Medicaid Billing

June 21, 2024

Jessica Carey

Medicare and Medicaid are two government-funded health care programs in the United States that provide medical assistance to eligible individuals. Medicare is a federal health insurance program primarily designed for senior citizens aged 65 or older, but it also covers people with certain disabilities or medical conditions. Medicaid is a joint federal-state program that provides health care coverage for low-income individuals and families, including children, pregnant women, and people with disabilities. These programs ensure that individuals have access to the medical care they need, regardless of their financial situation or health status.

Medicare and Medicaid help millions of Americans every year to receive health care services that they otherwise would not be able to afford. This support is especially important for elderly people and people who have a disability, who may have chronic health conditions and require ongoing medical care. Medicaid provides a safety net for low-income families and children who might not have access to health care otherwise. Without these programs, many people may have to go without necessary treatments.

In the following sections, we explore the Medicare and Medicaid billing process, which is a crucial aspect for any providers who contract with one or both of these programs. It’s especially important in the human services sector, where state policy coverage changes frequently with each administration.

Medicare and Medicaid Billing

The Medicare and Medicaid billing process refers to the method for health care providers to submit claims for reimbursement of services provided to eligible beneficiaries. It’s highly regulated and complex, as different rules and requirements apply to each program. Medicare reimbursement rates are set by the federal government and vary depending on the type of service provided, while Medicaid reimbursement rates are determined by each state. Understanding the Medicare and Medicaid billing process benefits providers and participants alike, as it helps to ensure that medical services are reimbursed appropriately, and that beneficiaries receive the care they need to stay healthy.

Service providers across the mental health, behavioral health, substance abuse, and housing sectors may be less familiar with the process than traditional medical providers. Streamlining your agency’s administrative workflow for eligible clients requires a thorough understanding of the rules and regulations set by the Centers for Medicare & Medicaid Services (CMS) and the various components of billing and coding. It can be a daunting task for newer or smaller agencies, but ensuring the reimbursement process runs smoothly and efficiently helps participants receive the care they need without undue financial burden. Below is an explanation of each billing system:

Medicaid Billing Guidelines

Health care providers who participate in Medicaid must follow strict guidelines to ensure accurate and timely payment for their services and avoid fraud. Here are some Medicaid billing guidelines that providers should be aware of:

Verification of Medicaid coverage: Before providing any services, health care providers should verify that the services are covered by Medicaid. This can be done by checking the patient’s Medicaid card or by using the state’s Medicaid website, which provides information on which services are covered and under what circumstances. Plans vary by state, and some states utilize PPO Medicaid while others utilize HMO or managed care. Be careful to check if a referral is needed before scheduling a client for a service.
Electronic vs. paper billing: Most health care providers can choose to bill Medicaid electronically or by paper. Electronic billing is faster, more accurate, and less expensive than paper billing. Providers who bill Medicaid electronically can also receive payment several weeks earlier. Electronic billing can be done through an internal electronic health records (EHR) system, such as Foothold, or a health care clearinghouse. Paper billing can be done by mail or fax.
State-specific information required on Medicaid claim: To ensure timely and accurate payment, health care providers must include all necessary information on their Medicaid claim, including the patient’s Medicaid number, the service provided, the date of service, and the amount charged. All submissions need to be on the correct forms provided by the Medicaid office. Forms and submission requirements may vary slightly by state.
State Medicaid fee schedule: Medicaid pays health care providers according to a fee schedule that varies by state. Each state’s fee schedule determines the payment amount for each service based on the type of service, the geographic location where the service was provided, and the provider’s specialty. It is illegal to charge an eligible patient more than the set fee schedule if the services are denied by the insurance.
Medicaid as a secondary insurance: Because Medicaid is often an income-based insurance plan, most covered individuals do not have a primary insurance provider. In cases where there is primary private insurance, Medicaid serves as the payer of last resort, stepping in only when no other insurance is available to cover the cost of health care services.
Medicaid and Medicare coverage: Medicaid also acts as secondary insurance if a patient has both Medicare and Medicaid coverage, as Medicare will generally pay first for the services rendered. Medicaid then becomes the secondary payer and pays for any remaining costs, such as copayments or deductibles.
Payment collection: After private insurance, Medicare, and Medicaid each pay their portions, health care providers must collect the remaining amount from the patient. Providers can bill the patient for the difference between the Medicaid-approved amount and the actual Medicaid fee schedule amount. Avoid any chance of fraud by paying close attention to the limits on how much providers can charge, and follow Medicaid guidelines closely for collecting payment from participants.

