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Medicare Prior Authorization Are you feeling lost and confused about Medicare Advantage prior authorization? You’re not alone. Navigating the healthcare system can be overwhelming, especially regarding insurance processes. But fear not—we are here to demystify it all for you.

This comprehensive guide will delve into everything you need to know about Medicare Advantage prior authorization. From understanding what it is, why it’s necessary to learn how it works, and the steps involved, we’ll break it down in simple terms. There will be no jargon, no confusing terms—just clear and concise information.

What is Prior Authorization?

Prior authorization is a process used by insurance companies to determine whether they will cover a specific medical procedure, treatment, or prescription drug. It is required for certain services to ensure that they are medically necessary and cost-effective.

Why is Prior Authorization Necessary?

Prior authorization prevents unnecessary medical procedures, reduces healthcare costs, and ensures patients receive appropriate care. Insurance companies can control expenses and ensure that resources are allocated efficiently by reviewing and approving or denying requests for certain healthcare services.

Problems With Medicare Advantage Prior Authorization

However, prior authorization can be complex and time-consuming. It requires healthcare providers to submit detailed information about the patient’s condition, medical history, and proposed treatment plan. The insurance company then reviews this information to determine whether the requested service meets its coverage criteria.

While prior authorization can be beneficial in some cases, it can also lead to delays in care and administrative burdens for both healthcare providers and patients.  There are many elements, moving parts, and hands that touch a prior authorization request.  Thus, the process is ripe for mistakes, misunderstandings, and delays.  Understanding the process and requirements can help you navigate this system more effectively.

Prior Authorization Process for Medicare Advantage

Obtaining prior authorization for Medicare Advantage plans involves several steps. Here’s a breakdown of the process.doctor's office calls for prior authorization

Consultation with Healthcare Provider

The first step is to consult with your healthcare provider. They will determine if the service or treatment you need requires prior authorization and initiate the process on your behalf.

Submission of Prior Authorization Request

Once your healthcare provider has determined that prior authorization is necessary, they will submit a request to your insurance company. This request includes all the necessary documentation, such as medical records, test results, and treatment plans.  This is where I see problems arise.  The doctor’s back office uses incorrect codes, forgets test results, and the doctor’s notes are missing essential language.  Then, the request is denied.

Review by the Insurance Company

The insurance company will review the submitted request and evaluate the medical necessity of the service requested. It may also consider factors such as cost-effectiveness and alternative treatment options.

Medicare Prior Authorization approval Approval or Denial

The insurance company will either approve or deny the prior authorization request based on their evaluation. If approved, you can proceed with the recommended treatment. If denied, you have the option to appeal the decision.  The additional problem is the insurance company does not give a reason for the denial, so the provider is clueless about where to begin.  The carrier is not required to give a reason, so the provider needs to commit more resources to find out what is needed or let it go.

Appeals Process

You can appeal the decision if your prior authorization request is denied. This involves providing additional documentation or evidence to support the medicalMedicare Appeal process necessity of the requested service. The insurance company will review your appeal and make a final determination.

It’s important to note that the prior authorization process may vary slightly depending on your specific Medicare Advantage plan and the services you need. For detailed information about the process, consult with your healthcare provider, insurance company, and Center for Medicare & Medicaid Services (CMS).

Standard Medicare Procedures & Services Requiring Prior Authorization

Pre-certified surgeryPrior authorization is typically required for certain medical procedures, treatments, and prescription drugs. While the specific requirements may vary depending on your Medicare Advantage plan, here are some standard procedures and services that often require prior authorization.

Specialized Surgeries

 Complex surgical procedures, such as organ transplants or bariatric surgery, often require prior authorization. This ensures that the procedure is medically necessary and appropriate for the patient’s condition.

High-Cost Medications

Certain prescription drugs, especially those with high costs, may require prior authorization. This helps insurance companies manage expenses and ensure patients receive appropriate medications.

Imaging TestsPre-certify MRI

Advanced imaging tests like MRI or CT scans may require prior authorization. This ensures that these tests are necessary and will provide valuable information for diagnosis or treatment.

Physical Therapy or Rehabilitation Services

Medicare Advantage plans often require prior authorization for physical therapy, occupational therapy, or other rehabilitation services. This helps ensure that these services are appropriate and will contribute to the patient’s recovery.

I have found that skilled nursing facility care is very difficult to get approved, especially if the stay exceeds the initial twenty days.  The impasse is a combination of the skilled nursing facilities (SNF) refusing to submit for a patient with a Medicare Advantage plan.  Many SNFs will not even consider submissions for stays beyond twenty days.  Some seem to not know how to properly submit a reauthorization or claim.  From the insurance company’s side, their restrictions seem overly prohibitive.  This has been a huge source of complaints to CMS and Congress.

Preauthorize durable medical equipment Durable Medical Equipment

Equipment such as wheelchairs, oxygen tanks, or home healthcare supplies may require prior authorization. This ensures that the items are medically necessary and will improve the patient’s quality of life. CMS has a significant history of fraud, waste, and abuse regarding durable medical equipment.

It’s important to check with your specific Medicare Advantage plan to understand which procedures and services require prior authorization. Your healthcare provider can also provide guidance based on your individual needs.

Benefits of Medicare Advantage Prior Authorization

While the prior authorization process can be perceived as burdensome, it offers some benefits for patients and insurance companies. Here are a few advantages of Medicare Advantage prior authorization:

  1. Cost control: Prior authorization helps insurance companies control healthcare costs by ensuring that services are medically necessary and cost-effective. This helps keep premiums affordable for all members.
  2. Appropriate care: Prior authorization ensures that patients receive appropriate care by evaluating the medical necessity of requested services. This helps prevent unnecessary procedures or treatments that may not be beneficial.
  3. Improved outcomes: By reviewing and approving requests for certain healthcare services, insurance companies can help ensure that patients receive the most effective and evidence-based treatments. This can lead to improved health outcomes and better quality of life.
  4. Resource allocation: Prior authorization helps allocate healthcare resources efficiently by ensuring that they are used for the most appropriate and effective services. This helps prevent overutilization of healthcare services and ensures that resources are available for those who need them.

While there are benefits to prior authorization, it’s important to acknowledge the challenges and drawbacks of the process as well.

Challenges & Drawbacks of the Medicare Prior Authorization ProcessMedicare Advantage Prior authorization

While prior authorization serves a purpose in the healthcare system, it has its challenges and drawbacks. Here are some common challenges that patients and healthcare providers may encounter.

Prior Authorization Administrative Burden

The prior authorization process can be time-consuming and requires healthcare providers to gather and submit extensive documentation. This administrative burden can take away valuable time that could be spent on patient care.

Dr. Jesse M. Ehrenfeld, M.D., president of the AMA (American Medical Association), says,

The need to right-size prior authorization has never been greater—mountains of administrative busywork, hours of phone calls, other clerical tasks that are tied to this onerous review process. It not only robs physicians of face time with patients, but studies show that it contributes to physician dissatisfaction and burnout.

Delayed Care

Prior authorization can sometimes lead to delays in care, as the review process may take time. This can be frustrating for patients who need immediate treatment or services.

Starting in 2026, CMS is shortening the time frames for prior authorization decisions. Insurance payers must respond within 72 hours for an expedited or urgent request and seven calendar days (not business days) for a standard request.

Prior authorization denied Denial of Coverage

There is always a risk of prior authorization requests being denied. This can be disappointing for patients hoping to receive a particular treatment or procedure.

Lack of Transparency

Insurance companies may have different criteria and guidelines for prior authorization, leading to confusion and lack of transparency. Patients and healthcare providers may struggle to understand the reasons for a denial or how to navigate the process effectively.

Dr. Jesse M. Ehrenfeld, M.D. describes the problem of the lack of transparency with the insurance companies.

When a request is denied, we often don’t know why. We don’t tell you the reasoning behind the denial. It can take hours and hours to appeal a decision. And then sometimes you wait weeks or even months for a peer-to-peer consult.

The CMS final rule will require insurers to provide specific, very specific denial reasons and public reporting of metrics. How often do they approve? How often do they deny things? How long does it take for a process to actually give a result for a request?

Insurers will also be required to share that information with patients, so that our patients can become informed decision makers when they buy health insurance on the exchanges and make planned decisions. That’s going to begin in 2026 and will go a long way in bringing much-needed transparency and accountability to the entire process.

Appeals Process

While the option to appeal a prior authorization denial exists, it can be a lengthy and complex process. Patients may need to provide additional documentation and evidence to support their case, which can be challenging and time-consuming.

In the efforts to improve the Medicare Advantage prior authorization process, CMS will require, according to Dr. Ehrenfeld,

Plans to support an electronic prior authorization process that’s embedded in the physician’s electronic health records, bringing much needed automation and efficiency to our current very manual and very time-consuming workflow. That change is going into effect in 2027—it’s going to be a game-changer for everybody.

So having direct integration of prior authorization into the EHR (electronic health record) is going to significantly reduce the burden on physicians. And this is where so much of that $10 to $15 billion in savings is going to come from.

Despite these challenges, some strategies and tips can help you navigate the prior authorization process more effectively.

