For numerous healthcare providers, a significant portion of their patient base is covered by Medicare and Medicare Advantage plans. Working with these programs is fundamental to business operations. Nevertheless, due to the frequent updates these plans undergo, tracking changes in patients’ eligibility is a critical aspect of billing work.
Medicare and Medicare Advantage eligibility changes can occur for a variety of reasons, including alterations in patients’ income, residence, or medical conditions. They can impact the amount providers are reimbursed for their services, making change tracking important for accurate Medicare billing.
This article aims to serve as a guide for healthcare providers to master Medicare billing with a focus on managing eligibility changes, avoiding common mistakes, and maximizing revenue.
Understanding Medicare and Medicare Advantage Plans
Medicare provides government-funded insurance to individuals aged 65 and above, as well as those who have certain disabilities. The program is divided into four different parts, each offering different types of medical coverage:
- Part A – covers inpatient hospital care, including skilled nursing care
- Part B – covers outpatient care, preventive services, and medical equipment supplies
- Medicare Advantage also referred to as Medicare Part C – covers care offered by Parts A, B, and D, along with additional benefits like vision, dental coverage, wellness programs, etc. It is represented by commercial payers.
- Part D – covers prescribed drugs.
Medicare Advantage is offered by private insurance companies, approved by CMS to participate in the program. It usually offers lower out-of-pocket expenses for members; however, it may have a limited healthcare provider network. Members may need to choose a facility within the plan’s network and pay additional costs if they seek care outside of it. Individuals who have Parts A and B are also eligible for Medicare Advantage, although they may need to be in a valid enrollment period in order to enroll.
Medicare and Medicare Advantage Billing
There are several critical aspects a biller should keep in mind when working with Medicare and Medicare Advantage plans to ensure accurate and timely payment.
1. Verify Medicare eligibility: Before submitting a claim, it is crucial to verify the patient’s eligibility for Medicare or Medicare Advantage. Ensure that services are covered under the patient’s plan, verify whether the Medicare ID number is correct, and check the coverage dates.
2. Double-check Medicare billing guidelines: Familiarize yourself with the most current Medicare billing manuals to ensure compliance with regulations. Stay up to date with changes to Medicare policies and coding guidelines to ensure accurate billing.
3. Use Appropriate Codes: Correct billing (CPT, HCPCS) codes must be used when you submit a Medicare claim. This helps to prevent errors and subsequent claim denials. Part C plans follow the Medicare coding guidelines for most services, however, there are some specific points billers should be aware of:
- HCCs: Medicare Advantage uses Hierarchical Condition Categories codes (HCCs) to calculate the risk score and expected costs based on the patient’s diagnosis codes. Higher risk scores lead to higher payments. If these codes are not used correctly, the facility may receive lower payments from Medicare Advantage plans
- Modifiers: Medicare Advantage may require the use of certain modifiers to indicate additional service information, such as the provider’s credentials or location. Modifiers also reflect the specificity of the procedure performed, e.g., the part of the body treated (left, right, bilateral), etc.
4. Coordination of benefits: Billers must understand the coordination of benefits rules to ensure that the claim is submitted correctly.
- If the patient has another health insurance plan, Medicare is considered primary and must cover its share of reimbursement first. Secondary plans can receive crossover claims from Medicare, eliminating the need for the biller to submit the claim independently. However, in such cases, it is necessary to ensure that Medicare eventually delivers a crossover to avoid submitting the claim independently (as it will be denied as a duplicate).
- A Medicare Advantage plan may also require the beneficiary to inform them of any changes in any new coverage obtained. This ensures an accurate Coordination of Benefits (COB) process, and that Medicare Advantage is aware of any other insurance that may affect payment for healthcare services.
5. Understanding Payment Rules: Medicare Advantage plans have slightly different payment rules and fee schedules. Traditional Medicare billing is based on a fee-for-service basis, while Medicare Advantage plans have another procedure. Medicare pays Medicare Advantage plans on a capitated per member per month (PMPM) basis. This capitation payment is essentially a fixed amount of money provided every month for each enrolled member, regardless of the amount of care that he/she utilizes. It is determined by the enrollee’s location and a so-called “risk score”. Medicare Advantage plans then negotiate with providers, and they can establish a variety of reimbursement structures, such as capitation, fee-for-service, or other models, based on negotiated agreements.
6. Prior authorization requirements: Medicare Advantage plans require prior authorization for a larger number of services, including non-emergency hospital admissions, MRI, CT scans, PET scans, certain medications, and procedures (like joint replacement surgery, bariatric surgery, etc.). It’s important to check the patient’s Medicare Part C eligibility and plan to determine which services require prior authorization.
