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Life Health > Long-Term Care Planning

17 more Medicare facts you need to know

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Medicare benefits generally become available at the beginning of the month in which an individual reaches age 65. An individual whose birthday falls on the first day of a month is treated as having reached age 65 on the last day of the month immediately preceding his or her birthday. Assuming an individual is otherwise eligible for Medicare, benefits become available at age 65 even if the individual is still working. Individuals who qualify for Medicare on the basis of disability — other than those who are disabled due to Lou Gehrig’s disease (amyotrophic lateral sclerosis) — must be continuously disabled for 24 months before they will be able to receive Medicare benefits. There is no waiting period for Medicare benefits when eligibility is based on disability due to Lou Gehrig’s disease or on end-stage renal disease.

As enrollment season approaches, here are answers to several core questions your clients may ask. If you have additional queries, please leave them in the comments section.

1. Can a person age 65 or over qualify for Part A (Hospital Insurance) benefits without qualifying for Social Security or Railroad Retirement benefits?

Certain individuals age 65 or over and otherwise ineligible for Part A (Hospital Insurance) may enroll voluntarily and pay a monthly premium if they also enroll in Part B (Medical Insurance). Any such person must also be a resident of the United States and also either a U.S. citizen or an alien lawfully admitted for permanent residence status (who has continuously resided in the United States for at least five years immediately before applying for Medicare benefits). 

2. Is there any way that an individual not automatically eligible for Part A (Hospital Insurance) can be enrolled?

Yes, provided the individual (1) has attained age 65, (2) is enrolled in Part B (Medical Insurance), (3) is a resident of the United States and is either (a) a citizen, or (b) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the five years immediately preceding the month in which he applies for enrollment, and (4) is not otherwise entitled to Part A (Hospital Insurance) benefits.

Certain disabled individuals under age 65 may also be able to obtain Part A (Hospital Insurance) coverage by paying monthly premiums. This category of eligibility applies to someone who previously qualified for Medicare coverage on the basis of disability and continues to be disabled, but whose income exceeds the level allowed under Social Security for payment of disability income benefits to disabled persons and thus loses eligibility for Medicare benefits under the normal disability provisions.

Certain government employees who otherwise do not qualify for automatic Part A (Hospital Insurance) may also be able to enroll for Part A coverage by paying a premium.

For individuals who voluntarily enroll in Part A (Hospital Insurance) by paying a premium, the premium is $426 a month in 2014 (but see paragraph below for premium reduction exception). This premium amount increases by up to 10 percent for those who must pay a premium surcharge for late enrollment. 

The Part A (Hospital Insurance) premium is reduced — by 45 percent (to $234 a month in 2014) — for individuals with credits for 30 or more quarters paid into the Social Security system (and certain current, surviving and divorced spouses of such individuals). The reduced premium amount increases by up to 10 percent for those who must pay a premium surcharge for late enrollment. 

An individual who qualifies for the reduction is an individual who (1) has 30 or more quarters of coverage, (2) has been married for at least the previous one year period to a worker who has 30 or more quarters of coverage, (3) had been married to a worker who had 30 or more quarters of coverage for a period of at least one year before the death of the worker, (4) is divorced from, after at least 10 years of marriage to, a worker who had 30 or more quarters of coverage at the time the divorce became final, or (5) is divorced from, after at least 10 years of marriage to a worker who subsequently died and who had 30 or more quarters of coverage at the time the divorce became final.

3. In general, what benefits are provided under Part A (Hospital Insurance)? 

Part A (Hospital Insurance) provides the following main types of benefits:

(1) Inpatient hospital care for up to 90 days in each “benefit period” (also known as a “spell of illness”). The patient pays a deductible of $1,216 in 2014 for the first 60 days and coinsurance of $304 a day for each additional day up to a maximum of 30 days. In addition, each person has a non-renewable lifetime “reserve” of 60 additional hospital days with coinsurance of $608 a day.

(2) Post-hospital extended care in a skilled nursing facility for up to 100 days in each “benefit period.” The patient pays nothing for the first 20 days in 2014. After 20 days the patient pays coinsurance of $152.00 a day for each additional day up to the maximum of 100 days (including the 20 days at no charge).

(3) The first 100 post-hospital home health service visits following a hospital or skilled nursing facility stay. The services must be made under a plan of treatment established by a physician. There is no charge for home health care visits under Part A, except that there is 20 percent cost-sharing payable by the patient for durable medical equipment (other than the purchase of certain used items). The 100-visit and post-institutional care limits apply only to Medicare beneficiaries enrolled in both Parts A and B.

