Lois Cornillaud was in her mid eighties and living in her own apartment in Clearwater, Fla., when her daughter, Barbara Kennedy, noticed that she was having trouble keeping track of her bills—double-paying some and not paying others. And she was getting a constant stream of medical bills and notices from Medicare. The paperwork was confusing, but Kennedy (then in her early sixties) was determined to figure it out. Besides wanting to help her mother, "I thought I'd be on Medicare soon, so I should understand this," says Kennedy, now 69.
Kennedy became a student of Medicare, reading the Medicare & You handbook, scouring her mother's Medicare summary of benefits notices for unexpected charges and acting as her mother's advocate, sometimes with the help of the local Area Agency on Aging. For instance, after a hospital sent her mom a $1,700 bill for speech therapy she never had, Kennedy asked for an itemized bill. "The hospital dropped the charge, and I never heard about it again," she says. She also fought a miscoded ambulance bill, an unexpected rehabilitation charge and a $250 bill for an eye procedure the doctor had told her would be covered.
Now that Cornillaud is 92 and in a long-term-care facility, Kennedy has to monitor her care as well as her medical bills. After studying the Medicare system for almost a decade, "I'm more comfortable with it," she says.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Like Kennedy, you may find yourself getting a crash course in Medicare on your parents' behalf long before you qualify for benefits yourself. The paperwork can be overwhelming, especially if your parents have a lot of medical issues. You may also encounter a range of claims problems—from small billing or coding errors that can be fixed with a quick phone call to large charges that need to be appealed to an administrative law judge.
Here's how to help your parents' claims go smoothly and make sure they get all the coverage they deserve.
Know how it works
Most people 65 and over are covered by traditional Medicare. Medicare Part A (which has no premium) covers hospitalization, and Medicare Part B (typically $104.90 a month) covers doctors' visits and outpatient expenses. Together, parts A and B pay the bulk of seniors' medical expenses. Each part exacts co-payments and deductibles.
Traditional Medicare allows patients to use any doctor who accepts Medicare payments, but it can sometimes be difficult to find those doctors, especially in the case of psychiatrists and some specialists. You can search for doctors near your parent who accept Medicare assignment by going to www.medicare.gov and clicking on "Find doctors & other health professionals."
Many seniors buy a standardized Medicare supplement plan (sometimes called medigap) to pick up out-of-pocket expenses. These supplemental plans automatically fill in gaps in coverage, so claims problems are few. "Under federal law, the plans have to pay. There's no dispute about that," says Bonnie Burns, of California Health Advocates, who worked with the government to standardize medigap plans in the early '90s.
Medicare doesn't provide prescription-drug coverage. For that, most people buy a separate Medicare Part D plan, offered by private insurers. Seniors who have retiree health insurance can use it to fill the gaps in medical and drug coverage rather than buy a supplemental plan and Part D.
About one-fourth of seniors are enrolled in Medicare Advantage plans, which cover both medical and drug costs. These plans, provided by private insurers, follow the framework of traditional Medicare. Unlike traditional Medicare, however, patients are generally limited to a network of doctors and hospitals. Medicare Advantage premiums tend to be lower than the total premiums for Medicare plus medigap and Part D coverage, but you usually pay more in out-of-pocket costs than with Medicare, medigap and Part D combined. Confusion about network requirements can cause complications with claims you wouldn't have with traditional Medicare.
Pick the right plan. One way to help your parents avoid Medicare problems is to pick the right Part D or Medicare Advantage plan for their needs. You can help them do that during open enrollment, from October 15 to December 7 every year.
If your parents take expensive medications, for instance, be sure the plan continues to cover their drugs in the new plan year. Get a list of your parents' medications, and go to the Medicare.gov/find-a-plan tool to estimate the out-of-pocket costs for their drugs under each plan available in their area. "For a cancer patient who tends to take more-expensive drugs, this issue is very important," says Kirsten Sloan, of the American Cancer Society.
Two recent trends among Part D and Medicare Advantage plans are to shift drugs to more-expensive pricing tiers and make patients jump through hoops before some medications will be covered—for example, by requiring step therapy (which means they generally must try cheaper drugs first) or preauthorization (which means their doctor must prove their need for that drug). And many plans are switching from fixed-dollar co-payments to coinsurance, which is based on a percentage of the drug's cost. If a parent takes expensive cancer-treatment drugs, for example, the out-of-pocket costs could rise significantly.
If your parents have a Medicare Advantage plan, also make sure their key doctors, such as their primary-care doctor and, say, their oncologist, will be in the plan's network next year, says Sloan. "Don't assume that they stay from year to year," she says. Ask the plan about specific providers, and look carefully at the Annual Notice of Change, which Part D and Medicare Advantage plans must send to participants in September. The notice alerts them to plan changes for the following year, says Frederic Riccardi, director of client services for the Medicare Rights Center.
