Balance Billing of QMB Beneficiaries is Prohibited. Period.
By Rae Robinson, Esq.
For low-income Medicare beneficiaries, Medicaid plays a crucial role in assisting with Medicare out-of-pocket costs. The Qualified Medicare Beneficiaries (QMB) Program is a Medicaid benefit that assists low-income Medicare beneficiaries by paying their Medicare Part A and Part B premiums and cost sharing amounts, including deductibles, coinsurance, and copayments.
Federal law prohibits all Medicare providers, even those who do not accept Medicaid, from balance billing QMB beneficiaries for Medicare deductibles, coinsurance, or copayments for Medicare Parts A and B services and items. These rules apply to all Original Medicare and Medicare Advantage (MA) providers. State Medicaid policies vary regarding billing State Medicaid agencies for Medicare cost-sharing amounts; however, persons enrolled in the QMB program are not liable for any Medicare Part A or Part B cost-sharing amounts.
All Medicare and Medicaid payments received for furnishing services to QMB individuals are considered payment in full. Federal law allows States to limit their payment of Medicare cost sharing amounts for QMBs by adopting “lesser-of” policies, applying the Medicare or Medicaid payment rate whichever is less. This usually eliminates or reduces the Medicare cost-sharing payment. As of 1/2017, most States apply “lesser of” policies. QMBs may not waive this prohibition and are still responsible for nominal copayments for Part D-covered prescriptions.
QMB Billing Problems: Unfortunately, balance or inappropriate billing of QMB beneficiaries persists. Many providers serving Original Medicare or MA beneficiaries are either unfamiliar with the prohibition on billing QMB beneficiaries or have difficulty identifying which of their patients are QMBs, resulting in ongoing problems with billing protected dually eligible beneficiaries for cost sharing amounts.
Beneficiaries may pay the improper charges, unaware of the billing restrictions or concerned about undermining provider relationships, or be subjected to undue distress when unpaid bills are referred to collection agencies. Providers who bill a QMB individual for amounts above the sum total of all Medicare and Medicaid payments are violating federal law and may be subject to sanctions.
MA plans with dual-eligible beneficiaries must specify in their provider contracts that these beneficiaries may not be held liable for any Medicare Part A or Part B costs when the state is responsible for paying these amounts and may not impose any cost sharing. MA contracts must state that providers will accept the MA plan payment as payment in full or bill the appropriate State resource.
System Changes to Promote Compliance: CMS and advocates have been working together to address this recurring problem. CMS recently rolled out system enhancements that will assist providers in more readily identifying a patient’s QMB status and exemption from cost-sharing amounts and make it easier for providers to comply with the law.
Starting October 2017, CMS system changes will identify a patient’s QMB status and lack of cost-sharing liability for providers through the Original Medicare FFS Claims Processing System and, for Original Medicare beneficiaries, through the Medicare Summary Notice.
- Effective October 3, 2017, a QMB indicator will be included in the Medicare FFS Claims Processing System (Provider Remittance Advice) to help providers more readily identify the Qualified Medicare Beneficiary (QMB) status of each patient and to support providers’ ability to follow QMB billing requirements. See MLN Matters® Number: SE1128 Revised for more information.
- Effective October 3, 2017, the beneficiary Medicare Summary Notice will clearly identify when the beneficiary was enrolled in the QMB program, and will accurately reflect the beneficiary’s cost-sharing liability ($0 for the period enrolled in the QMB program). See MLN Matters® Number: SE1128 Revised for more information.
- Effective November 4, 2017, the HIPPA Eligibility Transaction System (HETS), which releases Medicare eligibility data to Medicare providers, suppliers, or their authorized billing agents (including clearinghouses and third party vendors), will indicate periods during which the beneficiary is enrolled in QMB and owes $0 for Medicare Part A and B deductibles and coinsurance.
Steps to Promote Compliance
Before billing a patient for these amounts, following these best practices to determine if a patient is enrolled in the QMB program will help providers avoid engaging in unlawful billing practices:
- Establish procedures to routinely identify the QMB status of Medicare patients prior to billing for items and services, using new QMB information in the Medicare FFS Claims Processing System and new QMB data and information in HETS.
- Ensure that billing procedures and third-party vendors exempt QMBs from Medicare charges and remedy billing problems should they occur, and adopt procedures to detect when improper billing occurs and remedy as necessary.
- Determine the State processes to seek Medicare cost-sharing payments. Providers may need to complete a State Provider Registration Process to receive payment from the state.
- If a MA Plan contracted provider, contact the plan for instructions.
