In a press release published on October 9, the Secretary of Health and Human Services (HHS) Sylvia Burwell announced next year’s standard Medicare premium and deductibles with no change for Part B and a slight change for Part A. With approximately 49 million Medicare Part B enrollees, premiums and deductibles will remain unchanged at $104.90 and $147 respectively for 2015. At the same time, the premiums of Medicare Part A will fall 4.5 percent ($19) to $407 in 2015. Though the providers can continue to bill for their services with this year’s deductible in 2015 for Medicare Part B, they need to consider this change while billing for services covered under Medicare Part A in 2015.
Medicare Part A
- 99% of Medicare beneficiaries do not pay a Part A premium because they have a minimum of 40 quarters of Medicare-covered employment. Medicare enrollees age 65 and over and certain disabled individuals who have fewer than 30 quarters of coverage pay a monthly premium to qualify for coverage under Part A. Enrollees who have between 30 and 39 quarters of coverage can buy into Part A at a reduced monthly premium rate which is $224 for the year 2015. This is $10 less than the rate in 2014.
- The Medicare Part A deductible that beneficiaries should pay when they are admitted to a hospital will be $1,260 in 2015, a small increase of $44 from $1,216 (this year’s deductible). The beneficiaries’ share of costs for the first 60 days is covered by the Part A deductible; they must pay an additional $315 per day for days 61 – 90 in the year 2015 and $630 per day for hospital stays beyond the 90th day.
- Medicare enrollees admitted into skilled nursing facilities will pay $157.50 as the amount for daily co-insurance for days 21 through 100 in a benefit period in 2015. In 2014, it was $152.00.
- Income-related monthly premium rates (higher Part B monthly premiums paid by beneficiaries with higher incomes – less than 5% of Medicare enrollees) will remain the same as that in 2014.
Medicare Part B
Medicare Part B covers physician’s services, outpatient hospital services, some home health services, durable medical equipment and other items. As per the HHS Office of the Assistant Secretary for Planning and Evaluation, the premiums will be more than $125 lower over the course of a year with unchanged premiums and deductibles compared to the projections for 2015 made in 2009 by the Congressional Budget Office (CBO). Here are some facts to consider.
- If we consider this in the perspective of Medicare beneficiaries, the unchanged premiums and deductibles will leave more of elder persons’ cost of living adjustments from Social Security into their pockets. Majority of people signed up for Medicare Part B automatically and money is taken automatically from their Social Security payments.
- HHS Secretary opined in the press release that the stabilization of Part B premiums is an example for slower health care cost growth promulgated by the Affordable Care Act, to deliver more sustainable and affordable healthcare services. CMS Administrator says that the administration has taken important steps to improve the quality of care while keeping the Medicare premiums and deductibles the same. Both statements ensure greater financial and health security for older people next year.
- A CMS actuarial analysis of the Part B premiums reveals that the most prominent factor that can help to stabilize premiums will be a sharp cut in physician fees. CMS is expecting to reduce physician payments for enrollees over age 65 to $65 per enrollee per month (around 14 percent) and cut the physician fee schedule for disabled enrollees around 16 percent, to about $70 per enrollee per month.
Cutting doctors’ fees arbitrarily is unsustainable and will risk the next generation of new cost-saving and quality-enhancing reforms. Doctors will have to thoroughly examine their billing and coding procedures and manage their revenue cycle effectively to receive maximum reimbursement in this scenario. Professional billing expertise is vital to avoid claim denials in the backdrop of fierce payment cut. Effective policies and their successful implementation are essential to address the risks of payment cuts.
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