Individuals eligible for Medicare are in one of six categories: (a) age sixty-five or older; (b) disabled adults; (c) disabled before age eighteen; (d) spouses of deceased, disabled, or retired employees; (e) retired federal employees enrolled in the Civil Service Retirement System (CSRS); or (f) individuals of any age diagnosed with end-stage renal disease (ESRD).
Medicare Part A provides coverage for care in hospitals and skilled nursing facilities, for home health care, and for hospice care. Part B provides outpatient medical coverage. Part C offers managed care plans called Medicare Advantage as an option to the traditional fee-for-service coverage under the Original Medicare Plan. Part D is a prescription drug benefit.
Medicare Part B covers physician services, diagnostic X-rays and laboratory tests, some preventive care examinations and tests, outpatient hospital visits, durable medical equipment, and other nonhospital services. It does not cover most routine and custodial care, examinations for eyeglasses or hearing aids, some foot care procedures, services not ordered by a physician, cosmetic surgery, health care received while traveling outside the United States, and procedures deemed not reasonable and medically necessary.
Participating providers agree to accept assignment for all Medicare claims and to accept Medicare’s fee as payment in full for services. They are responsible for informing patients when services will not, or are not likely to be, paid by the program. They must also comply with numerous billing rules such as global periods.
Nonparticipating providers choose whether to accept assignment on a claim-by-claim basis. NonPAR providers are allowed 5 percent less than PAR providers on assigned claims; on unassigned claims, nonPAR providers are subject to Medicare’s limiting charges.
The Original Medicare Plan is a fee-for-service plan that provides maximum freedom of choice when selecting a provider or specialist.
Medicare Advantage plans offer additional services but restrict beneficiaries to a network of providers, a preferred provider organization (PPO) plan, private fee-for-service, or Medical Savings Account.
Medigap insurance pays for services that are not covered by Medicare. Coverage varies with specific Medigap plans, but all provide coverage for patient deductibles and coinsurance. Some also cover excluded services such as prescription drugs and limited preventive care.
The Medicare Medical Review (MR) Program is implemented by contractors to ensure correct billing. Under this program, a carrier may audit claims by sampling codes to see if they match national averages, and may request documentation (medical records) to check on certain claims.
