Chapter 3 — Key Takeaways

Why Medicare is upstream of everything

Use Medicare as the default hypothesis, never as the answer. Reliable divergences: consultation codes, edit and modifier policy, preventive/screening benefits (modifier PT vs. 33).

The four parts

• Part A deductible is per benefit period, not per year. A benefit period ends after 60 consecutive days out of an inpatient setting.
• Part B: annual deductible, then 20% coinsurance, and no out-of-pocket maximum.
• "Hospital = Part A" is wrong. An outpatient encounter at a hospital is Part B.

Participation status

$$\text{Limiting charge} = (\text{par amount} \times 0.95) \times 1.15$$

Two steps. 115% of the non-par amount, not of the par amount. Par \$400.00 → non-par \$380.00 → limiting charge **\$437.00**.

Coverage determinations

• NCD — national, binding on all MACs.
• LCD — one MAC's jurisdiction only.
• Billing and coding article — the companion document where the covered ICD-10-CM code list actually lives. Reading the LCD and stopping is the common error.
• Statutorily excluded ≠ not reasonable and necessary. Different notices, different modifiers. An ABN is for the second, never the first, and never routinely.

Always check: which contractor published it, the version and effective date (the policy on the date of service governs), whether an article exists, and whether an NCD supersedes it.

Medicare Advantage

Everything operational changes: the plan adjudicates, there is a network, referrals and prior authorization appear, there is an out-of-pocket maximum, and appeals start with the plan.

The trap: the patient says "I have Medicare" and they are right. Only the eligibility transaction tells you where to send the claim. And being in network with an insurer's commercial products does not put you in network with its Medicare Advantage product.

Medicaid

Fifty programs, one name. Four things hold everywhere:

1. Payer of last resort — always bills after every other liable payer.
2. Balance billing the beneficiary is generally prohibited.
3. Most enrollment is managed care — a private plan with its own network and rules.
4. Verify eligibility every visit. Monthly churn is structural, and a lapse is often reversible.

Duals, crossovers, and MSP

• QMB beneficiaries may not be billed for Medicare deductibles or coinsurance — regardless of what the state pays. Build a control for this.
• Crossover: read the indicator on the remittance advice. Crossed → do not bill the secondary (duplicate). Not crossed → bill it yourself, promptly.
• MSP thresholds: 20 employees (age-65 entitlement, actively working) and 100 employees (disability entitlement). Retiree coverage is not current employment.

Key terms

Part A · Part B · Part C / Medicare Advantage · Part D · MAC · beneficiary · assignment · participating · non-participating · limiting charge · NCD · LCD · ABN · Medicaid · dual eligible · QMB · CHIP · Medicare Secondary Payer · crossover claim · Medicare Summary Notice

Monday morning

You should be able to:

• Compute a limiting charge in two steps without looking it up.
• Tell an Original Medicare patient from a Medicare Advantage patient before you bill anything.
• Find the LCD and its billing and coding article for a service, and check its jurisdiction and version.
• Determine MSP primacy from three facts: age or disability, active employment, and employer size.
• Recognize a QMB and stop the statement before it goes out.
• Name where to look up any of it, free.

The Encounter so far — the same visit, two payers:

The practice collects 22% less under Medicare. The patient pays less too — because a flat \$30 copay is worse for them than 20% of \$96.52. Cost sharing is computed on the allowed amount, except the copay, which is computed on nothing at all.