Coordination of Benefits with Medicare

Coverage and Benefits

When a member has Medicare as a primary plan and a secondary HMSA commercial plan, HMSA coverage will be reduced by the amount of benefits paid by Medicare for the same covered services. After any member deductible has been applied, HMSA will cover any remaining Medicare copayments and deductibles.

Note: The policies listed in this section do not apply to coordination of benefits for members of Medicare-based plans, such as 65C Plus.

Exhaustion of Medicare Benefits

For members entitled to Medicare benefits, HMSA provides coverage after all Medicare benefits (including all lifetime reserve days) are exhausted. For hospital charges incurred after the member's Medicare benefits exhaust, HMSA will pay the lesser of:

• The HMSA eligible charge for the entire confinement less Medicare Part A and Part B payments for ancillary services; or
• Total hospital charges for inpatient days for which Medicare rules permit the hospital to bill the member.

Part B Only

If the member has Part B coverage only, HMSA will pay inpatient benefits based on the HMSA eligible charge less any Medicare Part B benefits for ancillary services.

UB-04 Highlights

Billing Tips

Interim Payment

For long-term confinements, providers occasionally bill Medicare for interim payments before the member is discharged. As a general rule, HMSA does not make interim payment.

Provider Medicare Number

Facilities must make sure that HMSA has all current Medicare provider numbers. If a claim is submitted with a Medicare provider number HMSA does not have on file, the claim will be rejected. To notify HMSA of updated Medicare provider numbers, facilities should contact their HMSA Field Representative.

Crossover Claims

For members whose Medicare benefits have exhausted, HMSA receives Medicare crossover claims at the end of the confinement. Under usual circumstances, the facility does not need to file additional claims with HMSA; the crossover claim provides sufficient information to process the claim.

The Explanation of Medicare Benefits (EOMB) should indicate whether the crossover was made. Providers are encouraged to wait 21 days after receiving the EOMB to allow HMSA time to receive and process the crossover claim. If the crossover claim is problematic or delayed, the facility may submit a claim to HMSA. Please follow the guidelines below.

• Submit hardcopy UB-04 claim.
• Include the final EOMB with the date of admission through the date of discharge.

Note: Adjustments to the final claim will be made based on any Part B payment made during the confinement period.

General Coordination Rules

HMSA follows certain rules to help determine which plan pays first when there is other insurance or coverage that provides the same or similar benefits. The most common coordination rules are as follows:

Both Plans Are Group-sponsored

When both plans are through a group sponsor (such as an employer), the plan without coordination of benefits rules pays first.

Member Coverage

The plan the member has as an employee pays before the plan the member has as a spouse or dependent child.

Active Employee Coverage

The coverage the member has as the result of active employment pays before coverage the member holds as a retiree or under which the member is not actively employed.

Note: When none of the general coordination rules apply (including those not described above), the coverage with the earliest continuous effective date pays first.

Dependent Children Coordination Rules

Birthday Rule

For a child covered by both parents who are not separated or divorced or who have joint custody, the coverage of the parent whose birthday occurs first in a calendar year pays first.

Court Decree Does Not Stipulate

For a child covered by separated or divorced parents, and a court decree does not stipulate which parent has health insurance responsibility, the coverage of the parent with custody pays first. The payment order for this dependent child is as follows:

• Custodial parent
• Spouse of custodial parent
• Other parent
• Spouse of other parent

Court Decree Stipulates

For a child covered by separated or divorced parents, the court decree stipulating which parent has health insurance responsibility will be followed.

Medicare Coordination Rules

Medicare as Secondary Payer

Since 1980, Congress has passed legislation making Medicare the secondary payer and group health plans the primary payer under certain circumstances. These laws apply only if the member has both Medicare and employer group health coverage, and the member's employer has the minimum required number of employees as described in the following paragraphs. For more information, the member may contact his or her employer or the Centers for Medicare & Medicaid Services (CMS).

If the Member Is Age 65 Or Older

If the member's group employs 20 or more employees, and if the member is age 65 or older and eligible for Medicare only because of his or her age, HMSA coverage is provided before Medicare benefits as long as the member's employer or group health plan coverage is based on the member's status as a current, active employee or the status of the member's spouse as a current, active employee.

