- Section 1 Introduction
- Introduction
- Federal Government Administration
- Fundamentals of Medicare: State Responsibilities
- Fundamentals of Medicare: Participating Providers
- Voluntary and Involuntary Termination of Provider Agreement
- Disclosure of Health Insurance Information
- Privacy Act
- National Provider Identifier
- Legacy Provider Numbers/Provider Transaction Access Numbers (PTANs)
- Medicare Administrative Contractors
- Fundamentals of Medicare: Information References
- Acronyms
- Fundamentals of Medicare: Glossary of Terms
- Section 2 Medicare Basics
- The History of Medicare
- What Is the Medicare Program and How Is It Funded?
- Medicare Eligibility and Premiums
- The Social Security Administration and Medicare Enrollment
- The Medicare Card
- Medicare Part A
- Inpatient Hospital Care
- Skilled Nursing Facility Inpatient Care
- Home Health Care Benefit
- The Hospice Benefit
- Medicare Part B Medical Insurance
- Fundamentals of Medicare - Medicare Program Exclusions
- Medicare Advantage Organizations
- Medicare Secondary Payer
- Supplemental Insurance
- Coordination of Benefits Trading Partners
- Section 3 Fraud and Abuse
- Section 4 Getting Ready to Bill Medicare
Section 2: Medicare Basics
Medicare Advantage Organizations
Table of Contents
What are Medicare Health Plans?
Medicare health plans provide different ways for beneficiaries to get their health care coverage in the Medicare program. The Medicare health plan that the beneficiaries chooses affects many things like cost, benefits, doctor choice, convenience, and quality. The Medicare health plan choices include:
The Original Medicare Plan is available nationwide. If beneficiaries get their health care from the Original Medicare Plan, they use their red, white, and blue Medicare card to get their health care. The Original Medicare Plan pays for many health care services and supplies, but it doesn’t pay their health care costs. There are costs the beneficiary must pay, like coinsurance, and deductibles. These costs are called “gaps” in Medicare coverage. Beneficiaries might want to consider buying a Medigap policy to cover these gaps in Medicare coverage.
Medicare Advantage Organization (formerly Medicare+Choice) plans are available in many areas. Individuals with one of these plans don’t need a Medigap policy. MAO plans include:
- Medicare Managed Care Plans
- Medicare Preferred Provider Organization Plans
- Medicare Private Fee-for-Service Plans
- Medicare Specialty Plans
Beneficiaries who decide to join a MAO will use the health care card provided by the MAO plan for health care. These plans must offer all that traditional Medicare covers. The MAO will often give more choices and, sometimes, extra benefits, like extra days in the hospital.
To join a MAO, beneficiaries must have Medicare Part A and Part B. The beneficiary will be responsible for the standard monthly Medicare Part B premium. In addition, they might have to pay a monthly premium to the MAO for the extra benefits that they offer.
Individuals in a MAO don’t need a Medigap policy because MAO generally cover many of the same benefits that a Medigap policy would cover, such as extra days in the hospital after they have used the number of days that Medicare pays for.
A Private Fee for Service plan is one of the options that a beneficiary can choose under the MAO program. Private insurance companies administer PFFS plans, but beneficiaries who enroll in PFFS plans are, by law, are still enrolled in the Medicare program. Beneficiaries must continue to pay the Medicare Part B monthly premium and, in addition, may have to pay a PFFS monthly premium.
Beneficiaries receive the same benefits under a PFFS plan as under traditional Medicare. However, PFFS plans have the flexibility to offer “enhancements” to the program, reduced cost-sharing amounts and worldwide emergency care, for example. Because insurance companies decide where they will do business, companies may offer PFFS plans in some parts of the country. Insurance companies can decide that a plan will be available to everyone with Medicare in a state, or be open in certain counties. Insurance companies may also offer more than one plan in an area, with different benefits and costs.
To find a PFFS service plan visit Medicare.gov and click on Medicare personal plan finder.
Medicare Managed Care Plans
The most popular option under the MAO is the Medicare Managed Care Plan, also known as HMOs. For explanation purposes, the Medicare Managed Care Plan will be referred to as HMOs in this guide. HMOs are private insurance companies contracted by CMS to provide comprehensive care through a series of participating facilities and medical professionals called a network. To find a HMO insurer visit Default Enrollment Policy and Data of Approved Medicare Advantage Organizations.
HMOs fall into two categories, “risk” and “cost-based.” Each type of HMO has its own requirements and policies. The major difference is in the ability of the beneficiary to move outside of the network for services. Both types of HMOs provide emergency and urgent care coverage if the patient’s medical condition requires immediate attention. The beneficiary must maintain his/her payments for Medicare Part B in order to choose an HMO.
Risk based HMOs cover the largest group of beneficiaries outside of the traditional “fee-for-service” Medicare program. In order for the Medicare HMO to make payment for services, beneficiaries must stay within the network. If the beneficiary does not follow the HMO’s regulations, the HMO will deny payment. When this happens, the beneficiary cannot look to traditional Medicare to make payment.
Cost-based HMOs allow the beneficiary freedom of choice. If the beneficiary stays within network, services will be billed to the HMO insurer and the patient has a minimal co-pay responsibility. If the beneficiary goes outside the network, the claim may be billed to Part A or Part B and Medicare can make payment. In these cases, the beneficiary is liable for all deductibles and coinsurance amounts under the fee-for-service program.
When a beneficiary is in one program, he/she is not eligible for the benefits provided by another (except in rare cases). A beneficiary may change their selection of programs during the course of entitlement. It is important to note that although the HMO is the beneficiary’s replacement for traditional Medicare, they will have a separate card through the HMO. The patient’s Medicare card will not indicate HMO enrollment and the Social Security Administration does not revoke the traditional Medicare card.
Revised 1/2021