Molly Janczyk and Gary Russell: An explanation of the differences between Social Security Medicare and Medicare/STRS Supplemental Insurance

From Molly Janczyk, April 9, 2007

Subject: Differences bet/ Soc. Sec.Medicare and Medicare/STRS Supplemental Insurance:

For distribution: ORTA, OEA-R, STRS have stated they will include data they determine appropriate in newsletters and or websites for membership.

Due to recent discussion, this is meant only as general information as each case must be considered based on its merit and qualifications.

The following has been confirmed by Gary Russell and Staff Members of STRS HC, presented to Shirlee Zerkel, John Curry and Kathie Bracy for review or questions and may now be circulated.

Sources: Medicare.gov STRS HC Dept.

*Categories of Medicare:

1. Medicare/STRS: Part A & B: STRS enrollees who qualify themselves or through a spouse for Medicare with Soc. Sec. and have STRS for supplemental coverage which is included in our premiums. We, therefore, have Medicare coverage and supplemental coverage through STRS. This means you submit your claim and Medicare settles first and sends you their results stating you may owe an amount. That is for those without supplemental coverage. For STRS retirees, the claim then goes to STRS HC providers Aetna or Med. Mut., etc who look at the remaining balance. If Medicare paid 80% after the initial deduc. and charges, then sent you a claim with 20% remaining, that 20% goes to Med. Mut. or Aetna, etc. and they then pay 80% of that 20% balance. For Plus Plan recipients, then, Med. Mut or Aetna sends you an EOB (explanation of benefits) stating patient responsibility of 20% remaining after your $500 deductible is met. You then have a small amount to pay until your $1500 out of pocket max is met for the year after which STRS pays at 100%. Examples will be clearly outlined below.

2. Medicare recipients without supplemental plans such as we have with STRS. These are straight Medicare recipients qualifying for Medicare alone through Soc. Sec. who pay their deduc. and then 20% of costs with no stop gaps.
(Supplemental insurance is available at additional costs to them).

3. STRS enrollees who do not qualify for Part A through Medicare Soc. Sec. and have Part B only. STRS does not provide Medicare Part A but they have comprehensive overnight hospital/facility coverage through STRS without addt'l charge.

Only 7600 STRS recipients are Part B only and most spouses are A & B.

Premiums as stated in HC info. along with reimbursements.

Soc. Sec. Medicare and STRS retirees all pay the same for Medicare Part B : That amount is $93.50. STRS reimburses you $52.80 and you pay: $40.70

Whether you have Part A & B or just Part B, the premiums follow: There is no charge for Part A.

30 yr. retiree: Parts A & B: (Part : free) Plus Plan: $67 ; spouse: $301 Basic Plan: $40; spouse: $148

STRS comprehensive hospital at no addt'l charge if you do not qualify through Soc. Sec. yourself or through your spouse for Medicare Part A.

STRS does not have Medicare or Assisted Living info.

Medicare predicts insolvency before STRS HC.

*Possible problems are in how claims are submitted by medical providers and facilities/hospitals:

Any claim that is not precertified and determined NOT MEDICALLY NECESSARY for procedure or facility that is ordered and done by Dr. and facility will NOT be paid by Medicare or STRS HC providers. So, if this claim is denied, Medicare and Med. Mut., Aetna, etc. are not responsible and will not pay the claim and the patient is billed regardless of deduc. and out of pockets met. This can occur if a claim is not complete or reasons for medical necessity clearly provided.

The Dr. or facility then has to resubmit medical necessity reasons and diagnosis for the procedure or need for longer stay in the facility or hospital to appeal the claim.

When a claim is denied, then there is NO coverage and ALL hospital costs, facility, treatments, meds, Dr. visits,etc. associated with it are DENIED as well and billed to the patient. THAT DOES NOT MEAN YOU OWE IT and you should not pay anything until all the appeals have been processed. Tell the Dr. and facility/hospital why the claims were denied and direct the Dr. and facilities to appeal with proper documentation.

Medicare related cases can take up to 2 yrs to pay without problem.
(Probably a lot of this happens: bureaucracy). If you keep in touch and communicate generally, payment is not pressed as this type of problem is all too common.

The above problems exist with both Medicare recipients and with recipients that have both Medicare and STRS supplemental coverage. Medicare requires a diagnosis and medical necessity for all procedures as do STRS HC providers. The difference is:

1. With STRS supplemental, you must precert facility; with Medicare you can generally use any facility.
2. Be sure your procedure is precerted for medical necessity prior to procedure. Medicare will also deny if not medically necessary.

MEDICARE Soc. Sec. VS. MEDICARE/STRS Supplemental (STRS retirees): Some differences:

* Hospital stays:

Medicare recipients without STRS Supplemental:

Each hospital stay has a benefit period of 1 - 60 days. If multiple stays are within this consecutive day period , it is considered as one period.

