By Jim Sullivan, CPA/PFS June 24, 2020
Editor’s note: This article is adapted from the PFP
Section podcast “How
Medicare Benefits Have Changed Due to Our Public Health Emergency,” featuring
Jim Sullivan, and its write-up.
The Centers for Medicare and Medicaid Services (CMS) has
responded to the COVID-19 pandemic by making several temporary changes to
Medicare.
Current Medicare
coverage
To
put the changes into perspective, here’s a refresher on how Medicare works:
There are two ways a beneficiary may be
covered under Medicare. The first is through original Medicare. Original
Medicare consists of:
·
Part
A, which covers
hospital stays and stays in a skilled nursing facility after a stay in a
hospital;
·
Part
B, which pays 80% of the
approved cost of doctor bills, outpatient services, durable medical equipment,
and prescription drugs that are administered in a doctor’s office; and
·
Part
D, which covers
prescription medications.
Individuals who want additional coverage may
also purchase Medicare supplement or Medigap coverage,
which includes Medigap plans provided by private insurance, retiree health
benefits, and Medicaid.
The second way beneficiaries can be covered is
through a Medicare Advantage (MA) plan. These plans are
offered through private insurance companies. Most plans include prescription
drug coverage. While MA plans must offer similar benefits as traditional
Medicare, cost sharing varies among plans.
Most MA plans are either a preferred provider
organization (PPO) or a health maintenance organization (HMO). Under a PPO,
beneficiaries who see providers outside their network may pay more than they
would when seeing an in-network provider.
HMO beneficiaries must go to in-network
providers for the plan to pay for the care. Exceptions are provided for
emergency care. Certain health care procedures may require prior authorization
from the beneficiary’s primary care physician or the MA plan itself.
Changes due to COVID-19
Some of the major changes made to Medicare in
response to COVID-19 include the following:
Testing. Testing for COVID-19 ordered after Feb. 4, 2020, is
covered under traditional Part B when ordered by a physician or other health
care provider. Beneficiaries are not required to pay the Part B deductible or
any related co-insurance.
Costs normally paid by the beneficiary for
services related to COVID-19 testing are eliminated. “Testing-related services”
include the costs of a visit to a physician or outpatient facility.
MA plans may not charge for COVID-19 tests and
testing-related services. Under the legislation, plans may not impose
authorization requirements for such testing.
Treatment. If a Medicare patient is required to be
quarantined in the hospital even if they no longer require acute care, they
will not be required to pay an additional deductible for the cost of the
quarantine.
MA plans may waive or reduce cost sharing for
COVID-19-related treatments but this is not required. CMS has also announced
that MA plans may waive prior authorization requirements for COVID-19 services.
Vaccines. Part B is required to fully cover a COVID-19
vaccine if one becomes available.
Telemedicine. Telemedicine services are now available to
beneficiaries in any geographic area and will be reimbursed by Medicare. CMS
has also waived the requirement that a provider of telemedicine must have
treated the beneficiary in the past three years. Covered telemedicine is not
limited to COVID-19-related services.
Extended medication supplies. Part D plans must provide up to a 90-day
supply of covered drugs to beneficiaries who request it. Part D sponsors are
also required to cover drug purchases at out-of-network pharmacies if
beneficiaries cannot be reasonably expected to use a network pharmacy.
Other changes. MA plans must cover services at out-of-network
health care facilities for all beneficiaries, not only those with COVID-19.
Prior to the pandemic, Medicare paid for a
stay in a skilled nursing facility only if it was preceded by a three-day stay
in a hospital. This requirement has been waived. The waiver applies to all
beneficiaries, not just those with COVID-19
Other rules apply. For details go to www.medicare.gov.
Click on “What Medicare Covers.” From the drop-down menu, click on “Is my test,
item, or service covered?”
Note that many of these changes (such as
telemedicine coverage) are temporary and will presumably end once the public
health emergency is declared ended.
For more news and reporting on the coronavirus
and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page. To find
more financial planning resources related to the impact of COVID-19,
visit aicpa.org/pfp/covid19. For all other
AICPA PFP Section resources, visit aicpa.org/PFP.
— Jim Sullivan, CPA/PFS, is a
Medicare specialist at Fairhaven Wealth Management located in Wheaton, Ill. He
can be reached at jsullivan@fairhavenw.com.
To comment on this article or to suggest an idea for another article, contact
Ken Tysiac, the JofA’s editorial director, at Kenneth.Tysiac@aicpa-cima.com.
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