Medicare Will Now Cover Medically Necessary Dental Care

In November 2022, the Centers for Medicare and Medicaid Services (CMS) announced that Medicare coverage will be expanded to include medically necessary dental services. This change in Medicare rules will allow people with life-threatening conditions to receive dental care and operations related to conditions approved by CMS.

The provisions in the final rule become effective on January 1, 2023.

What Makes Dental Care Medically Necessary?

The final rule expanded the definition of “medically necessary.” Medicaid currently defines “medically necessary” as “health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”

When it goes into effect, the final rule will include dental care in the definition of medically necessary care.

The final rule also expanded the definition of “physician” to include dentists and oral surgeons.

What Dental Care Is Included in the Final Rule?

The types of dental care and procedures covered will be limited to patients who:

1. Have a jaw fracture and need their teeth stabilized or immobilized.
    

2. Need a tumor surgically removed, and ridge reconstruction must be performed to remove the tumor.
    

3. Have a neoplastic disease, and teeth extraction is necessary to prepare the jaw for radiation.
    

4. Have certain heart diseases and need to receive examinations and treatment before receiving cardiac valve replacement, organ transplant procedures, or valvuloplasty.
    

5. Need dental splints (only if they get this treatment in connection with a medically necessary treatment).
    

In addition to the above services, Medicare coverage will be applied to other necessary medical care, including:

• Anesthesia

• X-rays

• The use of an operating room to perform dental services

Expanded Dental Coverage Does Not Apply to Patients With Diabetes

Neither the final rule nor the interim rule expanded dental coverage for diabetes patients. The final rule does not cover normal dental examinations for diabetic patients, despite the importance of regular dental checkups for this population. However, coverage could expand over the next several years.

The Effect of Having Dental Coverage on Medicare Recipients

The expansion of Medicare dental coverage will have a positive impact on some seniors, while others will not receive any benefit. Because of the language included in the final rule, some seniors will receive savings for dental care if dental work is required to treat qualifying medical conditions. Seniors who do not qualify for the expanded dental care coverage in the final rule are still required to pay a fee for services not covered by Medicare.

Patients with diabetes can expect to continue to pay for dental examinations and surgeries out-of-pocket if Medicare does not cover the procedure.

The Future of Expanded Coverage for Medicare Recipients

Seniors enrolled in Medicare can expect more changes to coverage in the future. CMS announced its intention to complete an annual review of covered services, as well as possibly expand the definition of “medically necessary” and include more services for dental care.

Contact us

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

What to Do When Medicare Denies Coverage

When Medicare declines to cover your medical needs, the denial can leave you with an expensive medical bill. If Medicare refuses to cover your care, do not assume this means you will have to take on the financial burden.

As a beneficiary of Medicare, you have the right to appeal the denial.

There are many reasons why Medicare might initially fail to cover a type of care, but it is possible to overcome Medicare’s denial by appealing it. Although getting a coverage denial can feel discouraging, those who choose to appeal have a good chance of success. According to Medicare Rights Center, 80 percent of Medicare Part A appeals and 92 percent of Part B appeals result in coverage for the beneficiary.

Review the Reason for the Denial

After Medicare declines coverage, identify the reason for the denial. Knowing why Medicare claims to be unable to pay for your care can help you appeal successfully.

As a beneficiary of Medicare, you should receive a denial notice if you already received the treatment. The denial notice states the grounds for the rejection. Coverage denials of services you have not yet received will appear on your Medicare Summary Notice.

The most common cause of coverage denials is a subjective determination that the service was unnecessary. Yet as the Alzheimer’s Association explains, there are several reasons Medicare might fail to cover care.

• A problem with the claim form, such as missing information, errors, or incorrect codes, could result in a denial. When you have a mistake on your claim, it might have been un-processable.
  
  Contact your provider, who can correct the problem and resubmit the claim. If Medicare has already processed your claim, you may need to submit a redetermination request, which is the first step in the appeals process.
   

• In other cases, the document may state that the service was “not medically necessary.” For Medicare billing, a procedure or item is medically necessary if it treats an illness, injury, condition, or disease and meets accepted medical standards.
  
  As an example, Medicare will not cover elective cosmetic surgery because it is unrelated to the beneficiary’s health. Whether health care is “medically necessary” can be a subjective determination. If Medicare denied you coverage because a procedure or item was not “medically necessary,” you can appeal by explaining why you need coverage for your treatment.
   

• Your denial might note that your claim “does not support the need for this many visits or treatments.” For instance, you could get this notice if you visited your doctor frequently. This decision is a subjective, appealable decision like the determination of medical necessity.
  
  To appeal, you can explain why your condition required you to make multiple appointments or pursue numerous treatments.
   

• Sometimes, Medicare denies coverage because of a local rule, making “a local coverage determination.” The notice must refer to the law and state how the beneficiary can get a copy. As unique circumstances can shape the interpretation and applications of local regulations, you can appeal the determination.

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

  Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

tep-Up in Basis and Why It Matters in Estate Planning

Recent news stories may have made you aware of the “step-up in basis” and the current administration’s desire to eliminate or adjust it.

