Navigating The End-Stage Renal Disease (ESRD) Payment System The Payment Systems Mark A. Meier, MSW, LICSW Page 1 of 10
00:00:00 Mark A. Meier: Let s now shift our focus to talk about the specifics associated with the reimbursement systems that are part of dialysis. We are going to look at Medicare, Medigap, Medicaid as well as private insurance. You might recall seeing this slide from the United States Renal Data System previously. 00:00:19 As you can clearly see here, Medicare is the primary payer source for over 80% of the patients who are in the ESRD program. It is the rare patient who doesn t at some point use Medicare to cover their dialysis or transplant related services. With that in mind, let s turn our attention now to the intricacies associated with the Medicare program. 00:00:42 Like other aspects of the ESRD program, Medicare is constantly being looked at and changes are frequently considered or being made. As a renal professional, it is of the utmost importance to stay abreast of what is taking place in the Medicare program. 00:01:01 As you have likely experienced, this program can be confusing and difficult to navigate for even the most skilled of professionals. Imagine the challenges Medicare poses for our patients who are often overwhelmed, not feeling well, and not even sure of the questions to ask about coverage. 00:01:19 So, let s go back and begin by discussing what Medicare is. A quick review. As you know, Medicare is a federally funded program that was designed to provide health insurance coverage for individuals over the age of 65. In addition to those over 65, Medicare provides insurance coverage for 00:01:41 individuals who have lived with a permanent disability for at least two years. End-Stage Renal Disease is the only disease state that provides automatic coverage under the Medicare program as long as work and other citizen requirements are met. As you remember, Medicare is divided into Part A and 00:02:01 Part B, when it comes to the original Medicare program. Medicare Part A is hospital insurance and it covers such things as inpatient hospital care and inpatient care in skilled nursing facilities not including custodial or long-term care, hospice and some home healthcare. 00:02:19 Most people don t have to pay a monthly premium for Part A because they or a spouse paid Medicare taxes while they were working. Medicare Part B is medical insurance and covers such things as doctor s services, outpatient care, including outpatient dialysis and some transplant services, as well as some home healthcare. 00:02:41 Part B also covers some preventative services as well. Most people must pay a monthly premium for Part B and premium rates can change yearly. Part B premiums are typically taken out of the patient s monthly Social Security or Railroad Retirement payment. So, who is eligible? Page 2 of 10
00:03:03 An individual can enroll in Medicare Part A at any age if their kidneys have failed and they require ongoing dialysis treatments or receive kidney transplant providing they meet one of these two criteria: First, they have worked long enough to receive benefits under Social Security, the Railroad 00:03:24 Retirement Board, or as a Medicare-qualified government employee. Or two, they are the spouse or dependent child of a person who has worked long enough to receive benefits under Social Security, the Railroad Retirement Board, or as a Medicare-qualified government employee. 00:03:41 Other situations might arise that fall outside of the normal Medicare eligibility criteria. So, if you ever have questions about a patient s eligibility, the wisest choice would be to contact your local social security office to discuss your patient s needs. 00:03:59 The coverage period for Medicare is based on the type of renal replacement therapy your patient receives. Let s take a look at the three examples listed here. In-center dialysis, home dialysis, and transplant eligibility options. Let s start with in-center hemodialysis. 00:04:17 When a patient enrolls in Medicare based on ESRD, and they are on dialysis, their Medicare coverage usually starts the first day of the fourth month of dialysis treatments. So, for example, if Mr. Heitz began dialysis on July 24th, Medicare coverage would start on October 1st. If Mr. 00:04:38 Heitz happened to be covered by an employer group health plan, for the first 30 months he is covered by Medicare. This employer health plan will pay first on his healthcare bills and Medicare would pay second. An issue to consider here is that, if a patient comes to you without insurance and 00:04:58 applies for Medicare, what other coverage will they need and/or be eligible for the first three months they are on dialysis? Let s take a look at home dialysis. Medicare coverage can start sooner if your patient chooses to do home or self-dialysis during the three-month waiting period that we discussed earlier. 00:05:20 For home or self-dialysis, a patient s Medicare benefits begin on the first month of dialysis if, there are two conditions, the patient takes part in a training program through a Medicare-certified training clinic and two, the patient s doctor certifies the patient will finish the home training and do home dialysis or self dialysis. 00:05:43 You should note when a patient is uninsured and considering options that even if a patient tries and fails home dialysis training, Medicare will backdate the effective date to the first of the month dialysis starts. So, if a patient starts home training, doesn t want to continue and transitions to Page 3 of 10
