NEWS: NEW MEDICARE DEVELOPMENTS OF NOTE—The MOON Notice, Part B Equitable Relief, and Powered Wheelchair Claims changes.

Three changes of note in Medicare rules have recently been adopted – two of which are already in effect – which will affect many New Mexico Medicare beneficiaries.

The “MOON” Notice:  Starting March 8, hospitals are required to give Medicare patients a written notice when they are in a hospital but not yet officially “admitted.”  The initials stand for “Medicare Outpatient Observation Notice.” Most people will be surprised to know that a Medicare patient who is in a hospital, and receiving the same services as other patients, may not yet be admitted; rather they may be classified as an outpatient, under “observation” status.  The distinction is not semantic; among other things the days involved will not count toward the three day hospitalization prerequisite for post-hospital skilled nursing home coverage.  Even though outpatient observation status can last for several days, affected Medicare patients have usually been unaware of it.

The MOON is intended to alert affected beneficiaries to their outpatient status, and it applies both to fee-for-service beneficiaries and Medicare health plan members.  It must be given within 36 hours.  In theory at least this will enable an affected patient, ideally with help from their physician, to dispute the classification.   It may also influence patients’ decisions to later appeal their Medicare coverage determinations.  However, advocates who have followed the development of the MOON closely are uncertain how thoroughly it will be enforced.

New Part B Equitable Relief:  Thousands of New Mexico seniors have had private, individual health insurance purchased through the New Mexico Health Insurance Exchange – a/k/a the “Marketplace” — at the time they became eligible for Medicare.  Unbeknownst to many of them, the Medicare eligibility automatically rendered them ineligible for premium and cost sharing subsidies for their Marketplace coverage.  As a result they may have delayed enrolling in Part B, thinking their Marketplace coverage – with the subsidies – was more than adequate.  When they learn that they should have taken Part B, their coverage will be delayed and they will face higher premiums.  Recognizing that the lack of adequate information contributed to this problem, the federal Medicare agency (“CMS”) has established a new type of equitable relief to avert those negative consequences.

This relief enables (1) such individuals who delayed enrolling in Part B to enroll on or before September 30, 2017 and have their coverage begin promptly, without premium penalties; and (2) such individuals who already enrolled in Part B and have late enrollment penalties, to seek reduction of those penalties (also by September 30).  It applies mainly to individuals who became eligible for Medicare on or after March 1, 2017.  Affected individuals must apply for the relief at a local Social Security office.  Earlier this year CMS mailed notices about this relief to at least 12,000 New Mexicans who their records showed as being enrolled in both Marketplace coverage and Medicare Part A as of a certain date, but many affected individuals may have fallen through the cracks or neglected the notices.  For more detailed information, see https://www.cms.gov/Medicare/Eligibility-and-Enrollment/Medicare-and-the-Marketplace/Downloads/Limited-Equitable-Relief-Fact-Sheet.pdf .

Power Wheelchair Claims Change:  The Medicare program regularly adopts new rules designed at least in part to save money, often involving services that are determined to be subject to incorrect coverage.  One type of such rules involves using prior authorization – the requirement that beneficiaries get approval of certain services or medical equipment before obtaining them.  Starting July 1st prior authorization will be required for two specific types of power wheelchairs, designated as Codes “K0856, group 3 std.” and “Code K0861, group 3 std.”  The Medicare agency has created a list of 135 items of Medical Equipment, Prosthetics, and Orthotics is asserts as being “frequently subject to unnecessary utilization” and so it will surprise no one if the implementation of prior authorization requirements eventually extends to other types of medical equipment.

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