Medicare HMO Beneficiaries Transferring to Fee-For-Service Medicare

A beneficiary, who was previously enrolled in a Medicare HMO/Managed Care program, returning to traditional Fee-For-Service (FFS) Medicare, is subject to the same benefits, rules, requirements, and coverage criteria as a beneficiary who has always been enrolled in FFS Medicare. When a beneficiary returns to FFS Medicare, it is as though he or she has become eligible for Medicare for the first time. Therefore, if a beneficiary received any items or services from their HMO or Managed Care plan, they may only continue to receive such items and services if they would be entitled to them under FFS Medicare coverage criteria and documentation requirements.

For example, a beneficiary who has obtained a capped rental item (e.g., pneumatic compression device) through an HMO/Managed Care plan must, under traditional FFS Medicare, obtain a CMN (if applicable) and meet FFS Medicare criteria for the item before a new capped rental period would begin.

An exception to this rule is if a beneficiary was previously enrolled in FFS and received a capped rental item, then enrolled in an HMO, stayed with the HMO for 60 or fewer days, then returned to FFS. For purposes of this instruction, CMS has interpreted an end to medical necessity to include enrollment in an HMO for 60 or more days.

Another partial exception to this rule involves home oxygen claims. If a beneficiary begins taking oxygen while under a Medicare HMO, the supplier must obtain an initial CMN and submit it to the DME MAC at the time that FFS Medicare coverage begins. However, the beneficiary does not have to obtain the blood gas study on the CMN within 30 days prior to the date on the CMN, but the test must be the most recent study the patient obtained while in the HMO, under the guidelines specified in DME MAC policy. It is important to note, just because a beneficiary qualified for oxygen under a Medicare HMO, it does not necessarily follow that he/she will qualify for oxygen under FFS Medicare.

These instructions apply whether a beneficiary voluntarily returns to FFS Medicare, or if he/she involuntarily returns to FFS Medicare because their HMO or managed care plan no longer participates in the Medicare+Choice program.

Suppliers should maintain open communication with beneficiaries and determine, prior to delivery of an item or continued rental, whether there has been a change in enrollment from a Medicare HMO to FFS Medicare.

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Last Updated Dec 19, 2019