00:06:04 in-center, then the patient will still have Medicare without the three-month waiting period. Let s talk about Medicare in transplant. Medicare coverage can begin the month a patient is admitted to a Medicare-approved hospital for a kidney transplant or for healthcare services required before the 00:06:24 transplant if the transplant takes place in that same month or within the following two months. Also, Medicare coverage can begin two months before the month of a transplant if the transplant is delayed more than two months after the patient has been admitted to the hospital for the transplant or 00:06:42 for those healthcare services needed before their transplant. For example, let s say Mrs. Perkins was admitted to the hospital on May 25th for some tests she needed before her kidney transplant. She was supposed to get her transplant on June 15th. However, her transplant was delayed until September 17th. 00:07:03 Therefore, Mrs. Perkins Medicare coverage will start in July or two months before the month of her transplant. It is important to note that Medicare won t cover surgery or other services needed to prepare for dialysis, such as surgery for a blood access, like a fistula, before Medicare coverage begins. 00:07:24 However, if your patient completes home dialysis training, Medicare coverage will be retroactive back to the month he or she began training, and these services could be covered. So, how does a patient enroll? It is important to know that enrollment is not automatic. 00:07:44 Patients typically will work with the social worker to apply for Medicare benefits. Completed applications are submitted to the local Social Security offices. Waiting periods begin as soon as the patient begins dialysis. If the patient decides to apply for Medicare after all of the requirements are 00:08:03 met, coverage will be retroactive for up to 12 months before the month of application. Let s take a moment and help answer an important question your patients will ask and that is, when do I sign up for Medicare? If your patient doesn t have any insurance or is underinsured, this is a fairly 00:08:23 easy question to answer and your patients should probably enroll in Medicare Part A and B immediately. But what if your patient is working and has insurance or what if your patient is covered under another person s private insurance? This leads us into our discussion about Employer Group Health Plans or EGHPs. 00:08:43 How does the Employer Group Health Plan and Medicare work together? Well, if your patient initiates dialysis and is already covered under an insurance program through an employer or other private insurance plan, they are faced with a decision and that is whether or not to sign up for Medicare or Page 4 of 10
00:09:03 defer Medicare during the first 30 months of dialysis, which is also known as the Coordination of Benefits period. When a patient is covered by an Employer Group Health Plan that insurance is considered primary during this 30-month coordination of benefits period. 00:09:19 And as we mentioned earlier, the Employer Group Health Plan pays dialysis bills first before any Medicare reimbursement might occur. Primary coverage does not switch from an Employer Group Health Plan to Medicare just because a patient signs up for Medicare. 00:09:37 At the end of the 30-month coordination period the patient s Employer Group Health Plans is no longer required to pay primary benefits and will become secondary and Medicare will become the primary insurance. So what are the reasons to enroll in Medicare within the coordination of benefit period and what are reasons to not enroll? 00:09:59 When you are helping your patient decide whether or not to forgo enrolling in Medicare Part A and B because of an Employer Group Health Plan, there are some key pieces of information you should have as this decision is being made. One of the primary reasons often cited why a patient might choose to 00:10:19 defer enrolling in Medicare if they are covered by an EGHP, is to help them avoid paying the Medicare Part B Premium, which for new enrollees in 2010 was $110.40 a month. So, other questions to ask though are, does the Employer Group Health Plan have yearly deductibles and/or co-insurance? 00:10:42 If so, Medicare Part B might cover those costs and that would be a reason to consider having Medicare along with the Employer Group Health Plan. Another question is, does the Employer Group Health Plan have a renal related capitation? Meaning, the EGHP might only pay a certain amount of dollars 00:11:00 toward the cost of dialysis and without additional coverage the patient may be liable for those costs. Another question is, does the EGHP have a lifetime limit? Based on recent healthcare reform, lifetime limits are being phased out, but this should be checked out on each individual policy. 00:11:20 If the patient is still subject to a lifetime limit, how much is it and how much of it has the patient exhausted? Dialysis, its related medications, hospitalizations, can be very expensive and patients can easily use $80,000-$100,000 worth of benefits in a year. 00:11:37 If a patient hits a lifetime limit on a policy without any other coverage the patient might find himself with bills to pay. A very serious thing to consider, is the patient a candidate for transplant? If so, and the patient is likely to get a transplant in the 30-month coordination of benefits Page 5 of 10