(4) Hospice care for terminally ill patients.

4. Specifically, what inpatient hospital services are paid for under Part A (Hospital Insurance)? 

Subject to a deductible and coinsurance, Medicare Part A (Hospital Insurance) pays for inpatient hospital service for up to 90 days in each “benefit period” (also called a “spell of illness”). Medicare will also pay (except for a coinsurance amount) for 60 additional hospital days over each person’s lifetime (called the “lifetime reserve” days).

Medicare pays for hospital care if the patient meets the following four conditions: (1) a physician prescribes inpatient hospital care for treatment of an illness or injury, (2) the patient requires the kind of care that can be provided only as an inpatient in a hospital, (3) the hospital is participating in Medicare (except in certain emergency situations), and (4) the utilization review committee of the hospital, a Quality Improvement Organization (QIO), or the applicable Medicare Administrative Contractor (MAC) does not disapprove of the stay.

The patient must pay a deductible of $1,216 in 2014 for the first 60 days in each benefit period. If the stay is longer than 60 days during a benefit period, coinsurance of $304 a day must be paid for each additional day up to a maximum of 30 days.

Thus, a 90-day stay in 2014 would cost the patient $10,336. After 90 days, the patient pays the full bill unless the lifetime reserve of 60 days is drawn upon. The patient must pay coinsurance of $608 a day for each of the 60 additional lifetime reserve days.

The coinsurance amounts are based on those in effect when services are furnished, rather than on those in effect at the beginning of the beneficiary’s benefit period.

A “benefit period” is a way of measuring the patient’s use of services under Part A (Hospital Insurance). A new 90-day benefit period starts with each new spell of illness, beginning with the day a patient begins receiving inpatient hospital care. A benefit period ends when the patient has been out of a hospital or other facility primarily providing skilled nursing or rehabilitative services for 60 days in a row (including the day of discharge). After one benefit period has ended, another one will start whenever the patient again receives inpatient hospital care.

There is no limit to the number of 90-day benefit periods a person can have in a lifetime (except in the case of hospitalization in a psychiatric hospital for mental illness), but the lifetime reserve of 60 days is not renewable. Also, special limited benefit periods apply to hospice care. 

Example 1. Mr. Smith enters the hospital on February 5. He is discharged on February 15. He has used 10 days of his first benefit period. Mr. Smith is not hospitalized again until August 20. Since more than 60 days have elapsed between his hospital stays, he begins a new benefit period in August. Part A (Hospital Insurance) will again pay for up to 60 days of inpatient hospital coverage, subject to Mr. Smith’s payment of the deductible, and another 30 days subject to Mr. Smith’s payment of coinsurance.

Example 2. Mr. Jones enters the hospital on September 14. He is discharged on September 24. He also has used 10 days of his first benefit period. He is then readmitted to the hospital on October 20. Because fewer than 60 days have elapsed between hospital stays, Mr. Jones remains in the same benefit period and will not be required to pay another hospital deductible when he re-enters the hospital on October 20. This means that the first day of his second admission is counted as the eleventh day of hospital care in that benefit period. Mr. Jones will not begin a new benefit period until he has been out of the hospital (and has not received any skilled care in a skilled nursing facility) for 60 consecutive days.

“Lifetime reserve” days include an extra 60 hospital days a patient can use if the patient has a long illness and needs to stay in the hospital for more than 90 days. A patient has only 60 reserve days in a lifetime. For example, if a patient uses 8 reserve days in that individual’s first hospital stay covered under Medicare Part A, he or she will have only 52 reserve days left to use during subsequent hospital stays, whether or not such stays fall within new benefit periods. A patient can decide when and whether to use lifetime reserve days.

If a patient does not want to use lifetime reserve days, the patient must tell the hospital in writing, either at the time of admission or at any time up to 90 days after discharge. If a patient uses reserve days and then decides that he or she did not want to use them, the patient must request approval from the hospital to have the lifetime reserve days restored. A patient must pay the full hospital costs for any day after the first 90 days in a benefit period if the patient is not using lifetime reserve days to offset the costs after the 90 days. During 2014, Part A (Hospital Insurance) pays for all covered services except $608 a day for each reserve day the patient uses.

