VA “Fee Basis Card”

50.1.4 - VA “Fee Basis Card” (Rev. 1, 10-01-03) B3-2309.2 1. General One method the VA uses to authorize physician services is to issue the veteran a “fee basis ID card” (formally designated the VA Outpatient Medical Treatment Information Card). This card is issued to certain veterans with a service connected disability, as well as certain other veterans who require medical services for an extended period when VA and other Federal health care facilities are not capable of furnishing economical care, or, because of geographical inaccessibility, are not capable of furnishing the care or services required. The card constitutes an agreement by the VA to pay up to a specified monthly dollar amount for treatment of specific disabilities or for any condition specified on the face of the card. The veteran is not restricted in choice of physician nor does the physician selected by the veteran have to inform the VA in advance that they will be treating the veteran. (The physicians are not participating physicians in the VA program nor does the VA have an express “assignment” procedure.) When the charges for the services exceed the specified monthly amount routinely allowed by the VA, the VA may allow an additional amount if the physician justifies the need for the additional cost. If justified, the VA will authorize an increase in the monthly dollar limitation for a specific period of time. The VA may approve charges for services exceeding the specified monthly amount retroactively if they were of the type that would have been approved had they been submitted in advance. 2. VA Fee Basis Payment Is Payment in Full When a physician accepts veterans as patients and bills the VA, the physician must accept the VA’s “usual and customary” charge determination as payment in full. Neither the patient nor any other party can be charged an additional amount. Except for the VA copayment (see subsection 4(b)), Medicare cannot make payment on an assigned or unassigned basis when the physician’s bill exceeds the amount the VA paid a physician who has accepted the “Fee Basis” card. However, as indicated in subsection 4(a), Medicare can pay for services that are not reimbursable by the VA. Therefore, the mere existence of a “Y” trailer code indicating that the beneficiary has a VA fee card (as discussed in subsection 5) is not sufficient to deny Medicare benefits. See subsection 4(a) for secondary Medicare benefits where the veteran bills the VA, and the VA reimburses the beneficiary or physician less than the Medicare allowable amount. 3. Crediting Part B Deductible Payments made by the VA for otherwise covered services are credited to the beneficiary’s Part B deductible. (See subsection 5(c).) 4. Secondary Benefits (a) Veteran Bills the VA Where the physician does not accept the fee basis card (i.e., bills the veteran directly) the veteran may file a claim with the VA. The VA may either reimburse the beneficiary for out-of-pocket costs or pay the physician based on a claim filed by the beneficiary. If the VA payment to the beneficiary or physician based on a claim filed by the beneficiary is less than the Medicare fee schedule or allowable amount for the services, Medicare can pay secondary benefits to supplement the VA payment, provided the beneficiary submits a copy of the VA’s explanation of benefits which accompanies the VA payment. The VA explanation of benefits generally consists of a computer-generated notice, which looks much like a punch card. It contains the beneficiary’s name and social security number, the physician’s or supplier’s name, the month of service, and the amount paid. (The VA plans to add the day of service to the notice.) The VA sends this notice to the party that receives the payment (i.e., the beneficiary or the physician/supplier). In some cases, the VA may also send a letter containing more detailed information. If the A/B MAC (B) cannot determine from the VA notice the amount the VA paid for particular services, it asks the physician or supplier to help it match up the VA payment with specific services for which Medicare has been billed. If the A/B MAC (B) is unable to obtain the help it needs from the physician or supplier, it make reasonable assumptions about the relationship between the VA payment and the services which have been billed to Medicare based on the information available to it. The Medicare secondary benefit amount, where the VA payment to the beneficiary or physician is less than the allowable amount, is the lower of the following: • The Medicare allowable amount minus applicable Medicare deductible and coinsurance amounts; or • The Medicare allowable amount minus the VA payment. EXAMPLE: An individual who is authorized by the VA to receive physician services for treatment of a nonservice-connected condition is issued a fee basis card. The individual receives treatment from a physician who charges $135. The physician does not accept the fee basis card. The individual bills the VA directly. The VA pays the individual $82 ($96 fee basis rate minus $14 outpatient copayment). The Medicare allowable amount for the service is $115. The individual’s unmet Part B deductible is $75. The Medicare secondary benefit is the lower of: • The Medicare allowable amount minus applicable deductible and coinsurance amounts: $115 - $75 = $40 X .80 = $32, or • The Medicare allowable amount minus the VA payment: $115 - $82 = $33. The A/B MAC (B) pays $32, the lower of $32 or $33. The beneficiary’s Part B deductible is considered met by the VA payment. (b) Physician Bills the VA; VA Bills Beneficiary for Copayment If a physician accepts the fee basis card and bills the VA, the VA payment is considered payment in full. If the VA bills the beneficiary a copayment amount for authorized physician/supplier services that are covered by Medicare in the absence of the VA authorization, the A/B MAC (B) pays