00:11:58 period, serious consideration should be given to enrolling in Part A and B. In order for the patient to be eligible for the Part B coverage of immunosuppressive drugs, which are needed post transplant, the patient must be enrolled in Part A during the month of the transplant. 00:12:15 Part B currently provides immunosuppressive coverage for 36 months post transplant, which can provide significant health benefits to your patients. Finally, could your patient lose the Employer Group Health Plan for any reason? For example, if the patient is working and is unable to continue 00:12:37 working they could be faced with losing their insurance. In this event, the patient might be able to continue coverage through COBRA, but that is generally very expensive. However, maintaining the Employer Group Health Plan through COBRA might offer the patient some additional coverage options that wouldn t be available through Medicare. 00:12:57 For example, the Employer Group Health Plan might have better prescription drug coverage than say, Medicare Part D, for example. So a caveat here though, in some instances, you might have patients who initiate dialysis with a private insurance plan of their own or a high-risk pool plan, which we will talk about later. 00:13:19 If that patient were to elect Medicare, then the Medicare plan will become the primary insurance when it is effective and the private plan or the high-risk plan becomes secondary. In a situation such as this, it is important to verify with the patient s current insurance how the coordination with Medicare will occur. 00:13:40 High-risk insurance plans tend to be very expensive and there may cost savings for a patient to sign up for Medicare. You should again verify this and counsel your patient appropriately. If a patient forgoes enrolling in Medicare or wants to enroll in Medicare Part A only, there are some extremely important issues to consider. 00:14:03 It is generally recommended that if a patient wants to enroll in Medicare Part A they should also enroll in Part B at the same time. If your patient wants to enroll in Part A, but not Part B so they can avoid paying for the Part B premium during the 30-month coordination of benefits period they 00:14:22 will be charged a premium penalty when they go to enroll in Part B if they delay enrolling in Part B for 12 months or more from enrolling in Part A. That penalty is 10% of the current Part B premium for each 12-month period they had Part A, but not Part B. 00:14:41 If your patient initially defers enrolling in both Part A and Part B they can still sign up for both parts before their 30-month coordination of benefits ends. If your patient chooses to enroll in Part A, but not Part B, they will in the future be allowed to enroll in Part B during the General Enrollment Period. Page 6 of 10
00:15:03 The general enrollment period is from January 1st to March 31st each year with their Part B then taking effect on July 1st of that year. So, it is important to help your patient understand that if they think they are going to need Medicare, waiting to sign up for Part B is not only going to be 00:15:22 more expensive, but they might be delayed for several months in receiving the coverage even after they have signed up. For example, let s say that in May your patient decides they really need Medicare Part B. The next general enrollment period won t occur until the following January, which is seven 00:15:42 months away, and they won t receive coverage until July of that year, which is yet another seven months away. Meaning, they will not have the benefit of Medicare coverage for 14 months. This is an incredibly important decision that your patient must make and your assistance and understanding is vital. 00:16:01 Let s take a look at Part B and its role in immunosuppressive drug coverage. If a patient is entitled to Medicare because of permanent kidney failure, their Medicare coverage will end 36 months after their transplant. Medicare coverage will continue to pay for immunosuppressive drugs with no time 00:16:22 limit if your patients meet either of the following conditions: The first is that your patient was already entitled to Medicare because of age or disability prior to getting ESRD. Or second, they became entitled to Medicare because of age or disability after getting a transplant that was paid for by 00:16:44 Medicare, or paid for by private insurance that paid primary to your Part A coverage in a Medicare-certified facility. You can see the Part B coverage of drugs post transplant is critical, and so decisions about whether or not to enroll in Part A and B requires serious thought, and forgoing Part B 00:17:05 to avoid the associated premium charges might prove far more costly in the long run than if the patient were to just enroll in Part B to begin with. So, when does Medicare coverage end? Well, for in-center hemodialysis Medicare coverage will stop 12 months after they stop dialysis. 00:17:28 When you talk about transplant, Medicare coverage will stop 36 months after the month they receive a kidney transplant. And again, as we noted, Medicare coverage can be extended if one of these conditions is met: For example, if a patient were to need to start dialysis again or get a transplant 00:17:49 within 12 months after the month they stopped getting dialysis. The second is that, they start dialysis or get another kidney transplant within 36 months after the month of that kidney transplant. Medicare is an extremely complex program that requires you to fully understand the situations your Page 7 of 10
