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2015 National Training Program. Wo r k b o o k. Module: 5 Coordination of Benefits

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2015 National Training Program Wo r k b o o k Module: 5 Coordination of Benefits Module Description Centers for Medicare & Medicaid Services (CMS) National Training Program (NTP) Instructor Information
2015 National Training Program Wo r k b o o k Module: 5 Coordination of Benefits Module Description Centers for Medicare & Medicaid Services (CMS) National Training Program (NTP) Instructor Information Sheet Module 5 Coordination of Benefits The lessons in this Coordination of Benefits training module explain the coordination of benefits when people have Medicare and certain other types of health coverage. The materials up to date and ready to use are designed for information givers/trainers who are familiar with the Medicare program, and would like to have prepared information for their presentations. Objectives This session should help you Explain health and drug coverage coordination Determine who pays first Identify where to get more information Target Audience This module is designed for presentation to trainers and other information givers. It can be easily adapted for presentations to groups of beneficiaries. Time Considerations The module consists of 41 PowerPoint slides with corresponding speaker's notes, activities, and five Check Your Knowledge questions. It can be presented in about 45 minutes. Allow approximately 15 more minutes for discussion, questions, and answers. Additional time may be allocated for add-on activities. Course Materials Additional materials available: Job Aid Common Situations Where Medicare Pays First Module 5: Coordination of Benefits Contents Introduction... 1 Session Overview... 2 Lesson 1 Coordination of Benefits Overview... 3 When Does Medicare Pay?... 5 When Medicare Is the Primary Payer... 6 Medicare Secondary Payer... 7 Gathering Secondary Payer Information... 8 Gathering Secondary Payer Information From Employers... 9 Benefits Coordination & Recovery Center Lesson 2 Health Coverage Coordination Medicare and the Marketplace Medicare and Marketplace Coordination Important Retiree Coverage Considerations Possible Health Claims Payers Employer Group Health Plans Non-group Health Plans No-Fault Insurance Liability Insurance Workers Compensation Workers Compensation Medicare Set-Aside Arrangement (WCMSA) Federal Black Lung Benefits Program Consolidated Omnibus Budget Reconciliation Act (COBRA) Veterans Affairs (VA) Coverage TRICARE for Life Coverage (TFL) Lesson 3 Medicare Part D Coordination of Benefits Coordination of Prescription Drug Benefits Possible Drug Coverage Payers Part D and Other Payers Who Pays First Coordination of Benefits Resource Guide Acronyms CMS National Training Program Contact Information i ii Module 5 explains the Coordination of Benefits when people have Medicare and certain other types of health coverage. This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, Medicaid, the Children s Health Insurance Program (CHIP), and the Federally-facilitated Health Insurance Marketplace. The information in this module was correct as of May To check for an updated version, visit The CMS National Training Program provides this as an informational resource for our partners. It s not a legal document or intended for press purposes. The press can contact the CMS Press Office at Official Medicare program legal guidance is contained in the relevant statutes, regulations, and rulings. 1 This session should help you Explain health and drug coverage coordination Determine who pays first Identify where to get more information 2 Lesson 1, Coordination of Benefits Overview, covers the following: Coordination of Benefits Medicare as the Primary Payer Medicare Secondary Payer 3 If you have Medicare and other health coverage, each type of coverage is called a payer. When there s more than one payer, coordination of benefits rules decide which pays first. The primary payer pays what it owes on your bills first, and then your provider sends the rest to the secondary payer to pay. In some cases there may also be a third payer. 4 Medicare can be the primary payer, the secondary payer, or sometimes other insurance plans should pay and Medicare shouldn t pay at all. Medicare may be the primary payer if you don t have other insurance, or if Medicare is primary to your other insurance. Medicare may be the secondary insurance payer in situations where Medicare doesn t provide your primary health insurance coverage, or when another insurer is primarily responsible for paying. Medicare may not pay at all for services and items that other health insurers are responsible for paying. 