MEDICARE COVERAGE OF MENTAL HEALTH SERVICES
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While Medicare covers a broad array of mental health services, special rules limit coverage and reimbursement. Medicare coverage of mental health and behavioral health benefits is not as extensive as coverage for other services.
Hospitalization: Medicare covers care in specialized psychiatric hospitals which only treat mental illness when in-patient care is needed for active psychiatric treatment. As with care in a general hospital, Medicare pays for necessary in-patient hospitalization for up to 90 days per benefit period. Medicare beneficiaries who need to be in a hospital for more than 90 days are entitled to 60 lifetime reserve days which can be used only once in a life time.
Unlike care in a general hospital, care in a specialized psychiatric hospital is limited to a total of 190 days in a lifetime. Once this maximum has been reached, Medicare coverage of psychiatric hospitalization is exhausted and cannot be renewed. Moreover, if the patient is hospitalized in a psychiatric hospital on the first day he or she becomes eligible for Medicare, that day and any previous days of the psychiatric hospitalization are deducted from the psychiatric hospital days available in the patient’s initial benefit period. (42 C.F.R. § 409.63.) This limitation can be harsh for individuals who need frequent and/or lengthy in-patient treatment in a specialized hospital. If they require lengthy hospitalizations for treatment of physical ailments, no such limitation would be placed on the number of covered hospitalizations to which they would be entitled.
Partial Hospitalization: Partial hospitalization programs offer intensive psychiatric treatment on an outpatient basis to psychiatric patients, with an expectation that the patient’s psychiatric condition and level of functioning will improve and that relapse will be prevented so that re-hospitalization can be avoided. Partial hospitalization programs are located in hospital outpatient departments or community mental health centers. These programs include diagnostic services; individual and group therapy; therapeutic activities; family counseling regarding the patient’s condition; patient education and the services of social workers, psychiatric nurses, and occupational therapists. Medicare does not cover transportation and meals provided to partial hospitalization patients, but, as discussed below, it does cover some partial hospitalization services.
Partial hospitalization services must be provided under the direct supervision of a physician pursuant to an individualized treatment plan, and the services must be essential for treatment of the patient’s condition. If the supervising physician "rides circuit" between the hospital and its outpatient services department, Medicare will sometimes deny claims on the grounds that no direct supervision is present. An individual must show that his or her treatment is under the direct, personal supervision of a physician, and that treatment is being provided in accordance with his or her individualized care plan. (Medicare Intermediary Manual § 3112.4.)
Clinician Coverage and Outpatient Mental Health Services: Medicare covers needed diagnostic and treatment services provided by physicians, including psychiatrists, as well as clinical psychologists, social workers, psychiatric nurse specialists, nurse practitioners and physicians assistants. In order for Medicare to reimburse these clinicians, they must be certified as participants accepting Medicare. Brief visits for the purpose of monitoring the efficacy of prescribed medications are Medicare-covered. Medicare also covers needed outpatient mental health services including individual and group therapy, therapeutic activity programs, family counseling and patient education services, drugs which a patient generally cannot self-administer and diagnostic tests, including lab testing.
The Medicare statute itself places no limits on clinician coverage as long as the services provided are medically necessary. However, many Part B carriers have Local Medical Review Policies (LMRPs, also known as Local Coverage Determinations, or LCDs) setting out the number of visits Medicare will cover for mental health services. As a result of these policies, an individual may be told Medicare will not pay for doctor and other visits his providers consider to be medically necessary. The individual should appeal any denial of coverage that he or she believes is based on a LMRP rather than on his or her individual medical needs.
Home Health Services: Medicare pays for home health services for individuals who require skilled care on a part-time or intermittent basis and who are confined to the home. People with mental health needs who meet these eligibility criteria are eligible for care in their home, even if they have no physical limitations. An individual is considered "homebound" if the illness is manifested in part by a refusal to leave the home or is of such a nature that it would not be safe for the individual to leave the home unattended. (HCFA Program Memoranda, A-01-21, Feb. 6, 2001.)
LIMITATIONS ON REIMBURSEMENT
Reimbursement for certain psychiatric services differs from the usual Medicare reimbursement rules. Medicare Part B generally reimburses doctors at 80% of the approved amount; the patient pays the remaining 20% coinsurance amount. When a claim is for mental health services, Medicare makes an initial deduction of 37½ % before paying 80% of the charge. As a result, the Part B reimbursement is, on average, about 50% of the charge. The coinsurance for mental health claims is therefore 50 percent, which is more than for other Part B-covered services (usually 20%).
SUPPLEMENTAL INSURANCE COVERAGE
Individuals should consider carefully the purchase of supplemental Medicare insurance coverage or Medigap insurance. It is also important to explore any retirement health insurance an individual's employer may offer. Depending on income, an individual may also be eligible for Medicaid.
Supplemental (Medigap) Insurance: Medicare supplemental insurance, also known as Medigap insurance, is designed to fill the "gaps" in coverage offered under the traditional Medicare program. There are ten standard Medigap policies designated as plans "A" through "J." Plan A is the basic plan containing core benefits. All other plans build upon the core benefits. Each state has its own Medigap regulations based on model rules issued by the National Association of Insurance Commissioners ("NAIC"). As with all insurance, individuals should review any policy carefully before purchase to assure that it covers the mental health services they need.
All Medigap policies except for Plan A, the basic plan, cover the hospital deductible amount. All plans pay for eligible hospitalization expenses not covered under Medicare for days 61 through 90 in a benefit period and for each lifetime reserve day. Once Medicare hospital benefits are exhausted, Medigap plans cover 100% of Medicare-eligible hospital expenses, for a life time maximum of 365 days. The NAIC Model rules do not distinguish between general inpatient hospital and psychiatric hospitals in describing the hospital benefits available.
