Medicare is the federal government’s principal health care
insurance program for people 65 years of age and over. In addition, the program
covers people of any age who are permanently disabled or who have end-stage
renal disease (people with kidney ailments that require dialysis or a kidney
transplant). The Medicare program insures 39 million Americans and spends $213
billion a year on their care.

For the most part, Medicare pays only for "acute"
care — care that the program’s administrators view as reasonable and necessary
to diagnose or treat an illness or injury. In other words, the program does not
pay for most preventive or chronic health care. Medicare consists of three
major programs: Part A, which covers hospital stays; Part B, which covers
physician fees; and the recently-added Part C, which permits Medicare
beneficiaries to receive their medical care from among a number of delivery
options.

Although Medicare was originally conceived as a program that
would relieve older persons of the burden of paying for health care, Medicare
beneficiaries now pay a greater percentage of their incomes for out-of-pocket
health care expenses than they did before Medicare was enacted in 1965. In
addition to paying a monthly premium, Medicare recipients are often required to
pay a portion of the cost of the services they receive. This
"cost-sharing" may take the form of a deductible or co-insurance amount.
Deductibles, co-insurance amounts and premiums usually increase each January.
In addition, there are many services and items, such as prescription drugs, and
long-term nursing home or in-home care that Medicare does not cover. To help
with this cost-sharing and the items that Medicare does not cover, Medicare
beneficiaries often purchase private insurance policies called
"Medigap" policies.

 For more on the basics of Medicare, Medicare.gov has a
booklet designed for friends and family of Medicare members. To download the
booklet, click here.

Eligibility

Medicare is an "entitlement" program, meaning you
do not have to be poor to get Medicare. There are two parts of Medicare, each
with their own eligibility requirements. Medicare Part A is available for anyone
who is over age 65 or who is permanently disabled and who is eligible for
Social Security.

You are eligible for Medicare Part A if you:

• are a United
  States resident who has reached age 65 and are either a U.S. citizen or a
  legally admitted alien who has resided in the U.S. continuously for at least
  five years;
• are a disabled
  person of any age who has been entitled to Social Security, widows, or Railroad
  Retirement disability benefits for 25 months;
• have end-stage
  renal disease that requires dialysis treatment or a kidney transplant.

Medicare Part B is available for anyone over age 65
regardless of Social Security eligibility.

Medicare Part A

Medicare Part A covers institutional care in hospitals and
skilled nursing facilities, as well as certain care given by home health
agencies and care provided in hospices.

Any person who has reached age 65 and who is entitled to
Social Security benefits is eligible for Medicare Part A without charge. That
is, there are no premiums for this part of the Medicare program.

Hospital Coverage

Medicare pays for 90 days of hospital care per "spell
of illness," plus an additional lifetime reserve of 60 days. A single
"spell of illness" begins when the patient is admitted to a hospital
or other covered facility, and ends when the patient has gone 60 days without
being readmitted to a hospital or other facility. There is no limit on the
number of spells of illness. However, the patient must satisfy a deductible
before Medicare begins paying for treatment. This deductible, which changes
annually, is $992 in 2007.

After the deductible is satisfied, Medicare will pay for
virtually all hospital charges during the first 60 days of a recipient’s
hospital stay, other than telephone and television expenses. What Medicare
covers includes:

• a bed in a
  semiprivate room, meaning a room with at least one other patient. (Medicare
  will pay for a private room only if it is "medically necessary.")

•  all meals

•  regular nursing
  services

•  operating room,
  intensive care unit, or coronary care unit charges

•  medical supplies

•  drugs furnished
  by the hospital

•  laboratory tests

•  x-rays

•  the use of
  appliances

•  medical social
  services

•  physical and
  occupational therapy

•  speech therapy

•  blood
  transfusions after the first three pints of blood

However, Medicare will not pay for treatments or procedures
that it considers medically unproven or experimental.

