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FROM THE PBA ELDER LAW SECTION NEWSLETTER

Medicare 101 for Attorneys

By Kathleen M. Martin

Since attorneys who deal with elder law, by definition, work with older adults and their caregivers, Medicare issues often arise in the course of providing representation. Since Medical Assistance advocacy requires extensive knowledge of many rules and regulations, it is tempting to let Medicare issues take care of themselves. However, even if direct Medicare advocacy is not a core area of your practice, a working knowledge of how Medicare works can help you provide more complete service to your older clients, the disabled population and their caregivers. Additionally, we will all face decisions about Medicare coverage some day, maybe in the not too distant future.

Traditional Medicare is an insurance model, based upon the Blue Cross/Blue Shield model. It consists of “parts,” i.e. Part A, Part B, Part C and Part D. Part A is hospital insurance, which covers hospital stays, skilled nursing in a facility (limited benefit), home health care and hospice care. Most people qualify for this benefit at age 65 years at no cost (if there is a 10-year work history, or if a spouse had a least a 10-year work history). Part B is medical insurance, which covers physician services, some outpatient services, ambulance services and durable medical equipment. The premium is currently $96.40 per year for most beneficiaries. Part D is the prescription drug benefit that provides limited assistance with outpatient prescription drugs through private insurers. Part C is the Medicare Advantage Program, which is an alternate delivery system for Medicare services through private plans approved by The Centers for Medicare and Medicaid Services (CMS). Part C plans replace traditional Medicare for beneficiaries who choose this option.

To be eligible for Medicare, the beneficiary must be age 65 or older (the eligibility date is not currently tied to full eligibility for Social Security benefits, which is currently beyond age 65 years), or have end-stage kidney disease and have had a transplant or three months of regular dialysis, or be under age 65 years and receiving Social Security or RR retirement disability, after a 24-month waiting period (this is waived for certain disease processes, such as ALS). There are enrollment rules and penalties for failing to timely enroll for benefits. Employer group health care benefits can be creditable coverage, delaying the time that a person must choose Medicare benefits without any penalty.

Hospital coverage under Part A must be in an acute care hospital and there is a cost sharing requirement. In 2009, the acute hospital cost sharing includes a deductible per spell of illness of $1,068, with $0 co-pay for days 1-60, $267 per day for days 61-90 and $534 per days 91-150. A spell of illness continues until the beneficiary has not received hospital or skilled care in a SNF for 60 consecutive days. SNF coverage generally requires a three-day admission to a hospital under Medicare coverage (3 “midnights”), admission to Medicare certified SNF within 30 days of discharge from the hospital and the need for daily skilled nursing or rehabilitation. SNF coverage can be up to 100 days per spell of illness; co-insurance starts at Day 21. Currently the coinsurance cost is $133.50 per day. Hospice care and home health care are also Part A benefits, with overlap with Part B. Generally, there is no cost-sharing requirements for these programs.

The issue of deductibles and coinsurance requires the consideration of purchasing Medigap insurance to cover the gaps in traditional Medicare coverage. The federal government has created 12 standardized plans (Plans A through L, not to be confused with Parts A, B, C and D), although plans H, I and J are not available to new buyers due to the advent of Part D plans. Medicare (www.medicare.gov) has information on “Choosing a Medigap Policy” on its Web site or in paper form. Many insurers sell these plans, including AARP. Retired persons may also have these plans available from

their former employer. The key is to decide what type of coverage needed (does the individual travel frequently, see doctors who charge more than Medicare will pay, have a chronic condition that generates high medical bills, have the income to pay premiums, etc.). There is a list of companies who sell plans by state at “Medicare Options Compare” on the Medicare Web site. Another good site is www.medicare.gov/caregivers, which is designed for caregivers to help loved ones negotiate Medicare options. Additionally, there was a recent article on www.elderlawanswers.com on “How to Choose a Medigap Policy,” which is an excellent resource to assist you in helping your clients or your loved ones.

Medicare Part B covers some types of outpatient care, including but not limited to, physician visits, lab testing, ambulance costs and durable medical equipment. In 2009, the deductible for Part B is $135. Part B has a monthly premium which is currently $96.40 for persons with incomes under $85,000 annually or $170,000 per couple. A premium increase that is due to a sudden spike in income may be waived in certain circumstances. Some low-income beneficiaries are eligible to have their Part B premium waived through a program with the Department of Welfare. There are several issues that may arise related to Part B coverage, but the most common is failure to apply for Part B in a timely manner, or declining coverage when it is not in the beneficiary’s best interest to do so.

