Obviously, there are always new things happening within Medicare. Today, I’m focusing on two topics:: changes in networks within Medicare Advantage plans, and the billing issue of “Observation Status.”

Has Your Doctor Notified You That They Will No Longer Be In The Network of Your Medicare Advantage Plan?

Some clients are calling after receiving letters from their Medicare Advantage plan, notably United Healthcare, stating that their primary care physicians are being dropped from the network. They have until September 1st to find a new PCP or one will be assigned to them.

Why is this being done? There are several reasons, but the most common issue involves how the insurance company sees the provider’s efficiency:: are they seeing the same patients multiple times for the same condition; how many Rx are they prescribing; how often are they performing preventive care screenings; etc etc etc. The insurance companies are seeking higher “star” ratings, which improves their reimbursement levels, so inefficient providers are sometimes finding themselves on the chopping block.

I can help you find a new doctor. In addition, I would like the name of your doctor that is being affected by these changes, so please give me a call.

Observation Status Being Used Too Often?

An observation stay is actually an outpatient hospital stay. You receive medical services that help the hospital doctor decide whether you should be admitted to the hospital as an inpatient or discharged from the hospital.

In general, doctors will only admit a Medicare beneficiary to the hospital if the doctor expects you to need 2 or more nights in the hospital. An emergency room visit that results in someone staying overnight on the hospital for “observation” does not necessarily result in a formal admission, at east for Medicare purposes.

You are not considered admitted unless the doctor formally admits you to the hospital.

What Medicare reimburses depends on your exact status.

Part A of Medicare pays for inpatient hospital stays. Part B pays for outpatient services. The rates of reimbursement are different as are your cost sharing amounts. Without formal admittance, some costs may not be reimbursed under Part B as they would be under Part A.

In addition, admittance to a skilled nursing facility, under Original Medicare, requires a 72 hour, or 3 night admittance to a hospital. Observation status does not meet the requirement.

Next consider medications administered to you while in the hospital during an observation stay. While Part A of Medicare will pay for Rx during your stay, medications permitted by Part B are limited to these:: certain antigens, drugs for osteoporosis, end stage renal disease, hemophiliac clotting factors, anti-nausea, and certain injectables, oral cancer medications, and inhalation/infusion drugs. Most all of these specifcally named medications are directly related to managed care plans for chronic illnesses. Therefore, all other medications would not be covered under Part B, and the beneficiary on observation status would be directly liable for payment of these costs.

You should continually ask what your status is during a hospital stay. If the level of care and treatment does not match the formal status assigned to you, you may need to insist on a status change or find a facility that will provide the correct level of care to match your financial considerations.

While Medicare Advantage plans, in general, do not have the same issue with observation versus admittance status, it nevertheless requires your vigilance.

Call me if you’d like more information, or need to review a case.

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