Medicare Cost-Sharing for Qualified Medicare Beneficiaries

Balance Billing is Prohibited.  Period.

New Guidance released jointly by the Center for Medicaid and CHIP Services (CMCS) and the Medicare-Medicaid Coordination Office (MMCO) once again highlights and advises about an issue that has created hardships for low-income people using Medicare and challenges for advocates trying to help them. The jointly-issued Guidance includes a link to an additional source of guidance.  Both documents address the same issue:  the statutory prohibition on provider balance billing of Qualified Medicare Beneficiaries (QMBs) for deductibles and co-insurance or copayments for Medicare Parts A and B services.

For details on the Guidance see the MMCO-CMCS Information Bulletin of January 6, 2012, "Billing for Services Provided to Qualified Medicare Beneficiaries (QMBs)" and the companion document from the Centers for Medicare & Medicaid Services' (CMS) Medicare Learning Network (MLN) Matters titled "Prohibition on Balance Billing Qualified Medicare Beneficiaries (QMBs)." This is the first formal Guidance from the federal government on this issue since 2008.

Background

Who are Qualified Medicare Beneficiaries? Qualified Medicare Beneficiaries (QMBs) are people with Medicare who have incomes at or below 100% of the Federal Poverty Level, or a higher level set by their state, and very few resources.[1]  The QMB benefit is administered by State Medicaid programs. QMBs can be eligible for Medicare cost-sharing protections only, or they can be eligible for those cost-sharing protections and for full Medicaid services under their State's Medicaid plan.

What is the QMB benefit? People with QMB are excused, by law, from paying Medicare cost-sharing, and providers are prohibited from charging them.[2] All cost-sharing (premiums, deductibles, co-insurance and copayments) related to Parts A and B is excused, meaning that the individual has no liability.  The state has responsibility for these payments for QMBs regardless of whether the particular service is also a Medicaid-covered service.  States can, but are not required to, pay premiums for Medicare Advantage plans' basic and supplemental benefits; states do have responsibility for MA co-payments for Part A and B services.

The State's responsibility, however, is limited.  It need only pay cost-sharing up to the amount it would pay under its state plan for the same service. If the service is not covered under the State plan, it must create a rate at which it will pay.  In situations where the state's rate is less than Medicare's, this limited responsibility can result in the state paying nothing for cost-sharing.  For example, if Medicare allows $100 for a visit to a physician's office, Medicare will pay 80% of that amount, or $80.  If the state Medicaid program pays only $70 for the same service, it would make no payment for that service delivered to a QMB.

The authority (but not a requirement) for states to limit their QMB cost-sharing obligations to their Medicaid payment for the same service (or if Medicaid did not cover the service, to a payment level they adopted in their state plan) was added to Medicaid law in 1997.[3]  After this change in the law, many states that had been paying at the full Medicare rate changed their payment policies to pay at their lower Medicaid rate.[4]  A congressionally-mandated study of the effects of this provision of the law concluded that the reduced rates resulted in fewer doctor visits and mental health services, but did not examine the effect on health of such reductions and recommended further study of the issue.[5]  No such further study or other federal action has been undertaken.[6]

People with QMB coverage encounter difficulties using their benefit when they seek services from a provider who participates in Medicare but not Medicaid.  Providers sometimes do not know that they are serving a QMB-qualified person, that they are prohibited from billing that individual and that they must bill the state instead.  Moreover, it is not clear that states have easy-to-use processes for such billing.

The Guidance

The Guidance addresses some, though not all, of the issues above.

The joint CMCS/MMCO Guidance was distributed widely – to a list of about 35,000 offices, including State Medicaid agencies, Governors' offices, state associations, CMS Regional Offices and advocates.  The MLN Guidance is available on the CMS website at www.cms.gov/MLNMattersArticles/Downloads/SE1128.pdf  and is sent to a self-subscribed list, including providers, provider associations, and others.

Both documents make clear that billing people with QMB for any Medicare cost-sharing is prohibited by federal law and that providers who bill QMBs are violating their provider agreements and are subject to federal sanctions.  The documents focus explicitly on Medicare cost-sharing, "including deductible, coinsurance, and copayments."[7]

Both documents remind the reader that a section of the State Medicaid Manual, 3490.14, that says a provider can choose to serve a QMB as a private patient and thus bill him or her has been superseded by the statutory change to Medicaid in 1997 that includes the clear prohibition on billing people with QMB.

Both documents make clear that a Medicare-only provider must become a Medicaid provider to submit claims to Medicaid and acknowledge that the provider enrollment process will vary from state to state.  They direct the provider to contact the state to learn about its provider registration process.

The MLN piece reminds providers that most states have "cross-over" billing agreements with Medicare whereby any Medicare claim for a person also receiving Medicaid is sent to the state for the state's share of payment.  It suggests the particular QMBs might just need to be added to the state's cross-over billing records.

The joint CMCS/MMCO Informational Bulletin suggests ways States can improve communication with QMB providers and reinforce the provider prohibition on QMB balance-billing:

1. Offer separate enrollment forms for QMB-only providers.  This suggestion implies, but does not say, that such forms might be simpler than those used for providers billing for full Medicaid services.
2. Include mention of the prohibition on balance billing in all communications with providers serving people with QMB.
3. Provide clear Guidance for QMB providers on enrollment and billing processes.

The Bulletin also directs providers to recognize that they must complete the State's enrollment process to be included in the state billing system and to contact the State to determine the exact process for submitting claims for people with QMB.

The Guidance does not address the issue of how providers know a patient is a QMB.  Some states are creating Medicaid cards that specifically identify those individuals but advocates believe that many states do not yet have a clear way for their QMBs to let providers know of that status.

Unfortunately, the Guidance also does not strongly encourage states to create a streamlined process for Medicare-only providers to submit claims for QMBs.  The superseded portion of the State Medicaid Manual, §3490.14, suggested that the actual submission of a bill by a Medicare-only provider to the State Medicaid agency could be considered sufficient to make the provider a Medicaid provider, these two Guidance documents focus more attention on directing the provider to contact the state to learn of the state's process for enrollment or registration as a Medicaid provider.

The Guidance also does not address the complexities of QMB billing for individuals enrolled in Medicare Advantage programs, although it does make clear that MA co-payments are included in the prohibition.  Those issues, however, have been addressed by CMS in earlier Guidance.[8] Little is known about the extent to which this Guidance is followed.  In a 1999 survey of state practices with respect to paying Medicare cost-sharing, only 19 states reported paying some copayments for their Medicare beneficiaries in Medicare managed care.[9]  To the knowledge of the Center for Medicare Advocacy, no follow-up survey has been done.

Finally, the Guidance does not address issues of billing for Medicare cost-sharing for individuals who are not Qualified Medicare Beneficiaries.  Again, previous Guidance from CMS has addressed that issue.[10]

What Can Be Done?

Advocates report that people with QMB are frequently charged improper cost-sharing.  To the extent that providers are merely confused about their responsibilities, it will be helpful to provide them with the recent CMS Guidance.  The Center for Medicare Advocacy also has a letter sent by CMS to a provider that was billing improperly.[11] Advocates report that they have successfully used this letter to educate other providers about their responsibilities and the consequences of billing QMBs. 

To the extent that providers are unwilling to serve people with QMB if there is a small or no cost-sharing payment from their state, QMBs will have greater difficulty getting access to needed health care.  Advocates can work with their states to increase the state's cost-sharing payment to the full Medicare rate.  Perhaps it is time for Congress to revisit the question of whether limited cost-sharing payments adversely impact beneficiaries.