(Medicare Benefit Policy Manual)

When the VA pays an amount for Medicare covered services that is equal to, or less than, the deductible and coinsurance that would apply if Medicare were the primary payer, utilization is not  reduced.   50.1.4 - VA Fee Basis Card (Rev. 1, 10- 01-03) B3-2309.2  1.  General   One method the VA uses to authorize physician services is to issue the veteran a fee basis ID card (formally designated the VA Outpatient Medical Treatment Information Card).  This card is issued to certain veterans with a service  connected disability, as well as certain other veterans who require medical services for an extended period when VA and other Federal health care facilities are not capable of furnishing economical care, or, because of geographical inaccessibility, are no t capable of furnishing the care or services required.  The card constitutes an agreement by the VA to pay up to a specified monthly dollar amount for treatment of specific disabilities or for any condition specified on the face of the card.  The veteran i s not restricted in choice of physician nor does the physician selected by the veteran have to inform the VA in advance that they will be treating the veteran. (The physicians are not participating physicians in the VA program nor does the VA have an expre ss assignment procedure.)   When the charges for the services exceed the specified monthly amount routinely allowed by the VA, the VA may allow an additional amount if the physician justifies the need for the additional cost. If justified, the VA will authorize an increase in the monthly dollar limitation for a specific period of time.  The VA may approve charges for services exceeding the specified monthly amount retroactively if they were of the type that would have been approved had they been submitted in advance.   2.  VA Fee Basis Payment Is Payment in Full   When a physician accepts veterans as patients and bills the VA , the physician must accept the VAs usual and customary charge determination as payment in full.  Neither the patient nor any other party can be charged an additional amount.  Except for the VA copayment (see subsection 4(b)), Medicare cannot make payment on an assigned or unassigned basis when the physicians bill exceeds the amount the VA paid a physician  who has accepted the Fee Basis card.  However, as indicated in subsection 4(a), Medicare can pay for services that are not reimbursable by the VA.  Therefore, the mere existence of a Y trailer code indicating that the beneficiary has a VA fee card (as  discussed in subsection 5 ) is not sufficient to deny Medicare benefits.  See subsection 4(a) for secondary Medicare benefits where the veteran bills the VA, and the VA reimburses the beneficiary or physician less than the Medi care allowable amount.   3.  Crediting Part B Deductible   Payments made by the VA for otherwise covered services are credited to the beneficiarys Part B deductible.  (See subsection 5(c).)  4.  Secondary Benefits   (a) Veteran Bills the VA   Where the physician does not accept the fee basis card (i.e., bills the veteran directly) the veteran may file a claim with the VA.  The VA may either reimburse the beneficiary for out -of-pocket costs or pay the physician based on a claim fil ed by the beneficiary.  If the VA payment to the beneficiary or physician based on a claim filed by the beneficiary is less than the Medicare fee schedule or allowable amount for the services, Medicare can pay secondary benefits to supplement the VA paymen t, provided the beneficiary submits a copy of the VAs explanation of benefits which accompanies the VA payment.   The VA explanation of benefits generally consists of a computer -generated notice, which looks much like a punch card.  It contains the beneficiarys name and social security number, the physicians or suppliers name, the month of service, and the amount paid.  (The VA plans to add the day of service to the notice.)  The VA sends this notice to the party that receives the payment (i.e., t he beneficiary or the physician/supplier).  In some cases, the VA may also send a letter containing more detailed information.  If the A/B MAC (B) cannot determine from the VA notice the amount the VA paid for particular services, it asks the physician or supplier to help it match up the VA payment with specific services for which Medicare has been billed.  If the A/B MAC (B) is unable to obtain the help it needs from the physician or supplier, it make reasonable assumptions about the relationship between t he VA payment and the services which have been billed to Medicare based on the information available to it.   The Medicare secondary benefit amount, where the VA payment to the beneficiary or physician is less than the allowable amount, is the lower of the following:    The Medicare allowable amount minus applicable Medicare deductible and coinsurance amounts; or    The Medicare allowable amount minus the VA payment.   EXAMPLE:  An individual who is authorized by the VA to receive physician services for treatmen t of a nonservice -connected condition is issued a fee basis card.  The individual receives treatment from a physician who charges $135.  The physician does not accept the fee basis card.  The individual bills the VA directly.  The VA pays the individual $82 ($96 fee basis rate minus $14 outpatient copayment).  The Medicare allowable amount for the service is $115.  The individuals unmet Part B deductible is $75.  The Medicare secondary benefit is the lower of:    The Medicare allowable amount minus applicabl e deductible and coinsurance amounts:   $115 -  $75 = $40 X .80 = $32, or    The Medicare allowable amount minus the VA payment:   $115 -  $82 = $33.   The A/B MAC (B) pays $32, the lower of $32 or $33.  The beneficiarys Part B deductible is considered met by the VA payment.   (b) Physician Bills the VA; VA Bills Beneficiary for Copayment   If a physician accepts the fee basis card and bills the VA, the VA payment is considered payment in full.  If the VA bills the beneficiary a copayment amount for authorized ph ysician/supplier services that are covered by Medicare in the absence of the VA authorization, the A/B MAC (B) pays a secondary benefit to the beneficiary consisting of the lower of the VA copayment amount or the amount Medicare would pay in the absence of  VA coverage (Medicare allowable amount minus applicable deductible and coinsurance amounts).   