If the hospital stay extends beyond 60 days, the Medicare
beneficiary begins shouldering more of the cost of his or her care. From day 61
through day 90, the patient pays coinsurance of $248 a day in 2007. Beyond the
90th day, the patient begins to tap into his or her 60-day lifetime reserve.
During hospital stays covered by these reserve days, beneficiaries must pay
coinsurance of $496 per day in 2007. This reserve is not reset after each
"spell of illness." Once it has been exhausted, the beneficiary will
receive coverage for only 90 days when the next spell of illness occurs.
However, studies show that the average length of a hospital stay covered by
Medicare is eight days.

Medicare Part A also pays for stays in psychiatric
hospitals, but payment is limited to a total of 190 days of inpatient
psychiatric hospital services during a beneficiary’s lifetime.

Fighting a Hosptial Discharge

If you are admitted to a hospital as a Medicare patient, the
hospital may try to discharge you before you are ready. You may need more time
to recover from surgery or your hip fracture may not be fully healed, but the
hospital may want the room back. While the hospital can’t force you to leave,
it can begin charging you for services. Therefore, it is important to know your
rights and how to appeal. Even if you don’t win your appeal, appealing can buy
you crucial extra days of Medicare coverage.

 

Before a hospital can discharge you, it must give you a
written notice of discharge. If you do not receive a notice and the hospital is
threatening to discharge you or begin charging you for services, you can ask
for the hospital to give you its discharge decision in writing. You can’t
appeal your discharge until you receive the notice—called a Hospital-Issued
Notice of Non-coverage or Notice of Discharge and Medicare Appeal Rights—in
writing. 

Once you receive a notice, you should immediately contact
your local Medicare Quality Improvement Organization (QIO). A QIO is a group of
doctors and other professionals who monitor quality of care. They are paid by
the federal government and not affiliated with a hospital or HMO. The phone
number should be on the notice. You can also click here, for a list of QIOs. 

It is very important to contact the QIO right away. You must
contact the QIO by noon on the first business day after you receive the notice.
If you do this, you will not have to pay for your care while you wait for your
discharge to be reviewed. If you don’t contact the QIO by noon, the hospital
can begin charging you on the third day after you receive the notice. 

The QIO will conduct a review of the discharge. The QIO
doctors will review the medical necessity, appropriateness, and the quality of
hospital treatment furnished to you. The hospital cannot discharge you while
the QIO is reviewing the discharge decision, and you will not have to pay for
the additional days in the hospital. If you don’t agree with the QIO’s
decision, you can ask it to reconsider. It must issue a decision within three
days. 

If, after the reconsideration, the QIO still agrees with the
hospital’s decision, you can appeal to an administrative law judge (ALJ). You
will probably need legal counsel to help you through this process. You can
appeal the ALJ’s decision to the Department of Health and Human Services,
Departmental Appeals Board (DAB) the ALJ rules against you. Finally, if you
don’t agree with the DAB decision, you can appeal to federal court as long as
$1,000 is at stake. 

Skilled Nursing Facility Coverage

Medicare Part A covers up to 100 days of "skilled
nursing" care per spell of illness. However, the conditions for obtaining
Medicare coverage of a nursing home stay are quite stringent. Here are the main
requirements:

    1. The Medicare
recipient must enter the nursing home no more than 30 days after a hospital
stay that itself lasted for at least three days (not counting the day of
discharge);

 2. The care
provided in the nursing home must be for the same condition that caused the
hospitalization (or a condition medically related to it); and

 3. The patient must
receive a "skilled" level of care in the nursing facility that cannot
be provided at home or on an outpatient basis. In order to be considered
"skilled," nursing care must be ordered by a physician and delivered
by, or under the supervision of, a professional such as a physical therapist,
registered nurse or licensed practical nurse. Moreover, such care must be
delivered on a daily basis. (Few nursing home residents receive this level of
care.)

