This article has been published in "The Advocate", a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, October 2006 issue, @2006 by Steven J. Bruzonsky, Esq.
Medicare and Medicare Advantage (formerly known as Medicare+Choice) Balance Billing
It is clear that just as a participating Medicare provider which has billed Medicare can't balance bill the patient's personal injury settlement, that a participating Medicare+Choice (M+C) provider, which has billed the M+C healthplan, can't balance bill the patient's personal injury settlement as well.
M+C is part of a comprehensive Medicare statutory and regulatory scheme, with M+C serving as a substitute for Medicare coverage. 42 U.S.C. Chapter 7, specifically 42 U.S.C. § 1395, Subchapter XVIII of the Federal Social Security Act, establishes Medicare. 42 U.S.C. §§ 1395w-21 through 1395w-28; and 42 U.S.C. § 1395mm establishes the M+C program by which healthcare organizations substitute for Medicare.
Once a provider bills Medicare, the provider must must withdraw all claims/liens the injury settlement (except for claims related to services not covered by Medicare and for Medicare deductibles and coinsurance). This applies even if Medicare did not pay the claim or if the provider refunded payment received back to Medicare. If the provider collected on a lien after billing Medicare, then the provider must issue refund to Medicare or the patient as set forth at this section. Medicare Secondary Payer Manual, Chapter 2, § 40.2. 42 U.S.C. § 1395cc(a)(1) requires that Medicare providers file agreements "not to charge [except deductible or coinsurance amounts] any individual or other person for items or services for which such individual is entitled to have payments made under this subchapter." The First Circuit held that the Medicare statutory language, including 42 U.S.C. § 1395cc(a)(1), barred a hospital from balance billing the third party settlement, where the hospital was paid by Medicare, and then the claimant's personal injury claim settled with payment of the Medicare lien. Rybicki v. Elliot Hospital, 792 F.2d 260 (1st Cir. 1986).
Similarly, once a provider bills the M+C healthplan, the provider afford the patient the same protections, as discussed above, for M+C that would be provided for Medicare. The Medicare Managed Care Manual, Chapter 4 â€“ Benefits and Beneficiary Protections § 40.4 Balance Billing provides that "Medicare balance billing protections for beneficiaries also apply for MA MSA plans." This means that just as participating Medicare providers, if they elect to bill Medicare, may only charge the patient the applicable deductible and copay, that the same applies to participating M+C providers. Note that 42 U.S.C. 1395w-22(k)(2)(A) limits M+C providers to payment of no more than 115 percent of the contracted rate, which includes payment of any deductibles, coinsurance, copayments, or balance billing (the amount paid by the enrollee's health insurer plus any cost-sharing by the patient). 42 C.F.R. § 422.2 implements the statute by stating that "Medicare payment to the M+C organization discharges the enrollee's obligation to pay for the services." It further states that (for purposes of M+C) "balance billing is the the amount paid by the enrollee's health insurer plus any cost-sharing) by individual" and that "Cost-sharing includes deductibles, coinsurance, and copayments."
What if the M+C participating provider chooses not to bill the M+C healthplan, but instead elects and files a timely ARS 33-931 statutory lien and bills the patient's injury settlement? In this case, you should request or obtain a copy of the provider's M+C contract, or other written permission from the M+C plan, to ascertain if it permits the provider to bill the injury settlement. 42 USC 1395W-26(b)(3) provides that state law "cannot take away an M+C organization's right - - - to bill, or authorize providers or suppliers to bill, for services for which Medicare is not the primary payer." 42 C.F.R. § 417.528 and 42 C.F.R. § 422.108 both provide that the M+C plan may "authorize" the participating provider to bill the primary payer, or that they may bill the enrollee if paid by a primary payer. 42 C.F.R. § 422.108 also states that "A State cannot take away an MA organization's right under Federal law and the MSP regulations to bill, or to authorize providers and suppliers to bill, for services for which Medicare is not the primary payer. - - -." Although the provider may contend that it has been orally authorized to bill the injury settlement, that argument is obviously not legally persuasive when there is no written authorization.
Note that other than Rybicki, supra, which only discusses Medicare, there is no other Federal (U.S. Supreme Court or Ninth or other Circuit) or Arizona caselaw discussing a provider's right to recover or balance bill under the M+C or HMO statutes and regulations.