Prior authorization appeal processNavigating the Prior Authorization Process Effectively

Navigating the prior authorization process can be overwhelming, but with the right strategies, you can streamline the process and ensure a smoother experience. Here are some tips to help you navigate prior authorization effectively:

Understand your Medicare Advantage Plan

Familiarize yourself with your Medicare Advantage plan’s specific requirements and guidelines. This will help you understand which procedures and services require prior authorization and what documentation is needed.  This is important because you may have to be the force behind the doctor’s office to pursue approval beyond the initial request.

Communicate with Your Healthcare Provider

It is crucial to communicate openly and clearly with your healthcare provider. They can guide you through the prior authorization process, provide necessary documentation, and advocate for your needs.  The office needs to see that you want the procedure or test because they have limited resources to pursue further requests or appeals from the insurance company.

Gather All Necessary Documentation

Before submitting a prior authorization request, ensure you have all the necessary documentation. This may include medical records, test results, treatment plans, and any additional information requested by your insurance company.  If you can assist in the process, then dig in.  You may also have to be the supervising authority to make sure the office’s back office submits all relevant materials.

Be Proactive

Start the prior authorization process as early as possible to avoid delays in care. Submit your request well in advance of your scheduled procedure or treatment to allow ample time for review. Doctor’s offices are usually overworked and understaffed. To ensure you are taken care of in a timely way, contact the office yourself to see where your prior authorization is in the process. Ask for dates when you should expect tasks to be completed by the doctor’s office and insurance company.

Keep Copies of All Documents

Make copies of all documents related to the prior authorization process, including your request, supporting documentation, and any communication with your insurance company. This will help you stay organized and provide evidence if needed for an appeal. The documents are your records. You and the insurance company paid for the tests, and you have a right to your own copies.

Follow Up with Your Insurance Company

Stay proactive and follow up with your insurance company to ensure your prior authorization request is processed. This will help you stay informed and address any issues or concerns in a timely manner.  Everyone is busy.  Balls are dropped.  People forget.  You make sure none of that happens with your case because you are on it.

How to Appeal a Prior Authorization Denial

If your prior authorization request is denied, you have the option to appeal the decision. Here’s a step-by-step guide on how to appeal a prior authorization denial.

  1. Understand the denial: Carefully review your insurance company’s denial letter. Understand the reasons for the denial and the specific requirements for appealing the decision.
  2. Gather additional documentation: If you believe that the denial was made in error or that additional information could support your case, gather all the necessary documentation. This may include medical records, test results, or a letter of medical necessity from your healthcare provider.  Your provider will need to perform most of this work.
  3. Submit an appeal letter: Write a formal appeal letter to your insurance company. Generally the doctor will need to draft and submit the letter.  He will need to more clearly state the reasons for your request, provide supporting documentation, and explain why you believe the requested service is medically necessary.
  4. Follow up with your insurance company: This is where you can help the process. Stay in contact with your insurance company to ensure your appeal is processed. Follow up regularly. You will be able to follow up more readily than the provider’s office. Get any additional information or documentation requested.

Remember, the appeals process may take time, and no approval is guaranteed. However, following these steps and providing compelling evidence increases your chances of a favorable outcome.

Bottom Line: Understanding Medicare Advantage Prior Authorization May Determine Your Success

In conclusion, understanding and managing Medicare Advantage prior authorization is crucial for both patients and healthcare providers. While the process can be complex and time-consuming, it ensures that healthcare services are medically necessary and cost-effective.

By familiarizing yourself with the prior authorization process, understanding your Medicare Advantage plan requirements, and effectively communicating with

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your healthcare provider and insurance company, you can navigate this system with confidence and ease.

Remember to stay proactive, gather all necessary documentation, and be prepared to advocate for your needs. In the event of a denial, don’t hesitate to appeal and seek assistance if needed.

Empower yourself with knowledge and take control of your healthcare journey. With the right information and resources, you can successfully navigate Medicare Advantage prior authorization and receive the care you need.

How to pay Medicare IRMAA taxAre you in the lucky top 4% of earners? You will pay more for your Medicare benefits.  The more is IRMAA (Income-Related Monthly Adjustment Amount).  The amount you pay for your Medicare health and prescription drug coverage depends on your level of income.  There is a ladder.

Would you like to avoid paying that tax or possibly pay a smaller portion of it? We will guide you through the key IRS exceptions for Medicare IRMAA (Income-Related Monthly Adjustment Amount). By understanding and leveraging these exceptions, you can potentially lower your Medicare expenses and put more money back in your pocket.

Medicare IRMAA is an additional premium that high-income Medicare beneficiaries are required to pay. However, there are exceptions that may enable you to reduce or even eliminate this extra cost. Knowing the ins and outs of these exceptions can make a significant difference in your healthcare expenses.

In our comprehensive guide, we will break down each exception and provide you with the information you need to take advantage of them. From ‘Life-Changing Events’ to ‘Reconsideration Requests,’ we will explore all the options available to you.

Understanding the IRS Exceptions for IRMAAMedicare taxes

The Income-Related Monthly Adjustment Amount, or IRMAA, is an additional premium that high-income Medicare beneficiaries have to pay. However, the IRS provides exceptions that may allow you to reduce or eliminate this extra cost. Let’s explore these exceptions in detail.

Medicare tax exception Life-Changing Event

One of the exceptions to IRMAA is a life-changing event. This includes events like marriage, divorce, death of a spouse, or work stoppage. If you experience any of these events, you may be eligible for a reduction in your Medicare costs.

To qualify for this exception, you will need to provide documentation of the life-changing event and submit it to the IRS. Documentation is key. The IRS will not take your word for it. You need to prove your income decreased.

Examples of documentation may include a marriage license or divorce decree, death certificate, or proof of work stoppage. By leveraging this exception, you can potentially save a significant amount of money on your monthly Medicare premium.

Medicare IRMAA Exception 1: Marriage or Divorce

Getting married or divorced can have a significant impact on your income and, consequently, your Medicare costs.

If you are recently divorced and you are a lower income earner, you may drop below the IRMAA threshold or at least step down the ladder, which would reduce your tax.
For some individuals, marriage may reduce their income because alimony is lost. The threshold is increased because it is for two persons. The initial threshold for a single individual is $103,000. For married filing jointly, it is $206,000. Either of these lifestyle changes may affect your income in that year and, consequently, your IRMAA tax, even if your income was higher in the previous year.

To take advantage of this exception, you must provide documentation of the marriage or divorce and proof of the change in income. By doing so, you can potentially save a significant amount on your Medicare expenses.

Medicare IRMAA Exception 2: Work Stoppage or ReductionIRMAA work stoppage

If you experience a work stoppage or a significant reduction in your work hours, you may be eligible for an exception to IRMAA. This can happen if you retire, get laid off, or experience a reduction in your income due to other circumstances.  This is probably the most common reason high-income earners should apply for the exception.  Their income was significantly higher the previous year because of work, but the year they retire and must pay the Medicare premium, their income is drastically smaller.  That is what the exception is for.

To qualify for this exception, you will need to provide documentation of the work stoppage or reduction in work hours, along with proof of the decrease in income. By doing so, you can potentially reduce or eliminate the additional premium you have to pay.

Medicare IRMAA Exception 3: Loss of Income-Producing Property

If you experienced a loss of income-producing property, such as rental properties or investments, you may be eligible for an exception to IRMAA. This can happen if your rental property becomes unprofitable or if you experience significant losses in your investments.

IRMAA lost property income I had a high-net-worth client who lost significant rental income because of flooding in Missouri. His properties produced nothing for several years as he settled with insurance companies and repaired buildings.

To qualify for this exception, you will need to provide documentation of the loss of income-producing property, along with proof of the decrease in income. By leveraging this exception, you can potentially lower your Medicare costs and save money.

Medicare IRMAA Exception 5: Loss of Pension Income

Pension plans go bankrupt. Some pensions are for a particular duration. The cessation of a pension may impact your income significantly enough to affect the IRMAA tax.

To qualify for this exception, you will need to provide documentation of the change in income, along with proof of the decrease in income. By taking advantage of this exception, you can potentially reduce or eliminate the additional premium you have to pay.

Medicare IRMAA Exception 6: Employer Settlement Payment

Employers pay out settlements to employees for many reasons.  These settlements may increase income in a given year or for several.  The settlement may have its own legal stipulations.

To qualify for this exception, you will need to provide documentation of the change in income, along with proof of the decrease in income. Some legal settlements may be placed legally outside of your modified adjusted gross income.  By taking advantage of this exception, you can potentially reduce or eliminate the additional premium you have to pay.

Medicare IRMAA Exception 7: Correcting An Erroneous Determination

Sometimes, the IRS may make an erroneous determination regarding your Medicare costs. If you believe that the IRS made a mistake in calculating your IRMAA, you can submit a reconsideration request and provide additional documentation to correct the error.

To qualify for this exception, you will need to provide evidence that the IRS made an error in its determination. This can include documentation of your income, tax returns, or any other relevant information that supports your case. Correcting an erroneous determination can potentially save you a significant amount on your Medicare expenses.

Applying for a IRMAA exception

To apply for an exception to IRMAA and reduce your Medicare costs, you will need to follow a few steps.

First, gather all the necessary documentation to support your case. This includes marriage or divorce certificates, death certificates, proof of work stoppage or reduction, documentation of the loss of income-producing property, proof of a change in tax-exempt income, or evidence of an erroneous determination.