As soon as the nursing facility determines that a patient is
no longer receiving a skilled level of care, the Medicare coverage ends. And,
beginning on day 21 of the nursing home stay, there is a significant copayment
equal to one-eighth of the initial hospital deductible ($124 a day in 2007).
This copayment will usually be covered by a Medigap insurance policy, provided
the patient has one.

A new spell of illness can begin if the patient has not
received skilled care, either in a skilled nursing facility (SNF) or in a
hospital, for a period of 60 consecutive days. The patient can remain in the
SNF and still qualify as long as he or she does not receive a skilled level of
care during that 60 days.

 Nursing homes often terminate Medicare coverage for SNF care
before they should. Two misunderstandings most often result in inappropriate
denial of Medicare coverage to SNF patients. First, many nursing homes assume
in error that if a patient has stopped making progress towards recovery then
Medicare coverage should end. In fact, if the patient needs continued skilled
care simply to maintain his or her status (or to slow deterioration) then the
care should be provided and is covered by Medicare.

Second, nursing homes may wrongly believe that care
requiring only supervision (rather than direct administration) by a skilled
nurse is excluded from Medicare’s SNF benefit. In fact, patients often receive
an array of treatments that don’t need to be carried out by a skilled nurse but
which may, in combination, require skilled supervision. In these instances, if
the potential for adverse interactions among multiple treatments requires that
a skilled nurse monitor the patient’s care and status, then Medicare will
continue to provide coverage.

When a patient leaves a hospital and moves to a nursing home
that provides Medicare coverage, the nursing home must give the patient written
notice of whether the nursing home believes that the patient requires a skilled
level of care and thus merits Medicare coverage. Even in cases where the SNF
initially treats the patient as a Medicare recipient, after two or more weeks,
often, the SNF will determine that the patient no longer needs a skilled level
of care and will issue a "Notice of Non-Coverage" terminating the
Medicare coverage.

Whether the non-coverage determination is made on entering
the SNF or after a period of treatment, the notice asks whether the patient
would like the nursing home bill to be submitted to Medicare despite the
nursing home’s assessment of his or her care needs. The patient (or his or her
representative) should always ask for the bill to be submitted. This requires
the nursing home to submit the patient’s medical records for review to the
fiscal intermediary, an insurance company hired by the Health Care Financing
Administration to administer the Medicare program.

The review costs the patient nothing and may result in more
Medicare coverage. While the review is being conducted, the patient is not
obligated to pay the nursing home. However, if the appeal is denied, the
patient will owe the facility retroactively for the period under review. This
should be addressed. If the fiscal intermediary agrees with the nursing home
that the patient no longer requires a skilled level of care, the next level of
appeal is to an Administrative Law Judge. This appeal can take a year and
involves hiring a lawyer. It should be pursued only if, after reviewing the
patient’s medical records, the lawyer believes that the patient was receiving a
skilled level of care that should have been covered by Medicare. If you are
turned down at this appeal level, there are subsequent appeals to the Appeals
Council in

Washington

,
and then to federal court.

 Hospice Care

If the Medicare beneficiary has no more than six months to
live, Medicare will pay for unlimited hospice care. This can be at home or in a
hospice facility, and includes services not generally covered by Medicare.
These services include home health aide and homemaker services, physical
therapy, counseling, as well as physician and nursing services. There is also a
provision for "respite care"–up to five consecutive days of
inpatient care to give the patient’s primary at-home caregiver some relief. The
patient must pay 5 percent of the cost of this respite care.

Hospice benefit recipients are responsible for up to a $5
copayment for each prescription drug, but otherwise there are no deductibles or
other copayments for this benefit. Bear in mind, however, that in electing
hospice care, the beneficiary is choosing to receive noncurative medical and
support services rather than treatment toward a cure for the terminal illness.

Because Medicare’s hospice home care benefit does not cover
full-time care, it is not an option unless there is a full-time caretaker in
the home.