Medicare beneficiaries have the right to receive all the hospital care that is necessary for the proper diagnosis and treatment of their illness or injury. Under federal law, a beneficiary’s discharge date must be determined solely by medical needs, not by the diagnosis-related group (DRG) or Medicare payments. Beneficiaries have the right to be fully informed about decisions affecting their Medicare coverage and payment for their hospital stay and for any post-hospital services. They also have the right to request a review by a quality improvement organization (QIO) of any written notice of noncoverage they receive from the hospital stating that Medicare will no longer pay for their hospital care. QIOs are usually groups of physicians who are paid by the federal government to review medical necessity, appropriateness and quality of hospital treatment furnished to Medicare patients. 

The following inpatient services are covered by Part A (Hospital Insurance):

  • Bed and board in a semi-private room (two to four beds) or a ward (five or more beds). Part A (Hospital Insurance) will pay the cost of a private room only if it is required for medical reasons (e.g., the patient needs isolation for medical reasons or needs immediate hospitalization and no other accommodations are available). If the patient requests a private room, Part A will pay the cost of semi-private accommodations; the patient must pay the extra charge for the private room. The patient or family must be told the amount of this extra charge when a private room is requested. Normally, Medicare patients are assigned to semi-private rooms. Ward assignments are made only under extraordinary circumstances.
  • All meals, including special diets.
  • Nursing services provided by or under the supervision of licensed nursing personnel (other than the services of a private duty nurse or attendant).
  • Services of the hospital’s medical social workers.
  • Use of regular hospital equipment, supplies, and appliances, such as oxygen tents, wheel chairs, crutches, casts, surgical dressings, splints, and hospital “admission packs” (toilet articles) when routinely furnished by the hospital to all patients. Certain equipment, supplies and appliances used by the patient in the hospital continue to be covered after the patient has been discharged. Examples include a cardiac pacemaker and an artificial limb.
  • Drugs and biologicals ordinarily furnished by the hospital. A limited supply of drugs needed for use outside the hospital is also covered, but only if medically necessary in order to facilitate the patient’s departure from the hospital and the supply is necessary until the patient can obtain a continuing supply. Drugs and biologicals that the hospital obtains for the patient from a private source (community pharmacy) are covered when the hospital is responsible for making payment to the supplier.
  • Diagnostic or therapeutic items and services ordinarily furnished by the hospital or by others (including clinical psychologists, as defined by the Centers for Medicare & Medicaid Services), under arrangements made with the hospital.
  • Operating and recovery room costs, including hospital costs for anesthesia services.
  • Services of interns and residents in training under an approved teaching program.
  • Blood transfusions, after the first three pints. Part A (Hospital Insurance) helps pay for blood (whole blood or units of packed red blood cells), blood components, and the cost of blood processing and administration. If the patient receives blood as an inpatient of a hospital or skilled nursing facility, Part A will pay for these blood costs, except for any nonreplacement fees charged for the first three pints of whole blood or units of packed red cells per calendar year. The nonreplacement fee is the amount that some hospitals and skilled nursing facilities charge for blood that is not replaced. The patient is responsible for the nonreplacement fees for the first three pints or units of blood furnished by a hospital or skilled nursing facility. If the patient is charged nonreplacement fees, the patient has the option of either paying the fees or having the blood replaced. If the patient chooses to have the blood replaced, the patient can either replace the blood personally or arrange to have another person or an organization replace it. A hospital or skilled nursing facility cannot charge a patient for any of the first three pints of blood that the patient replaces or arranges to replace. If the patient has already paid for or replaced blood under Part B (Medical Insurance) of Medicare during the calendar year, the patient does not have to meet those costs again under Part A.
  • X-rays and other radiology services, including radiation therapy, billed by the hospital.
  • Lab tests.
  • Respiratory or inhalation therapy.
  • Independent clinical laboratory services under arrangement with the hospital.
  • Alcohol detoxification and rehabilitation services when furnished as inpatient hospital services. Alcohol detoxification and rehabilitation services may also be covered under Part B (Medical Insurance) when furnished as physician services.
  • Dental services when the patient requires hospitalization because of the severity of the dental procedure or because of the patient’s underlying medical condition and clinical status.
  • Cost of special care units, such as an intensive care unit, coronary care unit, etc.
  • Rehabilitation services, such as physical therapy, occupational therapy, and speech pathology services.
  • Appliances (such as pacemakers, colostomy fittings, and artificial limbs) that are permanently installed while the patient is in the hospital.
  • Lung and heart-lung transplants. 