Next, complete the appropriate forms provided by the IRS SSA-44 (12-2023). These forms may vary depending on the exception you are applying for. Make sure to fill them out accurately and include all the required information.
Once you have completed the forms, submit them to the IRS along with the supporting documentation. It is crucial to keep copies of all the documents and forms for your records.

After submitting your application, the IRS will review your case and make a determination. If your exception is approved, you will receive a notification informing you of the reduction or elimination of your IRMAA.
By applying for an exception and reducing your Medicare costs, you can put more money back in your pocket and have a significant impact on your overall healthcare expenses.

Bottom Line: Don’t Ignore the IRMAA Exceptions

Leveraging the key IRS exceptions for IRMAA can reduce your Medicare costs. Whether you have experienced a life-changing event, a change in income, or an erroneous determination, understanding these

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exceptions can significantly reduce your healthcare expenses.

Don’t let high-income Medicare premiums burden your finances. Take the necessary steps to apply for an exception and potentially reduce or eliminate your IRMAA. By doing so, you can save money and have more control over your healthcare expenses.

 Many years ago, I was still new to the Medicare insurance business. I had a few hundred clients but no high-income earners. I knew what Medicare IRMAA was, but I had never met someone subject to the IRMAA tax before Doug. He was an improbable candidate. After many years and thousands of clients later, I am very familiar with IRMAA, and I can tell you what the Medicare IRMAA 2024 schedule is all about.

Don’t Judge A Book by Its Cover

Doug drove up to my office on a loud Harley Davidson hog, his long hair waving in the wind. He was a big dude, and his leathers made him even bigger. I was a little nervous, but we sat down and took care ofIncome determines your Medicare Part B premium Medicare business.

A few months later, when Doug’s Medicare started, I got a distressed phone call. “You said my Medicare premium was going to be this amount. It’s three times that!”

I was befuddled. I got my calculator out but couldn’t figure out why it was so high. Finally, I said, “Your income would have to be unusually high to be charged that much.”

Doug got quiet.  “How high?” he asked. The first IRMAA bracket was $85,000 for a single person at the time. Doug guffawed and said, “Hell, my income is way more than that.”

Turns out Doug was not only a retired municipal employee with a pension and Social Security. He was also retired from the military with 20 years of service and a pension. On top of that, he had built up a stock portfolio that kicked out around $30,000 in dividend income a year.

I should have taken the adage, ‘Don’t judge a book by its cover’ more seriously.

Since then, I have always brought up income in my introductory meetings and how income affects Medicare Part B premiums. Zip code or fashion choices are no guarantee of what someone’s income may be.  

What Is Medicare IRMAA?

what is medicare part b irmaaIRMAA stands for income-related monthly adjustment amount. The government loves acronyms. Medicare IRMAA is a surcharge that high-earners pay for their Medicare Part B monthly premium.

Everyone pays a tax for Medicare during their working years. The Medicare tax is included in the FICA (Federal Insurance Contribution Act) you pay and is recorded on your pay stubs. Your Medicare tax is currently 1.45%. It is graduated up for higher earners.

In 1966 when the Medicare program began, the cost to workers was $3 per person per month, which is approximately $30 in today’s dollars. The baby boomers are leaving the workforce in huge numbers currently, so fewer workers are paying the Medicare tax. Medicare tax revenue is dropping like a stone in relation to the number of people collecting.

As Baby Boomers leave the workforce, they enter Medicare. The number of workers paying into Medicare is contracting, and the number taking out of the program is ballooning. Medical expenses are climbing. The current demographics are crushing Medicare’s ability to provide the same level of service as in the past because expenses are outpacing tax revenue.

Medicare Prescription Drug Improvement & Modernization Act

In 2003 Congress passed the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). In the legislation, Congress addressed the coming shortfall in Medicare revenue.congress is the institution that legislated the IRMAA rules in the existence. Congress’s answer was to raise taxes. The top 7 percent of earners were required to pay more into the program. There are currently 65 million Medicare beneficiaries. The IRMAA tax will affect approximately 4.6 million people out of the 65 million. If you are a politician, it is better to keep 60.4 million voters happy, even at the expense of making 4.6 million unhappy.  

A little-known fact is Medicare beneficiaries pay less than 25 percent of the actual Medicare cost. The current Part B premium is only $174.70. That premium covers about a fifth of the actual cost. In the MMA, Congress increased the Part B premium based upon your income. The IRMAA increases the percentage that upper-income Medicare beneficiaries actually pay for their Medicare. Instead of paying only 25 percent of the Medicare cost, IRMAA payors pay for 35, 50, 65, 80, or 85 percent of the actual Medicare cost. The additional revenue the IRMAA tax brings in is allocated to offset Medicare’s budget shortfall.

medicare irmaa is based upon your tax returns. How Does the Medicare IRMAA 2024 Schedule Work?

Medicare IRMAA is a different calculation from the progress income tax rates the IRS uses for federal income tax brackets.

You do not pay a federal income tax rate on everything you make. The federal government divides your taxable income into chunks — also known as tax brackets — and each chunk gets taxed at a progressively higher rate. The beauty of this is that no matter which bracket you’re in, you won’t pay the highest tax rate on your entire income! Only the “chunk” in that bracket. For example, you pay 10% on the first $40,000 of income, 25% on the next $20,000 of income (total of $60,000), and 35% on the next $15,000 of income (total of $75,000).  

Memedicare irmaa chartdicare IRMAA 2024 schedule utilizes a “cliff” style of assessment instead. That means if you are just $1 over the cut-off for the next tier of IRMAA, you will pay the higher amount. There are no brackets for each chuck of income like federal income tax and no graduation or progression in the amount you pay. The Medicare 2024 Part B IRMAA premium brackets change when you earn one dollar more above the line.

What Is Medicare IRMAA Based Upon in 2024?

The IRS and Social Security work with Medicare. Medicare determines your income based on your most recent tax filing. So, for example, you are going on Medicare in 2023. The most recent tax filing was in 2022 for 2021. Usually, IRMAA is based on a two-year lag in your income.

How Is Medicare IRMAA Calculated?

Your adjusted gross income (AGI) determines where you fall in the Medicare IRMAA 2024 schedule. The AGI, however, differs from the MAGI (Modified Adjusted Gross Income) you usually think of when doing your taxes. AGI for IRMAA is a Medicare-specific form of MAGI. It is your AGI with tax-exempt bonds–-both earned and accrued interest–-added back into your income. Interest from U.S. Savings bonds used for higher education is added back. Earned income from working abroad that was not added to gross income is included.  MAGI (Modified Adjusted Gross Income) for Medicare differs from what MAGI usually means for non-healthcare-related purposes.

You will be sent your Medicare IRMAA Initial Determination Notice soon after you enroll in Medicare Part B. Confirm the income amounts the IRS uses are correct–they make mistakes, too.

what does irmaa stand for in medicareMedicare Financial Planning

Examine the Medicare IRMAA 2024 schedule to see if you are close to any of the limits.  

What are your plans for the future? Will you withdraw from retirement savings this year or in future years? A home sale can spike your income when your intention is only to downsize and move to a one-story home. Capital gains from a stock and property sale or other appreciated assets may come back to visit you as an unexpected IRMAA tax.

Any of these actions may increase your income substantially enough to move you into and/or up the IRMAA brackets, requiring you to pay more. Knowing and planning for these events, you can move assets in smaller amounts over time to avoid large spikes in income and, consequently, increases in your income tax and IRMAA Part B premium.

How Do I Reduce Medicare IRMAA?Medicare Irmaa

Charitable donations of cash, appreciated assets, and appreciated stock can reduce your taxable and IRMAA surcharge, as well as contributions to 401ks, IRAs, and other qualified programs. Some minor adjustments may drop you down a bracket and save you some money.

What Is the Medicare IRMAA 2024 Schedule?

Since 2007, some Medicare beneficiaries’ Part B monthly premiums included a surcharge based on income. The Medicare IRMAA for 2024 is in the table below.

Individual

Couple IRMAA Tax

Part B

Total Monthly Premium

Less than $103,000

Less than $206,000 $0.00

$174.70

$103,000 < $129,000

$206,000 < $258,000 $69.90

$244.60

$129,000 < $161,000

$258,000 < $322,000 $174.70

$349.40

$161,000 < $193,000

$322,000 < $386,000 $279.50

$454.20

$193,000 < $500,000

$386,000 < $750,000 $384.30

$559.00

$500,000 < Greater

$750,000 < Greater $419.30

$594.00

Since 2011, higher-income Medicare beneficiaries have paid a surcharge on top of their Medicare Part D premium. The Medicare IRMAA for 2023 prescription drug plans is in the table below. This does not include premiums for specific Medicare Part D plans, Medicare supplements, or Medicare Part C/Medicare Advantage plans. The totals only reflect Part B premiums and Medicare IRMAA 2023 surcharges.  

These IRMAA surcharges for Part D have nothing to do with the Part D Gap (or Donut Hole).

Individual

Couple IRMAA Tax Part D

Total Monthly

 Part B & Part D

Less than $103,000

Less than $206,000 $00.00

$174.70

$103,000 < $129,000

$206,000 < $258,000 $12.90

$257.50

$129,000 < $161,000

$258,000 < $322,000 $33.30

$382.70

$161,000 < $193,000

$322,000 < $386,000 $53.80

$580.00

$193,000 < $500,000

$386,000 < $750,000 $74.20

$633.20

$500,000 < Greater

$750,000 < Greater $81.00

$675.00

The Bottom Line For Medicare IRMAA in 2024

Medicare has rules. Lots of rules, including how much you pay if you are successful in our country. We are about helping you navigate the rules, and in the case of Medicare IRMAA for 2024, make sure you do not

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Christopher Grimmond

pay one penny more than is required.