Medicaid Coverage

Medicare billing, coding, and guidelines vary depending on the specific part of Medicare being billed for. You should always verify coverage by checking the Medicare Coverage Database or by contacting the patient’s Medicare Administrative Contractor (MAC). Here is an overview of the billing guidelines for each part of Medicare:

Part A: Medicare Part A covers inpatient hospital care, skilled nursing care, and hospice care. Providers should include information such as the person’s Medicare number, date of admission, and diagnosis codes. Providers must also make sure that the services they provide are medically necessary and covered by Medicare.
Part B: Medicare Part B covers outpatient medical services such as doctor visits, lab tests, and medical equipment. Providers must also make sure that the services they provide are medically necessary and covered by Medicare.
Part C: Medicare Part C, also known as Medicare Advantage, is a type of health plan offered by private insurance companies that provides coverage for Parts A and B services. Providers should bill Medicare Advantage plans directly using the plan’s billing instructions. Medicare Advantage plans often have different billing guidelines and requirements than traditional Medicare, so health care providers should familiarize themselves with each plan’s specific instructions.
Part D: Medicare Part D covers prescription drugs. Providers should submit claims for Part D drugs to the assigned prescription drug plan using the instructions. Health care providers should also ensure that they have obtained a written order from the patient’s physician before providing any non-emergency services. Remind clients of the Medicare Part D coverage gap, which occurs when a person is responsible for a greater portion of the prescription costs until they reach the threshold.

Similarities and Differences Between Billing Medicaid and Billing Medicare

Although both Medicare and Medicaid are government-funded health care programs in the United States, their billing processes and guidelines differ in several ways. One similarity is the importance of verifying coverage before providing services. Both programs require health care providers to include specific information on claims to ensure accurate and timely payment, such as the place of service, the National Provider Identifier (NPI) for the individual practitioner or organization, the procedures performed, and the diagnoses listed. Additionally, providers can choose to bill both programs electronically or by paper.

However, there are also notable differences. Medicare pays according to a fee schedule determined by the Centers for Medicare and Medicaid Services (CMS), while Medicaid pays according to a fee schedule determined by each state. Additionally, Medicaid is generally the primary payer for participants who have both Medicaid and Medicare coverage, whereas Medicare is always the primary payer for participants who have both Medicare and private insurance coverage. Finally, Medicaid provides more extensive coverage for long-term care services and disability services, while Medicare provides more extensive coverage for acute care services.

Billing for Dual Eligible Beneficiaries

Dual eligible beneficiaries refer to individuals who are eligible for both Medicare and Medicaid coverage. Generally, these individuals are low-income seniors over 65 years old or individuals with disabilities who qualify for Medicare due to a disability and Medicaid due to their low-income status. In some cases, younger individuals with certain chronic conditions may also be eligible for dual coverage. These individuals often have complex health care needs and require frequent medical attention, which can be expensive. Dual eligibility helps ensure that they have access to the medical care and services they need without facing financial hardship.

When a beneficiary has dual coverage, health care providers must bill Medicare and Medicaid separately. Since these programs have different coverage rules and payment structures, and billing them together can result in delayed or incorrect payments. When billing dual eligible beneficiaries, providers must bill Medicare first as it is the primary payer. If Medicaid also covers the service, providers can bill Medicaid for any remaining costs. Providers can use the Medicare crossover process to submit claims to both programs simultaneously. Follow state-specific Medicaid fee schedules and ensure all required information is included on the claim form to avoid payment delays.

Recent Developments in Medicare and Medicaid Billing

In recent years, the Centers for Medicare and Medicaid Services (CMS) have implemented several initiatives to streamline the Medicare and Medicaid billing process and reduce errors. One such initiative is the Medicare Administrative Contractor (MAC) program, which consolidates the processing of Medicare claims to a single entity in each jurisdiction. This program has led to increased efficiency, faster claim processing times, and reduced errors.

Another initiative is the Medicare Access and CHIP Reauthorization Act (MACRA), which includes provisions to simplify billing procedures and encourage providers to use electronic health records (EHRs). Under MACRA, providers can receive incentives for using certified EHRs to submit claims, which can help reduce errors and improve efficiency.

Electronic billing and electronic health records (EHR) have also played a significant role in improving the accuracy of Medicare and Medicaid claims submissions. By using electronic systems, providers can reduce errors and delays associated with paper claims submissions. Electronic billing also allows for faster processing times, reducing the time it takes to receive payment.

Working with an EHR company can greatly reduce the stressors associated with Medicaid and Medicare billing. Much of the demographic information needed on the forms can be automated and duplicated for each new submission. The use of EHRs also allows providers to easily track patient care and treatments, leading to more accurate claims submissions. This is especially helpful when standard reimbursement provisions or denial kickbacks from the office request more detailed documentation, such as intake form attachments or service notes.

Advanced EHR features may also give care providers access to a person’s medical history outside their agency, which can help ensure that the services provided are covered by Medicare or Medicaid with regard to medical necessity. Overall, the integration of electronic systems in the billing process has streamlined the process, making it easier for health care providers to bill for services and for CMS to process claims.

Coding and Billing for Medicaid in Review

Health and human service providers who participate in Medicaid or Medicare must adhere to strict billing guidelines to ensure accurate and timely payment for their services. Get familiar with these guidelines and stay up to date on any changes to the programs’ policies and procedures. By doing so, you can provide quality care to your participants, coordinate care with primary physicians and other practitioners, and avoid fraud or potential penalties for non-compliance. Working with a wrap-around EHR service provider and consultant like Foothold Technology can help you best prepare for all the administrative tasks associated with coding, billing, and claims submissions.