If you are considering engaging in estate planning or you may be inheriting assets, it is important to understand what the step-up in basis is and how it may affect you.

What Is the Step-Up In Basis?

The step-up basis is a provision in federal tax law. It determines how assets are valued for calculating capital gains taxes when a person passes away, leaves these assets to heirs, and those assets are sold.

So, for example, imagine a person passes away and leaves their home to their children through their will.

When the children inherit the property, the home’s cost basis changes. (“Cost basis” is the amount for which an item is originally purchased.) The home’s cost basis is adjusted – or “stepped up” – from what it was valued at when the parent originally purchased the home to its fair market value on the date the parent died.

In this case, suppose the original cost of the home 30 years ago was $100,000, and the “stepped up” basis in 2022 (date of death) is $300,000.

If the children then sell the home for $500,000, the resulting capital gains liability is calculated by subtracting the stepped-up basis from the sale price. This determines the children’s taxable gain ($500,000 - $300,000 = $200,000 gain). The effect is that the capital gain between the original purchase of the home and the children’s receipt of it is eliminated.

In other words, without the step-up in basis, the children who inherited the property would have had a considerably higher taxable gain after the sale ($500,000 - $100,000 = $400,000 gain). As a result, they would then have potentially had to pay more in capital gains tax.

Why Bequeath Assets Through a Will or Estate Plan?

Passing assets, such as the home in the example above, to your loved ones through your will or estate plan means those who inherit are often subject to much lower capital gains tax than if the assets were outright transferred or given to your loved ones during your life.

This is because assets transferred or gifted before death are subject to the purchaser’s cost. Capital gains tax is then calculated based on the differential between the original cost basis and the sale price (after considering any depreciation or other capital gains exclusions that may apply).

What Assets Step Up In Basis Upon a Person’s Death?

The step-up in basis can apply to many kinds of assets, including:

• real estate

• personal property

• brokerage accounts

• stocks

• bonds

• bank accounts

• businesses

• art

• antiques

• collectibles

• and much more

Gifting or bequeath these types of assets through your will or estate rather than giving them away during your life can make a big difference for your heirs.

In addition, under federal law, all community and marital property gets a new basis when the first spouse dies. Their death brings the property up to the fair market value at that time. So, a surviving spouse could sell these assets and take advantage of this adjusted basis. And, subject to certain exceptions, the qualifying property of the surviving spouse can also receive a second step-up in basis at their death.

When Does the Stepped-Up Basis Not Apply?

While some assets qualify for a stepped-up basis, some can lose the ability to receive an adjusted basis.

For example, a surviving spouse cannot benefit from a second step-up in basis for assets that had been placed into an irrevocable trust before the first spouse’s death.

The stepped-up basis also does not apply to the following types of assets:

• IRAs

• employer-sponsored retirement plans

• 401(k)s

• pensions

• tax-deferred annuities

• gifts made before death

• and some other assets

When Are Capital Gains Taxes Assessed?

Capital gains are taxed when an asset is sold (for a profit).

In the above example, if the house is sold three years after the parent’s death for $700,000 (which would mean it increased in value by an additional $400,000 during this time), then capital gains tax is potentially due on $700,000 (sale price in 2025) - $300,000 (stepped-up basis at date of death) = $400,000 of gains.

It is assessed and payable for the tax year in which the post-death sale occurred, and liability effectively shifts to the heirs who benefit.

Why Do Some Believe the Step-Up in Basis Should Be Eliminated?

Many believe the stepped-up basis creates an inequitable tax loophole that allows people with significant assets to shelter these assets from capital gains tax if they dispose of them through their estate.

For example, in the scenario above, if the home was initially purchased for $100,000 and sold by the heirs of the purchaser for $1,000,000 shortly after the purchaser’s death, $900,000 of capital gains would effectively never be taxed.

Meanwhile, someone who sell their assets during their lifetime will likely not get equal tax benefits (even considering the $250,000 personal residence capital gains exclusion) and may face a hefty capital gains tax bill.

On the other side of this argument are those who posit that not having a stepped-up basis can lead to double taxation. From their viewpoint, heirs or an estate would face capital gains tax as well as potentially significant estate tax.

This would likely only affect those with a good amount of wealth, given the current federal estate and gift tax exclusion, which will rise from $12.06 million in 2022 to $12.92 million in 2023. Most people will not fall into this category. Because of this, the tax revenue that the government could raise by eliminating the step-up-basis could arguably outweigh the double taxation issue.

However, this could all change after 2025, when the federal exclusion is set to be cut by approximately half. This will potentially affect a much larger group of people. The argument may not be so strong under those circumstances.

Navigate Estate Planning With a Qualified Attorney

Planning to avoid capital gains taxes is a complex endeavor that a person should only undertake with the assistance of a qualified professional. Every person’s situation is different, and there is no one-size-fits-all solution.

While saving money on capital gains may seem attractive, there may be situations where leaving assets to heirs upon your death may not be the best plan or may create more significant tax issues. In addition, it may not be the best strategy if, for example, you need to engage in Medicaid planning.

Contact your attorney for answers to questions about capital gains taxes and whether you or your loved one may benefit from a step-up in basis.

Contact us

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com