If you fall into one of the Medicare IRMAA brackets, talk with your financial planner and tax consultant about minimizing the damage. Get started positioning assets well before 65 and have a plan to move yourself down the Medicare IRMAA 2024 schedule.

We are licensed and experienced insurance professionals. This may be your first Medicare IRMAA rodeo in 2024. It is not ours at Omaha Insurance Solutions. Give us a call and speak with an experienced  & licensed insurance agent professional at 402-614-3389.

  

  

You don’t get Medicare because you want it. You must be eligible for Medicare. Medicare eligibility doesn’t mean you can enroll in Medicare whenever you wish. You can only enroll in Medicare during specific periods under particular circumstances. 

the most current Medicare enrollment rulesThese special times are called election periods, each governed by criteria and circumstances. You must meet specific criteria to be eligible for Medicare and can enroll in Medicare during a specific time period or circumstance.  

Congress passed the Consolidated Appropriations Act of 2021 (CAA), which expanded, streamlined, and made Medicare eligibility and enrollment easier. 

Two areas of change are very relevant to newbies going on Medicare in 2023.  

The Last 3 Months of Medicare Initial Enrollment 

You have probably heard you have seven months to enroll in Medicare—3 months before your 65th birthday, the month of your 65th birthday, and 3 months after your 65th birthday. This is referred to as your Initial Enrollment Period. The problem for years was a bizarre rule when you enroll during the last 3 months of this period that affected your Medicare eligibility.  When can I get on Medicare?

The old rule was if you enrolled during the 3 months before your 65th birthday, Medicare started the month you turned 65. That remains the same.  For example, your 65th birthday is in July.  Your Medicare will start in July if you enroll in April, May, or June.    

If you enrolled during the 3 months after your 65th birthday, Medicare did not start until 2 months later for month 5, 3 months later for month 6, and 3 months later for month 7.  For example, if you enroll in August, Medicare starts in October.  You enroll in October, Medicare starts in January.  Crazy.   

Now when you enroll during the last 3 months, Medicare starts immediately the following month. For example, if your 65th birthday is in July and you enroll in Medicare in August, Medicare starts September 1st instead of October 1st.  

Or if your 65th birthday is in July and you enroll in Medicare in September, Medicare starts October 1st instead of December 1st.  

This makes way more sense. It shortens the waiting time and prevents lapses in coverage from employer health plans ending on an immovable date. Not sure why this Medicare eligibility wasn’t fixed years ago.  

Medicare General Enrollment Period Eligibility

When do I get Medicare? Over the years, a few people came to me who missed enrolling in Medicare when they were first eligible. Consequently, they were assessed the famous Medicare 10% penalty compounded for each year without Medicare, but more importantly, their Medicare eligibility was affected.  They could not start their Medicare health coverage until months later. 

Quite often, they have no health coverage for months. They are entirely on their own, paying for any medical services out of their own pocket. 

 Imagine you are 67 and decide it’s time to get on Medicare. You retired a few years back but never signed up for Medicare or had any other health insurance. You cannot just show up at the Social Security office, sign up for Medicare and have it start the next month. You must wait until the General Enrollment Period from January 1st—March 31st. This is just for enrollment. Medicare then did not start until July 1st, and you could only purchase a Part D drug plan and/or Medicare Supplement. No Medicare Part C/Medicare Advantage until January 1st. Not sure about the confused thinking behind such a bad rule.  

In 2023, when a Medicare beneficiary signs up for Medicare during the General Enrollment Period, Medicare coverage starts on the 1st of the following month. For example, if you sign up in February, Medicare starts March 1st. You don’t need to wait anymore until July 1st for Medicare to start.  

People constantly complain about how confusing Medicare is. Medicare rules, however—believe it or not—remain very constant over time. These two rule changes from the Consolidated Appropriations Act of 2021 (CAA) are unusual because Medicare does not change much. These new rules about Medicare eligibility and enrollment periods are a welcome adjustment to how Medicare operates. 

The Bottom Line On Medicare Eligibility & EnrollmentGet help navigatoring Medicare

When you do not deal with Medicare rules daily, they feel overwhelming.  I understand and sympathize.  Also, understand Medicare eligibility and the ability to enroll in Medicare is critical.  There is no room for mistakes. 

You want to know how Medicare works, the rules, and the intricacies so that you have the best possible Medicare health coverage.

You can also just call us rather than trying to remember the Medicare eligibility and enrollment rules. We listen to your situation and provide the most up-to-date and relevant Medicare information.

Medicare in omaha

Christopher Grimmond

Call 402-614-3389 to speak with an experienced insurance professional and licensed agent. 

 

Insulin is very important to Medicare beneficiaries. Medicare changes to insulin cost will benefit clientsMedicare is superb health insurance.  The coverage is the most comprehensive of any health plan.  The cost is incredibly low for the consumer.  The medication portion, unfortunately, which has been relatively new since 2006, is not as good as most employer-provided drug coverage, at least for the Medicare demographic.  Consequently, Medicare continually evolves, so the 2023 Medicare changes for drugs are significant.

Does Medicare Cover Insulin? 

Medicare has covered insulin for a long time, but the cost to consumers has gone through the roof over the years.  Under the Trump Administration, the Centers for Medicare & Medicaid Services (CMS) announced Medicare changes in 2021 that covered 1,750 Medicare Part D prescription drug plans and Medicare Advantage plans with prescription drug coverage.  The plans would reduce insulin prices under the Senior Savings Model.  Medicare beneficiariesMedicare offers insulin through pumps would have access to a broad range of insulins at a maximum copay of $35 per month.  The program, however, was voluntary.

The Inflation Reduction Act (IRA) law the Biden administration sponsored significantly changed Medicare for 2023.  The IRA law set a cap of $35 for insulin that Medicare Part D prescription drug plans offered.  The insulin price reduction act went into effect in 2023.

Not all, but many insulin medications to combat diabetes are capped at $35 per month.

Medicare Changes Insulin Prices in 2023

The $35 insulin cap is for both Medicare Part B and Part D. Most people get their insulin medications through their Medicare Part D prescription drug plan.  They pay the monthly plan premium and a copay when they pick up their insulin.  In the past, the copays were significant.  Now insulins on Medicare prescription drug plans in 2023 changed to $35 per month.

Part B Medicare covers insulin in insulin pumpsWhat Are 2023 Changes to Insulin Covered by Medicare Part B?

Many others use insulin delivered through an insulin pump that people wear.  The pumps are considered durable medical equipment and are billed under Medicare Part B. Part B has a deductible and an unlimited 20 percent coinsurance.  However, when paired with a Medicare supplement, like Plan G, the 20 percent coinsurance is wholly covered.  After a small Part B deductible is met, the beneficiary pays nothing for the pump or insulin.

What About Disposable Insulin Patch Pumps?  

Insulet Omnipods are very popular. It is a disposable insulin “patch” pump.  The disposable pump is a small wireless, tubeless pump worn directly on the body.  Beneficiaries get the refills for the Omnipod under the Part D prescription drug plan, not Part B. Insulin Patch pumps are covered by Medicare

The Medicare change for 2023 is insulin refills will be $35 or less.

The patch pump, however, is considered a durable medical device, which falls under Part B.  The device will be covered like any other durable medical equipment with no price controls.  What you pay is determined by your plan.

How Does Medicare Change Deductibles in 2023 For Insulin? 

Most Medicare Part D prescription drug plans and many Medicare Advantage plans with prescription coverage have deductibles.  The deductibles aren’t going anywhere; they still exist.  However, the deductible no longer applies to covered $35 insulin medications.  In other words, Medicare beneficiaries do not have first to meet the deductibles of $505 before they start paying $35 for insulin.  This is significant.

Many times the large deductible is an insurmountable obstacle for some clients when they go to the pharmacy to pick up their medication for the first time.  They choose not to get their essential medication because of the cost.

I always show clients the prices when we meet.  I’m not sure what happens from the showing to when some actually pick up the medication at the pharmacy, but I have fielded many a phone call–“I can’t afford $$$$!”

Medicare changed the rule for $35 insulin on January 1, 2023, to no deductible.

2023 Medicare changes for part DReimbursement When Overcharged for $35 Insulin

Mistakes happen.  If you are charged more than $35 per month for an insulin medication that is part of the program, the Part D plan must reimburse you within 30 days.  The insurance company is responsible for the reimbursement.  Contact the plan.  The customer service 800-number is on the back of your Part D medical card.

Pharmacies Don’t Matter for $35 Insulin.Medicare changes the rule on preferred and non-preferred pharmacies for insulin

When I meet with clients, I always show how different pharmacies will affect drug copays.  The effect of pharmacies on cost is essential to know if you wish to maximize your Part D plan and pay the least.

Drug plans sign contracts with different pharmacy chains and networks.  As part of the deal, copays are lower if you go to one of the plan’s preferred pharmacies versus a non-preferred pharmacy.

