as “co-insurance.” Unfortunately, the “reasonable charge” is often less than the provider’s actual charge. If the provider agrees to “accept assignment,” he agrees to accept Medicare’s “reasonable charge” rate as payment in full and the patient is only responsible for the remaining 20%. If the provider does not accept assignment, the patient will be responsible for paying a portion of the difference between Medicare’s reimbursement rate (the reasonable charge) and the provider’s actual charge.
Since 1972, individuals receiving Social Security retirement benefits, individuals receiving Social Security disability benefits for 24 months, and individuals otherwise entitled to Medicare Part A, are automatically enrolled in Part B unless they decline coverage. Others must enroll in Part B by filing a request at the Social Security office during certain designated periods.
The major benefit under Part B is payment for physicians’ services. In addition, home health care, durable medical equipment, outpatient physical therapy, x-ray and diagnostic tests are also covered. Since January 1, 1998 home care is covered under Part B if the individual does not meet the Part A prior institutional requirements, received coverage under Part A for the maximum annual 100 visits, or only has Part B.
The following is a list of items and services which can be covered under Part B:
- Physicians’ services;
- Home Health Care;
- Services and supplies, including drugs and biologicals which cannot be self-administered, furnished incidental to physicians’ services;
- Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests;
- X-ray therapy, radium therapy and radioactive isotope therapy;
- Surgical dressings, and splints, casts and other devices used for fractures and dislocations;
- Durable medical equipment;
- Prosthetic devices;
- Braces, trusses, artificial limbs and eyes;
- Ambulance services;
- Some outpatient and ambulatory surgical services;
- Some outpatient hospital services;
- Some physical therapy services;
- Some occupational therapy;
- Some outpatient speech therapy;
- Comprehensive outpatient rehabilitation facility services;
- Rural health clinic services;
- Institutional and home dialysis services, supplies and equipment;
- Ambulatory surgical center services;
- Antigens and blood clotting factors;
- Qualified pyschologist services;
- Therapeutic shoes for patients with severe diabetic foot disease;
- Influenza, Pneumococcal, and Hepatitis B vaccine;
- Some mammography screening;
- Some pap smear screening, breast exams, and pelvic exams;
- Some other preventive services including colorectal cancer screening, Diabetes training tests, bone mass measurements, and prostate cancer screening.
- Opioid Treatment Programs (OTP) through bundled payments for Opioid Use Disorder (OUD) treatment services
Medicare Part B is fairly comprehensive but far from complete. There are certain items and services which are excluded from coverage. Excluded services include:
- Services which are not reasonable or necessary;
- Custodial care;
- Personal comfort items and services;
- Care which does not meaningfully contribute to the treatment of illness, injury, or a malformed body member;
- Prescription drugs which do not require administration by a physician;
- Routine physical checkups;
- Eyeglasses or contact lenses in most cases
- Eye examinations for the purpose of prescribing, fitting, or changing eyeglasses or contact lenses;
- Hearing aids and examinations for hearing aids;
- Immunizations except for influenza, pneumococcal and hepatitis B vaccine;
- Cosmetic surgery;
- Most dental services
- Routine foot care.
Part B Premium, Deductible and Co-pays
Medicare’s Part B is optional and is financed largely by monthly premiums paid by individuals enrolled in the program. Participants may have this premium automatically deducted from their Social Security check. Since 2007, for the first time in the history of the Medicare program, the premium has been income based.
Click this link for this year’s Part B premium breakdown by income.
Part B has an annual deductible requirement, as well. Each year, before Medicare pays anything, the patient must incur medical expenses equal to the deductible, based on Medicare’s approved “reasonable charge,” not on the provider’s actual charge.
As described above, a major problem with Medicare Part B is the difference between the cost of medical items or services, particularly physicians’ services, and the Medicare approved “reasonable charge.” When an item or service is determined to be coverable under Medicare, it is reimbursed at 80% of the “reasonable charge” for that item or service, the patient is responsible for the remaining 20%. Unfortunately, the “reasonable charge,” a rate set by Medicare, is often substantially less than the actual charge. The result of the “reasonable charge” reimbursement system is that Medicare payment, even for items and services covered by Part B, is often inadequate. The patient is left with out-of-pocket expenses.