5 For most people with Medicare, Medicare is their primary payer, which means Medicare pays first on their health care claims. Medicare pays first in the following situations: Medicare is your only source of medical, hospital, or drug coverage. You have a Medigap (Medicare supplement insurance) policy or other privately purchased insurance policy that isn t related to current employment. This type of policy covers amounts not covered by Medicare. Coverage through Medicaid and Medicare (dual eligible beneficiaries), with no other coverage that could be primary to Medicare. Retiree coverage, in most cases. To know how a plan works with Medicare, check the plan s benefits booklet or plan description provided by the employer or union, or call the benefits administrator. Health care services provided by the Indian Health Service. Veterans benefits. TRICARE. (Note: TRICARE is the U.S. Department of Defense health program for active-duty service members and their families. TRICARE for Life is the program for military retirees and their families.) Coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), with one exception: End-Stage Renal Disease. We ll talk about this coverage shortly. 6 Medicare Secondary Payer (MSP) is the term generally used when Medicare isn t responsible for paying a claim first. When Medicare began in 1966, it was the primary payer for all claims except for those covered by workers compensation, Federal Black Lung Benefits Program benefits, and U.S. Department of Veterans Affairs benefits. In 1980, Congress passed legislation that made Medicare the secondary payer to certain primary plans in an effort to shift costs from Medicare to the appropriate private sources of payment. The MSP provisions have protected Medicare s Trust Funds by making sure that Medicare doesn t pay for services and items that certain health insurance or coverage is primarily responsible for paying. The MSP provisions apply to situations when Medicare isn t the beneficiary s primary health insurance coverage. Medicare saves almost $9 billion annually on claims processed by insurances that pay primary to Medicare. 7 If you re already getting Social Security benefits (for example, getting early retirement), you ll automatically be enrolled in Medicare Part A and Part B without an additional application. Three months before Medicare coverage begins, you re sent a notice asking you to complete the Initial Enrollment Questionnaire online. It asks the questions below about other health insurance you have, like group health coverage from your or a family member s employer, liability insurance, or workers compensation. Do you have any group health plan coverage through your current employer? How many employees, including yourself, work for your employer? Does your employer group health plan cover prescription drugs? Will you be getting any group health plan coverage through the current employment of your husband/wife on your Medicare eligibility date? How many employees work for your husband s or wife s employer? Are you receiving Federal Black Lung Benefits Program benefits or workers compensation benefits? Are you receiving treatment for an injury or illness that another party could be held responsible for, or could be covered under no-fault, automobile, or liability insurance? If you re not getting retirement benefits from Social Security or Railroad Retirement Board, you must sign up to get Medicare. As a new Medicare enrollee, you re automatically registered to use the website, which is Medicare s secure online service that allows you, or your designee, to access your personal Medicare information, health care claims, preventive services information, Medicare Summary Notices, and more. You may complete the questionnaire online at, or over the phone by calling the Benefits Coordination & Recovery Center at TTY users should call Coordination of benefits relies on multiple databases kept by several stakeholders, including federal and state programs, plans that offer health insurance and/or prescription coverage, pharmacy networks, and a variety of assistance programs available for special situations and/or conditions. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 added mandatory reporting requirements for group health plan (GHP) arrangements and for liability insurance, including selfinsurance, no-fault insurance, and workers compensation. Insurers are legally required to provide information. Penalties of up to $1,000 per day/per beneficiary may be incurred for failure to report data. Stakeholders must use a secure web portal to facilitate the transfer of data. Internal Revenue Service (IRS)/Social Security (SSA)/Centers for Medicare & Medicaid Services (CMS) Claims Data Match The law requires the IRS, SSA, and CMS to share information about Medicare beneficiaries and their spouses. A key data source is the IRS/SSA/CMS Claims Data Match. By law, employers are required to complete a questionnaire on the GHP that Medicare-eligible workers and their spouses choose. The Claims Data Match identifies situations where another payer is primary to Medicare. Voluntary Data-Sharing Agreements (VDSAs) CMS has entered into VDSAs with numerous large employers. These agreements allow employers and CMS to send and receive GHP enrollment information electronically. Where discrepancies occur in the VDSAs, employers can provide enrollment/disenrollment documentation. The VDSA program includes Part D information, letting VDSA partners submit records with prescription drug coverage, be it primary or secondary to Medicare prescription drug coverage (Part D). 