Coordination of Benefits Question (U65 on Medicare)

[TN_agent]

OK, did a search and didn't find this exact question answered, maybe someone can point me in the right direction. I think I know how this should work, but some of these rules are tricky.

U65 just got her disability awarded and has been enrolled in Medicare A&B. She is still within the window to decline B. She is currently covered under her husband's active employment GHP. His employer is a large-group (over 100 employees), so from what I can tell GHP would be primary if she keeps both.

She wanted to know how Medicare would pay if she stayed on the B rather than declining it. Assume that the GHP coordinates benefits.

What I am not 100% clear on is outpatient and doctors balance billing if they accept Medicare assignment.

She has called Medicare twice and gotten two different answers, hence her calling me (her son is a client).

Do I understand this correctly?

Let's assume the GHP has a $1500 deductible on a certain (outpatient) procedure then pays 80%. First bill of any kind for any doctor in 2017.

On a procedure, the negotiated rate with the GHP is $3000. Medicare's is $1500. Provider accepts GHP and Medicare assignment.

She has a $1500 deductible, then 20% coinsurance, so her GHP will pay $1200 and say she owes $1800.

Medicare's is supposed to pay 80% after part B deductible. They would not pay any, because the GHP had already paid the $1200, which is more than what they would normally be obligated to pay, in this case about $1055.

Lady additionally owes $182 part B deductible to doctor's office, plus the coinsurance of $108 to get the doctor paid $1500 total. Is that right?

Does the doctor's office have to take the $1200 from GHP + $300 from lady as paid in full because they accept Medicare assignment, or could they balance bill the woman for the rest of the $3000 her GHP has contracted? I know that I should know the answer to this, but it doesn't come up often because most people I have dealt with are already planning to terminate GHP before I get to them.

 

[Todd King]

I'm not totally sure on this, but since Medicare won't be the primary payor, the Medicare approved amount probably won't come into play. I think they'll be responsible for the 20%.

Now, I never really worked with any of the underage clients that still maintained a group policy, and some things have changed a bit since I was in the field too, so don't take my words as gospel on this particular situation.

 

[somarco]

This from MLN should answer your question(s). Look at the graphic on pg 4.

Medicare secondary to group health rarely pays anything.

https://www.cms.gov/Outreach-and-Ed...-MLN/MLNProducts/downloads/MSP_Fact_Sheet.pdf

 

[me112233]

There is a hidden benefit from enrolling in Part B -- limited or no balance billing. Here's the peculiar math:

Let's say the doctor issues a bill for $4,000 for some random outpatient surgery:

Primary payer (group insurance) processes the bill as it would normally, and pays the appropriate amount. In typical example, group insurance company reduces bill to $2,500, then pays 80%, or $2,000, and then the doctor would typically ask for the $500 that is left over, BUT . . . . .

Secondary payer (Medicare) processes the same bill as it would normally, reduces it to $1,800, and would normally pay $1,440 (80% of $1,800). Medicare then looks at what the group insurance actually paid, sees that it was more than $1,440, so Medicare PAYS NOTHING . . . .

Now, that sounds bad, BBBBBUUUUUTTTTTT . . . .

That was a BIGGG BBBBBUUUUUTTTTTTT . . . .

You see, according to Medicare, the entire Medicare approved charge of $1,800 was paid for by the primary payor (and then some) and therefore, the doctor can't balance bill the patient.* So, even though Medicare paid nothing, the simple fact that the patient was enrolled in Part B indirectly saved her the $500 that would normally be asked for by the doctor.

A secondary benefit of enrolling in Part B is that your client will NEVER get burned by potential "out of network" issues. Even if she is enrolled in a HMO plan, she can rest assured that the most she will have to pay is 20% of Medicare approved Part B benefits no matter what doctor/lab/radiology group is involved; and in most cases, she will not pay anything. [OK, if she hasn't met her $183 deductible yet, she could possibly be out a few dollars, but you get the idea . . . .]"

*Illustration presumes doctor takes Medicare assignment, which 98% of doctors nationwide do.

 

[somarco]

Me, you are calling the 20% balance billing?

 

[TN_agent]

That is essentially what I am asking, in cases of double coverage, do Medicare rates or GHP rates apply in this situation in terms of what doctors can bill for? Can a doctor who accepts Medicare assignment bill this woman (who is covered by Medicare) at a higher than Medicare rate because she has a GHP that is primary?

I would lean towards no, because that would encourage people to drop the GHP because of higher negotiated rates, and the government would be paying more of these claims OOP. In both examples above the GHP is picking up bills that Medicare would have had to pay otherwise.

But, I have yet to find that information anywhere verifying that.

 

[somarco]

Go back to my post #3, click the link and study page 4.

If you need more detail, read the rest of the brochure in that link starting with page 6.

When Medicare is the secondary payer they review the claim as if they were primary. Primary payer reprices the claim to $1,000.

Medicare reviews the claim and determines their allowable charge is $700.

Medicare pays nothing.

 

[me112233]

Go back and read what I posted for exactly what it says. It is stepwise. Do it in the order presented. Do not think of it as two major med plans coordinating benefits.

As for the doctor, he can write up a bill for $50,000,000 if he wants to, but the group insurance company will reprice it to the charges allowed by the plan, and require the doctor write off the excess $49,997,500 that is over the network allowable fee, and then pay the appropriate cost share based on the $2,500 repriced number (in my example, 80% or $2,000).

THEN, the same bill for $50,000,000 is submitted to Medicare, which reprices it to $1,800, and makes the doctor write off $49,998,200. (But it is OK that the doc got paid $2,000 by the group insurance.)

Medicare would normally pay $1,440 on the $1,800 bill, BUT since the doc already got paid that much (actually more) by the group insurance, Medicare pays nothing.

