Medicare Frequently Asked Questions
Disclaimer: This is a sampling of information. Please refer to the CMS website (www.cms.gov) and consult your own experts for additional information.
What's covered under Medicare?
The program consists of two separate but complementary divisions: Medicare Part A and Medicare Part B.
Medicare Part A, or Medicare Hospital Insurance, covers medically necessary inpatient hospital care, skilled nursing facility services, hospice, and some home health care. Most people do not pay a monthly payment (premium) for Part A because they (or a spouse) paid Medicare taxes while they were working.
Medicare Part B-It is under Medicare Part B that most equipment you use in your home are covered and reimbursed. Medicare Part B covers medically necessary Durable Medical Equipment, Prosthetics, and Orthotics (DMEPOS), physician's services, ambulance, outpatient physical therapy, speech pathology services, and other health services, including patients with End Stage Renal Disease (ESRD). Part B helps pay for covered doctor services and supplies that are medically necessary.
Those enrolled in Medicare Part B pay a monthly premium. In 2011 that premium will be $110.50 per month, typically deducted from your Social Security check.
Medicare+Choice was added to the Social Security Act in 1997. Under this section a beneficiary would have access to health plan choices that go beyond the original Medicare.
A Medicare Managed Care Plan is a choice offered in some areas of the country by private insurance companies, sometimes called an HMO. Those enrolled pay the Medicare Part B premium and sometimes an additional premium.
Private Fee-for-Service Plan is a Medicare health plan offered by a private insurance company. Medicare pays a set amount of money every month to the private company and the company provides health care coverage to people with Medicare who join this plan.
What proves I am in Medicare?
Each participating member of Medicare is issued an insurance card. On that card is your Health Insurance Claim number (HICN), a nine-digit number followed by an alpha number code (with the exception of Railroad Retirement beneficiaries).
What are the requirements for equipment used in the home?
Medicare Part B helps pay for medical equipment and supplies used in the home, such as oxygen equipment, wheelchairs, artificial limbs, braces, ostomy supplies, and hospital beds.
Medicare sets very specific restrictions on the types of services and equipment for which it will pay. One of those is Durable Medical Equipment (DME) under Medicare Part B. DME is defined as equipment that can withstand repeated use, is primarily and customarily used to serve a medical purpose, and is generally not useful to a person in the absence of an illness or injury.
All of the following requirements of this definition must be met before an item can be considered durable medical equipment (it is the role of your physician and your provider to help ensure these requirements are met):
- The equipment is prescribed by a physician
- The equipment meets the definition of medical equipment
- The equipment is necessary and reasonable for the treatment of the patient's illness or injury, or to improve the functioning of a malformed body member
- The equipment is used in the beneficiary's home
- The equipment is a covered service for the beneficiary
Under these requirements, some equipment that patients may find useful and even necessary would not be covered. For example, bathroom safety items such as grab bars are not covered because they are not primarily medical in nature; a new air conditioner is not covered because it does not serve a primarily medical purpose; elevators and other lift devices are not covered because they are useful to people who are not sick or injured.
Home medical equipment must be appropriate for use in the home. A "home" can be a house, an apartment, a relative's house, a home for the aged or some other institutions that are not hospitals
An institution is not considered a home if it is a:
- hospital or
- primarily engaged in providing skilled nursing care
What is the process for getting equipment through Medicare?
Only physicians and other authorized medical practitioners (nurse practitioner, physician assistant, inters, resident, clinical nurse specialist) can order equipment on your behalf from Medicare. The doctor makes a diagnosis and writes an order for services and equipment. That order is basically a prescription for equipment, a dispensing order. Each item requires specific forms and specific timelines, described below. You don't need to worry about the process other than to understand why suppliers have to request information from you and why the process can take time to gather all of the documentation. In most cases, regardless of the form, the order must have:
- Description of the item
- Name of beneficiary
- Name of the physician
- Date of the order
- Medical justification for the order
What documentation is required to get equipment?
Medicare has strict rules regarding what kind of documentation must be collected before an item can be ordered or covered for you. It is not necessarily up to you to remember, your provider has responsibility to help you understand. However, if there are items you choose to purchase, for example, before a prescription has been written by your doctor and submitted, then you will be responsible for paying for the item. The types of documentation include:
- Dispensing Orders - Many items can be ordered verbally by your doctor. A dispensing order requires the following information:
- Description of the item
- Name of beneficiary
- Name of the physician
- Start date of the order
- Written Orders (Prescription with Medical Justification)-For Medicare to reimburse for any item, they require a minimum of a detailed written order from the treating physician to be signed and dated before submitting a claim to Medicare. A detailed written order simply describes the order, gives information about the patient and supplier and most importantly, details the medical justification from the physician for the order. For rental items, the document must include the length of need. Certain supplies and drugs require additional information.