9 The Coordination of Benefits program identifies the health benefits available to a Medicare beneficiary, and coordinates the payment process to prevent mistaken payment of Medicare benefits. Medicare eligibility data is shared with other payers and Medicare-paid claims are transmitted to supplemental insurers for secondary payment. An agreement must be in place between the Centers for Medicare & Medicaid Services (CMS) Benefits Coordination & Recovery Center (BCRC) and private insurance companies for the contractor to automatically cross over medical claims. In the absence of an agreement, the person with Medicare is required to coordinate secondary or supplemental payment of benefits with any other insurers he or she may have in addition to Medicare. Plans are ensured that the amount paid in dual coverage situations doesn't exceed 100% of the total claim, avoiding duplicate payments. The BCRC initiates an investigation when it learns that a person has other insurance. The investigation determines whether Medicare or the other insurance has primary responsibility for meeting the beneficiary's health care costs. The goal of these MSP information-gathering activities is to identify MSP situations quickly, ensuring correct payments by the responsible parties. 10 Check Your Knowledge Question 1 How many possible different payers could there be for an insurance claim? a. One b. Two c. Three ANSWER: c. Three. The primary payer pays what it owes on your bills first, and then your provider sends the rest to the secondary payer to pay. In some cases there may also be a third payer. 11 Lesson 2, Health Coverage Coordination, explains the following: Medicare and the Marketplace Important Considerations Identifying Appropriate Payers Determining Who Pays First 12 Medicare isn t part of the Health Insurance Marketplace, so if you have Medicare Part A you don t need to do anything related to the Marketplace; you re considered covered. No matter how you get Medicare, whether through Original Medicare or a Medicare Advantage Plan (like a Health Maintenance Organization or a Preferred Provider Organization), you won t have to make any changes related to the Marketplace. If you have Medicare, it s illegal for someone to sell you a Marketplace plan. NOTE: You may have Medicare and Marketplace coverage concurrently, only if you had your Marketplace coverage before you had Medicare. 13 Generally, there is no coordination of benefits between Medicare and an Individual Marketplace Qualified Health Plan (QHP) that you purchase through the Health Insurance Marketplace. There are several important factors to consider when you re making the decision about whether or not to remain in a QHP after you enroll in Medicare Part A. The QHP isn t secondary insurance, and it isn t required to pay any costs toward your coverage if you have Medicare. Individual Marketplace coverage isn't employer-sponsored coverage and it s not based on current employment. If you have individual Marketplace coverage and only enroll in Part A during your Medicare Initial Enrollment Period, you won t be able to enroll in Part B later using a Special Enrollment Period. You will have to wait for the General Enrollment Period (January 31 March 31 each year) and you will have to pay a lifetime Part B penalty if you went without Part B for more than 12 months. Once your Part A coverage starts, any premium tax credits and reduced cost-sharing you may have qualified for through the Marketplace will stop. That s because Part A is considered minimum essential coverage, not Part B. You may decide to choose Marketplace coverage instead of Medicare if you have to pay a premium for Part A. If you re paying a premium for Part A, you can drop your Part A and Part B coverage and get a Marketplace plan instead. If you only have Part B and would have to pay a premium for Part A, you can drop Part B and get a Marketplace plan instead. Only individuals enrolled in the Small Business Health Options Program (SHOP) program in the Marketplace will have coordination of benefits, because that coverage is based on current employment. These individuals have group health plan coverage and Medicare will pay secondary to the QHP coverage. In addition, these individuals can consider delaying Part B enrollment (without penalty) because SHOP employer-sponsored coverage is based on current employment. 