Medicare B and the FEHBP

Q: I recently enrolled in Medicare B. Will Medicare reimburse my doctor for his usual charges for services?

A: This depends on whether your doctor has agreed to accept the Medicare schedule of approved amounts as payment in full for his services. Doctors fall into three categories in this regard, each with different financial consequences:

First, if your doctor agrees to accept the Medicare-approved amount as payment in full – called accepting assignment – Medicare will pay 80 percent of this approved amount. You will be responsible for the other 20 percent. Your doctor cannot charge you any more than the Medicare-approved amount.

Second, if your doctor does not accept the Medicare-approved amount as payment in full (or does not accept assignment), but nevertheless treats Medicare patients, he can charge up to 15 percent more for his services than the Medicare-approved amount. He can also request full payment up front from you. Medicare will reimburse him for 80 percent of the Medicare-approved amount. You will be responsible for the other 20 percent plus whatever the doctor charges (up to 15 percent more) above the Medicare-approved amount.

Third, if your doctor opts out of Medicare entirely, he is not subject to the Medicare limits on charges and cannot submit claims to Medicare on your behalf. In this situation, your doctor will ask you to sign a private contract in which you affirm that you are responsible for the full cost of the services and that you will not seek reimbursement from Medicare. If you sign this contract, Medicare will not pay for any portionof the services you receive.

Q: In addition to Medicare B, I am also enrolled in a Federal Employees Health Benefits plan. I understand that Medicare will provide primary coverage for me as a retiree. What will my FEHB plan pay as the secondary insurer?

A: Read the section about coordination of benefits in your FEHB plan brochure carefully. Plans differ in their approach to coordinating benefits with Medicare; for example, some plans or options pay benefits only if you receive services from doctors who participate in their preferred-provider network.

There are FEHB plans that waive the deductible and co-insurance amounts when doctors accept Medicare assignment. Some plans may also pay the excess costs or the additional 15 percent charged by a doctor who does not accept assignment but treats Medicare patients.

If, however, your doctor has opted out of Medicare and you have signed a contract agreeing to be billed for health services, your FEHB plan will limit its payment to you to the amount it would have paid after a payment by Medicare – usually 20 percent – and you will be responsible for the balance of the charges.

Q: Medicare covers an initial physical examination – a one-time "Welcome to Medicare" physical exam – within six months of enrollment, but does not cover annual physicals. Will my FEHB plan pay for my annual physicals and other non-Medicare covered services?

A: Again, it is important to read your FEHB plan brochure carefully to see whether and to what extent your plan will pay for these services. Some plans will pay for these services and waive the deductible and coinsurance.

Q: Will I have to file Medicare claims?

A: Unless you signed a contract agreeing that you will not seek Medicare reimbursement, your doctor is required to file Medicare claims for the covered services you receive. In instances where doctors fail to submit a claim, you may file a CMS 1490S form on your own behalf. The form can be found at www.cms.hhs.gov/cmsforms/downloads/cms1490s-english.pdf. If your doctor accepts assignment, he will file a Medicare claim for you. Medicare will then pay its share of the bill directly to the doctor and forward the claim electronically to your FEHB plan.

If your doctor does not accept Medicare assignment, he is still required to file a Medicare claim for you. If you have paid for the services, Medicare will pay its share of the bill directly to you. Again, if your doctor fails to submit a claim, file Form CMS 1490S.

Be aware that Medicare does not electronically send completely denied claims to FEHB plans. Make sure that your FEHB plan receives the documents it needs to take action: the bills for services and Medicare notices of rejection.

Q: What can I do to assist in this coordination process?

A: Read the section about coordination of benefits in your FEHB plan brochure carefully. These plans – and standard and basic options offered by the same plan — can and do differ. Talk to the financial administrator in your doctor's office about how it processes Medicare claims. Many practices do not understand their obligations in this regard. Read what you sign; signing a private contract can have serious financial consequences for you. Send a copy of your Medicare card to your FEHB plan so that it can ensure that the electronic coordination is in place for your claims.