The Medicare recipient pays the first $992 for EACH hospital stay 61 or more days apart. If the patient has a medically necessary need to stay such as transplant or serious medical crisis, they pay $248 for each day from day 61 - 90. Should they be approved longer , they pay $496 each day for days 91 -150 and 100% of all days after 150. There are NO stop gap out of pocket maximums for Medicare patients.

The Medicare/STRS HC Supplemental patient pays:

Plus Plan: $500 deduc. and 20% of all costs up to $1500 for a total possible cost of $2000 assuming all procedures and facility costs are medically necessary just as with Medicare above.

* Procedures: no hospital stay is room only and many treatments, meds, Dr.s and procedures are billed:

Medicare patients:

Pay the 1st $131 and then 20% of all costs no matter how high as Medicare does not have any stop gap for out of pocket payments. Therefore if you are having lots of procedures, Dr.'s , meds, etc., you pay 20% of all of it whether $2000 or $50,000.

Medicare/STRS Supplement HC: (STRS retirees):

Plus plan: The $500 deduc. and out of pocket max of $1500 to = $2000 total applies to both hospital and procedures with no distinctions. Therefore $2000 is your max assuming your facility and procedures are precerted for medical necessity and within network. The Medicare 1st $131 is included in your $500 deduc.

Example of payment for $10,000 procedure:

Medicare recipient pays:

1st $131.

$10,000 - 131 = $9869 bal. Medicare patient then pays 20% of the $9869 to = $1973.80. The Medicare patient owes $2104.80 JUST for this ONE procedure.

**First Medicare settles their portion of claim with Medicare paying 80% after the 1st $131 for each procedure. That leaves 20% as shown above for the Medicare recipient to pay.

STRS: This is where the Medicare/STRS HC supplemental plan kicks in. STRS then pays 80% of the remaining $2104.80 after our deductible. We pay 20% up to $1500.

The 1st $131 was included in your $500 deduc. so take $500 from $2104.60 to = $1604.80. We pay 20% of the $1604.80 (because we have a supplemental plan and are not respon. for the total $2104.80 that Medicare recipients are without supplemental ins.) We then have only to pay 20% of the $2104.80 which is $320.96

Medicare recipients pay : $2104.80

**Medicare/STRS supplement retires pay: $500 + 320.96 to = $820.96 towards you total out of pocket stop gap of $1500 annually.

If a procedure is $40,000, then the 1st $131 is paid by the Medicare recipient with no supplement such as STRS and then 20% of the remaining $39,869 which is $7,973.80 for a total of $8104.80.

The Medicare/STRS Supplemental (STRS retirees) kicks in after Medicare settles. So, STRS retirees pay the $500 deduc. which includes the 1st $131. We then pay 20% of the $8104.80 up to $1500 stop gap out of pocket. $8104.80-500= $7604.80. We pay 20% of the $7604.80 to = $1520.96 but we are capped at $1500 so we pay our $500 deduc. + 1500 out of pocket max for a total of $2000.

THIS IS WHY YOU NEVER PAY A BILL UNTIL MEDICARE PROCESSES IT AND THEN IT GOES TO YOUR PROVIDER (Aetna, Med. Mut, etc.). You will receive the Medicare paperwork but you do not owe at this time if you have supplemental coverage. Your insurance provider will send you an EOB (Explanation of Benefits) will clearly states: Patient Responsibility: That is all you ever pay and no facility or Dr., etc. can bill you more. If any try, call Med. Mut or Aetna, give them the name of those trying to bill you and the phone number and they will contact them for you. If paperwork needs appealed, etc., you have 2 yrs according to Medicare to settle bills. Do not worry about your credit as it cannot be affected if you are in contact with those billing you and reasons not to pay exist.

Gary Russell of STRS states restrictions do exist using in network facilities and precerts for procedures to maximize our HC dollars as we do have more limited funds. STRS is self insured. He has never been involved in a case where in network facilities were not as close or closer to out of network facilities.

Russell states he does not think educators would have benefited by paying the 1.45% for the Medicare tax beginning in '86 to get Part A coverage which is overnight stays in hospitals and facilities as STRS provides comprehensive coverage for overnight stays which are favorably comparative if considering the cost output above and considering educators would have paid $500-600 annually for Part A if they had paid the tax.

ANYONE who questions or who has concerns over any item they read, question or experience: Please contact:

STRS: ContactUs@strsoh.org STRS: HCcomments@strsoh.org

1-888-227-7877

www.medicare.gov

and order:

'Medicare and You 2007' numbers and contact info on medicare website.

Basic plans have higher deduc. and higher out of pockets generally held by healthier recipients hoping not to have high annual HC costs.

All procedures and care must be handled by skilled staff and timelines are dictated by both Medicare and STRS supplemental providers. For ex., if you go to a skilled care facility for rehab, you are covered for a week or 10 days (it is up to you to know the time line). If your Dr. feels you need to stay and it is NOT precertified FIRST with Medicare or your Insurance Provider such as Aetna or Med. Mutual, you will be billed for the entire second period for the facility, the treatments, the skilled care, meds, etc. by Medicare and or your insurance provider. Medicare and STRS have nothing to do with this and it is up to you to ensure each subsequent period of time is precertified with Med. Mut., Aetna and/or Medicare. Ask how long each period is for so you or your family can avoid complications.

