Medicaid/Medicare Dual Eligibles: Who Pays the Piper?

Cost Sharing Confusion for Clients in the QMB Program

November 2, 2009

Author: Geoffrey Hale

Joe Client is disabled and lives only on SSI and SSD.  His health care is covered by Medicare, and Medicaid’s Qualified Medicare Beneficiary (QMB) program picks up his cost-sharing obligations.  He went to the doctor recently and, as with any other Medicare beneficiary, the doctor handed him a bill for his co-pay.  Now Joe has a bill that he can’t pay.  Can you help him?  Does he have to pay?

In an effort to help Joe and those in similar situations, this article will explain how the QMB program works, what sorts of problems tend to arise for our clients that are enrolled in QMB, and how to resolve them.  Particular attention will also be paid to those beneficiaries enrolled in Medicare Advantage plans rather than original fee-for-service Medicare, because the rules under that program are different.

Unfortunately, Joe’s situation is all too common in the QMB world.  Available to anyone in New York covered by Medicare and living at or below the Federal Poverty Level (FPL), the QMB program covers all of Medicare’s cost-sharing obligations for medical services provided under Parts A and B.  That means that beneficiaries in the program have virtually no out-of-pocket expenses for Medicare:  no Part B premium, no Part A premium (if they have one), no co-payments, no deductibles, and no co-insurance.  And, under the law that established the program, they should never be given a bill for any of these costs.

The law, however, is poorly understood.  Many providers act as if all Medicare beneficiaries are the same, and continue billing those covered by the QMB program, leaving them feeling stuck between a rock and a hard place: they’re expected to pay the bill, but can’t afford to do it.

Qualified Medicare Beneficiary Program
Low-income Medicare beneficiaries face staggering cost-sharing obligations.  Original Medicare includes an array of out-of-pocket expenses, ranging from a $96.40/month Part B premium, a $135 annual Part B deductible, 20% co-insurance for most covered out-patient services, as well as a $1,068 Part A deductible for in-patient hospital care.  All tolled, Medicare out-of-pocket expenses can easily amount to thousands of dollars a year - a cost those living at or near the federal poverty level of $10,830 a year (for an individual) can ill afford.

For those who qualify, Medicaid offers three different Medicare Savings Programs (MSPs) to help with Medicare cost sharing:

• The QMB program provides the most comprehensive benefits. Limited to those living at or below 100% of the FPL, the QMB program  covers virtually all cost sharing associated with Medicare:  Part B premiums, Part A premiums, if there are any, and any and all deductibles and co-insurance.
• For those with incomes between 100% and 120% FPL, the Specified Low-Income Medicare Beneficiary (SLMB) program will cover Part B premiums only – a benefit of $1,156.80 per year.
• For those with incomes between 120% and 135% FPL, but not otherwise Medicaid eligible, the Qualified Individuals program (QI) offers assistance with Medicare Part B premiums as well. 

Not only do these programs help with cost sharing under original Medicare, but eligibility for any one of these programs automatically makes clients eligible for Medicare’s Low Income Subsidy (LIS) program.  LIS offers important cost-sharing help with the Medicare Part D prescription drug benefit.1

Of these three MSPs, the QMB program provides the most complete and complex array of benefits for Medicare beneficiaries – and, accordingly, gives rise to the greatest problems for covered  individuals.  As in Joe’s case, some of the most significant issues involve confusion about billing requirements. 

What does the law say about billing for QMBs?

Joe never should have received a bill. The law strictly prohibits providers from billing beneficiaries directly for any cost sharing, and those who do may be penalized for the unwarranted billing.2

What if the provider bills the QMB anyway?

To remedy this situation, it may be necessary for advocates to educate providers on behalf of their clients. In Joe’s case, when we contacted the   provider, we were told that the provider did not participate in Medicaid.  Under the QMB program, however, that doesn’t matter.  Providers can only bill Medicaid. 

Although the general rule under Medicaid requires providers to be contracted with the state Medicaid program in order to bill Medicaid for services, the QMB program is an exception.  Under the QMB program, even non-Medicaid providers may bill Medicaid directly.3  Submission of the reimbursement request alone is sufficient to establish the provider agreement required for Medicaid reimbursement for QMB benefits. 

Medicaid is then required to reimburse the provider for all Medicare cost-sharing expenses, even if the service is not covered by Medicaid in the state plan.4  Whatever reimbursement Medicaid then pays the provider constitutes by law payment in full, and the provider cannot bill the beneficiary for any difference remaining.5

What if the beneficiary has already paid the bill?

In many instances, however, QMBs feel compelled to pay bills submitted to them by their providers.  In such instances, these beneficiaries are entitled to full reimbursement for all out-of-pocket expenses.  Reimbursement may be requested directly from the provider or through the state Medicaid agency.

The Health Assistance Partnership, a national organization that helps Medicare beneficiaries make the most of their coverage, has prepared a model letter to help advocates explain QMB to  providers.  The letter is available at: http://www.hapnetwork.org/assets/docs/high-five/qmb-letter-for-providers.doc.