7. Out-of-network services: Medicare Advantage may require prior authorization for out-of-network providers, to verify the medical necessity of the services and ensure that the costs are reasonable. Also, a biller should be aware that the patient may have a higher portion of cost to cover from their side (compared to in-network facilities) and therefore the out-of-pocket expenses should be double-checked.
Key Eligibility Changes to Keep an Eye On
As Medicare and Medicare Advantage plans continue to evolve, tracking patients’ eligibility changes becomes increasingly critical to ensure proper reimbursement. Here are the key types of changes in insurance policies that billers should watch out for:
- Changes in Medicare coverage eligibility – this includes the loss of Medicare or Medicare Part C eligibility due to changes in residency status, or potentially returning to employer group coverage. The billing team should carefully track these types of changes because if a Medicare termination was not noticed but expensive care was provided and the claim submitted, it will be rejected, meaning a big loss for the facility. These types of eligibility changes are some of the most dangerous for revenue streams. Also, note that if the patient loses eligibility for the original Medicare (Part A and B), they will also lose Medicare Part C eligibility.
- Changes in patients’ demographics – primarily, address or marital status updates. These changes might seem relatively minor; however, they can have a serious impact on the revenue cycle and often result in delayed payments.
- Medicare plan changes – this includes updates to the number of services covered by the insurance policy, prescription drug coverage, and the out-of-pocket expenses’ share.
It is important to monitor out-of-pocket expenses as their structure may differ across various plan types. In traditional Medicare, they are set by federal regulations but can change each year due to various factors, such as healthcare costs (e.g., in 2023 Medicare Part B deductible decreased from $233 to $226).
Medicare Advantage personal expenses differ based on the plan selected by the patient. Notably, there is an annual out-of-pocket maximum, and changes in this rate can have a significant impact on the patient’s financial responsibility and the reimbursement amount.
Why Tracking Eligibility Changes Matters
There are numerous reasons why it is vital for a healthcare facility to track insurance eligibility changes:
1. It helps avoid delayed payments and denied claims. It enables billers and administrative staff to notice Medicare policy changes “on the spot” and react to them quickly. By incorporating eligibility updates, the claim can be prepared with the correct information according to Medicare billing guidelines, and submitted to the insurance without delay, reducing the risk of denial and saving valuable time. Thus, the facility can streamline its revenue cycle billing process and maximize reimbursement.
2. Tracking eligibility changes ensures that patients have appropriate coverage. It is possible that individuals are unaware of their ineligibility, which can ultimately result in an increase in their responsibility for the cost of services, leading to financial strain and potentially even bankruptcy. If the service won’t be covered, the facility may have to write off the amount as bad debt.
3. Tracking eligibility changes in a timely manner mitigates legal risks that arise from billing for services not covered by Medicare/Medicare Advantage. If the errors are deemed intentional or fraudulent, the facility may face civil or criminal penalties, fines, and could even be excluded from Medicare. Additionally, repeated mistakes may trigger audits, which can be time-consuming and costly for the facility to respond to.
To ensure an effective Medicare and Medicare Advantage eligibility tracking process in the facility, it is essential to have a systematic approach in place. This may include creating a dedicated team responsible for monitoring eligibility changes, regularly updating the electronic health record (EHR) system with the latest information, and using automated software to identify any discrepancies or inconsistencies.
Benefits of Automated Eligibility Tracking
The simplest approach to implementing eligibility tracking would be to engage billing and administrative staff to manually process using spreadsheets. This approach includes verifying Medicare eligibility by calling their representatives, checking the website, and regularly monitoring policies, co-pays, deductibles, etc. This method is time-consuming and prone to errors, as it relies on human attention and memory to process a large amount of information accurately.
Another option is to automate the process and use specialized software, which verifies insurance coverage, out-of-pocket expenses, patient responsibility, etc., eliminating the need for manual intervention. This approach offers numerous benefits to medical facilities as it saves time and ensures the accuracy of the information, reducing the risk of claim denials and delayed payments due to human errors.
Approved Admissions delivers these benefits directly as it verifies insurance policies in real-time and provides detailed reports on changes in patients’ Medicare or Medicare Advantage coverage, including specific services or treatments and out-of-pocket expenses. No special inquiries need to be submitted by the biller since the system will automatically send notifications regarding any changes. The billing team can also initiate a Medicare or Medicare Advantage verification check in the system to assess the eligibility of a patient (or a group of patients) prior to their admission to the facility.
Any interoperability concerns can be swiftly addressed as Approved Admissions can easily integrate with a facility’s electronic health record (EHR) system, enabling the billing staff to access the most up-to-date insurance information for each patient.
Overall, an automated eligibility tracking process can help medical facilities ensure accurate and efficient billing for services provided to patients with Medicare or Medicare Advantage coverage. Real-time eligibility and coverage detail updates help facilities avoid costly mistakes and denials, ultimately improving financial performance, while the staff can focus on other essential tasks such as patient care and medical administration.