Part A (Hospital Insurance) does not pay for:

  • Services of physicians and surgeons, including the services of pathologists, radiologists, anesthesiologists, and physiatrists. (Part A (Hospital Insurance) also does not pay for the services of a resident physician or intern other than those provided by an intern or resident in training under an approved teaching program.)
  • Services of a private duty nurse or attendant, unless the patient’s condition requires such services and the nurse or attendant is a bona fide employee of the hospital.
  • Personal convenience (comfort) items supplied at the patient’s request, such as television rental, radio rental, or telephone.
  • The first three pints of whole blood (or packed red blood cells) received in a calendar year.
  • Supplies, appliances and equipment for use outside the hospital, unless continued use is required (e.g., a pacemaker).

5. Can patients choose their own hospitals? 

Except for certain emergency cases, Medicare will make payments only to “qualified” hospitals, skilled nursing facilities, home health agencies, and hospices.

Medicare generally does not pay for hospital or medical services outside the United States. (Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands are considered part of the United States.)

Medicare will pay for both emergency and nonemergency inpatient hospital care in a foreign hospital if the foreign hospital is closer to, or substantially more accessible than the nearest U.S. hospital (that is adequately equipped and available to handle the patient’s care) to, the patient’s U.S. residence,. Medicare also authorizes payment for emergency care in a Canadian hospital when the emergency occurred in transit between Alaska and another U.S. state without unreasonable delay and by the most direct route. Necessary physicians’ services in connection with Mexican or Canadian hospitalization that qualifies for Medicare coverage are also authorized under Medicare. If a person receives emergency treatment in a Canadian or Mexican hospital or lives near a Canadian or Mexican hospital, he should have the hospital help him contact a Medicare administrative contractor.

6. How is hospice care covered under Part A (Hospital Insurance)?

Under the Part A (Hospital Insurance) hospice benefit, Medicare pays for hospice services every day and also permits a hospice to provide appropriate custodial care, including homemaker services and counseling. Hospice care under Medicare includes both home care and inpatient care, when needed, and a variety of services not otherwise covered under Medicare (such as custodial care).

Medicare payments to a hospice are based on one of four prospectively determined rates for each day in which a qualified Medicare beneficiary is under the care of the hospice. The four rate categories are routine home care, continuous home care, inpatient respite care, and general inpatient care. Payment rates are adjusted to reflect local differences in area wage levels.

Hospice care is covered under Part A (Hospital Insurance) when the beneficiary (1) is eligible for Part A benefits, (2) is certified by a physician as terminally ill (i.e., have a life expectancy of six months or less), and (3) files a statement electing to waive all other Medicare coverage for hospice care from hospice programs other than the one chosen, and elects not to receive other services related to treatment of the terminal condition. (The beneficiary can later revoke the election.)

The following are covered hospice services:

  • Nursing care provided by or under the supervision of a registered professional nurse.
  • Medical social services provided by a social worker under a physician’s direction.
  • Counseling (including dietary counseling) with respect to care of the terminally ill patient and adjustment to the patient’s approaching death.
  • Short-term inpatient care (including both respite care and procedures necessary for pain control and acute and chronic symptom management) provided in a participating hospice, hospital, or skilled nursing facility. The respite care may be provided only on an intermittent, nonroutine, and occasional basis and may not be provided consecutively over longer than five days.
  • Medical appliances and supplies.
  • Services of a home health aide and homemaker services.
  • Drugs, including outpatient drugs for pain relief and symptom management.
  • Physical therapy, occupational therapy, and speech-language pathology services to control symptoms or to enable the patient to maintain activities of daily living and basic functional skills.

Services of a home health aide, homemaker services, and nursing care provided by or under the supervision of a registered professional nurse, may be provided on a 24-hour, continuous basis only during periods of crisis and only as necessary to maintain the terminally ill patient at home.

The definition of hospice care also includes any other item or service which is specified in the patient’s plan of care and for which Medicare may pay.

A “hospice program” for Medicare purposes is a public agency or private organization that is primarily engaged in providing the care and services listed above and makes the services available (as needed) on a 24-hour basis. A hospice program also provides bereavement counseling for the immediate family of the terminally ill patient. The care and services must be provided in the patient’s home, on an outpatient basis, and on a short-term inpatient basis. The nursing, physician, counseling, and medical social service benefits must be provided directly on a routine basis. The remaining hospice benefits may be provided through arrangements with other hospice programs (provided the agency or organization maintains professional management responsibility for all services).

The Centers for Medicare & Medicaid Services (CMS) may waive certain service requirements for hospices not located in urbanized areas that can demonstrate that they have been unable, despite diligent efforts, to recruit appropriate personnel. For these hospices, CMS may waive the provision requiring physical or occupational therapy or speech-language pathology services and dietary counseling.

