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Can Medicare Advantage Plans Deny Coverage?
By Chris Gasparini
Chris Gasparini has been a licensed insurance agent since 2005. He enjoys helping Medicare beneficiaries navigate their options to find the best solution for their unique needs. Chris feels as though ...his work truly helps people. Because he represents multiple insurance companies and plan types, Chris is able to help Medicare beneficiaries find the most cost-effective plan. Every day, he leaves work knowing he did what was right for each and every client he serves.Read more
Mar 26, 2021
The short answer to this is yes, Medicare Advantage plans can deny coverage. The more important thing to understand, however, is when coverage can be denied.
All insurance programs can deny some coverage, and this includes Original Medicare, which will only pay for medically necessary coverage. The conditions for coverage denial will vary between Original Medicare and Medicare Advantage, and some Medicare Advantage plans will have different denial conditions than others.
We’ll run through exactly what claims denial is, how Medicare Advantage plans work, and when you could reasonably expect coverage to be denied.
What Is Coverage Denial?
As the name implies, coverage denial simply refers to situations in which your insurance company refuses to pay for health care that you have undergone. This can be done for a variety of reasons, including breaches of contract, not paying your monthly premiums, or going to an out-of-network provider. We’ll discuss the possibilities in more detail below.
Understanding the conditions for coverage denial is very important when you’re looking at a plan to purchase. Each plan will have different conditions for denial. Misunderstanding these or thinking you are covered when you aren’t can be an extremely unpleasant experience later on.
Can Original Medicare Deny Coverage?
Although we’ll mostly be focusing on Medicare Advantage health insurance, it’s also relevant to include a quick note about coverage denial under Original Medicare. Part A and Part B of Medicare will deny coverage under unique circumstances compared to most insurance plans, but it is still a possibility.
Original Medicare can deny coverage for procedures that aren’t deemed medically necessary. This includes things like cosmetic procedures or routine dental and vision care.
How Does Medicare Advantage Work?
When understanding Medicare Advantage, an important thing to keep in mind is that it functions as a private insurance plan. Although Medicare Advantage health plans are regulated according to guidelines from Medicare, they are offered by private insurance companies, not the government.
Medicare Advantage plans, also known as Part C plans, can deny coverage under more conditions than Original Medicare. Let’s take a look at some important things to understand about these plans which partially explain their conditions for coverage denial.
Medicare Advantage Eligibility
Eligibility for Medicare Advantage is the same as Original Medicare. If you are 65 or older and a United States citizen, then you will be eligible. Additionally, if you have End-Stage Renal Disease (ESRD) and require regular dialysis, you will be eligible for Original Medicare and Medicare Advantage.
Basically, any Medicare beneficiary is also eligible for Medicare Advantage. Current enrollees can switch to Medicare Advantage during any enrollment period.
When Can I Enroll in Medicare Advantage?
Enrolling in Medicare Advantage follows similar rules to Original Medicare. You can enroll in a plan during your Initial Enrollment Period, during the Open Enrollment Period each year, or during a Special Enrollment Period.
If you are enrolled in a Medicare Advantage plan and move to a different part of the country, you may be eligible to change your plan due to triggering a Special Enrollment Period.
Medicare Advantage and Provider Networks
Like most private insurance plans, Medicare Advantage plans use provider networks. Original Medicare doesn’t have provider networks, so this is important to understand if you are considering switching.
Part C plans will function as either an HMO or PPO plan. This will determine how much coverage you can receive for seeing healthcare providers inside or outside of a specified service area or network of providers. Receiving care from a provider who isn’t part of that network may mean that your coverage is denied.
Additional Coverage from Part C Plans
Although so far it may seem like Medicare Advantage plans are more restrictive than Original Medicare, this isn’t quite accurate. Medicare Advantage plans will usually offer more coverage than Original Medicare, not less.
This varies from plan to plan, but many plans cover routine dental and vision care as well as some other areas that Original Medicare doesn’t cover as comprehensively. Many plans also offer prescription drug coverage, which isn’t available from Original Medicare. You can also get a prescription drug plan through Medicare Part D.
Although more coverage is available, the ultimate decision to transfer to Medicare Advantage should take many factors into account. Plans can be cheaper or more expensive, as well as restrictive or more comprehensive in coverage. The variations are vast and each individual should make sure to research the plans comprehensively.
When Will Medicare Advantage Plans Deny Coverage?
Now that you understand how Medicare Advantage plans work, let’s take a look at some specific scenarios under which these plans may deny coverage. Remember, this will vary from plan to plan, and these are just some things to keep in mind rather than rigid rules.
If You Don’t Pay Your Monthly Premium
If you don’t pay your monthly premium, a plan will usually have a specific amount of time after which you will be denied coverage. For most people, setting up automatic payment is the easiest way to make sure that this doesn’t happen.
If They Don’t Offer Coverage for Your Procedure
When you purchase a healthcare plan, you should be able to see an explanation of what types of procedures are covered. If your plan explicitly notes that a certain type of care isn’t covered, then you should naturally expect coverage to be denied.
This will vary somewhat for each plan. However, every Medicare Advantage plan will cover at least the same things that Original Medicare covers. It’s very common for plans to deny coverage for cosmetic procedures.
Some plans may also require referrals from a healthcare provider before you get certain procedures done. Even if they generally cover a procedure, you may be denied coverage if you don't get this prior approval.
If You Go Out of Your Plan's Network
As mentioned above, Medicare Advantage plans use provider networks to negotiate pricing for your healthcare. This means that if you go outside of that network, you may have to pay a larger amount of the cost or have the coverage denied entirely.
For this reason, you should always determine if your preferred healthcare providers are in-network. You should be able to figure this out by calling the physician or the insurance company to get details about the provider network. You can also discuss this with an independent insurance agent.
Can Medigap Plans Help?
Medigap policies, also known as Medicare Supplement plans, are plans that help pay for your out-of-pocket costs under Original Medicare. This means things like your Medicare Part A coinsurance, your Medicare Part B copayments, and so on.
These supplemental plans can help pay for these out-of-pocket fees, copays, and deductibles, but won't help you get any more coverage if your coverage gets denied. It is also essential to remember that Medicare Supplement insurance will not cover any fees associated with Medicare Advantage. They will only apply to Original Medicare coverage.
Outside of your Initial Enrollment Period, Medigap insurers can deny coverage based on pre-existing conditions. If you have health conditions and think your coverage may be denied, make sure to enroll during Initial Enrollment.
Things to Keep in Mind About Medicare Advantage
If you are curious about Medicare Advantage, there are a few key things to keep in mind. First, remember that Original Medicare can also deny coverage in certain cases. Keep in mind that every Medicare Advantage plan is different and that denials for one plan won’t necessarily mean that another plan denies that same coverage. Finally, keep coverage denial in mind when shopping for a plan, so you know what you can expect.
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