[page break]
Also see how a Medicare Advantage plan handles coverage for out-of-network providers. Some plans charge a higher co-payment if you go out of network, but others make you pay the entire cost yourself. Especially for cancer patients who are looking for special treatments, having the flexibility to go out of network can be important. Otherwise, they may only get out-of-network coverage if they can prove that it's an emergency or that no doctor in the network can provide that type of care.
Medicare beneficiaries can switch their Part D or Medicare Advantage plans during open enrollment in the fall, for coverage to begin on January 1. They may switch to a Medicare Advantage plan with a five-star rating anytime during the year, as long as they can find a five-star plan in their area.
Organize the paperwork
Keeping track of key documents will help you determine what your parents owe and don't owe and can make a big difference if you later need to appeal a charge. If you're helping with your parents' finances, gather the paperwork that your parents bring home from doctors' visits and that arrives in the mail. Set aside a place in their house or apartment for health-care-related statements. Organize all of the statements by the date of the procedure before paying any bills.
Each parent should get a Medicare summary notice showing the services that providers billed to Medicare over the past three months; what Medicare paid; and the amount your parent owes the provider (similar to an explanation of benefits from a private insurer). Match this notice with any bills received from the provider to make sure the claim has been processed. "A lot of clinics and doctors like to send out a bill within 24 hours of giving care," says Diane Omdahl, a former nurse and now co-founder of 65Incorporated.com, which provides information about how Medicare works. "I never pay a bill until I have a notice from the doctor's office reflecting that it was put through Medicare or the insurance plan. Then I hook them up together."
While matching bills to the summary notice, look for any unexpected charges. Organizing the paperwork by date makes it easy to see if there was double billing or inaccurate coding. For instance, when Omdahl was going through the paperwork for a friend who had cancer, she discovered triple billing for the same radiation treatment. "I started seeing the same abbreviation with the same date and code. Having been a nurse, I had never seen more than one radiation therapy in a day," she says. She asked the provider to send the bill through again, and the extra charges were removed.
Ask questions upfront
With traditional Medicare, doctors generally must give patients a notice (called an "advance beneficiary notice of noncoverage") if they believe a procedure won't be covered. Such notices are not an official denial but give patients a heads-up that the submitted claim will almost certainly be denied. Patients are asked to sign the notice before care is provided.
You and your parents need to be on the lookout for these notices and ask questions before signing. In some cases, the notice is legitimate—for example, if the patient has exceeded the annual limit for certain tests. At other times, it can be a mistake—say, if the doctor sends your parent to an imaging center for a diagnostic test, which is covered, but the lab codes it as a screening, which is not, says Terry Berthelot, senior lawyer for the Center for Medicare Advocacy.
In signing the notice, the patient can choose to have the service submitted to Medicare anyway, preserving the right to appeal. Still, it can be much easier to work with your doctor and providers to fix coding issues and answer questions than to go through a formal appeals process.
Admission versus observation. You'd think that if your parent spent several days in the hospital, it would be obvious that he or she was admitted. But that's increasingly not the case, as hospitals keep people for days or even weeks under "observation" so they don’t have to report them as inpatients. The reason: Hospitals are worried that Medicare will penalize them for a large number of admissions or readmissions.
This status makes a difference if your parent ends up needing skilled rehabilitation after leaving the hospital. "If the doctors think the patient will benefit from daily skilled care, or physical, speech or occupational therapy, then Medicare can cover up to 100 days in a skilled-nursing facility," says David Lipschutz, a policy lawyer with the Center for Medicare Advocacy. But to meet that condition, your parent must have been an inpatient for at least three days, not under "observation." Lipschutz has helped people whose parents have been in the hospital for days—and even weeks sometimes—but received big bills for rehab coverage because they were listed as under observation.
"It might seem like an inane question, but if your loved one is in the hospital and on Medicare, ask if they're an inpatient or under observation," says Lipschutz. Hospitals won't necessarily change your parent's status just because you ask, but your doctor may be willing to call the hospital and help get the status changed. (The Center for Medicare Advocacy is supporting a bill in Congress that would change the skilled-nursing rehab requirement to count days in observation as well as inpatient status toward the three-day requirement.)
Even though Medicare can cover up to 100 days of skilled care after a three-day hospital stay, people are usually cut off much earlier than that. Medicare will generally ask for evidence after 20 days that patients will still benefit from rehab. Anticipate that request, and get ready to ask the doctor to provide medical evidence that your parent needs continued care.
Where to find help
These sites can lead you to experts who provide one-on-one assistance.
SHIP. Go to the State Health Insurance Assistance Program with Medicare claims issues. Volunteers in each state are trained to know the appeal process and will help your parent—or you, as your parent's representative—build a case and know what to ask the providers and Medicare. To find local contacts, call 800-633-4227 or go to www.shiptalk.org.
The Medicare Rights Center (help line 800-333-4114) and the Center for Medicare Advocacy provide comprehensive information about Medicare claims and can answer questions about coverage.
Medical claims assistance professionals. These consultants can help manage your parents' medical paperwork, identify errors and file appeals. They usually charge by the project or by the hour (typically about $150). Go to www.claims.org.