Medicare Advantage
In addition to the original Medicare "fee-for-service" program, Medicare offers beneficiaries the option to receive care through private insurance plans. These private insurance options are part of Medicare Part C, which has also been known as Medicare+Choice plans, and is now called Medicare Advantage. The most common type of Medicare Advantage plans are health maintenance organizations (HMOs), Because, to date, most Medicare beneficiaries who participate in Medicare Advantage receive managed care through health maintenance organizations, this discussion will focus on Medicare HMOs.
Medicare Advantage is a means of receiving health care and Medicare coverage. The beneficiary must specifically opt to receive Medicare coverage and care through an HMO, or other private plan insurance. Once the choice is made, the beneficiary must generally receive all of his or her care through the plans providers in order to receive Medicare coverage. The main premise is that through preventive care and the use of a primary physician who acts as a "gatekeeper" to specialized care, health care costs can be reduced while beneficiary health can be maintained.
Private insurance plans are generally paid a fixed rate per beneficiary by Medicare, regardless of how many or how few services the beneficiary actually requires. While many Medicare beneficiaries in Connecticut can choose a Medicare Advantage plan, the number of plans available has diminished as some companies, maintaining that their reimbursement rates were too low, have withdrawn from the market in many areas of the state. Because Congress decided in 2003 to pay Medicare Advantage plans more on average than is paid under traditional Medicare, it is anticipated that the number of Medicare Advantage plans will increase.
HMOs and the private insurance plans are required to provide the full range of Medicare benefits to each enrolled beneficiary for a fixed payment per enrollee. Medicare HMOs are also required to provide additional services, over and above those available through the traditional Medicare program, without additional charge to Medicare enrollees. The HMO not only provides or ar ranges for direct medical services, but also, at initial decision stages, decides what care is reasonable and necessary. Enrollees are generally "locked in" which means they can receive Medicare coverage only for services provided through the HMO's providers.
SERVICES THAT AN HMO MUST PROVIDE A MEDICARE ENROLLEE
HMOs are required to provide those services and supplies that are covered under Parts A and B of Medicare. In addition, they must generally provide "additional" benefits to enrollees beyond those covered by Medicare. These additional benefits may take the form of either or both a reduction in the premiums, deductibles and coinsurance payments ordinarily required or the provision of health benefits or services beyond the required Part A and B coverage.
HMOs can, with the approval of the Center for Medicare & Medicaid (CMS), require Medicare enrollees to accept and pay for "supplemental" services which are above and beyond both the basic Part A and Part B services and the "additional" services referred to in the previous paragraph. The HMO's charge to the enrollee for these services may not exceed the premium that non-Medicare Advantage enrollees would be charged for a similar benefit package.
Generally, all substantive coverage rules under the regular Medicare benefit must also be met by a Medicare HMO enrollee. In addition, time limitations on coverage that exist in the regular Medicare benefit, such as 100 days of skilled nursing facility care, apply to HMO services. The Medicare Advantage plan should not have its own additional rules or criteria which further limit coverage.
Treating sources outside of the geographic area are covered when it is common practice to refer patients outside of the area for these services. Otherwise, services received by enrollees outside the HMO provider network, will generally not be paid for by Medicare and the beneficiary will be personally liable for the charges. Exceptions to this rule are emergency services, urgently needed services, and services denied by the HMO and found upon appeal to be services the enrollee was entitled to have furnished by the HMO.
Emergency services means services furnished by an out-of-plan treating source because they are needed immediately due to a sudden illness or injury and the time required to reach an in-plan treating source would mean risk of permanent damage to the patient's health. Emergency status continues for as long as transfer to an in-plan treating source is precluded due to risk to health or is unreasonable given the distance and nature of the medical condition.
Urgently needed services means services required to prevent serious deterioration of the patient's health resulting from an unforeseen illness or injury if the patient is temporarily absent from the HMO geographic area and the medical care cannot be delayed until the patient's return to the geographic area.
CONCLUSION
Many advocates involved in representing Medicare Advantage plan care enrollees find that the system is fraught with difficulties. Beginning with the absence of clear explanations, and thus clear understandings on the part of enrollees, as to what services may be covered under what circumstances, to the concern of advocates that economic issues, rather than quality of care, guide some coverage determinations, the Medicare Advantage system can present great problems for enrollees. The requirements that enrollees use only the HMO's providers and that specialty care must be approved in advance are often viewed as disadvantages to the Medicare Advantage program. This difficult situation is compounded by an appeals system that is often vague and can involve frequent delays.
Another problematic area has been private insurance marketing activities. Although certain marketing techniques are prohibited, including the prohibition of activities that would mislead, misinform, confuse, or defraud Medicare beneficiaries, abuse by some companies has been an ongoing problem. Unfortunately, the regulations provide no direct remedies that the beneficiary subjected to prohibited marketing activities may pursue.
On the other hand, there are some advantages for HMO enrollees. For many enrollees, deductibles or coinsurance payments are reduced or eliminated. In addition, there are no claim forms to be filled out and some plans offer benefits not covered by Medicare.
Each year, many Medicare Advantage plans have decided to withdraw entirely from the Medicare market due to insufficient profits. Under current law, HMOs may decide each year whether to offer a Medicare plan and may discontinue the plan after providing their enrollees with written notice 60 days prior to termination. The closing of plans in many areas of Connecticut and the nation has been frightening and confusing for enrollees.
These uncertain circumstances, variations in the services that a plan may offer, and the charges that plans may impose point out how important it is for a prospective enrollee to examine carefully the benefits and costs of the services offered by the HMOs. A comparison of these benefits and costs with the original Medicare program, combined with coverage from a Medicare supplemental policy (Medigap), should be conducted before enrolling in a Medicare Advantage plan.