When a physician accepts “assignment,” he or she agrees to accept the Medicare approved amount as full payment. Medicare will pay 80% and the patient will pay the 20% co-payment. When a physician does not accept assignment the patient is liable for the co-payment plus a balance above the Medicare fee schedule amount. However, under federal law there is a set limit as to the amount a physician may balance bill. A physician may balance bill only 115% of the Medicare fee schedule amount. For example, assume that you go to a doctor who does not accept assignment; his actual charge may be $100, but the Medicare fee schedule is only $70. The doctor may only bill you 115% of the fee schedule amount or $80.50. If the doctor bills above $80.50 he is violating federal law.
Many Connecticut senior centers and Social Security offices have lists of Connecticut physicians and medical equipment suppliers who accept Medicare assignment. Also, the State Department of Social Services, Elderly Services Division has a list and will assist in finding the names of physicians who accept assignment in specific areas. If the patient’s physician is not on the list, encourage him or her to accept assignment.
Connecticut residents may be eligible for the State’s mandatory Medicare assignment program, ConnMAP. This program requires Part B providers to accept assignment for Connecticut citizens of limited income. Applications are available at most senior centers and at the Connecticut Department of Social Services, Elderly Services Division in Hartford.
Connecticut citizens who are at least 65 years old or who are disabled may also qualify for the State’s prescription drug program, ConnPACE. If they have quite low incomes, the State of Connecticut will pay for part of the cost of eligible patient’s prescription drugs. Again, applications are available at most senior centers and at the State Department of Social Services, Elderly Services Division in Hartford. NOTE: Patients eligible for ConnPACE are automatically eligible for ConnMAP.
DIABETES SELF-MANAGEMENT TRAINING (DSMT)
- Are my diabetic self-testing strips covered if I am a non-insulin dependent diabetic?
- What services does Medicare cover for diabetes training?
- Will Medicare pay for additional self-testing strips?
WHEN SHOULD MEDICARE COVERAGE BE AVAILABLE FOR DIABETES SELF-MANAGEMENT TRAINING? A QUICK SCREEN FOR IDENTIFYING COVERABLE CASES
A beneficiary who has had any one of the following medical conditions within the twelve month period preceding the orders for the training:
- New onset diabetes;
- Poor glycemic control (HbA1C of $9.5 within 90 days of training);
- Change in treatment regimen from no medication to medication or from oral medication to insulin;
- High risk for complications based on poor glycemic control; documented acute episodes of severe hypo- or hyperglycemia within the past year necessitating third party assistance for emergency room visit or hospitalization;
- High risk based on one of the following documented complications: lack of feeling in the foot or other foot complications; pre-proliferative or proliferative retinopathy, or prior laser treatment of the eye; kidney complications related to diabetes.
Note: Beneficiaries who are inpatients in a hospital, skilled nursing facility, hospice or nursing home are not eligible for services under this benefit, as it must be provided in an outpatient setting.
- Initial Training: up to ten hours within 12 months to provide individuals with necessary skills (including skill to self-administer injectable drugs) and knowledge to participate in the management of his or her own condition.
- Follow-up Training: up to one hour each year.
CONDITIONS FOR COVERAGE
- Physician’s or qualified non-physician practitioner’s orders.
- Plan of care (POC) which includes content, number, frequency and duration of services.
- Services reasonable and necessary for treatment of diabetes (certification on POC).
- Group training if available within two months of doctor’s orders.
- Certified provider (may include physicians, individuals or entities that meet the applicable standards of the National Diabetes Advisory Board, or that are recognized by an organization that represents individuals with diabetes as meeting standards for furnishing the services).
PAYMENT AMOUNT DETERMINATIONS
Payment for DMST services will be made under the Medicare Part B physician fee schedule.
BLOOD GLUCOSE MONITORS AND BLOOD TESTING STRIPS
These will be covered without regard to whether the beneficiary has Type I or Type II diabetes or whether or not the beneficiary uses insulin. Blood testing strips and blood glucose monitors will be classified as durable medical equipment, and payment for the blood-testing strips will be reduced by 10 percent.
- Monitors with voice synthesizers are covered for patients with bilateral best corrected visual acuity of 20/200 or worse.
- The most regularly consumed supplies are the test strips and lancets used in conjunction with the glucose monitor. Generally, coverage is available for up to 100 lancets and 100 test strips every 3 months for a non-insulin dependent diabetic and 100 lancets and 100 test strips every month for an insulin dependent diabetic.
