TN Insurance Bulletin (1991-08-07): Medicare Supplement Benefits Paid at Reduced Amounts

NED McWHERTER GOVERNOR STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37243 8 U L L E T I N TO : FROM: DATE: AL L COMPANIES COMMIssIONER ELAINE MCREYNOLDS CAIV\ DE PARTMENT OF COMMERCE AND INSURANCE AU GUST 7, 1991 ELAINE A. McREYNOLDS COMMISSIONER RE : ME DICARE SUPPLEMENT BENEFITS PAID AT REDUCED AMOUN TS It has come to the attention of the Department of Commerc e ~nd Insurance that some insurance companies issuing excess coverage medicare su pp 1 ement po 1 i c i es are not paying insureds t he entire amount stated in the contract. If a medi care supplement policy has been issued and the terms of t he contract state benefits will be paid in excess of Medicares' approved amount full benefits must be paid. A deluge o f complaints have been received by the Department stat ing that doctors are billing insureds for excess charges after Med icare and their private insurance has paid. The ma jority of these insureds have excess pol icy coverage. In some cases the doctors have "overcharged" the patient by Medicare standards. Those doctors should be reported t o Equicor (1 -800-368-5779) which handles Part 8 claims in the State of Tennessee. The major ity of complaints however overchargi ng by doctors. We have found companies may be multiplying either 140% Explanation of Benefits ( EOB) amount and accordi ngl y. do not concer n that i nsu ranee or 125% of the paying benefits Federal la w states that during 1991 doctors may charge up t o 140% or 125% of the P..C.~Y.SI .. :L1.Jng charge for nonparticipating physicians . The prevailing charge may in some instances be greater than the usual and customary charge as determined by Medicare . Equi cor does monitor doctors in this state an d if a part icular doctor's usual and customary charge is less than the prevailing charge that doctor will be paid less. The ususa l and customary charge will be the "approved " amount on an EOB. Consequently a doctor may charge and collect a fee- greater than 140% of the appr6ved amount on · the EOB and sti11 be in compliance with Fe9era1 Law . Insurance companies who have issued policies that pay excess charges should be paying benefits ~p to the term~ of the contract. The Department expects a11 insurance companies to pay in accordance with the terms · of the contracts sold. The "Department further . expects adjustments . on a11 claims previous 1 y pa i d 1 based on any rate 1 ess t j,an the prevai 1 i ng rate and expects ·a 11 1991 c 1 aims to be paid to doctors at the prevailing rate. EAM:LAH :t h ... ~ ' :~ ·,~ :;i;~ ~--:..:. .-. ··- Tennessee Department of Commerce and Insurance, Authorization No. 335175, 1,600 copies. This public document was promulgated at a cost of .27 cents per copy.