QMB Problems with Medicare Advantage
Joe’s situation was actually complicated by an additional wrinkle.  His Medicare coverage was under Part C, Medicare Advantage, rather than original fee-for-service Medicare.  Because he is enrolled in a Medicare Advantage plan, the QMB cost-sharing rules are different.

What is Medicare Advantage?

Medicare Advantage provides coverage for original Medicare services though a private health insurance plan, either with or without the prescription drug benefit (Part D). Medicare Advantage plans must provide the same types of services as original Medicare, but they are permitted to offer additional services and vary the cost-sharing requirements.  This means that, while Medicare Part B carries a fixed premium, currently set at $96.40 per month, the premiums for Medicare Advantage plans may be lower – or they may be higher.  As a result, depending on the plan, participation in Medicare Advantage plans might actually hurt participants in the QMB program.

What are the QMB cost-sharing requirements for Medicare Advantage?

Under original Medicare, Medicaid covers all out-of-pocket expenses for QMBs – all premiums, deductibles, co-insurance, and co-pays.  Under the federal rules governing Medicare Advantage plans, however, Medicaid is required only to cover direct out-of-pocket expenses – deductibles, co-insurance, and co-payments.6  States have the option of covering premiums through Medicaid but they are not required to do so.  In New York, Medicaid covers the full Medicare Advantage premium only if it is lower than or equal to the traditional Part B premium.  If it is higher, Medicaid will only pay up to the amount of the Part B premium ($96.40 per month), unless the particular Medicare Advantage plan is found to be cost effective.7 Advocates assisting clients in Medicare Advantage plans may, therefore, have to request a cost-effectiveness determination, or help the client enroll in a different plan with lower premiums.

What can be done about billing problems for QMBs in Medicare Advantage plans?

The improper provider billing prevalent under original Medicare for QMBs is even more likely for those enrolled in Medicare Advantage plans. Because of the complex way that reimbursements are calculated, providers are often completely in the dark about what Medicaid will pay for QMBs. As a result providers or the Medicare Advantage plans themselves are even more likely to bill QMBs directly.

As with QMBs in traditional Medicare, however, Medicare Advantage plans and their providers are strictly prohibited from billing QMBs for covered services.  When this happens, and especially when the bill is mistakenly paid, the beneficiary may file a grievance with the Medicaid Advantage plan and request reimbursement.  Small consolation for a messy system.

Some Final Considerations

Is QMB beneficial to all clients?

The QMB program offers powerful cost-sharing assistance to eligible beneficiaries by covering  virtually all of their Medicare cost-sharing. While this cost sharing may be invaluable to many clients, it doesn’t necessarily meet the needs of all.

For example, the services covered by original Medicare are more limited than they are under full Medicaid.  Because it might be more important to enroll clients in Medicaid than simply cover their Medicare cost-sharing, advocates may have to make some strategic decisions.  Even where a  client’s income may be somewhat over the Medicaid limit, that client may be able to enroll in Medicaid by using a spend-down.8  Medicare cost-sharing expenses can be used to satisfy the spend-down and help clients become eligible for full Medicaid benefits, not just Medicare cost-sharing through the QMB program. 

The spend-down is a useful strategic tool that can help improve a client’s coverage. That way, for example, a client who may be over-income for Medicaid may be able to use Medicare cost-sharing expenses to satisfy the spend-down in order to get dental benefits not covered by Medicare.

If providers don’t understand the QMB program, who should explain it to them?

Advocates are increasingly concerned that the lines of responsibility are not clearly drawn, and providers and Medicare Advantage plans remain unaware of their obligations.  Beneficiaries should not be left in the position of having to explain to their providers why they will not pay a bill, and advocates shouldn’t always have to step in to explain it either.  Eventually, clearer direction may have to come from the Centers for Medicare and Medicaid Services (CMS).

For further information please contact Geoffrey Hale:  (585) 295-5730, ghale@empirejustice.org  or Cathy Roberts: (800) 635-0355, croberts@empirejustice.org at Empire Justice  Center.

Footnotes

1  For information on Medicare’s LIS, see, “Pathways to Extra Help,” at: http://wnylc.com/health/entry/61).

2  42 U.S.C. § 1396a(n).

3  Under terms established to provide benefits for QMBs, a provider agreement necessary for reimbursement “may be executed through the submission of a claim to the Medicaid agency requesting Medicaid payment for Medicare deductibles and coinsurance for QMBs.”  CMS State Medicaid Manual, Chapter 3, Eligibility, 3490.14 (b), available at:  http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?itemID=CMS021927.

4  Ibid.

5  42 U.S.C. § 1396a(n)(3)(A).

6  Section 1905(p)(3) of the Social Security Act.

7  09 OHIP/INF-1, available at:  http://www.health.state.ny.us/health_care/medicaid/publications/docs/inf/09inf-1.pdf.

8  Information about Medicaid spend-down is available at: http://wnylc.com/health/entry/46