All plans pay the Part B co-insurance amount which, as noted above, is 50% of the Medicare approved amount for mental health services. Plans C, F, or J offer coverage for the Part B deductible. Plans F, G, I or J offer coverage for the doctor’s charge up to 115% of the Medicare approved amount. An individual may not be able to obtain Plans I and J, however, because they are medically underwritten.
Insurance Through a Former Employer: A retiree may be able to keep current health care coverage through the purchase of COBRA health care continuation insurance. 29 U.S.C. §§ 1161 et seq. The relationship between COBRA and Medicare is complicated, however; if an individual wants to take advantage of COBRA to keep current health benefits, the individual must apply for and already be receiving Medicare before he retires and becomes eligible for COBRA.
An individual may also be eligible for retiree health benefits offered to former workers if he or she meets eligibility criteria established by the employer. Such insurance coverage is voluntary and subject to change or termination at any time. Since, in most cases, there is no requirement that mental health benefits be offered as a covered service, the plan document must be reviewed to determine whether the services he needs are covered.
Once an individual has retired, any health coverage obtained through his former employer will be secondary to Medicare. This means that the claims must be submitted to Medicare first, and the retiree health or COBRA plan will pay its share after Medicare pays. The amount of the deductible and co-payment the plan will pay is determined by the terms of the health plan. The plan will pay fully for items and services it covers but Medicare does not cover, such as prescription drugs.
Finally, an individual should enroll in Medicare Part B when becoming first entitled to Medicare. There is no special enrollment period for Part B after COBRA coverage or coverage under a retiree health plan ends. If an individual does not enroll when first entitled, the individual would have to wait to enroll until the next general enrollment period, which runs from January through March of each year, and the Part B coverage would not start until July of the year in which the individual enrolls. Then the individual would have no primary health insurance coverage for the care and services covered by Part B. Additionally, the individual would have to pay an increased Part B premium because of the delayed enrollment.
Medicaid: Depending on his income and resources, an individual may be eligible for Medicaid to pay for all or some of the expenses. Full Medicaid coverage would be available to a person over age 65 if he or she met the income and resource levels set by the state that individual resides in. If the income were too high, the individual might still be eligible for assistance with Medicare cost-sharing under the Qualified Medicare Beneficiaries (QMB) program, or with premium payments for Specified Low-Income Medicare Beneficiaries (SLMBs), Qualified Disabled and Working Individuals (QDWIs) and Qualified Individuals (QIs). If the individual is eligible for full Medicaid coverage, Medicare would still be the primary insurer. Thus, the individual could not be charged co-insurance, and Medicaid would pay for services covered by Medicaid but not by Medicare.
Within federal guidelines, states have flexibility to set their own Medicaid eligibility criteria and Medicaid benefit package. If an individual were eligible for the full Medicaid program, Medicaid in every state would pay for inpatient and outpatient hospital services, including rural health clinic and federally qualified health center services; nursing facility care; home health services; and physician and laboratory services. Rural health clinics and federally qualified health center services must include the services of a clinical psychologist and a clinical social worker.
Coverage of other mental health services is not required, however. Only five states provide Medicaid payment for medical social work services; nineteen states cover psychologist services; and thirty-four states cover clinic services. Of the nineteen states that cover nursing facility services for those 65 and over in an institution for mental disease, two states provide the services for only certain categories of people eligible for Medicaid. An individual should check with his or her state Medicaid agency to determine what optional services Medicaid covers. While prescription drug coverage also is optional, all states provide some prescription drug coverage under Medicaid. Therefore, an individual would get some benefit from enrolling in Medicaid if he or she is eligible to do so.
MEDICARE DELIVERY SYSTEMS
Individuals need to understand the difference between traditional Medicare and Medicare Advantage (MA) plans in order to decide which type of Medicare delivery system will best meet his or her needs for timely and appropriate access to mental health services. All MA plans must provide the same benefits and services that are offered under traditional Medicare; all therefore should cover the services described above. Co-payments and deductibles may differ, however. While some MA plans provide services in addition to those covered by traditional Medicare, few, if any, offer extended mental health coverage such as paying for more than 190 days of in-patient care in a psychiatric hospital.
If an individual enrolls in a MA HMO, he or she will be required to use the doctors and other providers in the HMO’s network. HMOs must provide and arrange for necessary specialty care, including providing for out-of-network care when network providers are unavailable or inadequate to meet the enrollee’s medical needs. For individuals with complex or serious medical conditions, the HMO must establish and implement a treatment plan that is appropriate for the condition and that includes an adequate number of direct access visits to the required specialists. Thus, an individual would be able to see mental health professionals in accordance with a treatment plan developed for him or her and without first seeing a primary care physician before every visit.
RETURNING TO WORK
Though some individuals are closer to retirement and are considering health coverage options, some younger people with mental illness who are already on Medicare need to know their rights to continue Medicare if they return to work. These rights were expanded by the passage of the Ticket to Work and Work Incentives Improvement Act of 1999 (Pub. Law 106-170). Under this law, people who return to work, and therefore lose their Social Security disability benefits, can continue to receive Medicare coverage for 8 ½ years after returning to work. As with most other Medicare beneficiaries, they will not have to pay Part A premiums, but they will need to pay Part B premiums. At the end of the 8 ½ years a disabled worker may continue to receive Medicare by paying premiums under both Parts A and B.
Medicare will cover some of the mental health needs of individuals, though they may have to incur larger out of pocket expenses than under a employer sponsored plan. Individuals need to consider carefully how to supplement their Medicare coverage, either through a Medigap policy, retiree health policy, or through Medicaid.
Copyright © 2010 Center for Medicare Advocacy, Inc.