A hospice program must have an interdisciplinary group of personnel (at least one physician, one registered nurse, one social worker, and one pastoral or other counselor) to establish the policies of the program and provide the required care and services. The group must maintain central clinical records on all patients, utilize volunteers, and is required to continue hospice care for any patient who is unable to pay for such care.

7. Does Part A (Hospital Insurance) pay for custodial care in a skilled nursing facility? 

Medicare does not pay for custodial care when that is the only kind of care needed. Care is considered custodial when it is primarily for the purpose of helping the patient with daily living or meeting personal needs, and could be provided safely and reasonably by people without professional skills or training. For example, custodial care includes help in walking, getting in and out of bed, bathing, dressing, eating, and taking medicine.

8. What items and services generally are (and are not) covered under Part A (Hospital Insurance) when provided in a participating skilled nursing facility? 

The following items and services are covered when provided in a participating skilled nursing facility:

  • Bed and board in a semi-private room (two to four beds in a room), unless the patient’s condition requires isolation or no semi-private rooms are available.
  • Nursing care provided by, or under the supervision of, a registered nurse (but not private-duty nursing).
  • Drugs, biologicals, supplies (such as splints and casts), appliances (such as wheelchairs) and equipment for use in the facility.
  • Medical social services, including the assessment of the patient’s medical and nursing requirements, the patient’s financial resources, home situation, and the community services available to him. Such services may also include the assessment of the social and emotional factors related to the patient’s illness, and the patient’s need for care, response to treatment, and adjustment to care in the skilled nursing facility. Appropriate action to obtain case work services to assist in resolving problems in these areas is covered by Medicare.
  • Medical services of interns and residents in training under an approved teaching program of a hospital.
  • Other diagnostic or therapeutic services provided by a hospital with which the facility has a transfer agreement.
  • Rehabilitation services, such as physical, occupational, and speech therapy, furnished by the skilled nursing facility, or by others under arrangements made by the skilled nursing facility.
  • All meals, including special diets furnished by the facility.
  • Blood transfusions, other than the first three pints of blood.
  • Such other health services as are generally provided by a skilled nursing facility.
  • The following services are not covered even if provided by the skilled nursing facility:
  • Personal convenience (comfort) items that the patient requests, such as a television, radio, or telephone.
  • Private duty nurses or attendants.
  • Any extra charges for a private room, unless it is determined to be medically necessary.
  • Custodial care, including assistance with the activities of daily living (i.e., walking, getting in and out of bed, bathing, dressing, and feeding), special diets, and supervision of medication that can usually be self-administered, when that is the only care required by the patient.
  • Physician’s services provided to a patient while the patient is in a skilled nursing facility are covered by Part B (Medical Insurance), not Part A (Hospital Insurance).

 9. What provisions are made under Part A (Hospital Insurance) for care in a skilled nursing facility? 

Federal regulations include the following services for skilled rehabilitation and nursing care: (1) insertion and sterile irrigation and replacement of catheters, (2) application of dressing involving prescription medications and aseptic techniques, (3) treatment of extensive bed sores or other widespread skin disorders, (4) therapeutic exercises or activities supervised or performed by a qualified occupational or physical therapist, (5) training to restore a patient’s ability to walk, and (6) range of motion exercises that are part of a physical therapist’s active treatment to restore a patient’s mobility.

A number of services involving the development, management and evaluation of a patient care plan may qualify as skilled services. These services are “skilled” if the patient’s condition requires the services to be provided or supervised by a professional to meet the patient’s needs, promote recovery, and ensure the patient’s medical safety. For example, a patient with a history of diabetes and heart problems, who is recovering from a broken arm, may require skin care, medication, a special diet, an exercise program to preserve muscle tone, and observation to detect signs of deterioration or complications. Although none of these required services necessarily falls within the definition of “skilled” on its own, the combination, provided by a professional, may be considered “skilled.”

To qualify for skilled nursing facility reimbursement, skilled physical therapy must be (1) specifically related to a physician’s active treatment plan, (2) of a complexity, or involving a condition, that requires a physical therapist, (3) necessary to establish a safe maintenance program or provided where the patient’s condition will improve within a predictable time, and (4) of the necessary frequency and duration.

10. When are post-institutional home health services covered under Part A (Hospital Insurance)? 

If a person needs post-institutional skilled health care in his or her home for the treatment of an illness or injury, Medicare pays for covered home health services furnished by a participating home health agency. In general, Part A (Hospital Insurance) covers the cost of 100 home health visits made on an “intermittent” basis during a home health spell of illness under a plan of treatment established by a physician. However, patients may be eligible for additional home health benefits under Part B.

