Medicare Part C Update: Co-Insurance Payments

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Prior to the implementation of NC Tracks, the North Carolina Medicaid program would pay co-insurance for correctly filed claims for dual eligible residents (Medicare and Medicaid) who were covered primarily by Medicare Part C plans. This was consistent with Medicaid policies and guidelines set forth in the May 2013 Medicaid bulletin. On or after July 1, 2013, when NC Tracks began processing Medicaid claims and payments, NC Tracks instead began applying the same policy used for “straight” Medicare Part A crossover claims. Under this current reimbursement policy, NC Tracks does not allow co-insurance to be paid unless the daily rate billed on the Medicare claim is less than the facility’s Medicaid rate.  As a practical matter, this results in almost no co-insurance payments to providers by Medicaid for these claims.

During 2011, Medicaid audit contractor Health Management Systems (HMS) conducted post-payment reviews of North Carolina long term care facilities for Medicaid payments received from 2005 through 2010. In its audit findings, HMS identified Part C co-payments as overpayments received by facilities.  Subsequently, the Medicaid program asked HMS to hold the recovery of alleged overpayments in abeyance until Medicaid could conduct an evaluation of the policy.  To date, there has been no further action regarding that aspect of the HMS audits. 

Because of the audit findings and continued uncertainty regarding past and future Medicaid policy, many facilities have held these payments and billed receivables in reserve accounts pending policy clarification by the Medicaid program. Providers and advocates on their behalf have requested that the Division of Medical Assistance review these issues and resolve them favorably to providers by restating and reinstituting the policy allowing Medicaid to pay co-insurance applicable to Part C claims.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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