II. Medicare


Question 1: Do the HCRA surcharges apply to payments made under a Medigap/Medicare Carve-Out policy?

Question 2: Does the HCRA surcharge apply to services provided to a patient who is eligible for payments as a beneficiary under Medicare?

Question 3: Are Medicare supplemental policies or employer group policies that provide inpatient coverage for persons eligible for payments as beneficiaries of Medicare obligated to fund to a covered lives assessment (if an obligated electing payor) or a regional GME percentage surcharge (if an obligated non-electing payor)?

Question 4: How does the covered lives assessment liability apply to family units where one or more members are eligible for Medicare?

Question 5: Do surcharges apply to employer provided health benefit plans for working individuals who are eligible for Medicare?

Question 6: Do electing payors owe a covered lives assessment per diem on a Medicare beneficiary when that person has exhausted their Medicare benefits?



Question 1: Do the HCRA surcharges apply to payments made under a Medigap/Medicare Carve-Out policy?

Answer 1: Where a Medigap/Medicare Carve-Out policy is making payments to a HCRA designated provider of services as a result of providing coverage for Medicare coinsurance and/or deductibles, surcharges do not apply because the payor is not considered to be acting as a "non-Medicare" payor.

The surcharge will apply where a Medigap/Medicare Carve-Out policy is making payments to a HCRA designated provider of services as a result of a person's exhaustion of Medicare benefits (i.e. inpatient length of stay exceeds Medicare covered maximum days), or non-covered services for which Medicare does not cover (i.e. private duty nursing, personal care items, tv and telephone) because the payor is considered to be acting as a "non-Medicare" payor.

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Question 2: Does the HCRA surcharge apply to services provided to a patient who is eligible for payments as a beneficiary under Medicare?

Answer 2: It is important to distinguish surcharge treatment between Medicare Part A and Part B eligibility. Generally, Medicare Part A benefits are automatically available to persons on their 65th birthday. For patients eligible for payments as a beneficiary under Medicare Part A, surcharges do not apply to payments made for Medicare covered services.

Medicare Part B coverage, on the other hand, is optional on the part of the individual. The individual must apply and pay premiums in order to be eligible for payments as a beneficiary under Medicare Part B. For individuals who enroll, the applicability of the surcharges follows the same rules as Medicare Part A. For individuals not enrolled in Medicare Part B, the surcharge rate is based on the payor's election decision.

For patients eligible for payments as a beneficiary under a Medicare Advantage plan, surcharges do not apply to payments made for Medicare covered services.

However, where a payor is making payments to a designated provider of service as a result of a person's exhaustion of Medicare benefits, or lack of Medicare benefits for a particular service, such payor shall be subject to HCRA surcharges, at rates based on their election decision, because the payor is considered to be acting as a "non-Medicare" payor. Those patients making payments for an uncovered Medicare services and without additional insurance, would be obligated to the Self-Pay/Uninsured surcharge rate.

There is no obligation to the covered lives assessment or the regional GME percentage for Medicare beneficiaries, regardless of whether they exhaust their Medicare benefits or not.

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Question 3: Are Medicare supplemental policies or employer group policies that provide inpatient coverage for persons eligible for payments as beneficiaries of Medicare obligated to fund to a covered lives assessment (if an obligated electing payor) or a regional GME percentage surcharge (if an obligated non-electing payor)?

Answer 3: Countable persons for purposes of covered lives assessment calculations never include persons who are eligible for payments as beneficiaries under Medicare. Likewise, for payors who have not elected into the Public Goods Pool, and incur an inpatient bill on behalf of a Medicare beneficiary, this is no regional GME percentage surcharge.

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Question 4: How does the covered lives assessment liability apply to family units where one or more members are eligible for Medicare?

Answer 4: In a family unit of two persons where only one individual is eligible for payments as a beneficiary of Medicare, then the unit is deemed an individual unit for purposes of the covered lives assessment calculation. In a family unit of two persons where both are eligible for Medicare, there is no covered lives assessment. In a family unit of three or more and only one is eligible for Medicare, then the family unit assessment applies.

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Question 5: Do surcharges apply to employer provided health benefit plans for working individuals who are eligible for Medicare?

Answer 5: Pursuant to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and the Deficit Reduction Act of 1984 (DEFRA), federal mandates, some privately insured employee health benefits plans for working Medicare eligible individuals are required to make patient service payments before Medicare. However, in such instances, the private insurer does not have a surcharge liability, unless the service is an otherwise uncovered Medicare service or where there is an exhaustion of Medicare benefits.

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Question 6: Do electing payors owe a covered lives assessment per diem on a Medicare beneficiary when that person has exhausted their Medicare benefits?

Answer 6: No. Section 2807-t of the Public Health Law excludes "persons" described as Medicare beneficiaries from purposes of countable persons for the covered lives assessment per diem. Section 2807-j of the Public Health Law describes payors and payments obligated to the surcharge, which includes payments for services for persons who have exhausted their benefits. Although a person may have exhausted their Medicare benefits, for purposes of excluding them as countable persons for the covered lives assessment per diem, they are still deemed as "Medicare beneficiaries."

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