- Use State online Medicaid eligibility systems or other documentation, including Medicaid identification cards or other documents issued by the State proving the patient is enrolled in the QMB program.
- Ask beneficiaries for a copy of their Medicare Summary Notice.
- Establish different processes as necessary for Original Medicare and MA QMB claims.
Understanding QMB billing rules and taking these steps will help providers comply with QMB billing requirements and avoid violating their Medicare Provider Agreements or Medicare Advantage contracts.
Executive Order Signals New Focus on Association Health Plans, Short-Term, Limited Duration Insurance, and Health Reimbursement Arrangements
On October 12, President Trump signed an executive order (EO) intended to “to reform the United States healthcare system to take the first steps to expand choices and alternatives to Obamacare plans and increase competition to bring down costs for consumers.”1 The EO directs various federal agencies to take steps to loosen restrictions that limit the availability of association health plans (AHPs) and short-term, limited-duration insurance (STLDI) and the use of health reimbursement arrangements (HRAs). The EO also announces a “focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system.”2
The same day that the EO was signed, the administration announced it would no longer be making payments to insurers for cost-sharing reductions (CSR). These payments serve to offset the costs to insurers of complying with the Affordable Care Act’s (ACA’s) required reductions of out-of-pocket costs for low-income enrollees of the health insurance exchanges (also known as marketplaces).3 Although this bulletin focuses on the EO, the announcement to end the CSR payments also is widely expected to affect marketplace enrollment and the financial stability of its health plans. The administration’s decision also is the subject of a legal challenge in the Northern District of California and potential bipartisan legislation, originating in the Senate (Senators Lamar Alexander (R-TN) and Patty Murray (D-WA)), to restore the CSR payments.
The Executive Order
The EO announces a general objective to expand competition and reduce insurer consolidation in health care markets. To that end, it directs the relevant agencies to “consider proposing regulations or revising guidance” to expand access to AHPs and STLDI, two alternatives to marketplace coverage, and to HRAs, which can be used by employers to subsidize the cost of care and, in some cases, coverage on the individual insurance market.
Association Health Plans. First, the EO contemplates expanding an existing category of coverage in the form of AHPs, which generally are exempt from the ACA’s protections for individual and small group coverage. Because AHPs are offered by associations of employers, they are treated like health plans offered by large employers, which are governed under the Employee Retirement Income Security Act (ERISA). The EO tasks the Department of Labor, which has exclusive regulatory authority over ERISA, to consider proposing regulations or revising guidance to expand access to AHPs within 60 days of the date of the order.
According to the EO, the focus of such rulemaking or guidance should be the Department of Labor’s treatment of employer associations. In advisory opinions, the Department of Labor has taken the position that an AHP can be treated like a health plan offered by a large employer within the meaning of ERISA when it is offered by a “bona fide employer group or association,” and it has required fairly close relationships between employers for a group to qualify as a “bona fide employer group or association.”4 The EO envisions allowing employer associations to be formed based on looser relationships, like “common geography or industry.” This policy shift could expand the availability of AHPs. As can be seen in Table 1, AHPs are subject to a subset of ACA and pre-ACA requirements.
Short-Term, Limited Duration Insurance. Similarly, the EO envisions a wider role for STLDI, another category of coverage that generally is exempt from the ACA’s various consumer protections for individual and small group coverage. (See Table 1). The EO appears to contemplate allowing individuals to remain enrolled in such plans for longer periods of time and for STLDI plans to be renewable; under current regulations, such plans are limited in duration to three months, including any renewals.5 Currently, STLDI is not considered “minimum essential coverage” that would satisfy the ACA’s individual mandate. Although the Trump administration has signaled that it may not enforce the individual mandate as aggressively as the Obama administration did, the EO does not speak directly to this issue. Rather, it simply directs the Secretaries of the three relevant agencies (Treasury, Labor, and Health & Human Services) to “consider proposing regulations or revising guidance . . . to expand the availability of STLDI” within 60 days of the date of the EO.
Health Reimbursement Arrangements. Finally, the EO directs the agencies to expand the ways that employers can use HRAs to reimburse employees with pre-tax dollars for the cost of insurance coverage that is obtained in the marketplaces and not offered by the employer itself. Leading up to the rollout of the ACA, some employers pushed for the opportunity to do just this: employers sought to offer HRAs that could be used by employees to purchase coverage on the marketplaces in lieu of directly offering employer-sponsored insurance. The departments of the Treasury, Labor, and Health & Human Services concluded that doing so would run afoul of the ACA’s requirement that group health plans not impose annual dollar limits, because the employer’s spending is inherently limited to the amount of the HRA.6 The agencies declined to evaluate the HRA in combination with marketplace plans purchased using HRA funds.