Article

Have Medicare? You may be able to get better access to mental health care this year

Written by: Dom DiFurio

The American population is aging—and much-needed mental health care providers are in short supply. Earlier this year, the federal government rolled out new rules to help older Americans access more services and give healthcarehealth care professionals the flexibility to help those in their community with the greatest needs.

But better health care access only works if the people poised to benefit understand the new rules. It’s not unusual for Medicare patients to need to advocate for themselves in health care situations, and doing so may help those from underserved communities receive better care.

Foothold Technology analyzed resources from the Centers for Medicare and Medicaid Services, Substance Abuse and Mental Health Services Administration, the Centers for Disease Control and Prevention, and the Commonwealth Fund to explain how the new Medicare rules will expand access to behavioral health treatment.

medicaid-billing — **nito // Shutterstock**

The Health Resources and Services Administration reports that 1 in 3 Americans live in a part of the U.S. where there is a shortage of mental health care professionals. The new rules for Medicare, announced in November, are intended to expand avenues to access for patients who can get services covered for mental health and drug use disorders.

Medicare is a federal health insurance program for Americans 65 and older, or younger people who live with disabilities. It’s not to be confused with Medicaid, the federal program for Americans with limited incomes.

About 1 in 5 Americans use Medicare, with higher use rates in more rural states like West Virginia, Maine, and Vermont, according to a 2021 analysis by KFF. Recipients often live in underserved communities and tend to have lower incomes, with around 1 in 3 of recipients earning less than 200% of the federal poverty level.

The ongoing shortage of mental health providers nationwide, combined with the increase in mental illness and substance use disorders, has made care hard to find—especially for Medicare and Medicaid users. A report from the Department of Health and Human Services released earlier this year found that Medicare- and Medicaid-covered providers are difficult to come by, forcing some to drive an hour or more for care.

In a December statement, Department of HHS Secretary Xavier Becerra said the rollout of the new rules is part of the government’s commitment to “expanding access to behavioral healthcare for people with Medicare.”

In particular, the department aims to address gaps in treatment for Medicare recipients in Native American communities, rural communities, and other underserved parts of the country. Many of the changes aim to make it easier for recipients to get early intervention and crisis intervention from the service workers closest to the communities they serve, make care more affordable, and expand access to the potential mental and behavioral health workforce for Medicare beneficiaries.This Medicare tool allows enrolled Medicare recipients to find providers nearby who Medicare covers. Read on to learn more about the changes coming to Medicare this year.

medicare-mental-health — **kmpzzz // Shutterstock**

Expanding billing eligibility

Family therapists and mental health counselors can bill Medicare directly due to the reforms implemented this year.

CMS will temporarily add health and well-being coaches to covered services under its Medicare Telehealth Services list this year. It’s also expanding the health care providers that provide covered behavioral health assessments to provide better physical care. It will begin allowing addiction, drug, and alcohol counselors who meet certain requirements to enroll as mental health counselors under Medicare.

CMS also plans to add a rule this year that allows health providers to pay for caregiver training through Medicare, hoping to expand and enhance the existing caregiving industry.

medicare-eligibility — **Drazen Zigic // Shutterstock**

Addressing rural health care deserts

This year, CMS will reduce requirements for nurse practitioners, allowing them to provide behavioral health services at rural health clinics and federally qualified health centers. Previously, they had to have certification in providing primary care, but CMS is removing the barrier in order to alleviate staffing shortages. It will also allow those clinics to continue providing telehealth services.

Expanded opioid treatment coverage

As part of its expansion of COVID-era telehealth policies, CMS is also extending a temporary rule that allows Opioid Treatment Programs to bill Medicare for assessments of patients conducted over the phone or online using audio only and no video. With this move, CMS hopes to avoid disruptions to existing access Medicare recipients have to opioid treatment.

Including community health workers and peer support specialists

Medicare will now allow for the reimbursement of services from more health care specialists, expanding the possible avenues for treatment in places where they might be hard to find.

The new reforms specifically include peer support specialists and community health workers. Peer support specialists help others avoid relapse and maintain their recovery process, a relationship informed by the specialist’s lived experiences with conditions like substance use disorder. Community health workers help connect the health care system with the communities they serve.

CHWs work at nonprofits, government agencies, public health departments, and community programs. They can perform educational outreach, counseling, or help people find transportation to appointments. These kinds of workers were integral to the public health response to the COVID-19 pandemic: Studies found CHWs offer support for geriatric patients with complex needs, according to a research review published in a 2022 issue of the Journal of the American Geriatrics Society.

Some states were already making rules to allow for coverage of CHW services, and new Medicaid rules may also expand the number of working CHWs around the country as funding for them is bolstered.

Story editing by Alizah Salario. Copy editing by Kristen Wegrzyn. Photo selection by Lacy Kerrick.