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What You Don't Know About Medicare Could Be Costing You!

Shannon Martin - October 26, 2011 10:50 AM

October 15, 2011 through December 7, 2011 is this year’s Medicare Open Enrollment period.  During this time, Medicare recipients can switch Medicare Part D programs (prescription drug coverage) or enroll or disenroll from a Medicare Advantage (MA) plan. 

From January 1st-February 14th, those enrolled in a Medicare Advantage plan can also disenroll and switch back to regular Medicare (this is the only change that can be made during that period).  It is worth each Medicare recipient’s or caregiver’s time to evaluate current Medicare coverage and consider alternatives based on his/her specific situation.  Even if an individual’s current plan is appropriate, it is important to understand the coverage, how it works, and Medicare recipients’ rights. 

During this time, an individual may be considering switching to a Medicare Advantage plan to save costs, or may be reviewing whether a current Medicare Advantage plan is still the best option.  MA plans are an option to receive a number of the various Medicare benefits via a private insurer instead of the traditional program.  Typically, these plans will have preferred providers or networks (or providers may not accept the coverage due to the reimbursement rates) and may require a primary care physician or have other restrictions.  They may also include additional benefits such as eye or dental care or gym memberships, and the deductibles, co-pays, etc. are usually less expensive for the recipient.  If a person is enrolled in a Medicare Advantage Plan and is not pleased with the plan/coverage and choices, there are several special enrollment periods, in addition to the annual periods, to make changes. 

One issue many people encounter is the situation where they must get inpatient rehabilitation and do not like the facilities available under the plan for skilled nursing.  The OEPI (Open Enrollment Period for Institutionalized Individuals) may help.  Persons “institutionalized” (i.e. residing in or moving in and out of a skilled nursing facility and other eligible institutions) have a continual enrollment period.  The person can disenroll from a Medicare Advantage plan while in the facility and return to regular Medicare (or a different MA if accepting enrollment) the beginning of the next month. 

Additionally, there is what is known as the “trial period”, which is the first 12 months after someone signs up for a MA plan for the first time.  During this time, he/she can choose to switch back to regular Medicare coverage (and get guaranteed issue on a Medigap plan).  There are various other Special Enrollment periods, for situations such as moving, becoming eligible or losing coverage from an employer or other entity and plan contract violations.  If a client feels they truly did not understand the coverage or were misled, it is worthwhile to contact Medicare or an attorney who specializes in this area about rights and appeals.

A major concern that is arising more often for Medicare recipients is the issue of inpatient hospitalization vs. observation status/outpatient stays.  A doctor must write an order to admit you to the hospital as an inpatient, otherwise you are considered an outpatient.  You may be considered an outpatient even if you have spent the night (or several) at the hospital receiving ER services, observation services, outpatient surgery, lab tests, x-rays, and more. 

Medicare Part A covers inpatient services and comes with certain deductibles (in 2011, $1132 for total stay of days 1-60) whereas Medicare Part B covers outpatient services which may mean patients pay individually (typically with 20% copay after meeting the annual deductible) for various tests and services (this Medicare Fact Sheet outlines all of the copays, deductibles, etc.).  Admission criteria relates to the intensity of service (IS) needed and the severity of your illness (SI).  There are several medical necessity screening tools that Medicare and its contractors use to determine if a hospital admission is medically necessary.  Ultimately it is up to the physician, however if the hospital is not being paid for inpatient admissions they will strenuously attempt to remedy that situation.  Criteria must be met for Medicare to pay and they have been increasingly focused on costly hospital stays in reducing potentially unnecessary expenses.

The other major concern this brings up for patients is coverage of any inpatient rehabilitation needed after a hospitalization.  Medicare will only pay for inpatient Skilled Nursing Services if you have been a hospital inpatient for at least 3 days in a row (not including the day of discharge).  Observation services DO NOT meet the 3-day inpatient criteria, so if a patient or family did not understand the situation outlined above, it could mean unexpected out-of-pocket costs in the thousands.  A hospital based rehabilitation program may be a consideration in this situation (hospital rehabilitation or long-term acute care hospitals are typically categorized as “hospital days” not skilled nursing days).

The importance of a proper understanding of Medicare benefits and options should not be overlooked.  A Medicare Analysis and education about the process when turning 65 should be an integral part of pre-retirement planning.  For current recipients, the enrollment periods provide an opportunity to ensure coverage is still most appropriate given the likelihood the individual’s health has changed and options have evolved.

Click here to get more Medicare-related information.

Shannon Martin, M.S.W., CMC, is Director of Communications at Aging Wisely, LLC (http://www.agingwisely.com), a professional care management and patient advocacy organization and EasyLiving, Inc. (www.easylivingfl.com), a licensed home care agency, in Clearwater, FL.  Shannon served as adjunct professor at Eckerd College in St. Petersburg, FL, where she created a course on “Eldercare”.  Prior in her career, Shannon served as social services director and admissions coordinator in an assisted living/skilled nursing facility and worked as a social worker and volunteer coordinator for a large hospice.

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