Opinion ID: 780622
Heading Depth: 3
Heading Rank: 1

Heading: medicare part a coverage

Text: The Medicare Act, 42 U.S.C. § 1395 et seq., provides health insurance for the aged and disabled. The Medicare program consists of two parts. Medicare Part A — the relevant program in this case-covers services provided to hospitalized patients. 1 Medicare Part A covers expenses for ninety days for each spell of illness. See 42 U.S.C. § 1395d(a)(1). When a spell of illness is broken by a period of sixty days during which a patient is not hospitalized, a new period of ninety days commences. Id.; see also 42 U.S.C. § 1395x(a). Medicare also allows for coverage of sixty additional life-time reserve days. See 42 C.F.R. § 409.61(a)(2). These reserve days are non-renewable. Id. The life-time reserve days can be used at any time; however, once they are used they are gone. In addition to limiting the time of coverage, Part A also limits the types of services that are covered. The services that are covered include room and board, nursing services, drugs, supplies, and other diagnostic and therapeutic items or services furnished to inpatients. See 42 U.S.C. § 1395x(b); see also 42 C.F.R. § 412.23(c). Of these covered expenses, Medicare is further limited in that expenses will be covered only if they are reasonable and medically necessary. See 42 U.S.C. § 1395y(a)(1)(A). Vencor, an operator of long-term hospital care facilities, 2 accepts assignment of Part A Medicare benefits from its patients. Medicare pays Vencor the lesser of the reasonable cost of its services or its customary charges, see 42 U.S.C. § 1395f(b)(1), pursuant to the Reasonable Cost Reimbursement System (RCRS). See 42 C.F.R. § 413. Under the RCRS, Medicare makes interim payments to Vencor subject to a year-end adjustment. 42 C.F.R. § 413.1(a)(1)(A). These interim payments are calculated on the basis of a per diem rate for each Medicare patient/beneficiary, which is derived by dividing the hospital's allowable net Medicare inpatient operating costs in a base year by the number of Medicare beneficiaries in that year. See 42 C.F.R. § 413.40(a)(3)(D). Medicare, however, does not cover the full per diem rate. 3 During the first sixty days of hospitalization, Medicare covers all allowable costs, excluding a deductible. From the 61st to 90th days of hospitalization, Medicare pays the full amount of allowable costs, less a coinsurance amount for which the patient is responsible. During the sixty reserve days, Medicare pays the full amount of allowable costs, less a higher coinsurance amount, for which the patient is also responsible. 42 U.S.C. § 1395e(a)(1). After Part A benefits have expired, hospital patients can no longer rely on Medicare to cover their hospitalization expenses. Because Medicare does not cover all of the health care costs of its beneficiaries, Medicare beneficiaries can obtain supplemental insurance to fill in the gaps, commonly known as Medigap insurance. Medigap insurance policies typically cover the initial deductible and coinsurance rates, as well as expenses after Part A benefits have been exhausted. Standard Life provides various forms of insurance in Kentucky and Tennessee, including Medigap insurance policies as described above.