Medicare limits the doctor (who takes assignment) to Medicare allowable charges as far as what can be collected from the Medicare beneficiary/patient. The doctor already got more than that from the group insurance policy, so doctor cannot ask the patient to pay any more. The doctor does NOT have to pay back the $200 over Medicare allowable charges he got from the group insurance, because that money came from the insurance company and not the patient.

Just for jollies, let us pretend that the group insurance has a 70% benefit scheme. That means it would pay $1750 (70% of $2500). Now, Medicare still won't pay anything, because $1750 is more than $1440. However, in this situation, the doctor is allowed to balance bill the patient for $50. ($1800 allowable charge minus the $1750 that the doctor already received from the group insurance coverage.)

If the group insurance only paid at a 50% benefit scheme, the group insurance would pay $1,250, Medicare would pay $190 ($1440 minus $1250) and the patient could be balance billed for $360 ($1800 maximum allowable charge minus $1250 minus $190).

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OK, did a search and didn't find this exact question answered, maybe someone can point me in the right direction. I think I know how this should work, but some of these rules are tricky.

U65 just got her disability awarded and has been enrolled in Medicare A&B. She is still within the window to decline B. She is currently covered under her husband's active employment GHP. His employer is a large-group (over 100 employees), so from what I can tell GHP would be primary if she keeps both.

She wanted to know how Medicare would pay if she stayed on the B rather than declining it. Assume that the GHP coordinates benefits.

What I am not 100% clear on is outpatient and doctors balance billing if they accept Medicare assignment.

She has called Medicare twice and gotten two different answers, hence her calling me (her son is a client).

Do I understand this correctly?

Let's assume the GHP has a $1500 deductible on a certain (outpatient) procedure then pays 80%. First bill of any kind for any doctor in 2017.

On a procedure, the negotiated rate with the GHP is $3000. Medicare's is $1500. Provider accepts GHP and Medicare assignment.

She has a $1500 deductible, then 20% coinsurance, so her GHP will pay $1200 and say she owes $1800.

Medicare's is supposed to pay 80% after part B deductible. They would not pay any, because the GHP had already paid the $1200, which is more than what they would normally be obligated to pay, in this case about $1055.

Lady additionally owes $182 part B deductible to doctor's office, plus the coinsurance of $108 to get the doctor paid $1500 total. Is that right?

Does the doctor's office have to take the $1200 from GHP + $300 from lady as paid in full because they accept Medicare assignment, or could they balance bill the woman for the rest of the $3000 her GHP has contracted? I know that I should know the answer to this, but it doesn't come up often because most people I have dealt with are already planning to terminate GHP before I get to them.

In your example, the woman could be asked to pay
$300 out if pocket (you are correct).

----------

OK, did a search and didn't find this exact question answered, maybe someone can point me in the right direction. I think I know how this should work, but some of these rules are tricky.

U65 just got her disability awarded and has been enrolled in Medicare A&B. She is still within the window to decline B. She is currently covered under her husband's active employment GHP. His employer is a large-group (over 100 employees), so from what I can tell GHP would be primary if she keeps both.

She wanted to know how Medicare would pay if she stayed on the B rather than declining it. Assume that the GHP coordinates benefits.

What I am not 100% clear on is outpatient and doctors balance billing if they accept Medicare assignment.

She has called Medicare twice and gotten two different answers, hence her calling me (her son is a client).

Do I understand this correctly?

Let's assume the GHP has a $1500 deductible on a certain (outpatient) procedure then pays 80%. First bill of any kind for any doctor in 2017.

On a procedure, the negotiated rate with the GHP is $3000. Medicare's is $1500. Provider accepts GHP and Medicare assignment.

She has a $1500 deductible, then 20% coinsurance, so her GHP will pay $1200 and say she owes $1800.

Medicare's is supposed to pay 80% after part B deductible. They would not pay any, because the GHP had already paid the $1200, which is more than what they would normally be obligated to pay, in this case about $1055.

Lady additionally owes $182 part B deductible to doctor's office, plus the coinsurance of $108 to get the doctor paid $1500 total. Is that right?

Does the doctor's office have to take the $1200 from GHP + $300 from lady as paid in full because they accept Medicare assignment, or could they balance bill the woman for the rest of the $3000 her GHP has contracted? I know that I should know the answer to this, but it doesn't come up often because most people I have dealt with are already planning to terminate GHP before I get to them.

In your example, the woman could be asked to pay
$300 out if pocket (you are correct).

 

[somarco]

I did read your post, Me, and it made no sense.

Perhaps you need to define balance billing for the class.

While you are at it, tell us how the COB provision in Medicare works. Either you disagree with my explanation in post #8 above, or you did not understand it.

 

[LostDollar]

It looks like
10.1.2 of this:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/msp105c03.pdf

Addresses your question. I don't have the time right now to paper,pencil and calculator convert the manual example to your example, but it kinda seems like the situations match.

(And I deleted my previous post because it is totally stupid in relation to this situation.)

========
Edit-to Somarco
I'm sorry, deleting my post messed up your ref to post 8, it's now post 7.
The stuff i said was so inappropriate to the thread that it was not good to leave it.
========================

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Math and incorrect law interpretation below. See post 13.

I get the provider being able to bill an additional $28.40.

GHP paid $1200.
Medicare allows $1500.
$1500-$182=$1308 x .8 = $1046.40 Medicare payment if Medicare primary.

Medicare primary pmt $1046.40 + medicare ded $182 = $1228.40
(Medicare Ded + Medicare coinsurance)

GHP pmt $1200 - Medicare amt $1228.40 = - 28.40 (the amount which the provider could recover from the patient.)