The facility may tell you that the precertification has been approved (I was victim to this with my husband and with my mother) and you rely on their word. If Med. Mut. or Aetna DOES not concur with the facility's determination of ability to care for yourself, your claim will be denied. For ex., we were told my mother was precertified for a second week due to a phone conversation with Med. Mut./OPERS contract. The therapist submitted she could walk 60 steps unassisted (not true, it was with a walker and she collapsed afterwards and was an independent living patient not yet able to assume her daily care which we were told had to be the case). We were billed for all the costs of the second week saying it was custodial care. We fought it and appeals were denied. Finally after months, our version of what we were told stood up but only with supporting instances proving multiple standards of untruths and bad care. Otherwise, we would have been billed in entirety. Lesson: write everything down and take names. Nursing homes for any are red flags and expect such so you are protected.

IT was not OPERS Med Mut. though I sure wasn't happy at the time. It was not Medicare. It was how claims were submitted 3 TIMES. My mother never owed $50,000+ because it was billed incorrectly and gets cast off as custodial care or medically unnecessary. The hospital tried and tried to get her discharged when her Dr. insisted she needed to stay. WHY? One recent patient told me, about 50% of the patients do not have coverage. So, it seems , they have to generate enough costs to pay for them thru us. That is why insurance is so high.

*Where does STRS enter into the claims process? STRS Staff may help with appeals if necessary and work with HC providers for clarification. STRS does not settle claims; the HC providers do (Medicare, Aetna, Med. Mut.). STRS becomes involved when the appeal is under way and the Dr. or facility have been working with insurance providers (Medicare, Aetna, Med. Mut.) for add'tl info due to insufficient or incorrect claims submitted as a claim CANNOT be paid in this case and may appear to be medically unnecesary or custodial in nature. Generally, STRS does not see these cases until appeals nearly completed as it is between the insurance provider and the Dr. and or facility.

The system in the U.S. needs changed. That is a whole other topic.

I have asked and have been advised that ORTA, STRS and OEA-R will provide some form of statement and of info in newsletters to help retirees avoid problems. It will be major points only to alert membership for their sake.

This is what I have asked: It is up to each organization to decide what is appropriate for their membership. I hope that contact info and resources are added to provide accurate and individual specific advice.

Notification by newletter to EVERY retiree about the difficulties they can expect without making sure they are within the confines of Medicare/STRS and Med Mut or Aetna, etc. precerts informing them that EVERY hospital and facility visit IS FOR A STATED PERIOD OF TIME SUCH AS A WEEK OR 10 DAYS AND ANY DAYS BEYOND THAT MUST BE APPROVED BY MEDICARE AND MED MUT , etc. REGARDLESS OF DR. RECOMMENDATION. GET THIS PRECERT IN WRITTEN CONFIRMATION FOLLOWING PHONE APPROVAL. IF YOU DO NOT, YOU MAY BE RESPONSIBLE FOR BILLS OVER AND ABOVE YOUR DEDUC AND OUT OF POCKET ANNUAL MAX AS MEDICARE AND THE INSURANCE PROVIDER WILL ONLY PAY FOR PRECERTIFIED PERIODS.
Many retirees of completely unaware of these conditions and or think a simple precert at the beginning of treatment is all that is necessary. I do not see in the 2007 HC booklet anything beyond the initial percert. I learned thru experience with my mother who had MedicareOPERS/Med. Mut., hospital and facility stays are approved in blocks of time by Medicare and Med. Mut., Aetna, etc. and not by Dr. recommendation. This must be done through your medical provider (Medicare, Med. Mut., Aetna , etc. not STRS).

Please put a notice in newsletters at least yearly, if not more, informing retirees of this responsibility to precert and to know each approved benefit period while in a facility or hospital and to precert EACH additional benefit period which many only learn of after receiving large bills as a service to your retirees.

Molly J.
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Addendum (4/9/07)

1. MEDICARE: Please add to the report where appropriate. There is still some question about Part A. Even if you do not qualify for Medicare Part A, you DO receive the equivalent of Part A through STRS.

If you do not qualify for Medicare Part A, STRS acts as our Part A. It is just not called that. It is called comprehensive hospital coverage instead for all overnight stays in hospital and facilities. That is what Medicare Part A is for: overnight coverage for hospital and facilities.

STRS provided this equivalent of Part A FREE. So, in effect, we all have Part A thru Medicare or thru STRS which provides us with equivalent coverage. Difference is we have stop gaps max costs and Medicare does not but we have to use in network facilities and get precerts (which just about all have to do anyway as Medicare requires a diagnosis and symptoms).

Everyone has Part B.