What is Medicare Part C?

Medicare advantage plans come in four basic types

Medicare Advantages Plans, or Medicare Part C, offer Medicare beneficiaries an alternative to traditional Medicare. These plans allow patients to choose a plan that can provide the flexibility they need in order to suit their specific needs. This may be appealing since many Medicare beneficiaries are on a fixed income.

Medicare Advantage Plans Covered Benefits

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Medicare Advantage Plan companies must follow the same set of rules that govern the Medicare program. Medicare contracts with public or private organizations to provide a variety of health coverage options that cover the same benefits that Medicare Part A and Part B cover.

  • Medicare Part A is called the hospital insurance because it helps pay for the care a patient receives in a hospital inpatient setting, critical access hospital, skilled nursing facility (SNF), hospice, and home health care.
  • Medicare Part B is the part of Medicare called medical insurance. This part of Medicare is optional to patients once they reach the age of 65, and they are charged a monthly premium. Part B covers most services not covered by Part A.

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Types of Medicare Advantage Plans - Part C

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There are four different types of Medicare Advantage Plans that beneficiaries can choose from. These vary in how the providers get paid, as well as copays and other requirements for the patients.

1. Health Maintenance Organization or HMO Plans

Medicare HMO plans operate in a similar way as managed care HMO plans. The characteristic that stands out the most with an HMO plan is its capitation payment method. The medical office receives a fixed, monthly payment per patient. This amount stays the same regardless of how many visits the patient has, the cost of incurred expenses, or even when they don't receive care at all. Other characteristics of an HMO are:

  • Limited to in-network providers except in emergencies
  • Referrals are required to see a specialist
  • Prior authorization is required for certain services
  • Members have no deductible and minimal copays

2. Preferred Provider Organization or PPO Plans

Medicare PPO plans are similar to managed care PPO Plans. PPOs pay by the fee-for-service method. Office visits, lab tests, X-rays, or other services are individually paid according to the fee schedule. This payment method allows the medical office to receive the maximum reimbursement for each episode of care. Some characteristics are:

  • In-network and out-of-network providers are allowed, but patients pay less when in-network providers used
  • No referrals are required to see a specialist
  • Prior authorization is required for certain services
  • Members may be responsible for deductibles, copays, and coinsurance
  • Offers extra benefits compared to traditional Medicare, at an extra cost
  • Includes an annual out-of-pocket maximum

3. Private Fee-For-Service or PFFS Plans

The most important thing to know about Medicare PFFS plans is that they allow providers to "balance bill" up to 15 percent over the plan payment amount for service. PFFS plans operate similarly to indemnity plans.

Indemnity insurance plans make payments to the medical office based on the fee-for-service model. In a fee-for-service, the medical office is paid a set amount for each type or unit of service rendered. Office visits, lab tests, X-rays, or other services are individually paid according to the fee schedule. This payment method allows the medical office to receive the maximum reimbursement for each episode of care.

4. Special Needs Plans or SNP

Medicare Special Needs Plans are geared towards beneficiaries who live with certain chronic conditions, diseases, or illnesses. Benefits are limited to patients who:

  • Have a specific chronic or disabling condition such as HIV/Aids, diabetes, mental health conditions, congestive heart failure (CHF), just to name a few
  • Live in a nursing home or receive care at home
  • Receive both Medicare and Medicaid benefits

Carriers

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Medicare Advantage plans are sometimes confused with managed care plans by medical office staff. Many of these plans are offered through major health insurance companies such as:

  • Aetna
  • AARP
  • United Health Care
  • Blue Cross Blue Shield
  • WellCare

It is important to be aware of the Medicare Advantage plans in your area and how to file claims in order to prevent delayed payments.

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