Whether a preferred or non-preferred pharmacy, the insulin on the Medicare Part D plan will be $35.  Many of my clients have a favorite pharmacy that may not be in the network—non-preferred.  It is good to know, wherever you pick up your $35 insulin; it will be $35 insulin.

Not All Medicare Insulin Is $35  

Medicare Part D prescription drug plans create formularies, a list of the medications the plan covers.  The medications are put in tiers that determine copays and deductibles.  Medicare requires the insurance companies to cover at least two medications in each category.  Sometimes companies make choices, like covering Humalog insulin types but not Novolog insulin.  The new law requires the plan to keep insulin at $35, but only insulins the plan carries.  Not every brand or type.  This is important in selecting a Part D plan.  You need to know which brands and types of insulins are covered under a particular plan.  And plans can change and often do change drugs on the formulary from year to year.

We always run clients’ medications when we meet to ensure they have the lowest cost plan for their specific list of medications.  During Annual Election Period (AEP) Oct 15th–Dec 7th, we re-run clients’ medications to make sure they still have the best plan for them.  If necessary, we change their plan.       

Medicare changes for 2023 do not include non-insulin anti-diabetic medicationsNo Medicare Change in 2023 for Non-Insulin Anti-Diabetic Drugs 

While Medicare’s $35 insulin is a tremendous financial relief for Medicare beneficiaries who are diabetic, other medications are equally important to improve and maintain glycemic control.  Some popular non-insulin and anti-diabetic medications are Trulicity, Bydureon, Ozempic, and Victoza.  Oral and injectable (non-insulin) pharmacological options are available for treating diabetes.  Medicare, however, did not change the pricing for these medications for 2023.  They are not part of the price reduction program currently.  

Special Election Period Because of $35 Insulin  

The $35 insulin for Medicare beneficiaries is a new regulation, so Medicare has allowed a special enrollment period for Exceptional Circumstances.” The rule is only for those who are on insulin.  You have a one-time opportunity to change your Medicare Part D prescription drug plan from December 8, 2022, until December 31, 2023.  The reason is to take advantage of the favorable pricing for insulin medications.  

Again, the ability to change Part D plans is only for those on insulin medications, a one-time opportunity during this period. 

True Out-of-Pocket Costs Carry Over 

True out of pocket costs troop Each of the Medicare Part D prescription drug plans track the amount the beneficiaries pay and what the plan pays.  These amounts determine where the beneficiaries are in the four stages.  This calculation is called True Out-of-Pocket (TrOOP) costs.  

Remember, there are four phases in pricing for Medicare Part D prescription drug plans: deductible, initial phase, the gap (or Donut Hole), and catastrophic phase.  Switching Part D plans during the year does not mess this up.  You do not start over again.  The amounts, totals, and placement within Part D plan phases transfer to the new plan.  

If you are in the gap phase in one plan, you will be in the same phase and place in the new plan.  You did not lose your place or are forced to start over again.  

Medicare Changes the Catastrophic Phase in 2023 

The fourth phase in the four stages of tracking Part D prescription drug costs is called Catastrophic. When a beneficiary reaches the catastrophic phase, they and the plan have paid out approximately $7,400 in out-of-pocket costs between the beneficiary and the plan.  The actual out-of-pocket for the beneficiary is $3,100.  The prescription costs are usually minimal unless it is an expensive medication.  The coinsurance in the catastrophic phase for expensive medications is an unlimited 5 percent, and 5 percent of a large amount is still significant for most pocketbooks.

The effect of the new legislation in 2024 is beneficiaries will no longer pay the unlimited 5 percent.  The out-of-pocket cost will stop at a hard cap of $3,250 out-of-pocket max for beneficiaries.  While still not a small amount, it is significantly less than what some beneficiaries paid who were on costly medications in previous years.    

Medicare Part D Annual Limit In 2025      

The Inflation Reduction Act (IRA) mandates that the annual limit of the Medicare Part D prescription drug will be $2,000 starting in 2025 and indexed for inflation yearly after that.  Part D expenses are not currently capped.  This Medicare change starting in 2023 is enormous. Medicare changes for 2023 

I think of my clients on various insulins, anti-diabetic medications, Eliquis for the heart, Humira & Enbrel for rheumatoid arthritis.  Their costs have been thousands of dollars for years.  That will stop.    

The Medicare Part D $2,000 cap is for all tiers of drugs.  The limit is for all medications on the plan’s formulary, and the $2,000 limit is for all Medicare beneficiaries regardless of past or current incomeIRMAA does not apply.

Inflation Cap on Part D Premiums   

The law also includes a 6 percent limit on Part D premium increases.  With current inflation around 6 percent now and medical costs usually at a higher rate of inflation growth than regular inflation, how the system will really work is yet to be seen.  

Smoothing Part D Out-of-Pocket Costs 

Medicare changes payments to smooth out the costAnother challenge with Medicare Part D prescription drug expense is the ups and downs of the costs. 

One month the cost may be $1,000, and the next month is $100.  Most consumers’ incomes are consistently the same each month, and large spikes in expenses create extreme hardship.  

The IRA law offers an option for smoothing the payments evenly over the year. 

In 2025 when the medication copays are set at a total out-of-pocket of $2,000 per year, “smoothing” would look like a $167 monthly payment for those on medications that reach the cost cap.  

The smoothing idea aims to reduce prescription abandonment, dosage reductions, and delays in treatment because of high-cost specialty drugs.  I had gotten phone calls too many times from the pharmacy when a client went to pick up a medication during the deductible phase.  “I can’t afford $500 for this #%&* drug!” I explained their cost would not be $500 every month.  They are in the deductible phase.  Clients tell me they can’t afford the drug, so they leave it at the pharmacy.  Not good.  

The Bottom Line For 2023 Medicare Changes

The Medicare Part D prescription drug program has evolved since its inception in 2006.  The Inflation Reduction Act (IRA) introduces significant changes to Medicare from 2023 to 2025.  The law addresses the growing senior population dependent upon insulin and its rising cost.  The IRA law reduces costs for those on limited incomes to afford critical life-sustaining medications.

It is essential to be aware of these new rules to benefit from them and get the proper medications to enhance your life’s quality.

 

Medicare has lots of rules and regulations. The insurance companies and the State Insurance Commissioners have even more laws. The Medicare supplement 30-day free look period is one of those rules.

Medicare Supplements are called Medigap policies because filling in the gaps is precisely what they do. They fill in the gaps in Original Medicare. Supplements fill in the Part A deductible and Part B coinsurance.

medicare supplement policy free look period

You pay a monthly premium for a Medicare Supplement, and as you age and medical costs increase, the private insurance companies that provide Medigap policies raise rates.

Some companies raise rates higher and faster than other insurance companies, so you may want to change policies. There are rules around changing Medigap policies, and knowing the regulations is essential, like the Medicare supplement free look period.

Medicare Open Enrollment Rules

People often think “Open Enrollment” or “Annual Election Period,” which is from October 15th—December 7th, is when you need to change your Medicare Supplement. You may change then, but it is not a particular time for that purpose. A person will still need to undergo health underwriting to qualify for the new supplement. Preexisting conditions may prevent the person from passing underwriting.

medicare supplement policy free look period

The Open Enrollment for Medicare Supplements is when you turn 65 and/or activate your Medicare Part B. During that period, you are exempt from answering health questions. The insurance company needs to offer you a supplement at the best possible rate no matter your health condition at the time.

The other time you can change Medicare Supplements is by filling out an application and answering the health questions. Most people pass underwriting, but not all. A recent heart attack, stroke, or bout with cancer is an example of why an insurance company would deny new coverage. There are other preexisting conditions that will disqualify an applicant. Of course, you can remain on your current supplement if you continue to pay premiums. Medigap policies are guaranteed renewable.

Medicare Supplement Free Look Period

When you change to a Medicare Supplement, you have a 30-day free look period. During that time, you can cancel the policy without any reason, and the insurance company must return your entire premium without question. If you have another Medicare Supplement, you may wish to continue paying the premium simultaneously. If you cancel the original plan, you may have to go through underwriting to reinstate it.

Medicare Free Look: No Fear

The free look period for a Medicare Supplement, like any insurance product, is to encourage the consumer to purchase because of less fear about changing one’s mind.

There are a few other instances when someone might change to a new Medicare Supplement, and the free look period would also apply in those instances.

Guaranteed issue is when someone is coming off an employer’s group health plan and already has Medicare Part A & B. You have 63 days to enroll in a Medicare Supplement without underwriting.

Another situation is enrolling in a Medicare Advantage plan for the first time. You have a 12-month window when you can change to a Medigap plan without underwriting.

Another rare situation is when an insurance company closes its Medicare Advantage plan in your service area. You are afforded a guaranteed issue opportunity for a Medicare Supplement.

Certain states have laws specific to them. You can change your Medicare Supplement on your birthday without underwriting (California, Oregon, Idaho, Nevada, Illinois, Louisiana), on your anniversary without underwriting (Missouri), and year-round without underwriting (New York, Connecticut, Massachusetts, and Washington). There is no such regulation in Nebraska or Iowa for Medicare Supplements.

free look period for medicare supplement policies

Again with any of these transitions, the Medicare Supplement 30-day free look period applies.

Over the years, I have had clients change their minds at the last minute. To change with them, the Medicare Supplement, free look period, makes the process easier and less cumbersome.

