This resource was prepared by Network 5 under Contract No. 500-00-NW05 and approved for distribution by HCFA on 8-17-00.  Appreciation is expressed to the NKF-CNSW Listserv participants for their input.  CNSW members, call 1-800-622-9010 for information on how to access this social work message board. 

The Network receives many questions from dialysis personnel, patients and plan administrators regarding Medicare coverage.  This publication attempts to answer commonly asked questions and is intended for providers and others who are interested in entitlement issues.

     What is Medicare Part A?

   Medicare Part A is hospital insurance for the aged, disabled and individuals who have ESRD.  Part A helps pay for care in a hospital and skilled nursing facility and for home health and hospice care.  There is no cost for Part A for individuals who meet the work requirement or who are the dependent(s) of an individual who meets the work requirement.  Individuals age 65 or older who do not meet the work requirement may purchase Part A by paying monthly premiums.

    What is Medicare Part B?

  Part B is medical insurance which helps pay for doctor bills, outpatient hospital care (including dialysis), and various other services not covered by Part A.  Part B is optional and requires the payment of monthly premiums.

   What does the phrase, “coordination of benefits” mean?

  Coordination of benefits is the sharing of costs by two or more insurers.  For ESRD patients, Medicare requires a 30 month coordination period for individuals who are covered by an Employer Group Health Plan (EGHP).  This applies whether the patient is employed or is the dependent (spouse or child) of an employee.

     How does coordination of benefits work for ESRD patients?

    If a patient develops ESRD and is covered by an Employer Group Health Plan (EGHP), the group plan is primary for 30 months. This means that the group plan pays first and Medicare is the secondary insurer.  Often, Medicare pays nothing during this time because the group plan has already paid more than the Medicare negotiated rate or assignment. If the patient has Medicare and the provider accepts Medicare assignment, however, the patient cannot be charged for the difference. After the EGHP has paid primary for 30 months they “flip” and Medicare becomes primary (pays 80%) and the group plan is secondary.

     When does the coordination period begin?

    If the beneficiary is in training for home dialysis, Medicare entitlement (and thus the coordination period) starts the month dialysis training is begun.  However, if the beneficiary undergoes dialysis at a facility, there is a 3-month waiting period between the month the dialysis starts and the month that Medicare entitlement and the coordination period begin. Many insurance plans cover the first 3 months that Medicare does not pay.  After the EGHP has paid primary to Medicare for 30 months, they are under no obligation to pay primary during this coordination period, even if the patient remains employed.          

    Can there be a second coordination period?

  Yes, if the patient has more than one period of Medicare entitlement. For example: If a kidney transplant functions for 36 months, Medicare is terminated.  If the transplant fails beyond this 36- month period and the patient returns to dialysis or receives another transplant, the patient must file a new application for Medicare.  There is a new 30-month coordination period for individuals covered by an employer group health plan.

     Will there be a second coordination of benefits period if the patient remains Medicare eligible due to a disability or age?

    The following scenario sparked much debate among CNSW members recently:  A patient started dialysis in the Fall of 1995 and received a transplant in February of 1996.  The EGHP paid primary for 30 months with Medicare becoming primary on the 31^st month. The patient lost his ESRD Medicare 36 months post transplant, but continued to receive Medicare based on disability. The transplant failed and he had to return to dialysis.  HCFA has confirmed that Medicare would remain primary in this case because there was no lapse in Medicare coverage. If the patient remained Medicare eligible due to age and there was no lapse in coverage, the same rule would apply.  

     What if the patient loses a transplant prior to the expiration of the 36 month Medicare coverage?

    The following scenario illustrates this question: A patient’s group plan had completed their required period as primary payer and Medicare was primary. The transplant failed before the expiration of the 36 months and the patient returned to dialysis with no lapse in Medicare coverage. Again, there would be no second coordination of benefits period because there was no lapse in coverage. Conversely, if Medicare coverage had lapsed and the patient had to reapply based on a new ESRD diagnosis (failed transplant and return to dialysis) a new coordination period would be required.

   Can a patient with employee group coverage delay enrolling in ESRD Medicare until close to the time that Medicare becomes primary?

  Yes.  There is no law requiring a patient to file an application for Medicare.  If the individual is adequately covered under an employer group health plan he/she may file for Medicare at any time during the coordination period.  If the individual wants Medicare coverage to be effective with the first month Medicare is primary payer, the earliest the application can be filed is in the 27^th month of the coordination period.

If an individual with group health plan coverage does not want to enroll in Part B and pay the premiums, he/she should be advised to delay filing the application for Part A.  

   Why?

