Editor’s note: This article is adapted from the PFP Section podcast “How Medicare Benefits Have Changed Due to Our Public Health Emergency,” featuring Jim Sullivan, and its write-up.
The Centers for Medicare and Medicaid Services (CMS) has responded to the COVID-19 pandemic by making several temporary changes to Medicare.
Current Medicare coverage
To put the changes into perspective, here’s a refresher on how Medicare works:
There are two ways a beneficiary may be covered under Medicare. The first is through original Medicare. Original Medicare consists of:
- Part A, which covers hospital stays and stays in a skilled nursing facility after a stay in a hospital;
- Part B, which pays 80% of the approved cost of doctor bills, outpatient services, durable medical equipment, and prescription drugs that are administered in a doctor’s office; and
- Part D, which covers prescription medications.
Individuals who want additional coverage may also purchase Medicare supplement or Medigap coverage, which includes Medigap plans provided by private insurance, retiree health benefits, and Medicaid.
The second way beneficiaries can be covered is through a Medicare Advantage (MA) plan. These plans are offered through private insurance companies. Most plans include prescription drug coverage. While MA plans must offer similar benefits as traditional Medicare, cost sharing varies among plans.
Most MA plans are either a preferred provider organization (PPO) or a health maintenance organization (HMO). Under a PPO, beneficiaries who see providers outside their network may pay more than they would when seeing an in-network provider.
HMO beneficiaries must go to in-network providers for the plan to pay for the care. Exceptions are provided for emergency care. Certain health care procedures may require prior authorization from the beneficiary’s primary care physician or the MA plan itself.
Changes due to COVID-19
Some of the major changes made to Medicare in response to COVID-19 include the following:
Testing. Testing for COVID-19 ordered after Feb. 4, 2020, is covered under traditional Part B when ordered by a physician or other health care provider. Beneficiaries are not required to pay the Part B deductible or any related co-insurance.
Costs normally paid by the beneficiary for services related to COVID-19 testing are eliminated. “Testing-related services” include the costs of a visit to a physician or outpatient facility.
MA plans may not charge for COVID-19 tests and testing-related services. Under the legislation, plans may not impose authorization requirements for such testing.
Treatment. If a Medicare patient is required to be quarantined in the hospital even if they no longer require acute care, they will not be required to pay an additional deductible for the cost of the quarantine.
MA plans may waive or reduce cost sharing for COVID-19-related treatments but this is not required. CMS has also announced that MA plans may waive prior authorization requirements for COVID-19 services.
Vaccines. Part B is required to fully cover a COVID-19 vaccine if one becomes available.
Telemedicine. Telemedicine services are now available to beneficiaries in any geographic area and will be reimbursed by Medicare. CMS has also waived the requirement that a provider of telemedicine must have treated the beneficiary in the past three years. Covered telemedicine is not limited to COVID-19-related services.
Extended medication supplies. Part D plans must provide up to a 90-day supply of covered drugs to beneficiaries who request it. Part D sponsors are also required to cover drug purchases at out-of-network pharmacies if beneficiaries cannot be reasonably expected to use a network pharmacy.
Other changes. MA plans must cover services at out-of-network health care facilities for all beneficiaries, not only those with COVID-19.
Prior to the pandemic, Medicare paid for a stay in a skilled nursing facility only if it was preceded by a three-day stay in a hospital. This requirement has been waived. The waiver applies to all beneficiaries, not just those with COVID-19
Other rules apply. For details go to www.medicare.gov. Click on “What Medicare Covers.” From the drop-down menu, click on “Is my test, item, or service covered?”
Note that many of these changes (such as telemedicine coverage) are temporary and will presumably end once the public health emergency is declared ended.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page. To find more financial planning resources related to the impact of COVID-19, visit aicpa.org/pfp/covid19. For all other AICPA PFP Section resources, visit aicpa.org/PFP.
— Jim Sullivan, CPA/PFS, is a Medicare specialist at Fairhaven Wealth Management located in Wheaton, Ill. He can be reached at firstname.lastname@example.org. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, the JofA’s editorial director, at Kenneth.Tysiac@aicpa-cima.com.