You have 30 days to look. No fear.

free look period for medicare supplement policies

Medicare has had an exciting history with prior authorization. Medicare prior authorization has become controversial over the years because of Medicare Advantage.

Have You Always Been Subject to Prior Authorization?

Health plans started using prior authorization in the 1960s. Hospital admittance grew after the creation of Medicare and Medicaid. At the same time, more employers began offering employees health insurance as part of their compensation package. Medical costs grew significantly, particularly hospital stays.

medicare pre authorization form

Insurance companies began implementing utilization reviews in the 1960s. Utilization reviews were a process to reduce the overutilization of resources and identify waste. Registered nurses initially performed utilization reviews in hospital settings. The skillset gained popularity within the health insurance industry as research grew around medical necessity, misuse, and overutilization of services.

medicare prior authorization form

Health plans reviewed claims for medical necessity and hospital length of stay. Health plans began to require physicians to certify the admission and subsequent days after admission to help contain costs. Prior authorization originated from the use of utilization reviews.

Fast-forward to the present day. You were subject to prior authorization when you entered the workforce and received employer-provided group health insurance as a benefit. The insurance company determines if it is “medically necessary” and covered by the policy your company purchased when you have any medical procedure. Then there is further discussion about the appropriate charges. Whether or not you were aware of it, prior authorization has always been part of your health insurance coverage.

Why Do Insurance Companies Use Prior Authorization?

Prior authorization is a medical management tool. Doctors and insurance companies work together to ensure that a specific treatment or service is the best option for the patient’s needs.

The purpose of prior authorization is to identify and discourage unnecessary and costly low-value services to reduce wasteful spending without impeding quality healthcare services.

Prior authorization, supervision, audits, and other compliance tools help identify and root out fraud, waste, and abuse in the healthcare system. The ultimate purpose is to reduce costs for the consumer and prevent unnecessary treatments.

The Department of Justice announced today (Feb 17, 2021) criminal charges against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various healthcare fraud schemes that resulted in approximately $1.4 billion in alleged losses.  

The charges target approximately $1.1 billion in fraud committed using telemedicine, $29 million in COVID-19 healthcare fraud, $133 million connected to substance abuse treatment facilities or “sober homes,” and $160 million connected to other healthcare fraud and illegal opioid distribution schemes across the country.

medicare pre authorization form

While most doctors, medical professionals, and medical facilities are honest and act with integrity, an element will always and continually seek illicit gain costing consumers and taxpayers untold amounts. This results in higher insurance premiums and medical costs. It is naive to believe all are good actors and that every recommended treatment and service is the best fit.

Why Does Original Medicare Not Use Prior Authorization?

In part, the Medicare prior authorization controversy is that “Original Medicare” does not require prior authorization for most procedures, and Medicare Advantage does. (Original Medicare is just Medicare Part A and Part B. The payment structure is called fee-for-service. Medicare Advantage (or Part C) is Medicare administered by a private insurance company contracted and approved by Medicare.)

At first glance, you probably ask, ‘Why does Original Medicare not require prior authorization’ because prior authorization is common practice in the health insurance world? No company will leave the decision to spend potentially tens of thousands of dollars, even millions, to one person without some oversight.

When Medicare was established, Congress included certain arrangements and excluded others. In Section 1862(a)(1)(A) of the Social Security Act:

“No payment may be made under Part A or Part B for any expenses incurred for items or service which . . .. are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed member . . ..”

The key phrase is “reasonable and necessary.” “Reasonable and necessary” has been interpreted over the years very broadly. If a submitted claim is in an allowed category and not excluded, the submission is “reasonable and necessary.”  

The doctor authorizes an MRI of the shoulder because the patient complains of problems. MRIs are covered. This procedure is “reasonable and necessary” because it is not an uncommon practice, even if there may be less expensive diagnostic procedures or treatments.

As you can probably guess, this broad interpretation with no oversight or accountability will result in large amounts of fraud, waste, and abuse.

Why Is Medicare Advantage Prior Authorization So Controversial?

The short answer to why is that Original Medicare doesn’t require prior authorization. The controversy is some believe beneficiaries are being denied essential medical services and treatments. Beneficiaries and medical professionals do not even attempt to overturn denials because they believe the appeal process is so burdensome.

The facts, however, do not paint such a sad picture. The Office of the Inspector General reviewed a large number of Medicare Advantage Organizations (MAO), reviewing 448 million preauthorization requests in 2016. Of those, MAOs denied about 1 million preauthorization requests for a denial rate of 4 percent—4 percent is tiny.

The September 2018 Office of Inspector General report found that Medicare Advantage Organizations (MAO) overturned 75 percent of their own denials from 2014-2016, overturning approximately 216,000 yearly. During that same period, independent reviews discovered additional requests that had been inappropriately denied.

The most surprising finding, however, is that only one percent of beneficiaries and providers appealed their denial, which raised the question: how many were denied necessary treatment because the process is so arduous?

Unfortunately, the study does not give a coherent explanation of the denials. From my experience of doing Medicare planning for a decade with thousands of beneficiaries, doctors’ offices do not always submit requests with detailed documentation in support. When the request is denied, they blame the insurance company, and the effort stops unless the patient pushes the issue.

The other reason I find for denial is the doctor’s office uses the wrong billing code. Quite often, the insurance company does not give any explanation in those cases. The response is “denied.” The solution requires the doctor’s office to call and talk with the claims department about billing codes, documentation, and supporting tests. In the absence of these items, nothing happens.

Unfair Statistics and Sensational Journalism

The Department of Health and Human Services Office of Inspect General (OIG) conducted a study of Medicare Advantage Organizations’ (MAO) denial of prior authorizations during one week (June 1-7, 2019). In that week, there were 250 denials. The OIG discovered that 13 percent of these prior authorizations were incorrect. This amounted to 33 cases.

Later in the same report, they admitted the usual national average is 5 percent. No reason was given why the study was not expanded when the conclusions from their study did not coincide with other long-standing evidence, particularly when the study was so microscopic–one week and 250 cases.

medicare prior authorization form

In the same study, they did not review the cases where the prior authorization was approved when it should have actually been denied. There was also no control group to compare against. The OIG did not study fee-for-service Medicare billing for fraudulent or wasteful claims or denials on their part.

The New York Times piled on in an April 2022 article. They presented a very slanted view of the study, beginning the article with “Medicare Advantage plans often deny needed care, federal report finds.” Only toward the very end of the article did the author get into any of the facts of the report. The general impression during the first half of the article is Medicare Advantage denies its clients the necessary medical care they need.

Why Are Medicare Prior Authorization Denials Overturned?

Denials may be overturned for many reasons. First, there were errors on the part of the insurance company. The decision was incorrect.

medicare prior authorization form

Errors on the part of the doctor’s office or medical facility. They did not include sufficient documentation or incorrect information. The denial is reversed, then. The provider may add new information from additional tests in the appeal process that contributes to an overturn.

The overturn does not necessarily mean the MAO acted inappropriately, but the process and extra steps critics claim create friction in the system. Patients may wish to avoid going through the trouble of appeal. Doctors may not make recommendations because of a history of denials.

Did Medicare Ever Use Prior Authorization?

The Medicare practice of accepting bills from providers at face value without question as “reasonable and necessary” was an established and haloed practice from the beginning of Medicare. All parties who benefited the most—except U.S. taxpayers—were unmotivated to change until the wheelchair scandal.

In 1999 it was discovered that Medicare spent $8.2 billion to procure power wheelchairs and “scooters” for 2.7 million people. A large portion was paid to scammers because they discovered that Medicare not only did not require prior authorization for wheelchairs, but Medicare did not even review the authenticity of the claims.

A Washington Post article published in August 2014 highlighted the massive fraud of Medicare’s resources. The article chronicled the sensational scams and trials of many Medicare swindlers. The outrageous theft of public funds and the massive fraud shamed CMS to amend its regulations to finally require preauthorization for some “durable medical equipment,” i.e., electric wheelchairs.

Bureaucrats inside CMS admitted they knew how the wheelchair scheme worked as early as 1998. But it was not until 15 years later that officials finally did enough to curb the practice significantly. Durable medical equipment—electric wheelchairs—is the only exception to the “reasonable and necessary” practice. They must be preapproved.

medicare pre authorization

Consequently, hundreds of millions of false and unnecessary claims were paid over many years in a massive Medicare fraud.  Once the bureaucratic problem was fixed, and claims were more thoroughly reviewed, an enormous shift occurred.  Medicare reimbursements for motorized wheelchairs fell from $32 million every month to $7 million78 percent decrease

The Medicare Claims System Is Designed for Fraud, Waste, & Abuse

By law, Medicare must pay most of its claims within 30 days. In that short window, it is supposed to filter out the fraud and uncover claims where the diagnosis or the prescription is bogus.

medicare pre authorization

The system attempts to ameliorate the damage through a “pay and chase” policy. The bill is paid, then it is reviewed. Only a tiny fraction of claims — 3 percent or less — are reviewed by a live person before they are paid. The rest are reviewed only after the money is spent. If at all.

The whole Medicare claims process is set up as an honor system for the richest program managed by the U.S. government. It is a thief’s dream.