EXAMPLE:   A physician accepts fee basis reimbursement for services rendered.  The charges for the services are $96.  The VA fee basis rate is $78.  The VA pays t he physician $78 and charges the beneficiary a $14 copayment.  The beneficiary claims Medicare reimbursement for the VA copayment amount.  The Medicare allowable amount for the services is $83.  The individuals unmet Part B deductible is $75.  The Medicar e secondary benefit is the lower of:    Amount payable by Medicare in the absence of VA coverage:   $83 -  $75 = $8 X .8 = $6.40, or    Individuals VA copayment obligation: $14.   The A/B MAC (B) pays $6.40.  The beneficiarys deductible is credited with $75. If  the beneficiarys Part B deductible had been met previously, the Medicare secondary payment would be $14, the lower of:    $66.40 ($83 X .8), or    $14.  NOTE:   Medicare may pay for covered outpatient emergency services furnished by a VA hospital if there is a charge for the services.  Medicares payment is subject to applicable Part B Medicare deductible and coinsurance provisions.  Accordingly, there is no Med icare payment until the Part B deductible is met.  However, any charges to the beneficiary for covered VA hospital outpatient emergency services are credited to the Medicare Part B deductible.  The CMS, OMB, Division of Accounting, which is responsible for  processing claims for emergency services by Federal providers, will ensure, in these cases, that pertinent data is entered into the beneficiarys Health Insurance Master Beneficiary Record.   5.  Procedure  (a) Claim Is for Primary Medicare Benefits   When the A/B MAC (B) receives a Y trailer code (code 3) or a code 36, (type code 3), automatic notice from the Health Insurance Master File (which is sent in instances where a Medicare beneficiary also has a VA fee basis card), it follows the instructions in the Medicare Secondary Payer (MSP) Manual, Chapter 5, Contractor Prepayment Processing Requirements, 20.3.1.  It contacts the physician or supplier to ascertain whether a claim has been, or will be submitted to the VA based on an authorization of the VA o r based on the fee basis card.  If the physician responds that no claim has been or will be submitted to the VA, the A/B MAC (B) pays the Medicare claim in the usual manner.  If the physician or supplier indicates that a claim has been or will be submitted  to the VA, the A/B MAC (B) denies the Medicare claim.  If the physician fails to respond to the A/B MAC (B)s inquiry within 30 days, the A/B MAC (B) denies the claim if the physician has accepted assignment  on the grounds that the physician refuses to fu rnish information necessary to determine the proper Medicare payment.  (The assignment agreement prohibits the physician from charging the beneficiary in these cases because the basis for denial is failure to furnish information, not noncoverage of service s.)  In unassigned cases, if the physician fails to respond to the A/B MAC (B)s inquiry within 30 days, the A/B MAC (B) pays the Medicare claim in the usual manner.  In accordance with a CMS -VA agreement, no contacts are to be made with the beneficiary, u nless the beneficiary has submitted a claim for secondary Medicare benefits.  Ordinarily, the A/B MAC (B) does not contact the VA for information concerning actual or potential VA payments; but if a VA facility offers to share such information with it, e.g ., information about payments to beneficiaries or physicians or about VA authorized services to beneficiaries, the A/B MAC (B) may work out arrangements with the facility to receive such information on a periodic basis or on request.   (b) Claim Is for Seco ndary Medicare Benefits   If the information on the claim indicates that the VA has already paid benefits for the services, but has not paid all of the charges, the Medicare A/B MAC (B)  pays Medicare secondary benefits in accordance with subsection 4(a) provided the VA claim was filed by the beneficiary .  If the beneficiary submits the VAs computer generated notice, the A/B MAC (B) assumes that the beneficiary filed the VA claim and pays secondary benefits.  If it is unclear wh ether the physician or beneficiary submitted the VA notification, the A/B MAC (B) assumes that, in unassigned cases, the beneficiary filed the VA claim and the A/B MAC (B) pays secondary benefits.  In assigned cases, the A/B MAC (B) asks the physician whet her the physician or the beneficiary filed the VA claim.  Also, when it is clear that the physician submitted the computer -generated notice, the A/B MAC (B) asks the physician (on both assigned and unassigned claims) whether the physician or the beneficiar y filed the claim with the VA (since in either case the VA sends the notice to the physician who receives the VA payment).   If the physician does not respond within 30 days, the A/B MAC (B) denies benefits, in assigned cases, because of the physicians ref usal to furnish information necessary to determine the proper Medicare payment.  (The assignment agreement prohibits the physician from charging the beneficiary in these cases because the basis for denial is failure to furnish information, not noncoverage of services.)  In unassigned cases, if the physician does not respond within 30 days, the A/B MAC (B) assumes that the beneficiary filed the VA claim and pays secondary benefits to the beneficiary.   (c) Claim Is for Reimbursement of VA Copayment Amounts or  Crediting of Medicare Deductible  Beneficiaries must attach to the Medicare claim form a copy of VA form 10 -9014 (Statement of Charges for Medical Care) showing the VA copayment amount for authorized services, when requesting Medicare payment toward that amount or in order to have their Part B deductible credited.   50.1.5 - Services Authorized by Indian Health Service  (Rev. 1, 10- 01-03) A3-3153.1.B, HO -260.3A.2 B.3- 2309.3   The Division of Indian Health of the United States Public Health Service authorizes private physicians and privately owned hospitals and nursing homes to provide treatment to Indians and their dependents under contractual arrangements with the Division of Indian Health.  In the case of such contract health services to Indians and their dependents entitled under the Indian Health Service (IHS) program and Medicare, Medicare is the primary payer and the IHS the secondary payer.   50.2 - Items and Services Furnished by Federal Provider of Services or Federal Agency  (Rev. 1, 10- 01-03) A3-3153.2, HO- 260.3.A, B3- 2309.1