A “home health agency” is a public agency or private organization that:

  1. is primarily engaged in providing skilled nursing services and other therapeutic services;
  2. has policies, established by a group of professional personnel, including one or more physicians and one or more registered professional nurses, to govern the services which it provides, and provides for supervision of its services by a physician or registered professional nurse;
  3. maintains clinical records on all patients;
  4. is licensed pursuant to applicable state and local law;
  5. has in effect an overall plan and budget;
  6. meets additional requirements and conditions of participation as the Centers for Medicare & Medicaid Services (CMS) finds necessary in the interest of the health and safety of individuals who are furnished services by the home health agency;
  7. meets additional requirements as specified by CMS for the effective and efficient operation of the program.

A “home health agency” does not include any agency or organization that is primarily for the care and treatment of mental diseases.

A number of rules and procedures have been established to stop fraud and abuse, including regulations requiring all home health agencies serving Medicare to obtain surety bonds. Agencies must be bonded and must provide quality care to at least 10 patients before applying to provide care to Medicare patients. At least seven of the 10 patients must be receiving active care at the time the agency applies to participate in Medicare.

11. How are premiums paid under Part B (Medical Insurance)? 

Most persons covered by Part B (Medical Insurance) have the premiums deducted from their Social Security, Railroad Retirement, or federal civil service retirement benefit payments. Persons who are not receiving any of these government benefits pay the premiums directly to the government.

Direct payment of premiums is usually made on a quarterly basis with a grace period, determined by the Centers for Medicare & Medicaid Services (CMS), of up to 90 days.

Public assistance agencies may enroll, and pay premiums for, certain public assistance recipients (usually recipients of public assistance under the Supplemental Security Income program). States must pay premiums for specified low-income persons. 

If a person’s Social Security or Railroad Retirement benefits are suspended because of excess earnings, and benefits will not be resumed until the next taxable year, the person will be billed directly for overdue Medicare premiums. If Social Security or Railroad Retirement benefits will be resumed before the close of the taxable year, overdue premiums are deducted from the Social Security or Railroad Retirement cash benefits when they resume.

Premiums must be paid for the entire month of death even though coverage ends on the day of death.

12. How can a person find out if a doctor accepts assignment of all Medicare claims? 

Doctors and suppliers sign agreements in advance to accept assignment on all Medicare claims. They are given the opportunity to sign participation agreements each year.

Medicare beneficiaries may use the Physician Compare tool available on the CMS website to find participating physicians. A listing of all Medicare approved suppliers can also be found on the CMS website. The names and addresses of Medicare-participating doctors and suppliers are also listed by geographic area in the Medicare-Participating Physician Directory and the Medicare-Participating Supplier Directory. Both directories are available in Social Security offices, from Medicare Administrative Contractors, in state and area offices of the Administration on Aging, at most hospitals, and at Medicare beneficiaries may also call 1-800-MEDICARE (1-800-633-4227) to locate physicians and suppliers.

Medicare-participating doctors and suppliers may display emblems or certificates that show they accept assignment on all Medicare claims.

13. What are Medicare providers and Medicare suppliers? 

The term “provider” generally means a hospital, a rural primary care hospital, a skilled nursing facility, a comprehensive outpatient rehabilitative facility, a home health agency, or a hospice that has in effect an agreement to participate in Medicare. A clinic, rehabilitation agency, or a public health agency that has a similar agreement to furnish outpatient physical therapy or speech pathology services, or a community mental health center with a similar agreement to furnish partial hospitalization services, is also considered a provider.

In general, “suppliers” are individuals or entities — other than doctors or health care facilities — that furnish equipment or services covered by Part B (Medical Insurance). For example, ambulance firms, independent laboratories, and entities that rent or sell medical equipment are considered suppliers.

There are different definitions of the term supplier and specific regulations governing different types of suppliers. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) encompass the types of items included in the definition of “medical equipment and supplies.” A “DMEPOS supplier” refers to all individuals or organizations that furnish these items. This can include a physician or Medicare Part A (Hospital Insurance) provider. A DMEPOS supplier must meet Medicare DMEPOS standards in order to obtain a supplier number. Those individuals or entities that do not furnish DMEPOS items but only furnish other types of health care services, such as physician’s services or nurse practitioner services, are not subject to these standards. A supplier number is also not necessary before Medicare payment can be made with respect to medical equipment and supplies furnished incident to a physician’s service.

