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Medicare Rules for Insurance Companies

Many Medicare beneficiaries prefer to receive their benefits through Medicare private plans called Medicare Advantage plans. These plans are sold through private insurance companies. Beneficiaries often enjoy these options because they usually have additional benefits. However, the Centers for Medicare & Medicaid Services (CMS) imposes a few rules on these insurance companies to ensure beneficiaries are getting the best care possible.

  1. Required Coverage

    • The Centers for Medicare & Medicaid services requires that all Medicare private health plans offer the basic traditional Medicare-covered services. This means that plans must offer all Part A and Part B services. However, CMS says that Medicare Advantage plans can charge for these services differently and may require additional restrictions such as prior authorization. Finally, CMS dictates that all insurance companies that offer Medicare Advantage plans must offer one plan that includes Part D prescription drug coverage.

    Notification

    • Medicare Advantage plans must notify applicants in writing whenever there is a change to covered services or a drug is taken off the formularly list (list of covered drugs). This notification can occur annually if the change occurs at the beginning of the benefit year. The plan may also send out a letter to beneficiaries if the change occurred in the middle of the benefit year. Second, whenever a Medicare Advantage plan denies coverage for a service, it must notify the beneficiary of his right to appeal and supply contact information to the company's appeals department.

    Marketing Guidelines

    • Medicare Advantage companies have to follow strict marketing regulations. CMS put these regulations in place to prevent marketing fraud. For example, an insurance agent selling a Medicare Advantage plan cannot contact beneficiaries without their explicit permission. This means no unsolicited phone calls or emails. He may not market his plans in health-care settings, nursing homes or anywhere where free food is served. Finally, she may not refer to herself as Medicare or say that her plan is endorsed by Medicare.

    Out-of-Network Care

    • Medicare Advantage plans can limit their beneficiaries to a network of providers and deny coverage if the beneficiary seeks care outside that network. However, CMS requires that Medicare Advantage plans cover any emergency or urgent care sought at an out-of-network facility.

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