Funding Fundamentals

It's time to Truly 'Work Smarter'

The case for Medicare Advantage in HME.

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 carrier.

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.

About the Author

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 tyler@benefits-365.com, or by phone at 855-365-BENE (2363).

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