Medicare Prior Authorization Test Program

In March 2017, CMS (Center for Medicare & Medicaid Services) designed a test program for preauthorization for fee-for-service Original Medicare. In the month of March, the GAO (U.S. Government Accountability Office), in a Senate report, estimated a savings of $1.1 to $1.9 billion when preauthorization was used that month. The report estimated the federal government made an estimated $36.2 billion in improper payments for the Medicare fee-for-service program from July 2015 to June 2016.  

The committee’s recommendation became the report’s title— “CMS Should Take Actions to Continue Prior Authorization Efforts to Reduce Spending.” The prior authorization programs created to monitor and measure improper payments were discontinued and never recommissioned.  

Original Medicare Fee-For-Service vs. Medicare Advantage

The government created Medicare in 1965. It had been a long-time project of the Democratic Party. CMS (Center for Medicare & Medicaid Services), Department of Health & Human Services, and Social Security Administration are government agencies. Politicians of all political parties exercise control and funding over these agencies and programs. The agencies are staffed by thousands of bureaucrats and government union workers. A tremendous amount of various and conflicting self-interests, power, and money are all mixed together.

medicare pre authorization

To save Medicare from ballooning budgets and to offer an alternative to citizens, the same politicians, programs, and agencies partnered with private insurance companies to control spending and improve patient care. What is now known as Medicare Advantage began back in the 90s.

The two ways of doing government healthcare for seniors are in competition. Politicians view the world through different ideologies and support policies and programs based upon their political views. Those who support the various political ideologies will support or attack these two platforms accordingly.

It is vital to find all the relevant facts, make your own comparisons and analysis, and determine where lies the truth and the better path.

When I meet with prospective clients, I begin with a brief explanation of Medicare. Then move on to the hundreds of plans. Drugs are next. This is hard. Clients must lay down their cards; some hold a straight flush of costly medications.

The Inflation Reduction Act of 2022 is a long-awaited solution to improve Medicare drug plans and make Part D affordable for those on costly medications.

Medicare reduction 2022

Inflation Reduction Act of 2022 Deals with Medicare Drug Changes

When Medicare Part D was first established, Medicare contracted with private plan sponsors to provide the prescription drug benefit. The private insurance company created the Part D Prescription Drug Plans (PDP), sold the PDPs, and managed the PDPs. Each company negotiated separately with the pharmaceutical companies the price of the medications and which medications would be included on the plan formularies–the list of authorized drugs.

The insurance companies had the leverage of their brand and how many customers they would bring to the pharmaceutical companies. They were also competing with the other insurance companies to get more medications at the lowest cost. The pharmaceutical companies, of course, were trying to maximize their revenues and profits.

Ideally, it was hoped that the competition and freedom of the market would keep prices low. However, patent laws create a temporary monopoly for pharmaceutical companies that develop these very effective and popular new drugs. The patent, and the consequent monopoly, benefit the nation and the world with the newest and best medications. Unfortunately, it is a substantial financial burden for those who need the medication.

The Inflation Reduction Act Creates Leverage for Medicare

When Part D was created in 2004, a law was established known as “non-interference.” Non-interference means that the Secretary of Health and Human Services (HHS) cannot negotiate drug pricing with pharmaceutical companies, pharmacies, and insurance companies. Instead, the prices would be determined exclusively between the insurance companies, pharmaceutical companies, and pharmacies competing amongst one another.

With the Inflation Reduction Act of 2022, Medicare changes the law. The Secretary of HHS is granted a narrow exception to the non-interference clause. The HHS Secretary can negotiate on behalf of the 84 million Medicare and 76 million Medicaid beneficiaries for the lowest prices for a very limited number of costly prescriptions. The category of medications is single-source brand-name drugs or biologics without generic or biosimilar competitors.

Inflation Reduction Act of 2022 Effects Medicare Change in 2026

inflation reduction act 2022 Medicare

The Drug Price Negotiation Program begins in 2026 and is limited to 10 Part D drugs. Another 15 Part D drugs will be added in 2027, 15 Part D in 20228, and 20 Part in 2029. The HHS Secretary will select the drugs from among the 50 highest total cost Part D medications.

The timeline for the negotiation process will span roughly two years. For those companies that do not comply, there is an excise tax. The tax penalty starts at 65% of the product sales in the U.S. and increases by 10% every quarter to a maximum of 95%. The other option is that company can remove all its medications from the Medicare and Medicaid market.

Is the CBO Accurate, Reliable, & Trustworthy?

The Congressional Budget Office (CBO) claims HHS Secretaries’ ability to negotiate prices with Part D producers will significantly reduce what Medicare spends over the next ten years. The CBO also claims that reducing the revenue to pharmaceutical companies will have little effect upon developing new and better drugs. These are all projections and opinions to support the policy change. There is no evidence.

Drug Manufacturers Are Penalized for Inflation

The Inflation Reduction Act of 2002 adds another Medicare change. The Act requires drug manufacturers to pay a rebate to Medicare if prices for single-source drugs covered under Medicare Part B and nearly all covered frugs under part D increase faster than the rate of inflation reflected by the Consumer Price Index (CPI). The rebate dollars will be deposited in the Medicare Supplementary Medical Insurance (SMI) trust fund.

Cap Out-of-Pocket Part D Spending

Medicare Part D currently provides catastrophic coverage for high out-of-pocket drug costs. Still, there is no limit on the total amount beneficiaries pay out of pocket each year. Under the current design, Part D enrollees qualify for catastrophic coverage when the amount that they pay out of pocket plus the value of the manufacturer discount on the price of brand-name drugs in the coverage gap phase exceeds a certain threshold amount. Enrollees with drug costs high enough to exceed the catastrophic threshold must pay 5% of their total drug costs above the threshold until the end of the year. This can be huge.

The Inflation Reduction Act of 2022 amends Medicare’s design of Part D. For 2024, the law eliminates the 5% coinsurance requirement above the catastrophic coverage threshold, effectively capping out-of-pocket costs at approximately $3,250 that year.

The legislation adds a hard cap on out-of-pocket spending of $2,000 per person in 2025. How this will be funded, other than with savings, is still being determined.

Inflation Reduction Act of 2022 Puts Medicare Insulin at $35

How much Medicare increase 2023

Insulin is probably the most common high-dollar medication that burdens many Medicare beneficiaries. Most plans relieve several insulin products, beginning with the Trump Administration and now Biden.

Currently, Medicare beneficiaries can choose to enroll in a Part D plan participating in an Innovation Center model in which enhanced drug plans cover insulin products at a monthly copayment of $35 in the deductible, initial coverage, and coverage gap phases of the Part D benefit.

Participating plans do not have to cover all insulin products at the $35 monthly copayment amount, just one of each dosage form and insulin type (rapid-acting, short-acting, intermediate-acting, and long-acting).

While Medicare is incredible health insurance, Part D prescription drug plans are the weakness because of the light coverage for higher-end medication. The Inflation Reduction Act of 2022 helps Medicare better service citizens with more reasonably priced medications.

We can ensure you have the plan that best covers your prescription drug needs at the lowest possible cost.

Call 402-614-3389 to speak with an experienced and licensed agent and insurance professional.

omaha Nebraska medicare insurance agent

Medicare Part D deductible for 2023

January begins a new calendar year for Medicare. What does that mean for your Medicare drug deductibles in 2023?

For most Medicare members with a Medicare Part D prescription drug plan, you have a deductible. The Medicare drug deductible for 2023 is currently $505. The Part D drug deductible for 2022 was $480, which means a 5% increase. The deductible is the amount you initially pay out of your pocket before the insurance plan begins paying for the prescriptions. Deductibles are vital because they keep the overall cost of medications low. Deductibles also prevent members from overusing Part D drug plans for trivial or unnecessary purposes.

2023 Medicare Drug Deductible Shock!

I mention the Medicare drug deductible for 2023 because I get distressed phone calls at the beginning of the year. Clients go to the pharmacy in January, February, and March and are shocked. They have a huge unexpected bill. I hear cries of ‘I can’t afford $500 every month for their medications!’

I remind clients that they are in the deductible phase of their Medicare drug plan. Once they meet their drug deductible, the medication cost will decrease significantly to around $45 per month per medication.

Since it is an entire year from the last time clients paid their drug deductible, it is understandable they forget.

For those paying the deductible all at once in January and for the first time, the deductible experience will be a new and eye-opening surprise.

Medicare drug deductible 2022

Plan For the Unexpected

I don’t know about you, but $505 is a lot of money to pay out all of a sudden, especially if you were not planning on it. I’m usually all tapped out by January. My trophy wife, high-maintenance step-children, and grandchildren require a lot of maintenance around Christmas time.

Once you have met your Medicare Part D deductible for the year, your Tier 3, 4, & 5 medications will be the amount listed in your handbook during the initial phase before the Gap. Please, consult my other blogs about the GAP / Donut Hole.

Most people, however, will not fall into the Gap and will simply pay minimal copays for the remainder of the year. It is the deductible that is the big obstacle.

Clients ask, ‘Are there other Part D plans without a deductible?’ There are a few, but the monthly premiums are much higher, like $100 per month, and the copays are generally higher too.

Medicare drug deductible 2023

Lowest Total Annual Medicare Drug Cost

When I run clients’ drugs through the Medicare Part D medication calculator, I look primarily at the total annual cost. The winning drug plan is the plan with the lowest total annual cost and with at least a 3 Star Medicare rating.