00:18:10 patients might be faced with when it comes to making the decision about when to enroll. If you are at all unclear with how to handle a particular situation you can speak to people at your local social security office. Some social workers have found that developing a relationship with a specific 00:18:29 person in the social security office can prove very helpful when you encounter a challenging situation. In addition to Medicare and Employer Group Health Plan coverage, there are some other programs that might provide important coverage to your patients. 00:18:45 Three such programs are Medigap policies, Medicaid, or Medical Assistance, and a fourth is highrisk insurance plans. Let s take a look at each of these. Although ESRD qualifies a patient for Medicare coverage it is important to remember that Medicare does not cover 100% of everything. 00:19:05 For example, Part A has a $1000 deductible and Part B of Medicare only covers 80% of the cost of each dialysis treatment, and only covers 80% of the cost of immunosuppressive drugs for those individuals who are post kidney transplant. The remaining 20% not covered by Medicare under either of these 00:19:26 situations can cost patients thousands of dollars annually or even preclude them from qualifying for a transplant. At the time of this recording, this is how Medicare coverage works, but with the advent of bundling, patients will have yet additional out-of-pocket costs. 00:19:43 Let s take a look at what a Medigap policy is. Supplement or Medigap policies are intended to help Medicare beneficiaries cover the co-pays and deductibles associated with Medicare Part A and B. For individuals over the age of 65 who have Medicare, there is a federal law that mandates insurers offer Medigap policies to them. 00:20:07 However, for individuals who are on Medicare and less than 65, there is no such federal protection, thus potentially leaving them responsible for the Medicare co-pays and deductibles. According to an excellent article recently written by Wendy Funk Schrag, there are currently 31 states that have 00:20:30 passed laws or implemented regulations to require insurers in the supplemental market to make such plans as Medigap available to those who are younger than 65. The chart above highlights those states. Medigap policies are not free and paying for the cost of the policies can at times be challenging for patients. 00:20:51 There are programs available to help with the cost of Medigap programs such as AKF s Health Insurance Premium Program. AKF s HIPP program can help patients as a last resort if they meet eligibility requirements. Medicare Advantage Plans are health plan options that are part of the Medicare program Page 8 of 10
00:21:13 in which an individual gets all of their Medicare covered services through an HMO, PPO, or other private group. What is important to note is that individuals who are not enrolled in Medicare Advantage Plans are not eligible to join these plans once they initiate dialysis. 00:21:33 If a patient is enrolled in a Medicare Advantage, you should work with the patient to compare the benefits of the Advantage plan versus the traditional Medicare with a Medigap plan. We talked about Medicaid. Remember, Medicaid is an income-based program administered by the individual states. 00:21:53 Each state sets its own income guidelines and coverage benefits. For some individuals with ESRD, they might be eligible for Medicare or/and Medicaid and this is also known as being dual eligible In these situations, Medicaid is usually the secondary payer and it covers the Medicare co-pays and deductibles. 00:22:13 For some of your low-income ESRD patients, they might not be eligible for Medicare due to a lack of work credits, but they might be eligible for Medicaid based on their lack of income. For other individuals who aren t eligible for Medicaid, there are other income-based programs such as the 00:22:32 Qualified Medicare Beneficiary Program or the Specified Low Income Medicare Beneficiary Program that can help pay for Medicare Part B premiums, co-pays and deductibles. Both of these programs are administered through the same state agencies that administer Medicaid. 00:22:51 Let s talk about high-risk insurance pools. Under Healthcare Reform, every state has been required to create a separate pre-existing condition insurance program that is funded by federal dollars. State officials can elect to run the pool themselves or allow the same company that runs the Federal Employment Health Benefits Program to operate them. 00:23:15 These high-risk pools are generally available to individuals who are not eligible for other insurance coverage, such as Medicare, Medicaid, Medigap, or other private insurance coverage. They do typically carry a high premium. To learn more about the high-risk pools in your state, you can contact 00:23:32 your state office of the health insurance commissioner. So, some concluding thoughts for you to consider. Insurance coverage is confusing for us as professionals, and therefore, you can safely assume that it is confusing for our patients. Medicare, Employer Group Health Plans, Medical Assistance, 00:23:52 Medigap, high-risk insurance pools, etc., create multiple coverage options for our patients. It is critical that you understand the basic components of Medicare and the coverage it provides. At the same time, many unique situations can present themselves. Page 9 of 10
00:24:10 So, it becomes important for you to have colleagues or community resources, such as your local social security office, to help you wade through the complexities of insurance coverage. Page 10 of 10