The EO directs the Secretaries of the Treasury, Labor, and Health & Human Services to consider proposing regulations or revising guidance within 120 days to expand access to HRAs and to allow them to be used “in conjunction with nongroup coverage.” This suggests that the administration may be contemplating allowing employers to reimburse employees for individual insurance plans, including plans offered through the marketplaces.
Implications for the Individual and Small Group Insurance Markets
Though it is unclear how quickly or even if the policy changes announced in the EO will take effect in the form suggested by the EO, the prospect of wider availability of AHPs, STLDI, and HRAs changes the outlook for consumers, health insurers, providers, and state and local governments. The EO clearly is intended in part to provide alternatives to the health insurance coverage made available through the marketplaces. Some analysts are concerned that young and healthy people are most likely to take advantage of these new options, resulting in a concentration of higher-risk enrollment in the marketplaces, higher premiums, and financial instability.
Though some analysts have warned of rapid change in the individual health insurance market, the EO’s various policy goals will take time to implement. The EO directs agencies to “consider” changing regulations or revising guidance in as little as 60 days from the date of the order. To reverse course on established policies, however, agencies may be required to engage in notice-and-comment rulemaking, which can be time consuming. (One study under four of the previous five presidential administrations found that rulemaking took, on average, 462 days between the issuance of a notice of proposed rulemaking and a final rule or action.7 ) Moreover, the rulemaking process typically is more complex and time consuming when multiple agencies are involved, and the EO directs the departments of the Treasury, Labor, and Health & Human Services to coordinate rulemaking activity related to STLDI and HRAs. The EO’s proposed timeframes indicate that we may see proposed rules or other guidance regarding AHPs and STLDI by the end of the year, while proposed rules or guidance regarding HRAs may arrive early next year.
Adding to the uncertainty, it is unclear whether or how state regulators may attempt to curtail the EO’s reach. For example, nothing in federal law precludes STLDI from offering limited benefits, varying premiums according to an enrollee’s health status, or denying high-risk enrollees the opportunity to renew. State laws that reach STLDI are not preempted, and to the extent STLDI falls within a state regulator’s purview, consumer protections in state law may apply. States interested in protecting the viability of their marketplaces may explore the scope of state regulatory authority over STLDI or undertake legislative or regulatory action to limit the duration or renewability of STLDI or to impose individual market requirements, like coverage of pre-existing conditions. Conversely, state laws that would regulate AHPs generally are considered preempted by federal law (unless the product is fully insured). If the administration broadens its own definition of AHPs and relaxes oversight of them, self-funded AHPs, which are not subject to regulation under state law, may become more widespread.
The EO’s emphasis on competition and consolidation in health care markets took many analysts by surprise. The EO directs “government rules and guidelines affecting the United States healthcare system” to “re-inject competition into healthcare markets by lowering barriers to entry, limiting excessive consolidation, and preventing abuses of market power.” To that end, it directs the Secretary of Health & Human Services to report on its efforts in consultation with the Secretaries of the Treasury and Labor and the Federal Trade Commission (FTC) every two years. It is unclear whether or how this might impact FTC and Department of Justice antitrust enforcement priorities, but recent years have been marked by increased interest in collaboration and consolidation among providers and payers. To the extent the EO signals a shift in enforcement priorities, it is unclear whether the administration’s emphasis would be on providers, insurers, or both.
*We would like to thank Stephanie Gross (Hooper Lundy & Bookman PC, San Francisco, CA) for authoring this Alert.
10/10/2017 – An Ethical and Compliant Corporate Culture is an Asset!
On October 4, 2017 the National Association of Corporate Directors (NACD), which represents more than 17,000 board directors and helps them prepare for the challenges of their position, released a report on corporate culture. The document entitled, “The Report of the NACD Blue Ribbon Commission on Culture as a Corporate Asset,” calls on directors “to take a proactive approach to culture oversight as a means to driving sustained success and long-term value creation.” The NACD explains that “Organizations with strong, positive cultures have been shown to outperform their peers on everything from sales, customer satisfaction, safety, and quality to profitability and productivity. Conversely, the absence of a healthy culture can create or exacerbate significant risks. Yet in a recent NACD survey, less than half of directors reported that their boards assess the alignment between the company’s purpose and values and its strategy, and only 50 percent say they understand the “buzz at the bottom”-the collective behaviors, norms, and values at the front lines of their organizations, among their rank-and-file employees.” The report may be accessed here: https://www.nacdonline.org/culture