Medicare Part D is the prescription drug benefit, which is the newest benefit under Medicare. Part D is handled through private plans, or as part of the Part C plan elected by a beneficiary. It is helpful to know that a Part D plan is required when a beneficiary who is Medicare eligible qualifies for Medicaid in a nursing home. Also, the state prescription benefits, PACE and PACENET, are now “PACE plus Medicare;” the PACE program will pay for the Part D plan for qualified individuals.

Medicare Part C, or Medicare Advantage, is the most difficult for beneficiaries to understand. These plans are substitutes for traditional Medicare and are obtained through private insurers. These plans are required to deliver the same “package” of services as traditional Medicare, but may offer additional coverage. Advantage plans can be coordinated plans (such as HMOs, PPOs or special needs plans), private fee-forservice plans or Medicare Medical Savings Accounts. Advantage Plans are heavily marketed, but usually not adequately explained to beneficiaries or their families. During the Bush administration, enrollment in these plans was encouraged, with the goal of containing costs for the Medicare program, although insurance companies were being subsidized heavily to stay in the program. The Obama administration has indicated an interest in looking at these plans and the overall cost, as part of the proposed healthcare reform.

Advantage plans can appear to be a bargain since the premiums are often less than traditional Medicare plus a Medigap plan. However, beneficiaries need to examine the plans carefully, since “high end users” who have chronic illnesses and access providers frequently may actually pay more out-of-pocket than if they paid for a good Medigap plan. HMOs are a common type of advantage plan. Beneficiaries are often shocked to learn that they must give up their usual physicians for ones who participate in the plan. Co-pays can be high and referrals must be obtained for any provider visits other than for the primary care physician. These plans often severely limit hospital stays and stays in a SNF, since that is what coordinated care plans are designed to do: save money by limiting expensive care. Some facilities do not accept the plan, particularly if the beneficiary becomes ill while traveling or is transported to a hospital out of network. Some long-term care facilities may not accept these plans. Advantage plans often are no advantage after all.

The above information is very basic and intended as a general overview. Medicare is a complex program that unfortunately is not fully understood by beneficiaries and providers alike. There are many opportunities for lawyers who work with the elderly and disabled to be of assistance. A discussion of all of the issues that can arise is beyond the scope of this article. The statutory basis of Medicare regulations can be found at 42 USC 1395 et seq. (Title 18 Social Security Act) and in 42 CFR (400 section). The POMs can be helpful and Medicare online manuals (www.cms.hhs.gov/manuals/).

Attorney Vicki Gottlich of the

Center for Medicare Advocacy Inc. (www.medicareadvocacy.org), at a recent NAELA seminar, listed some areas that lawyers might study in order to be helpful to clients. There are increasing instances of Medicare beneficiaries being held in acute care hospitals under “observation” and not being actually admitted. The patient is usually unaware of this distinction until he or she is presented with a large hospital and pharmacy bills which are not covered by Medicare and also is denied Medicare coverage for skilled nursing care. Medicare beneficiaries may also appeal an untimely discharge from the hospital, but may not be aware of the procedures.

Gottlich also referred to what she called pervasive myths perpetrated by providers, especially nursing home personnel. One is that Medicare coverage is not available unless the beneficiary shows continued improvement. Related to this is that Medicare will not cover physical therapy if it is “only for maintenance.” In reality, the restorative potential of the beneficiary is not the issue. The patient may need skilled services to prevent further deterioration or to preserve current capabilities (42 C.F.R. §409.32(c)). Other myths include the rumor that Medicare will not cover for long periods and that Medicare will not cover care for people with certain diagnoses.

Other areas for elder law attorneys are Part B enrollment issues, Part D issues and coordination of benefits issues. It is important in this area of law to know where to find the correct information and where to turn to for help. The Center for Medicare Advocacy is a good resource, as are the Medicare Web sites. Medicare distributes a booklet called “Medicare and You,” which is updated each year (can also be found online). Local APPRISE counselors (can be accessed by calling the local Agency on Aging) are trained volunteers who can be a valuable resource to beneficiaries and their caregivers.

Knowledge of Medicare can prove to be helpful in your everyday practices, as well as a valuable marketing tool to encourage clients to engage your services.

Kathleen M. Martin is with O’Donnell, Weiss & Mattei P.C. in Pottstown. She can be reached at kmartin@owmlaw.com or (610) 323-2800.