Proposed New Medicare Payment System May Affect Beneficiaries

Medicare is proposing a new flat rate reimbursement system for doctors who treat Medicare patients. Some worry that the plan may reduce payments to specialists and cause fewer doctors to accept Medicare patients.

The Centers for Medicare and Medicaid Services (CMS) says the proposed changes are designed to reduce paperwork by combining four levels of forms required for reimbursement into one form and one fee paid to doctors. Under the new system, doctors who see generally healthy patients and doctors who see more complicated patients would receive the same flat fee. According to a report by NPR, the flat fee would mean doctors who specialize in complex medical areas would receive a smaller reimbursement than under the current system. Doctors would receive the same amount regardless of whether they spent 15 minutes with a patient complaining of a head cold or an hour with a patient with stage 4 cancer.

As NPR reports, doctors are worried the new payment system will cause more specialists to refuse to see Medicare patients. In addition, doctors who do see Medicare patients may spend less time with them. And the implications extend beyond Medicare because private insurers often follow Medicare’s lead.

Due to the possible implications of the flat fee, advocates are asking CMS to start with a demonstration project rather than changing the entire reimbursement system for all physicians at once.

CMS is accepting public comments until September 10, 2018. The new fee structure would go into effect in January 2019.

Promissory Notes and Medi-Cal

A promissory note is normally given in return for a loan and it is simply a promise to repay the amount. Classifying asset transfers as loans rather than gifts can be useful because it sometimes allows parents to "lend" assets to their children and still maintain Medi-Cal eligibility.

Before Congress enacted the Deficit Reduction Act (DRA) in 2006, a Medi-Cal applicant could show that a transaction was a loan to another person rather than gift by presenting promissory notes, loans, or mortgages at the time of the Medi-Cal application. The loan would not be counted among the applicant's assets, unlike a gift. Congress considered this to be an abusive planning strategy, so the DRA imposed restrictions on the use of promissory notes, loans, and mortgages.

In order for a loan to not be treated as a transfer for less than fair market value (and therefore not to interfere with Medi-Cal eligibility) it must satisfy three standards: (1) the term of the loan must not last longer than the anticipated life of the lender, (2) payments must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments, (3) and the debt cannot be cancelled at the death of the lender. If these three standards are not met, the outstanding balance on the promissory note, loan, or mortgage will be considered a transfer and used to assess a Medi-Cal penalty period.

It's good practice when lending money to use a promissory note, whether or not the loan is related to Medi-Cal

Where’s My New Medicare Card? How to Find Out the Status

The federal government has begun mailing new Medicare cards to 59 million Americans. You should keep track of when your new card will arrive and contact Medicare if you don't receive it.

To prevent fraud and fight identity theft, the federal government is issuing new cards to all Medicare beneficiaries that will no longer have beneficiaries' Social Security numbers on them. The government began mailing the cards in April 2018 and the new cards should be completely distributed by April 2019. The cards are being mailed in phases based on the state the beneficiary lives in.

To check the status of card mailing in your state, go here: https://www.medicare.gov/newcard/. The map will show whether Medicare has sent new cards to your state. Once Medicare starts mailing cards to your state, it can take up to a month to receive the card. If the government has finished mailing the cards to your state, and you did not receive a card, contact Medicare right away at 1-800-MEDICARE (633-4227) or 1-877-486-2048 for TTY users.

If the government hasn't begun mailing cards to your state yet, keep checking the website. You can also sign up to receive an email when the card is mailed to you. If your mailing address is not up to date, call 800-772-1213, visit www.ssa.gov, or go to a local Social Security office to update it.

If you haven't received the new card yet, keep using the old card. If you have a Medicare Advantage plan, the Medicare Advantage Plan ID card is your main card, but your doctor may want to see your new Medicare card as well, so keep it handy.

Phone scammers are using the introduction of the new cards as an opportunity to separate Medicare beneficiaries from their money. One of the main scams that has emerged is a call requiring payment before the card can be issued. The cards are free and you don’t need to do anything to get yours. For more on the scams and what to do if you fall victim, see Reuters columnist Mark Miller’s recent column.

For information on the new cards, go here: https://www.medicare.gov/newcard/.