- Written Orders Prior to Delivery (WOPD) -These are required for TENS units, seat lift mechanisms, decubitus care items, and negative pressure wound therapy. Most importantly, WOPDs are now required for mobility, most specifically power mobility devices (PMDs). The dates are critical here. The WOPD should be dated on or before the date the item was ordered.
- Certificates of Medical Necessity (CMNs) -There are 5 items that require CMNs, Home Therapy Oxygen, Lymphedema Pumps, Osteogenesis Stimulators, Transcutaneous Electrical Nerve Stimulators (TENS) Units, and Seat Lift Mechanisms.
- DIFs DME MAC Information Form - The DIF is completed and signed by the supplier. It does not require a narrative description of equipment and cost or a physician signature. DIFs are used for Infusion Pumps and for Enteral Nutrition.
- Other documentation - There are several categories that require specific documentation: immunosuppressive drugs, support surfaces - groups 1 and 2 and respiratory assist devices (RADs).
What are my costs under Medicare?
Under the current Medicare Part B plan, you pay a certain deductible each year. $155.00 is the amount of the deductible for 2010. A deductible is the amount you must pay each year before Medicare begins paying its portion of your medical bill.
For Durable Medical Equipment, Medicare has certain allowable charges it will pay (that allowable is defined under Medicare rules). Medicare will pay 80% of the allowable charge after your deductible has been met - you are responsible for the other 20%. The 20% balance of the allowable charge is referred to as the co-payment.
You may have a supplemental policy that will pay the Medicare deductible and co-payment.
The co-payment may not be dropped by a supplier except in very special hardship situations and only on a case-by-case basis. A supplier who routinely drops the co-payment may be violating federal law. Note: If your supplier routinely waives Medicare copayments and deductibles, you should report these actions to the appropriate Durable Medical Equipment Regional Carrier (DMERC) or by contacting the Inspector General's Hotline at 1-800-HHS-TIPS.
Medicare reviews two critical elements to decide if they will provide equipment:
- is it medically necessary
- is it the least costly alternative
Medicare, in order to work to manage costs, requires that there be proof that the equipment provided is necessary for you to function within their rules and also that the equipment provided is the least costly option available to meet your need (for example, a standard wheelchair of steel or aluminum rather than one with a carbon fiber frame). Your provider has options within those categories of what brand and style to provide. You also have the option of upgrading through the use of the Advanced Beneficiary Notice, where you agree to pay additional costs for an upgrade out of pocket.
What is the Advanced Beneficiary Notice?
Medicare has strict standards requiring equipment to be medically necessary and limits on how long they allow equipment to be rented or how often it can be bought. There are cases in which reimbursement from Medicare may be denied even when the company providing your equipment thinks the equipment is a medical necessity, but is not certain it will qualify because of the conditions above. If Medicare chooses not to pay, then it becomes your obligation to pay for the item. In these cases, the supplier is given the obligation to notify you that what they are ordering for you may not be covered. That notice is given through an Advanced Beneficiary Notice (ABN), a form that you will be asked to sign confirming that you are aware of the fact that Medicare may not pay and that you will be liable for the costs if reimbursement does not come from Medicare.
Situations where a supplier may ask you to sign an ABN
- they believe that you may have rented the equipment before,
- you don't know if you've ever rented the equipment before,
- the item or service is expected to be denied as not reasonable or necessary, i.e. lack of medical necessity,
- you are requesting a medically unnecessary upgrade,
This written agreement on assigned and non-assigned claims prior to rendering the services must state the specific reason the supplier believes the services may be denied. Your supplier is not permitted to have every customer sign an ABN form as part of the delivery process, it violates the rules of CMS.
A new process, using the ABN described, allows HME suppliers to offer you items of higher quality than those usually covered by Medicare if you will pay the difference in price. The upgraded item must be within the range of services that are appropriate for the beneficiary's medical condition - for example an upgrade from a manual to an ultra lightweight wheelchair, but not from a cane to a wheelchair.
The ABN must note how the products differ and your signature notes that you agree to pay the difference in the retail costs between the two items. If you sign that ABN, the supplier may collect the difference between the charges for the upgraded item and the charges for the non-upgraded item from the beneficiary.
What is Assignment?
There are two different ways your supplier may provide equipment through Medicare, and you and the supplier must agree on the approach. One is if your provider chooses to accept the assignment of the equipment. When a supplier accepts assignment, it means he agrees that he will accept the Medicare allowable charge as full reimbursement. Payments will be made directly to the supplier and the supplier will bill you for the 20% portion and deductible not paid by Medicare.
The other approach is when a supplier does not accept assignment. That means that you agree to pay the supplier in full for the item, even the costs that exceed those normally allowed by Medicare. The supplier will file a claim on your behalf and then payment from Medicare will be made directly to you at 80% of the Medicare allowable charge if the supplier chooses non-assignment and the patient will then be responsible for full payment to the supplier.
The supplier is not required to file a claim for services or items that are not, in any circumstance, covered by Medicare. Examples: bath benches, diapers and support hose. However, if you request the claim to be filed, the supplier must do so.