- When greater than the usual quantities are required to assure appropriate glycemic control, the physician must document in the patient’s medical record the reasons for the higher than usual testing frequency. The patient must forward to the supplier a log of test results corroborating higher testing frequency. Suppliers must receive a written order from the physician before they may submit claims to Medicare for reimbursement.
- The physician must see and evaluate the patient within 6 months prior to ordering (and renewing prescriptions for) higher than usual quantities.
For more information Visit the Diabetes Association Website at http://diabetes.org/.
MEDICAL NUTRITION THERAPY SERVICES (MNT) FOR BENEFICIARIES WITH DIABETES OR RENAL DISEASE
- What type of services are covered for medical nutrition therapy?
- Is medical nutrition therapy covered for individuals undergoing maintenance dialysis?
- Is medical nutrition therapy covered for an individual with both renal disease and diabetes?
Pursuant to § 105 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), as of January 1, 2002, medical nutrition therapy services are available for beneficiaries with diabetes or renal disease.
- A beneficiary with diabetes, which is defined as diabetes mellitus Type I (an autoimmune disease that destroys the beta cells of the pancreas, leading to insulin deficiency) and Type II (familial hyperglycemia). The diagnostic criterion for a diagnosis of diabetes is a fasting glucose greater than or equal to 126 mg/dl. These definitions come from the Institute of Medicare 2000 Report, The Role of Nutrition in Maintaining Health in the Nation’s Elderly.
- An initial visit for an assessment; follow-up visits for interventions; and reassessments as necessary during the 12 month period beginning with the initial assessment (“episode of care”) to assure compliance with the dietary plan.
- A specific, maximum number of hours will be reimbursable in an episode of care. The maximum number of hours will be set forth in a future Center for Medicare and Medicaid Program Memorandum.
- The number of hours covered for diabetes may be different than the number of hours covered for renal disease.
CONDITIONS FOR COVERAGE
- The treating physician must make a referral and indicated a diagnosis of diabetes or renal disease.
- Services may be provided either on an individual or group basis without restrictions.
- When follow-up Diabetes Self-management Tranining (DSMT) and Medical Nutrition Therapy (MNT) services are provided within the same time period, hours from both benefits will be counted toward the maximum number of covered hours allowed during the episode of care.
- MNT services must be provided by a professional as defined below.
LIMITATIONS ON COVERAGE
- MNT services are not covered for beneficiaries receiving maintenance dialysis for which payment is made under § 1881 of the Act.
- If a beneficiary has both renal disease and diabetes, they may receive only the number of hours covered under this benefit for either renal disease or diabetes, whichever is greater.
- A beneficiary cannot receive MNT if they have received an initial DSMT within the last 12 months unless the need for reassessment and additional therapy has been documented by the treating physician as a result of a change in diagnosis or medical condition or the beneficiary receiving DSMT is subsequently diagnosed with renal disease.
- If a beneficiary diagnosed with diabetes has been referred for both follow-up DSMT and MNT services, the number of hours the beneficiary may receive is limited to the number of hours covered under either follow-up DSMT or MNT services annually, whichever is greater.
For Medicare Part B coverage of MNT, only a registered dietitian or nutrition professional may provide the services. This must be an individual licensed or certified in a State as of December 21, 2000; or an individual whom, on or after December 22, 2000:
- Holds a bachelor’s or higher degree granted by a regionally accredited college or university in the united States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics, as accredited by an appropriate national accreditation organization recognized for this purpose;
- Has completed at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and
- Is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed. In a State that does not provide for licensure or certification, the individual will be deemed to have met this requirement if he or she is recognized as a “registered dietitian” by the Commission on Dietetic Registration or its successor organization, or meets the requirements of the first two bullets of this section.
PAYMENT FOR MEDICAL NUTRITION THERAPY
Payment will be made under the Medicare Part B physician fee schedule for dates of service on or after January 1, 2002, to a registered dietitian or nutrition professional that meets the above requirements. Part B deductible and co-insurance rules apply. As with the DSMT benefit, payment is only made for MNT services actually attended by the beneficiary and documented by the provider and for beneficiaries that are not inpatients of a hospital or skilled nursing facility.