Member Is Younger Than 65 With Disability

If the member's employer or group employs 100 or more employees, and if the member is younger than 65 and eligible for Medicare only because of a disability (and not end-stage renal disease [ESRD]), HMSA's coverage is provided before Medicare benefits as long as the member's group health plan coverage is based on the member's status as a current active employee, the status of the member's spouse as a current active employee, or the current active employment status of an individual for whom the member is a dependent.

Member Is Younger Than 65 With ESRD

If the member is younger than 65, has employer group coverage and is eligible for Medicare only because of ESRD, HMSA coverage is provided before Medicare benefits but only during the first 30 months of the member's ESRD coverage. Thereafter, the coverage described in this plan is reduced by the amount that Medicare pays for the same covered services.

Dual Medicare Eligibility

If the member is eligible for Medicare because of ESRD and a disability or because of ESRD and the member is age 65 or older, HMSA coverage is provided before Medicare benefits during the first 30 months of the member's ESRD Medicare coverage if the HMSA plan was primary to Medicare when the member became eligible for ESRD benefits.

Facilities Or Providers Not Eligible Or Entitled to Medicare Payment

When services are rendered at a facility or by a provider not eligible or entitled to receive reimbursement from Medicare, and Medicare is allowed by law to be the primary payer, HMSA limits payment to an amount that supplements the benefits that would have been payable by Medicare had the facility or provider been eligible or entitled to receive such payments, regardless of whether Medicare benefits are paid.

Member Has Primary Medicare Part A and/or Part B Coverage but No Part D

HMSA medical plans cover some drugs and vaccines that are covered under Medicare Part D. For HMSA members with primary Medicare coverage but no Part D, you may submit a hard copy claim directly to HMSA for these services normally covered under Part D. Please write “Attention Claims Supervisor” on the envelope and indicate “no Part D” in box 19 of the CMS-1500 claim form.

Providers Who Opt Out of Medicare

Providers may choose to opt out of Medicare by contacting CMS. A letter confirming the provider has opted out for a two year period is generated by CMS. A copy of this letter must be attached to each claim filed by the opt out provider to HMSA when HMSA is secondary to Medicare. The letter must include the date range of the opt out period and it must coincide with the service date filed on the claim form.

Providers who opt out of Medicare are required to advise the member prior to services being rendered that they have opted out of Medicare and to receive services it will require that the member waive their primary Medicare benefits. Additionally the provider should advise the member that HMSA secondary benefits will be limited to secondary benefit levels and this will result in a higher out of pocket for the member. The provider should have on file the member's agreement to waive their primary Medicare benefits and member's acknowledgement that they are accepting only limited secondary HMSA benefits. Please also refer to the CMS website below for more information and requirements for opt out providers.

Participating HMSA providers who chose to opt out of Medicare are held to the HMSA's eligible charge. Refer to example below:

Changes to Dual Medical Coverage

An HMSA member is required to notify HMSA when he or she has other medical coverage.

Other coverage includes:

• Group insurance.
• Other group benefit plans.
• Non-group insurance.
• Medicare or other governmental benefits, including Medicare Advantage plans.
• Medical benefit coverage from auto insurance, when applicable.

Although HMSA proactively seeks medical coverage change information from your patients during open enrollment and prior to their 65th birthdate, such notification does not always happen in a timely manner. To document changes to a patient's medical coverage, please have the patient complete and sign the Coordination of Benefits Subscriber Questionnaire [PDF] while in your office. Please fax the information to HMSA at 808-948-6357, or mail the completed form to:

HMSA
Attn: CA/Other Party Liability, 8th Floor
P.O. Box 860
Honolulu, HI 96808

HMSA will update its claims processing system with the changes indicated as soon as the information is received.

Crossovers

When Medicare is the primary insurer and HMSA is secondary, the provider's claims may cross over automatically to HMSA after Medicare has processed the claims. Refer to Crossover Claims in this document for more information.

Additional Resources

Related information is located at Centers for Medicare & Medicaid Services (CMS).

Revision History