Improved Processing of Misdirected Medicare+Choice Claims

CMS has instructed their carriers to use a new remittance advice code to inform providers when a claim should be sent to an HMO. For instances where a claim for a Medicare+Choice beneficiary is mistakenly sent to a carrier, reason code 109 will now inform practices that the service should be billed to the patient's managed care plan. The Transmittal is available at: http://www.cms.gov/manuals/pm_trans/R1747B3.pdf

Expecting list fees from non-contracted groups

The Medicare + Choice program for Medicare enrollees in managed care plans has a new provision related to balance billing of patients who obtain services from non-contracted suppliers.

Effective 1/1/99, the total payment obligation of a non-contracted Medicare HMO and its Medicare enrollees is limited to the Medicare fee schedule amount. When services are performed as a non-contracted or out of network laboratory for a Medicare enrollee of a Medicare HMO, the lab can only collect the Medicare fee schedule amount.

If the non-contracted plan pays the lab less than the fee schedule amount, the lab can bill the patient the difference between what the plan pays and the Medicare fee schedule amount for the test.

If the non-contracted plan does not pay for the service and Medicare does not pay for the service based upon their fee schedule, then the patient cannot be billed.

The legal reference for this can be found in 42 U.S.C. Section 1395w-22(k)(1) (SSA Section 1852(k)(1)) and 42 C.F.R. 422.214(a)(1) makes it clear that a non-contracted supplier which provides services to Medicare + Choice enrollees must accept the amount that Medicare would pay for the services. Link for U.S.C. Code can be found at: www4.law.cornell.edu/uscode/42. Enter the code sections you want to view.