It's time to Truly 'Work Smarter'
The case for Medicare Advantage in HME.
- By Tyler Poole
- May 01, 2013
As you are reading this, we are roughly 60 days from the implementation
of competitive bidding reimbursement payments (depending on
how well CMS sticks to its timeline), and the home medical equipment
industry faces unprecedented uncertainty.
The anxiety at MedTrade Spring in Las Vegas was palpable, and the industry
responded with a myriad of possible remedies to the average 45 percent reimbursement
cuts to Medicare B payments. Retail opportunities, targeting new
payors, and new relationship building were all focal points of discussion to
reinvigorate the bottom line. These are all excellent ideas.
As I listened to all the new concepts, I couldn’t help but recall the voice of
my grandfather echoing in the back of my mind, his deep Arkansas backwoods
drawl imparting some familiar, but pointed advice: “Son, don’t work
harder, work smarter.” The smart solution, as I see it, is Medicare Advantage.
The Upside to Providers
Simply put, Medicare Advantage plans are a privatized version of the original
Medicare program. Administration of Medicare benefits are the responsibility
of a private insurance company, such as United Healthcare, Blue Cross, or
Coventry. As such, these private insurance companies are also the payor for
any services received by the beneficiary. Whether a provider was awarded bids
or not, having a contract in place with a private insurance payor for Medicare
covered services means you can continue to service your Medicare patients if
they are enrolled in the insurance company’s Medicare Advantage plan.
Most HME carriers have at least a few of these contracts with private
carriers. While it is true that the legal aspect of transitioning patients can be
cumbersome, it is my opinion that Medicare Advantage is certainly the “path
of least resistance,” and the smarter way (read: easier way) to stay afloat in
these most trying times for home medical.
So, what are the advantages of Medicare Advantage? These plans are a
true win-win. Beyond the payment advantages we just discussed, I’d like to
ask that you consider the looming prospect of a CMS audit. Maybe you have
already had one, or are currently in the process of defending yourself from
one. Now, what are your experiences with a United Healthcare audit? An
Anthem audit? Chances are you have no experience with such audits, and
therein lies one of the greatest benefits of Medicare Advantage: The insurance
company is the payor, and therefore, the insurance company handles oversight
and audit in every instance we have seen.
Also, Medicare advantage plans typically have no deductible for part B
services. Think back to January and February, and the hassles of trying to run
down the part B deductible from patients when it was due. Medicare advantage
plans almost never include a deductible on the patients’ part B services,
meaning you receive your 80 percent of contracted payment immediately from
The Upside to Patients
The benefits do not stop in the providers billing department, however. Advantage
plans offer robust benefits and an attractive price to patients, as well. Most
often, Advantage plans include your patients’ part D prescription coverage
within the plan benefits, meaning the beneficiary does not need to purchase a
separate coverage for medication. The carrier will provide all Medicare part A
and part B benefits within their plans, as they are required by CMS to do so.
What most seniors are not aware of, however, is that many of these plans can
offer supplemental coverage like dental, vision, or gym memberships within
their plans at no additional cost. These are benefits that Medicare A and B do
not offer, and the growing popularity of programs like “silver sneakers” attests
to the excitement these programs generate.
Advantage plans can offer your patients predicable co-pays for services,
replacing the less palatable 20 percent that can be so difficult to predict. A
doctor visit, instead of being billed at 20 percent , would be replaced with a
co-pay of, say, $10. Seniors enjoy a predictability of cost with these plans that
part B does not typically provide. To add to the peace of mind these plans
can provide, all Medicare Advantage plans have a “Maximum out of Pocket
limit”, which serves as their cap on spending. Let’s say Mr. Jones, a Medicare
A and B recipient, has a terrible fall, and finds himself hospitalized for two
weeks recovering from the injuries he sustained. When his bill arrives weeks
later, he finds that he has been billed for $45,000 dollars. Medicare will cover
80 percent, sure, but that still leaves Mr. Jones in the lurch for $9,000, since
Medicare A and B do not offer a cap on spending.
With a Medicare Advantage plan, Mr. Jones Maximum out of pocket might
have been $3,400. After that, his Advantage plan will pay ALL of his part A and
B costs for the remainder of the calendar year. Mr. Jones pays $3,400, and he is
done. Also, any other costs for medical services for the rest of the year are paid
at 100 percent by the insurance carrier. If Mr. Jones needed any further services
under part A or B, he would pay nothing. The carrier would pay 100 percent.
When you look at the numbers, it is quite easy to see why these Advantage
plans have continued to grow in popularity over the past few years. More
companies are moving into the space, which only enhances the competition
and makes for stronger plan options for seniors, and an opportunity for HME
providers to stabilize their reimbursement sources in a time of turbulence.
What would the change require from providers? Nothing, beyond changing
who you are requesting reimbursement from. If you have a contract, you can
take the patients. It’s that simple. At a time when we are all stretching for
opportunities to stay above water, simplicity is needed. No need to move to
new products. It is not necessary to open a new retail showroom. … Just work
smarter, not harder!
This article originally appeared in the May 2013 issue of HME Business.
Tyler Poole is vice president of Operations for Benefits-365, an insurance services brokerage that specializes in transitioning Medicare recipients to suitable Medicare Advantage plans within CMS regulations. He can be reached at firstname.lastname@example.org, or by phone at 855-365-BENE (2363).