For Medicare purposes, DMEPOS suppliers either accept or do not accept assignment. If a DMEPOS supplier accepts assignment, it agrees to accept the Medicare-approved amount as payment in full for the covered item. Such suppliers are referred to as “participating suppliers.” Participating DMEPOS suppliers are listed in directories available to Medicare beneficiaries and receive Medicare Part B payment directly from the Medicare program. Nonparticipating DMEPOS suppliers may accept assignment on a case-by-case basis; for claims on which they accept assignment, they receive payment directly from Medicare. If a beneficiary receives a service from a nonparticipating DMEPOS supplier on a nonassigned basis, however, payment is made to the beneficiary (who in turn pays the DMEPOS supplier).

Medicare suppliers are required to meet a number of standards, including the following: (1) complying with all applicable state and federal license and regulatory requirements, (2) maintaining a physical facility on an appropriate site, (3) having proof of appropriate liability insurance, (4) delivering Medicare-covered items to Medicare beneficiaries, (5) honoring all warranties, (6) maintaining and repairing items rented to beneficiaries, and (7) accepting returns of substandard or unsuitable items from beneficiaries.

14. What portion of the cost for Part B services must be borne by the patient? 

The patient pays an annual deductible each year under Part B (Medical Insurance). For 2014, the deductible is $147, which means that the patient pays for the first $147 of covered expenses incurred during the calendar year. After the deductible is met, the patient pays 20 percent of approved charges, and Medicare pays 80 percent. There is no cost-sharing for certain Part B services and supplies, including most home health services, pneumococcal vaccine, flu shots, the costs of second opinions for certain surgical procedures when Medicare requires these opinions, and certain outpatient clinical diagnostic laboratory tests.

15. How does a patient find out how much Medicare will pay on a claim for Part B services? 

After the doctor, provider, or supplier sends in a Part B (Medical Insurance) claim, Medicare sends the patient a notice called Explanation of Your Medicare Part B Benefits to explain the decision on the claim.

This notice shows what charges were made and what Medicare approved. It shows what the coinsurance is and what Medicare is paying. If the annual deductible has not been met, that is also shown. The notice also gives the address and telephone number of the Medicare Administrative Contractor.

16. What doctors’ services are covered under Part B (Medical Insurance)? 

Under Part B (Medical Insurance), Medicare usually pays 80 percent of the approved charges for doctors’ services and other services that are covered under Part B after the patient pays an annual deductible. Part B helps pay for covered services received from the doctor in the doctor’s office, in a hospital, in a skilled nursing facility, in the patient’s home, or any other location. Doctors’ fees and services covered by Part B include:

  • Doctors’ services are covered wherever furnished in the United States. This includes the cost of house calls, office visits, and doctors’ services in a hospital or other institution. Such services include the fees of physicians, surgeons, pathologists, radiologists, anesthesiologists, physiatrists, and osteopaths.
  • Services from certain specially qualified practitioners who are not physicians but are approved by Medicare, including certified registered nurse anesthetists, certified nurse midwifes, clinical psychologists, clinical social workers (other than in a hospital), physician assistants, and nurse practitioners and clinical nurse specialists in collaboration with a physician.
  • Services of clinical psychologists are covered if they would otherwise be covered when furnished by a physician (or as an incident to a physician’s services).
  • Services by licensed chiropractors for manual manipulation of the spine to correct a subluxation. Part B does not otherwise pay for any other diagnostic or therapeutic services, including X-rays, furnished by a chiropractor. Medicare pays for manual manipulation of the spine to correct a subluxation without requiring an X-ray (which previously was required) to prove that the subluxation exists.
  • Fees of podiatrists are covered, including fees for the treatment of plantar warts, but not for routine foot care. Examples of common problems covered by Part B include ingrown toenails, hammer toe deformities, bunion deformities, and heel spurs. Routine foot care not covered by Part B includes cutting or removal of corns and calluses, trimming of nails, and other hygienic care. Part B does help pay for some routine foot care if the patient is being treated by a medical doctor for a medical condition affecting the patient’s legs or feet (such as diabetes or peripheral vascular disease) which requires that a podiatrist or doctor of medicine or osteopathy perform the routine care.

Medicare helps pay for therapeutic shoes and shoe inserts for people who have severe diabetic foot disease. The doctor who treats the diabetes must certify the patient’s need for therapeutic shoes. The shoes and inserts must be prescribed by a podiatrist and furnished by a podiatrist, orthotist, prosthetist, or pedorthist. Medicare helps pay for one pair of therapeutic shoes per calendar year and for inserts. Shoe modifications may be substituted for inserts. The fitting of shoes or inserts is included in the Medicare payment for the shoes.