  If an individual does not enroll in Part B at the time he/she files for Part A, he may only enroll in Part B during the general enrollment period -  January through March of each year.  Part B coverage becomes effective July 1 of the year of enrollment. In a worse case scenario, this can lead to a delay in receiving Part B benefits of up to 15 months. In addition, the law requires that the Part B premium be increased by 10% for each full 12- month period the individual was not enrolled in Part B.

Example: A patient applies for Part A Medicare and declines Part B because he has employer group health insurance with good benefits under his spouse’s plan.  On March 31st, the company goes bankrupt or the spouse is terminated.  The patient cannot enroll in Medicare B until the first month of the General Enrollment Period – January – and benefits will not start until July of the following year.  There will be a 10% surcharge for each year that a patient is eligible for part B and did not pay the premium.  If the patient with group coverage had delayed applying for both A and B, he would be eligible to apply for Medicare A and B when the group insurance was terminated and there would be no surcharges.

   Why should a 2728 still be completed for patients who choose not to enroll in Medicare?

  The HCFA-2728 serves two purposes:  medical evidence of the end stage renal condition for Medicare entitlement, and registration of the patient with the national renal registry.  The form is sent to the Network where it is keyed and electronically sent to HCFA. HCFA provides the data to the United States Renal Data System (USRDS) for scientific research.  Therefore, the form must be completed on all patients, even those not initially applying for Medicare.  If the patient is not applying for Medicare because of adequate employer coverage, mark item 11 “no” on the 2728 and submit to the Network as usual.  Keep the original form with the patient’s medical record.  When the patient wants to apply for Medicare, the form should be taken to the local Social Security Office for processing.  The Network does not need to be notified of the patient’s decision to apply. Instructions for handling the HCFA-2728 are in the Renal Dialysis Facilities Manual.

     What if the original 2728 is lost?

    Recently, a number of Social Security offices have been asking for the original 2728 when a patient applies for Medicare.  Many providers have no original in their files and the Networks destroy their 2728s after two years.  HCFA is working with Social Security on this issue. In the interim, it is permissible in these cases to execute a new 2728, mark it as a duplicate and have the physician sign using the current date. 

   Should a patient covered under an employee health plan ever apply for Medicare A and B as soon as he or she becomes eligible?

  If the individual is adequately covered under an employer plan, he/she may file the application for Medicare at any time.  The decision rests partly on the adequacy of the group plan, which can vary widely.

When reviewing their plans, patients should be advised to pay particular attention to caps on services or medications.  This is particularly important for patients considering transplants. If there are questions concerning coverage, individuals should be advised to consult an employer health benefits officer or a representative of the group health plan.   The Social Security Office is only obligated to advise individuals about their options and of the consequences of declining Part B when signing up for Part A. Do not refer patients to SSA or the Networks for counseling about individual health plans.

   Can Medicare require a patient to pay back premiums if he/she signs up for Part B, discontinues paying premiums and later wants to be reinstated?

  Under current law, Part B coverage is terminated if the premium is not paid by the due date. The termination is effective 90 days after receipt of the billing notice.  Individuals are notified in the termination letter that Part B coverage may be reinstated if all past due premiums are paid within 60 days of the receipt of the termination letter.  If payment is not received within 60 days, Part B coverage will NOT be reinstated. The individual must reenroll in Part B during the general enrollment period.

   When should a person who is already entitled to Medicare due to age (65 or older) apply for ESRD Medicare?

    For persons already entitled to Medicare due to age (65 or older), entitlement to Medicare on the basis of ESRD will not be developed unless there is some advantage to the beneficiary.  An advantage may accrue if:

	The patient is not currently enrolled in Part B (ESRD provides a second initial enrollment period;
	The patient is paying an increased premium because of late enrollment in Part B;
	The patient has recently become entitled to Medicare on the basis of age and ESRD coverage would result in an earlier entitlement date;
	The patient is paying premiums for Part A.

     Who is entitled to lifetime coverage of the 8 month extension for immunosuppressive drugs?

    The Medicare ESRD benefit covers immunosuppressive drugs for all renal patients for 36 months.  However if a patient has Medicare prior to ESRD (for age or disability) then the patient will have coverage for immunosuppressive drugs as long as the patients has Medicare.  Starting January 1, 2000, if a patient’s coverage ends in the year 2000, Medicare will extend coverage for an additional 8 months if the patient remains eligible for Medicare due to age or disability. 

    Will Medicare pay for immunosuppressive drug therapy in connection with an organ transplant that Medicare did not pay for because a primary insurer paid for the transplant in full?

  Yes.  Medicare will cover immunosuppressive drugs when they did not pay for the transplant if Medicare would have paid for the transplant except for the fact that Medicare was the secondary payer.