a secondary benefit to the beneficiary consisting of the lower of the VA copayment amount or the amount Medicare would pay in the absence of VA coverage (Medicare allowable amount minus applicable deductible and coinsurance amounts). EXAMPLE: A physician accepts fee basis reimbursement for services rendered. The charges for the services are $96. The VA fee basis rate is $78. The VA pays the physician $78 and charges the beneficiary a $14 copayment. The beneficiary claims Medicare reimbursement for the VA copayment amount. The Medicare allowable amount for the services is $83. The individual’s unmet Part B deductible is $75. The Medicare secondary benefit is the lower of: • Amount payable by Medicare in the absence of VA coverage: $83 - $75 = $8 X .8 = $6.40, or • Individual’s VA copayment obligation: $14. The A/B MAC (B) pays $6.40. The beneficiary’s deductible is credited with $75. If the beneficiary’s Part B deductible had been met previously, the Medicare secondary payment would be $14, the lower of: • $66.40 ($83 X .8), or • $14. NOTE: Medicare may pay for covered outpatient emergency services furnished by a VA hospital if there is a charge for the services. Medicare’s payment is subject to applicable Part B Medicare deductible and coinsurance provisions. Accordingly, there is no Medicare payment until the Part B deductible is met. However, any charges to the beneficiary for covered VA hospital outpatient emergency services are credited to the Medicare Part B deductible. The CMS, OMB, Division of Accounting, which is responsible for processing claims for emergency services by Federal providers, will ensure, in these cases, that pertinent data is entered into the beneficiary’s Health Insurance Master Beneficiary Record. 5. Procedure (a) Claim Is for Primary Medicare Benefits When the A/B MAC (B) receives a Y trailer code (code 3) or a code 36, (type code 3), automatic notice from the Health Insurance Master File (which is sent in instances where a Medicare beneficiary also has a VA fee basis card), it follows the instructions in the Medicare Secondary Payer (MSP) Manual, Chapter 5, “Contractor Prepayment Processing Requirements,” §20.3.1. It contacts the physician or supplier to ascertain whether a claim has been, or will be submitted to the VA based on an authorization of the VA or based on the fee basis card. If the physician responds that no claim has been or will be submitted to the VA, the A/B MAC (B) pays the Medicare claim in the usual manner. If the physician or supplier indicates that a claim has been or will be submitted to the VA, the A/B MAC (B) denies the Medicare claim. If the physician fails to respond to the A/B MAC (B)’s inquiry within 30 days, the A/B MAC (B) denies the claim if the physician has accepted assignment on the grounds that the physician refuses to furnish information necessary to determine the proper Medicare payment. (The assignment agreement prohibits the physician from charging the beneficiary in these cases because the basis for denial is failure to furnish information, not noncoverage of services.) In unassigned cases, if the physician fails to respond to the A/B MAC (B)’s inquiry within 30 days, the A/B MAC (B) pays the Medicare claim in the usual manner. In accordance with a CMS- VA agreement, no contacts are to be made with the beneficiary, unless the beneficiary has submitted a claim for secondary Medicare benefits. Ordinarily, the A/B MAC (B) does not contact the VA for information concerning actual or potential VA payments; but if a VA facility offers to share such information with it, e.g., information about payments to beneficiaries or physicians or about VA authorized services to beneficiaries, the A/B MAC (B) may work out arrangements with the facility to receive such information on a periodic basis or on request. (b) Claim Is for Secondary Medicare Benefits If the information on the claim indicates that the VA has already paid benefits for the services, but has not paid all of the charges, the Medicare A/B MAC (B) pays Medicare secondary benefits in accordance with subsection 4(a) provided the VA claim was filed by the beneficiary. If the beneficiary submits the VA’s computer generated notice, the A/B MAC (B) assumes that the beneficiary filed the VA claim and pays secondary benefits. If it is unclear whether the physician or beneficiary submitted the VA notification, the A/B MAC (B) assumes that, in unassigned cases, the beneficiary filed the VA claim and the A/B MAC (B) pays secondary benefits. In assigned cases, the A/B MAC (B) asks the physician whether the physician or the beneficiary filed the VA claim. Also, when it is clear that the physician submitted the computer-generated notice, the A/B MAC (B) asks the physician (on both assigned and unassigned claims) whether the physician or the beneficiary filed the claim with the VA (since in either case the VA sends the notice to the physician who receives the VA payment). If the physician does not respond within 30 days, the A/B MAC (B) denies benefits, in assigned cases, because of the physician’s refusal to furnish information necessary to determine the proper Medicare payment. (The assignment agreement prohibits the physician from charging the beneficiary in these cases because the basis for denial is failure to furnish information, not noncoverage of services.) In unassigned cases, if the physician does not respond within 30 days, the A/B MAC (B) assumes that the beneficiary filed the VA claim and pays secondary benefits to the beneficiary. (c) Claim Is for Reimbursement of VA Copayment Amounts or Crediting of Medicare Deductible Beneficiaries must attach to the Medicare claim form a copy of VA form 10-9014 (Statement of Charges for Medical Care) showing the VA copayment amount for authorized services, when requesting Medicare payment toward that amount or in order to have their Part B deductible credited.