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Claim Submission for Beneficiaries Enrolled in Medicare Advantage Plans

Medicare Advantage (MA) plans are considered Medicare Part C. Beneficiaries can choose to enroll in a MA plan instead of original Medicare. 

The plans can include:

  • Part A
  • Part B 
  • Part D 

MA plans are managed by private insurance companies, which cover medically-necessary services and charge different co-payments, co-insurance, and deductibles than original Medicare. 

MA plans are normally Health Maintenance Organizations or Preferred Provider Organizations.

MA plans fall into two categories:

  • restricted 
  • unrestricted 

Each plan has its own requirements and policies. The major difference is the ability of the beneficiary to go outside the network for services. You can check a beneficiary's eligibility to determine the type of plan they are enrolled in based on the option code.   

Restricted Plans (Option Code C)

All claims must be submitted to the MA plan for processing with a few exceptions. 

The following services are processed by original Medicare when a beneficiary is enrolled in an MA option C Plan:

  • Services while a patient is enrolled in Hospice
  • Routine costs of qualifying clinical trials (see clinical trial billing below)

Unrestricted Plans (Option Code 1)

Original Medicare should process unrestricted option code 1 claims submitted for processing.

Who is responsible?

If the facility is an inpatient acute care hospital, inpatient rehabilitation facility, or a long term care hospital, the payer responsible at the time of admission is responsible for the entire stay. 

Example

If the beneficiary was not enrolled in an MA plan at admission, but enrolls partway through the stay, then original Medicare is responsible for payment, not the MA plan.

If a facility is exempt from the prospective payment system, such as children’s hospitals, cancer hospitals, or a Maryland waiver hospital, then the facility splits their claim and bills each payer accordingly.

Claim Submission

Hospitals and skilled nursing facilities are required to submit a claim to Medicare for all Medicare beneficiaries, even when a stay is covered by an MA plan. Although Medicare will not make payment on these claims, the claim is used to link a spell of illness. 

Billing for the MA Plan Claim

The claim should be billed as a covered claim, including all routine data required on a Medicare covered stay, as follows:

  • Type of bill (TOB)
  • Acceptable values in the third position of the TOB are 1, 2, 3, or 4.
  • TOB should NOT reflect a zero as the third digit. 
  • All days should be shown as covered
  • Condition code 04 (Patient is a member of a MA plan- informational only)
  • All charges should be billed as covered unless the charges are for items routinely billed as non-covered (i.e. telephone, personal services, etc.)
  • Deductible and coinsurance information should be recorded in the appropriate data items on all bills, if applicable.
  • Payer information (line A) report as Medicare
  • Payer code 'Z' and list primary payer as Medicare
  • Insured Information (line A) report the Medicare Beneficiary ID number and not the MA member number
  • Required remarks- Medicare Advantage paid bill

These claims are sent to the common working file (CWF) where they are edited against the CWF eligibility file. If the CWF Eligibility File has an MA record established, the claim will process with no Medicare reimbursement and the MA message will appear on the Remittance Advice. If however, there is a discrepancy between the CWF MA information and the data billed on the claim (i.e. CWF has an MA record but the claim was billed without condition code 04) the claim will be rejected. The provider will be required to correct the claim based on the CWF data and resubmit the claim as an adjustment.

Clinical Trial Billing 

Original Medicare will pay for covered clinical trial services furnished to beneficiaries enrolled in MA plans. The clinical trial coding requirements for MA enrollee claims are the same as those for regular Medicare fee-for-service claims. 

Beneficiaries are not responsible for the Part A and Part B deductibles. 

Beneficiaries are responsible for remaining original Medicare coinsurance amounts applicable to services paid under Medicare fee for service rules.

Providers must not bill for outpatient clinical trial services and non-clinical trial services on the same claim.  If covered outpatient services unrelated to the clinical trial are rendered during the same day/stay, the provider must split the bill as follows:

  • Clinical trial services are billed as fee-for-service
  • Outpatient services unrelated to the clinical trial are billed to the MA plan

If billing for an investigational device exemption (IDE) studies or clinical studies approved under coverage with evidence development (CED), the MA plan is responsible, and an informational only claim should be submitted to Medicare.

Type of Clinical Trial Where to Submit Claim
IDE (category A and category B)

MA plan

 
Clinical trials that qualify for coverage under a CED MA plan unless CMS determines that the significant cost threshold is exceeded
Clinical trials that qualify for coverage under the clinical trial policy Original Medicare

Indirect Medical Education and Direct Graduate Medical Education Billing

When a beneficiary is enrolled in a MA plan and is an inpatient at an approved teaching hospital, the facility receives a percentage add-on payment for each case paid under the PPS. This is known as the indirect medical education (IME) or direct graduate medical education (DGME) adjustment.  They receive this add on payment to reflect the higher patient care costs of teaching hospitals. 

When the beneficiary is enrolled in an MA, the facility files claims to original Medicare to receive payment for the IME or DGME payment since the MA is responsible for the regular services on the claim.

Indirect Medical Education Billing

Acute inpatient hospitals bill for IME as follows:

  • TOB 111
  • Condition codes 04 (patient is a member of a MA plan- informational only) and 69 (teaching hospital)
  • Payer code 'Z' and list primary payer as Medicare
  • Suggested remarks - Billing for IME payment

Payment will be made when the claim finalizes.

Direct Graduate Medical Education Billing 

Acute inpatient hospitals for nursing and allied health education, rehabilitation units and hospitals, psychiatric units and hospitals, long term care hospitals, children's hospitals, and cancer hospitals, bill for DGME as follows:

  • TOB 110
  • Condition codes 04 (Patient is a member of a MA plan- informational only) and 69 (Teaching hospital)
  • Payer code 'Z' and list primary payer as Medicare
  • Suggested remarks - Billing for DGME payment

Payment will be made at cost report time.

 

References