The calculator combines the monthly premium, deductibles, copays, and gap–if applicable–and spits out a total number for the year. That is the plan you want to use.

Look For Stars

As for the Medicare star rating, you want to have at least three stars. More stars are better. There is no point in having the cheapest Medicare drug plan if you never get your medications or the insurance company is so painful to deal with you need additional drugs to handle them.

Most Have A Medicare Drug Deductible

Medicare Part D deductible 2022

January to March is when Part D plans remind most people they have a deductible. Don’t be upset. There is nothing wrong. You must meet the Medicare drug deductible to get to the lower cost for your medications for the remainder of 2023.

If you have paid payroll taxes (FICA) for 40 quarters (or 10 years), you are eligible to apply for Medicare in Nebraska for 2022. You are eligible for Medicare Part A at zero premium and may purchase Part B at the current cost if your income is below the IRMAA (Income Related Monthly Adjustment Amounts) amounts.

The Easy Way To Apply For Medicare in Nebraska For 2022

If you are currently receiving Social Security benefits, you will be automatically enrolled in Medicare Part A for the hospital and Part B for doctor visits and outpatient services. You will then be given the option to cancel Part B if you wish.

How to apply for Medicare in Nebraska for 2022

You cancel Part B by signing the red, white, and blue Medicare card on the back and mailing it back to Medicare. Otherwise, Medicare Part A and B will start on the effective dates printed on the bottom right corner of the card. The Social Security Administration (SSA) will also start deducting the Medicare Part B premium from your monthly Social Security check.

Applying for Medicare in Nebraska in 2022 is easy that way. It is automatic. The other way is more challenging.

Online Application For Medicare in Nebraska for 2022

Applying for Medicare in Nebraska, Iowa, and throughout the country has become more difficult and complex with each subsequent month. The pandemic pushed the process almost entirely online. Social Security personnel were absent at Social Security Administration Offices throughout Nebraska, Iowa, and the whole country during that time. Offices were closed, and most employees were working remotely.

Identity theft, cyber security, and HIPPA regulations have pushed the Social Security Administration (SSA) to add more and more levels of security to the Medicare application.

I help my prospective clients apply for Medicare all the time. While eligibility for Medicare and Social Security benefits in Nebraska begins at 65, most people are not getting their Social Security benefit checks until much later. Instead, they are waiting until the full benefit age, which is around 66 and 8 months or older. So they need to apply for Medicare online.

How to apply for Medicare in Nebraska

I probably average helping five people a week apply for Medicare in Nebraska and Iowa. The level of difficulty each person experiences is amazing. I don’t know how other people do it on their own.

How Do You Apply For Medicare Benefits in Nebraska Online in 2022?

Enroll in Medicare online in Nebraska

If you are eligible for Medicare in Nebraska, type ssa.gov into your address bar. Do NOT Google ssa.gov. You will end up at all kinds of websites trying to sell you Medicare plans. The Social Security Administration logo will be in the top left corner if you are successful.

Click on Menu in the top right section of the website. Go under Benefits and click Medicare. Then, scroll down the page until you see a bright blue button that says “Apply for Medicare Only.” Click on the button that will take you to a page with a gray button that says, “Start New Application.” Click it.
Follow the prompts. The most crucial part is your My Social Security login. This is the tricky part.

Hundreds of people swear they never set up an online Social Security account. Then, when we start the enrollment process, we discovered they have a My Social Security account, and SSA requires us to use it.

Logging in to your My Social Security account may become an insurmountable obstacle if you need to provide personal verification information, like the answers to the three security questions you had set up previously. At that point, you will be stopped out and need to call or go to the Omaha, Lincoln, or Council Bluffs Social Security Administration office to get access to continue applying for Medicare in Nebraska in 2022.

If you do not have an online My Social Security account, you create one. In creating the account, you will need immediate access to email and text. With that, you will be able to set up an online account.
Follow the prompts to set up the account.

Second Form of Identification When Applying for Medicare in Nebraska for 2022

Giving SSA a second form of identification, such as your driver’s license, is vital. SSA will text a link to your phone. Then you take a photo of your driver’s license to verify who you are. Taking the photo so the system receives it can be problematic. This is the most difficult part of applying for Medicare.

Your phone’s camera software may not work well with SSA’s system, the cellular or internet connection may be weak, or the SSA system may be in a bad mood that day. Many factors can go into making the system unworkable. Be warned.

How to Apply For Medicare In Nebraska For 2022

If you cannot set up a second means of verification, you will probably have to wait for a verification code to be mailed to your physical address. Then you go back in to complete the enrollment process.

More than half of the time, the system works. We get the text verification and complete the My Social Security online account setup.

When you enter your My Social Security online account through the Medicare prompts, the system pulls up the application for Medicare. Fill in the details and complete the application. The application process will assume you want Medicare Part A for the hospital since it is free. The system will ask if you want Medicare Part B for doctor visits and outpatient procedures. Medicare Part B costs something. You have the option to say yes or no.

Check On Your Online Medicare Application

When you have completed the application, you can go back in and check on your Medicare application status. A newly created box is in your My Social Security account for Medicare. There will be three grey horizontal bars going across the page. When you complete the application, one bar will be blue. When all three bars are blue, a comment underneath will say you are approved. Congrats!

Above will be a “Verification of Benefits Letter” link. Click on the link. A letter will open up. In the body of the letter will be your Medicare number (MBI), which is made up of eleven digits consisting of a combination of numbers and letters. The letter will also have the dates when your Part A and/or Part B will start.

Sometimes clients tell me they want to wait for the Medicare card to come in the mail. Bad decision. It may take over a month for your Medicare card to show up in the mail, significantly decreasing your time to select, enroll, and get your medical cards from the insurance company before your start date.

Online Medicare Application Problems

How to enroll in Medicare online

Check your account two weeks after you apply for Medicare online, and keep checking it until you have a Medicare number.

If your account says your case was sent to Salinas, CA, for processing, you need to call your local SSA office to find out why. Salinas, CA, is a black hole.

There is a problem with your application that needs to be solved sooner rather than later, and the folks in Salina, CA, are not very proactive or even active in solving your problem–whatever it may be.

All of this above-said information works if your personal information is in good order with SSA. There may be problems of which you are only aware once you enroll. For example, your name is misspelled with SSA, your birthday is wrong, your address is out-of-date, your maiden name was not changed to your married name or back after a divorce, and your naturalization date or number is incorrect. You could also be flagged as a terrorist, Russian mole, or affiliated with the opposing political party–just kidding.

I’ve experienced all of these with clients–except the terrorist one. Making corrections takes lots of time. I had a gentleman born at a Japanese civilian hospital instead of the U.S. military hospital on the base where his father served, which created a whole set of problems that plagued him throughout his life.

Getting the correct documentation takes time if it can be found. Then SSA takes time to verify the documentation and may ask for more. Then there is the processing time, which could result in you missing your intended start date. That is why you start applying for Medicare in Nebraska as early as possible in 2022.

Calling the SSA Office

You, of course, can call the SSA office or stop in to apply for Medicare in Nebraska for 2022. If you contact them too early, they will not talk with you. Too early is more than 3 months before you turn 65. Then, when they talk with you, SSA generally will set the appointment a month or two later, so you are right up against your birth month and start date. This will work if there are no problems and everything else works smoothly, but this situation usually causes anxiety for most people.

How to Apply For Medicare In Nebraska For 2022

My Experience Helping Clients Apply for Medicare

I’m an insurance agent. I am not an employee of the SSA, but I feel like an unpaid auxiliary staff member. My clients need help, so I’ve learned to navigate the SSA Medicare enrollment system through trial and error. It is a system that is continually evolving.

How to Apply For Medicare In Nebraska For 2022

I’m happy to help my clients. The process creates a tremendous amount of empathy for my clients for what they have to go through. Not only are they confused with all the information and choices that come with going on Medicare, but they have a government bureaucracy that is an unfriendly and confusing obstacle to overcome. I try my best to help and give encouragement when I can’t do specific tasks for them, like finding an original birth certificate with a raised seal.

As the bugs get worked out of the SSA/Medicare system, and Medicare beneficiaries become more tech-savvy, the process for applying for Medicare in Nebraska for 2022 will become more efficient–I hope.

Until then, use this guide to navigate and find your way to the end of the Medicare application maze.

What Our Clients Are Saying About Omaha Insurance Solutions

Steve S.

When it came time for me to enroll in Medicare, I had no idea what the process was or what types of coverage to expect. Christopher at Omaha Insurance Solutions took care of all of those questions and alleviated any anxiety with the process. His patience is outstanding and is outdone only by his knowledge of the products he represents. His services cost nothing, and he advocated for the best plan to fit my specific needs. I highly recommend Omaha Insurance Solutions when looking for answers to Medicare questions.

Paul K

The Medicare decision process was overwhelming for me. Chris and Angi did an exceptional job of laying out pros and cons for each option and patiently listened to my concerns and answered my questions. I never felt pressured to make a decision or steered in a direction that I was not 100% comfortable with. I trust Chris and would not hesitate to recommend Omaha Insurance Solutions to my family and friends.

Paul & Terri P.

Medicare can be confusing, but Chris did a great job of explaining all our options to us. He patiently answered all our questions and gave us knowledgeable advice. We are so appreciative of Chris and Angie’s guidance, and we highly recommend them to anyone needing help with Medicare insurance.