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
- Is there a fixed co-payment for outpatient Part B services in a hospital and will my Medigap policy pay the co-payment amount if it is greater than 20%?
- Will Medicare pay for fixing a fractured hip on an outpatient basis or only on an inpatient basis?
- Are there limits on the amount Medicare will pay for outpatient therapy?
As of August 1, 2000, Medicare changed the way it pays for outpatient hospital and community health center services. This system, called the outpatient prospective payment system (OPPS), changed how much Medicare beneficiaries pay and how much Medicare pays for outpatient services, such as emergency room visits or one day surgery services. This payment system was one of the many changes made by the Balanced Budget Act of 1997 (BBA).
Under OPPS, the beneficiary must continue to pay the Part B deductible ($110 per year in 2005) and, depending upon the service received, either a 20% coinsurance amount (as before the BBA) or a fixed co-payment amount for each service. The fixed co-payment amount is determined by taking into account a number of factors including the national median charge for the particular service received and the hospital wages in which the service was provided.
Depending upon what service was received and what hospital provided the service, the beneficiary’s out-of-pocket costs may be higher than they were before the BBA for the same service. Hospitals may choose to lower the fixed co-payment amount for a particular service to a minimum of 20% but if they do, they must keep the lower co-payment for one calendar year and they must charge all Medicare patients that lower amount.
The Medicare, Medicaid and SHIP Benefit Improvement and Protection Act of 2000 (BIPA) places a cap of 57% on the fixed co-payment amount for services received after April 1, 2001. That cap will be incrementally lowered each year until it reaches 40% for services received in the year 2006 and thereafter. Medigap insurance will still cover co-insurance amounts. If the beneficiary has a Medigap policy that covered out-of-pocket costs before the BBA changes, the same policy should also cover the out-of-pocket costs under the new payment system.
Medicare does not pay for all outpatient department services under the new prospective payment system. For example, Medicare continues to pay for clinical diagnostic laboratory services, ambulance services, dialysis and outpatient therapy under the old system. In addition, Medicare will not pay at all for some surgical procedures if they are given on an outpatient basis (for example, fixing a fractured hip). Even if the beneficiary can get these services on an outpatient basis, Medicare considers them inpatient services and will not pay for them on an outpatient basis. Beneficiaries should check with their hospital or doctor to make sure that Medicare will pay for the procedure they are receiving on an outpatient basis.
MEDICARE COVERAGE OF HOME OXYGEN THERAPY
- What is the coverage criteria or standards for coverage of oxygen therapy?
- It is my understanding that the coverage criterion for oxygen therapy is a “national coverage determination.” What does that mean?
- How is medical necessity for oxygen therapy established?
Medicare provides for coverage of home oxygen therapy under the Part B durable medical equipment benefit. This coverage includes the rental of the oxygen delivery system and the cost of oxygen itself, including portable units. On October 1, 1985, the Health Care Financing Administration (HCFA) established rigid coverage criteria requiring patients to demonstrate medical necessity through specific laboratory evidence. HCFA requires that medical necessity be established through arterial blood gas (ABG) studies. When ABG studies are not available or medically contraindicated, oxygen saturation levels may be determined by ear oximetry readings. However, HCFA and Medicare Part B carriers discourage the use of oximetry testing.
The coverage criteria creates three categories:
1) An ABG-PO2 at or below 55 or oxygen saturation at or below 88%, is presumed to establish coverage,
2) An ABG-PO2 at 56-59 or oxygen saturation at 89% will establish coverage if one of three specified conditions are also shown, these include:
• Dependent edema suggesting congestive heart failure, or
• Pulmonary hypertension, or cor pulmonale, or
• Erythrocythemia with a hematocrit › 56%
3) An ABG-PO2 at 60 or above or oxygen saturation at or above 90% creates a presumption that oxygen is not medically necessary.
Although it is stated that the presumption is rebuttable, in practice HCFA automatically denies coverage for anyone who does not meet the ABG or oximetry standards.
The oxygen coverage criteria have been established as a national coverage determination which is codified at Section 60-4 of the Medicare Coverage Issues Manual (HCFA Pub.-6). This means that the restrictive coverage criteria are binding on all coverage determinations from the initial decision through an ALJ hearing. See, 42 U.S.C. § 1395ff(b)(3)(A).