Medicare Advantage Plans: a Survival Primer

As of January, almost 10.5 million Medicare beneficiaries were receiving health care through Medicare Advantage plans (also known as Medicare Part C). Payment issues for providers who see patients in Medicare Advantage plans are different from those for the standard fee-for-service Medicare (also known as Original Medicare). As more and more Medicare patients enroll in Medicare Advantage plans, psychiatrists need to understand how the plans work since there is a growing likelihood that patients aged 65 and over will be enrolled in one of them.

For patients who have reached age 65 or obtained Medicare because of disability, you should check to see what kind of Medicare coverage they have. Specifically, you should ask patients about their coverage type at every visit, especially their first visit of each new year, since patients may have switched from fee-for-service to a Medicare Advantage plan, or vice versa. If you inadvertently bill the Medicare carrier for a patient who is enrolled in an Medicare Advantage plan, chances are the claim will bounce back and you'll be advised to refile with the Medicare Advantage plan. However, if the Medicare carrier pays it by mistake, when the error is discovered, you will have to return the money and then refile the claim.

There are several types of Medicare Advantage plans: HMO plans, PPO plans, private fee-for-service plans, special needs plans, and medical savings accounts (MSAs). Coverage and payment rules vary for each type. Neither you nor your patients will be reimbursed by Medicare, but rather by the private Medicare Advantage plan that covers the patient.

Essentially, beneficiaries who enroll in a Medicare Advantage plan are taking themselves outside of standard Medicare. In fact, you can see a Medicare Advantage patient without being enrolled as a Medicare provider as long as you are eligible to be a Medicare provider (that is, you haven't opted out of Medicare, unless you are providing emergency or urgently needed services, and you are not on the excluded and sanctioned provider list of the Health and Human Services Office of Inspectors General).

If you are an in-network provider for a Medicare Advantage plan (that is, you have a contract with the plan), you will receive whatever payment amount you negotiated with the plan for seeing its enrollees—be it higher or lower than the Original Medicare amount. Out-of-network providers must be paid at least the amount they would have received under Original Medicare, unless they charge less than the standard Medicare fee.

Some psychiatrists may find that they are in-network providers without realizing it. If when you joined an insurer's network you signed an “all products” contract, then it means you are an in-network provider for the insurer's Medicare Advantage plan as well as for any other plans the insurer maintains. In other cases, the contract specifies that it covers only the plans listed or stated exclusions.

Confusion may arise if you are a non-contracting provider who sees a patient enrolled in a Medicare Advantage plan. As you would for any privately insured patient, you should check to see whether the visit is covered by the Medicare Advantage plan. Some Medicare Advantage plans have prior authorization and/or referral requirements, so be sure you know the plan's rules for covering services before you provide them.

You may request a written advance coverage determination (also known as an organization determination) from the plan before providing a service to confirm that the service is medically necessary and is covered by the plan. In the absence of an advance coverage determination, the Medicare Advantage plan can retroactively deny payment for a service provided to an enrollee if the plan determines that the service was not covered or was not medically necessary. In this case, the enrollee may be held responsible for paying the fee.

For a first visit, the plan may respond benevolently, paying you even though the visit was not preauthorized, but thereafter it may refuse to pay if the patient does not obtain required prior authorization for the out-of-network visit. Here's the twist, however: If the plan rejects your services, saying they're not covered, then regardless of whether you're a Medicare provider, you're free to charge the patient your customary fee (rather than the Medicare fee) because the care is not considered to be covered by Medicare