14 As discussed previously, people with Medicare who have employer or union retirement plans that cover prescription drugs must carefully consider their options. A person s needs may vary from year to year based on factors like health status and financial considerations. Options provided by employer or union retirement plans can also vary each year. Each plan is required by law to annually disclose to its members how it works with Medicare prescription drug coverage. If a person with Medicare loses creditable drug coverage, he/she has 63 days to enroll in a Part D plan without incurring a late enrollment penalty. Contact the employer group health plans benefits administrator for information, including how it works with Medicare drug coverage. Creditable coverage is coverage that is expected to pay, on average, at least as much as Medicare s standard prescription drug coverage. When making a decision on whether to keep or drop coverage through an employer or union retirement plan, there are some important points to consider: Most employer/union retirement plans offer prescription coverage comparable to Medicare drug coverage, and often generous hospitalization and medical insurance for the entire family, which is particularly important for those who are chronically ill or have frequent hospitalizations. If you drop retiree group health coverage, you may not be able to get it back. If you drop drug coverage, you may also lose doctor and hospital coverage. Family members covered by the same policy may also be affected, so any decision about drug coverage should consider the entire family s health status and coverage needs. 15 It s important to identify whether your medical costs are payable by other insurance before, or in addition to, Medicare. This information helps health care providers determine whom to bill and how to file claims with Medicare. There are many insurance benefits you could have and many combinations of insurance coverage to consider before determining who pays and when: No-Fault Insurance Liability Insurance Retiree Group Health Plan Veterans Affairs Benefits Employer Group Health Plan Depending on the type of additional insurance coverage a person may have, Medicare may be the primary payer or secondary payer for your claim, or may not pay at all. 16 Coordination of benefits is dependent on whether you, or your spouse or family member, is currently working or retired, and on the number of employees of that company. The Federal Employee Health Benefits program is a type of employer group health plan (EGHP). EGHP coverage is coverage offered by many employers and unions for current employees and/or retirees. You may also get group health coverage through your spouse s or other family member s employer. If you have Medicare and are offered coverage under an EGHP, you can choose to accept or reject the plan. The EGHP may be a fee-for-service plan or a managed care plan, like a Health Maintenance Organization. Businesses with 50 or fewer employees or fewer can offer Small Business Health Options Program (SHOP) plans. When does Medicare pay first for people with employer group health plans? If you're 65 or older and have retiree coverage If you're 65 or older with EGHP coverage through current employment, either yours or your spouse s, and the employer has less than 20 employees If you're under 65, have a disability, and are covered by an EGHP through current employment (either yours or a family member s), and your employer has less than 100 employees If you're eligible for Medicare due to End Stage Renal Disease (ESRD) and you have EGHP coverage, either yours or your spouse s, and the 30 month coordination period has ended, or if you had Medicare as your primary coverage before you had ESRD 18 Medicare doesn t usually pay for services when the diagnosis indicates that other insurers may provide coverage, including the following: Auto accidents Illness related to mining (Federal Black Lung Benefits Program) Third-party liability Work-related injury or illness (workers compensation) 19 No-fault insurance is insurance that pays for health care services resulting from personal injury or damage to someone s property regardless of who s at fault for causing it. Types of no-fault insurance include the following: Automobile insurance Homeowners insurance Commercial insurance plans Medicare is the secondary payer where no-fault insurance is available. Medicare generally won t pay for medical expenses covered by no-fault insurance. However, Medicare may pay for medical expenses if the claim is denied for reasons other than not being a proper claim. Medicare will make payment only to the extent that the services are covered under Medicare. Also, if the no-fault insurance doesn t pay promptly (within 120 days), Medicare may make a conditional payment. A conditional payment is a payment for which Medicare has the right to seek recovery. The money that Medicare used for the conditional payment must be repaid to Medicare when the nofault insurance settlement is reached. If Medicare makes a conditional payment and you later resolve the insurance claim, Medicare will seek to recover the conditional payment from you. You re responsible for making sure that Medicare gets repaid for the conditional payment. The Medicare Modernization Act of 2003 (P.L , Tit
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