Medicare, Medicaid, and HRA's

[Belgarath]

Does Medicaid follow the same rules as Medicare in terms of "Secondary payer" rules? For example, if someone is under a group health plan, (more than 20 employees) also has an HRA, and is ELIGIBLE for Medicaid, and Medicaid pays a provider for something,  the group health plan should pay first, then Medicaid?

What happens if there is a deductible on the group health plan - let's say $1,000, and the provider charge for services is $800. The employee writes a check for $800, then is reimbursed from the HRA. Now Medicaid or Medicare pays the provider as well. Is the provider obligated to send $800 to Medicare/Medicaid, or does the provider send $800 back to the employer HRA?

I really have no idea how these rules work. I believe the provider is required to bill the primary payer before billing Medicare. Then if the primary payer denies all or part of the claim, the provider bills Medicare.

Can an HRA even pay you if you are covered by Medicare or Medicaid?

[leevena]

Specific information for Medicare can be found at cms.gov and for Medicaid go to Medicaid.gov.  

Long story short, Medicaid uses COB with all other payors.  In your example the group health plan pays first, the Medicaid pays pays based on COB.  Provider does not send back the $800.  And yes, the HRA does pay.  Hope this helps.

[Belgarath]

Thank you Leevena. I still don't understand, however, why the provider doesn't send back $800 to SOMEONE. The provider has received $1,600 for an $800 service. This can't be right.

??

[leevena]

Do not see where the provider is being paid $1;600.  Group plan pays first, so the employee in this situation pays the $800.  I assumed the HRA is structured to reimburse all $800, so the HRA reimburses the employee their $800 out-of-pocket.  Medicaid would not pay anything because the billed charges were $800 and paid in-full by the employee.

[Belgarath]

Hoo boy, this is stranger than I thought. Basic question - CAN you be covered under an HRA if you are eligible for Medicaid? Logically, it seems like the government would be delighted to have an employer plan pay expenses before the balance, if any, is billed to Medicaid, but I'm not sure of anything at this point!

If we assume that you can, and it is just a situation where there is a mix-up error, etc.. For example, provider charge is $2,000. They require 50% up-front payment on everything, so participant writes them a check for $1,000. Insurance company has a $5,000 deductible, so they pay nothing. Provider then sends bill to Medicare/Medicaid, and neglects to tell them that $1,000 already paid, and Medicare/Medicaid pays the provider the full $2,000. In the meantime, the HRA mistakenly pays the provider $1,500, since the HRA doesn't pay until participant pays $500 out of pocket. Provider now has checks in hand of $1,000 from the participant, $2,000 from Medicare/Medicaid, and $1,500 from the HRA. (A great business model if you can get away with it...).

Who gets money back? If you are allowed to have Medicare/Medicaid while having an HRA, it would seem that Medicare/Medicaid should be reimbursed $1,500, (cause they are a secondary payer and the HRA pays first?) and the participant should be reimbursed $1,000. 

This means HRA ultimately pays $1,500, Medicare/Medicaid pays $500, which is the appropriate amount for the provider to receive, and the rest is refunded appropriately.

Thanks so much for bearing with me through this preposterous exercise, which is apparently based upon a true story...

[leevena]

Yes, HRA is ok.  Medicaid is secondary, so primary pays what they are obligated to pay, which could be $0.00.

The provider asking for 50% up-front is not unusual with this type of benefit schedule.  Provider sending to Medicaid is irrelevant.  They are secondary and will coordinate with primary.  Very good chance that Medicaid will pay nothing more anyway.

If what you state above is true, which is a complete screw-up, then Medicaid will get their money back.

[Belgarath]

Thanks!