Health insurance providers generally include coverage for a wide range of medical services offered by healthcare professionals and hospitals, prescription medications, wellness services, and medical equipment. Nevertheless, there are specific items and services that both Medicare and private insurance companies do not reimburse. In medical billing, a non-covered service refers to a healthcare service or procedure that is not eligible for reimbursement by an insurance company or government payer. These nuances of coverage and non-coverage in the healthcare landscape highlight the significance of professional medical billing services to navigate these intricacies and ensure accurate billing.
When a service is deemed non-covered, the patient is usually responsible for the full payment of the service out-of-pocket, unless there are specific circumstances or exceptions outlined in the insurance policy or healthcare program guidelines. By performing insurance eligibility verification, medical practices can help patients to assess their insurance coverage and gain clarity on covered and non-covered services. This proactive approach helps in preventing unexpected expenses.
Common Reasons for the Classification of a Service as Non-covered
When a service is classified as non-covered, it means that the payer considers it either medically unnecessary or outside the scope of the covered benefits outlined in the insurance policy or healthcare program guidelines.
The common reasons for categorizing a service as non-covered include:
- Lack of medical necessity: The payer may deem that the service or procedure is not medically necessary for the patient’s condition or does not meet the specific criteria for coverage.
- Experimental or investigational: If a service or treatment is considered experimental, investigational, or not proven to be effective, it may be classified as non-covered.
- Cosmetic procedures: Certain cosmetic procedures, such as elective plastic surgery or non-medically necessary dermatological treatments, are typically excluded from coverage.
- Services outside the policy’s scope: Insurance policies have specific coverage limitations and exclusions. If a service falls outside the defined scope of covered benefits, it may be considered non-covered.
- Administrative reasons: Non-covered services can also include administrative or documentation-related issues, such as services performed by an out-of-network provider when the policy only covers in-network providers.
Medicare Non-covered Services
The items and services categories that Medicare does not cover are:
- Medically unreasonable and unnecessary services and supplies
- Non-covered items and services
- Services and supplies denied as bundled or included in another service’s basic allowance
- Items and services paid by other organizations or provided without charge
Medicare does not cover services and supplies that are not considered to be medically necessary to diagnose and treat the patient’s condition. Such items include (but are not limited to):
- Hospital-provided services that, based on the patient’s condition, could have been provided in a lower-cost setting, like the patient’s home or nursing home
- Hospital services exceeding Medicare length of stay limits
- Evaluation and management services exceeding those considered medically reasonable and necessary
- Excessive therapy or diagnostic procedures
- Unrelated screening tests, exams, and therapies w here the patient has no symptoms or diagnoses, except certain screening tests, exams, and therapies
- Unnecessary services based on the patient’s diagnosis, like transcendental meditation
- Items and services administered to the patient to cause or assist in death (assisted suicide)
Medicare Fee-for-Service does not cover custodial care, like long-term care services and supports, in the patient’s home or an institution, though there are exceptions to this rule.
Exceptions
Exceptions or items and services that may be covered listed on www.cms.gov are: Medicare Preventive Services, Transitional Care Management, Chronic Care Management, and Advance Care Planning. CMS states: “Medicare may cover items and services administered to alleviate pain or discomfort, even if such use may increase the risk of death, if not furnished for the specific purpose of causing death”.
Medically Reasonable and Necessary
Medicare typically covers time-tested technologies and procedures. In order to qualify as medically “reasonable and necessary”, services and items should be proven safe and effective. They must meet the following criteria:
- Be consistent with the symptoms or diagnosis of the illness or injury under treatment.
- Be necessary and consistent with generally accepted professional medical standards (e.g., not experimental or investigational)
- Are not provided primarily for the convenience of the patient, the attending physician, or other physician or supplier.
- Are furnished at the most appropriate level that can be provided safely and effectively to the patient.
The conditions for coverage as stated by CMS are: “Services must meet specific medical necessity requirements in the statute, regulations, manuals, and any medical necessity criteria defined by National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs), if any apply. For every service you bill, you must indicate the specific sign, symptom, or patient complaint that makes the service reasonable and necessary”.
More details on Medicare non-covered services and exceptions are available at: https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/items-and-services-not-covered-under-medicare-booklet-icn906765.pdf
Billing for Non-covered Services
According to Medicare rules, in certain cases, physicians can bill patients for services falling in the non-covered categories.
If a Medicare patient wishes to receive services that may not be considered medically reasonable and necessary, or the provider feels that Medicare may deny the service for another reason, the patient should be informed that they may be responsible for paying for the service.
To provide non-covered services, the provider must establish upfront financial agreements with the patient, including:
- Advance arrangements for non-covered services.
- Obtain a signed document specifying the non-covered service. Before billing a patient for a service denied by Medicare as investigational or not medically necessary, it is mandatory to have the patient sign an Advance Beneficiary Notice (ABN) before providing the service.
- The patient acknowledges sole responsibility for payment. A service-specific acknowledgment is required as generic waivers are deemed insufficient by CMS.
The ABN must include a detailed description of the intended service, an estimated cost within a $100 range, and an explanation of why it is anticipated that Medicare will not cover the service. The ABN will allow the patient to make an informed decision about whether to get the service and accept responsibility to pay for it out of pocket if Medicare does not pay.
When an ABN is secured, append modifier GA (waiver of liability statement issued as required by payer policy, individual case) to the relevant line item(s) on the claim to signify that the patient has been duly informed.
Familiarizing yourself with these rules and effectively incorporating them into your practice enhances the chances of receiving payment for essential services, even when not covered by Medicare. However, navigating the intricacies of payer guidelines can be challenging. Simplify the process by outsourcing medical billing to a competent service provider. With expertise in billing regulations, these professionals stay updated with the rules related to billing patients for uncovered services, helping physicians in securing payment for such services.
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