  • The cost of diagnosis and treatment of eye and ear ailments is covered. Also covered is an optometrist’s treatment of aphakia.
  • Plastic surgery for purely cosmetic reasons is excluded; but plastic surgery for repair of an accidental injury, an impaired limb or a malformed part of the body is covered.
  • Radiological or pathological services furnished by a physician to a hospital inpatient are covered.

Part B also covers (1) medical and surgical services, including anesthesia, (2) diagnostic tests and procedures that are part of the patient’s treatment, (3) radiology and pathology services by doctors while the patient is a hospital inpatient or outpatient, (4) treatment of mental illness (Medicare payments are limited), (5) X-rays, (6) services of the doctor’s office nurse, (7) drugs and biologicals that cannot be self-administered, (8) transfusions of blood and blood components, (9) medical supplies, and (10) physical/occupational therapy and speech-language pathology services.

Part B does not cover (1) most routine physical examinations (the “Welcome to Medicare” initial screening and subsequent annual updates are generally not considered the same as a routine physical), and tests directly related to such examinations (except some Pap smears and mammograms), (2) most routine foot care and dental care, (3) examinations for prescribing or fitting eyeglasses or hearing aids and most eyeglasses and hearing aids, (4) immunizations (except annual flu shots, pneumococcal pneumonia vaccinations or immunizations required because of an injury or immediate risk of infection, and hepatitis B for certain persons at risk), (5) cosmetic surgery, unless it is needed because of accidental injury or to improve the function of a malformed part of the body, (6) most prescription drugs, (7) custodial care at home or in a nursing home, and (8) orthopedic shoes.

Charges imposed by an immediate relative (e.g., a doctor who is the son/daughter or brother/sister of the patient) are not covered.

Doctors cannot make self-referrals for certain designated health services. Designated health services include any of the following items or services: (1) clinical laboratory services, (2) physical therapy services, (3) occupational therapy services, (4) radiology services, including MRI, CAT scans, and ultrasound services, (5) radiation therapy services and supplies, (6) durable medical equipment and supplies, (7) parenteral and enteral nutrients, equipment, and supplies, (8) prosthetics, orthotics, and prosthetic devices and supplies, (9) home health services, (10) outpatient prescription drugs, and (11) inpatient and outpatient hospital services.

The law prohibits a doctor who has a financial relationship with an entity from referring Medicare patients to that entity to receive a designated health service. The prohibition also applies if a doctor’s immediate family member has a financial relationship with an entity. A financial relationship can exist as an ownership or investment interest in, or a compensation arrangement with, an entity. The law is triggered by the mere fact that a financial relationship exists; it does not matter what the doctor intends when making a referral. An entity cannot bill Medicare, Medicaid, the beneficiary, or anyone else for a designated health service furnished to a Medicare patient under a prohibited referral.

The law prohibits Medicare payments for designated health services in violation of the law. If a person collects any amount for services billed in violation of the law, a refund must be made. A person can be subject to a civil money penalty or exclusion from Medicare if that person (1) presents or causes to be presented a claim to Medicare or bill to any individual, third-party payer, or other entity for any designated health service the person knows or should know was furnished as a result of a prohibited referral, or (2) fails to make a timely refund.

17. What outpatient hospital services are covered under Part B (Medical Insurance)? 

Part B (Medical Insurance) helps pay for covered services a patient receives as an outpatient from a participating hospital for diagnosis or treatment of an illness or injury. Under certain conditions, Part B helps pay for emergency outpatient care the patient receives from a nonparticipating hospital. The patient must meet the annual Part B (Medical Insurance) deductible before Medicare will begin paying for outpatient hospital charges and then pay a 20% copayment.

Major outpatient hospital services covered by Part B include (1) services in an emergency room or outpatient clinic, including same-day surgery, (2) laboratory tests billed by the hospital, (3) mental health care in a partial hospitalization psychiatric program, if a physician certifies that inpatient treatment would be required without it, (4) X-rays and other radiology services billed by the hospital, (5) medical supplies such as splints and casts, (6) drugs and biologicals that cannot be self-administered, and (7) blood transfusions furnished to the patient as an outpatient (after the first three pints).

Outpatient hospital services not covered by Part B (Medical Insurance) include (1) most routine physical examinations and tests directly related to the examinations, (2) eye or ear examinations to prescribe or fit eyeglasses or hearing aids, (3) most immunizations, (4) most prescription drugs, (5) most routine foot care, and (6) most dental care.

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