More on deductibles and coinsurance

CMS recently published the Part A deductible and coinsurance and Part B deductible amounts for CY 2010.  For most covered inpatient stays, as well as covered outpatient services, Medicare does not pay the entire Medicare allowable for those stays or outpatient services.  Beneficiaries generally are responsible for a portion of the Medicare allowable in the form of deductibles and/or coinsurance.

Under Part A, Medicare beneficiaries are entitled to 90 regular benefit days per benefit period. Regular benefit days renew whenever a new benefit period begins.  That is, a patient once again has 90 covered inpatient days every time a new benefit period begins.  Medicare beneficiaries are also entitled to 60 lifetime reserve days, which may be used after regular benefit days for that benefit period have been exhausted.  Lifetime reserve days do not renew.  Once used, they are gone forever.

A benefit period begins with the first day on which a patient is admitted to an inpatient hospital or a SNF to receive services.  That benefit period continues until there is a 60-consecutive-day period during which the patient is not an inpatient in either a hospital or a SNF.  (With respect to the latter, the benefit period does not close as long as the patient is receiving skilled care as an inpatient in the SNF.)

For the first 60 covered inpatient days during a benefit period, the beneficiary is responsible for one inpatient deductible.  The applicable inpatient deductible is the one in effect during the calendar year in which that benefit period begins.  For inpatient covered days 61-90, the beneficiary is responsible for a daily coinsurance amount equal to 25% of the applicable inpatient deductible.  If a beneficiary exhausts (uses up) his regular benefit days, he may then draw upon any remaining lifetime reserve days.  For each lifetime reserve day, the beneficiary is responsible for a daily coinsurance amount equal to 50% of the applicable inpatient deductible. With respect to the coinsurance calculation, the coinsurance amount is based on the deductible applicable for the calendar year in which the coinsurance days occur.

The following is an example of how these rules would apply to an inpatient stay that begins in December of one year (2009) and ends during the following year (2010):

Assume that this was the first inpatient admission during the benefit period and that the beneficiary remained in the hospital for 61 covered days.  Because the benefit period began in 2009, the deductible for 2009 (the year in which the benefit period began) would be applied, in the amount of $1068.00.  This is the only amount for which the beneficiary would be liable for the first 60 covered days.  He would then be responsible for an additional single day’s coinsurance for day 61, in the amount of $275.00, which is the coinsurance amount for covered days occurring during 2010.  Thus the beneficiary’s total liability for this stay would be $1343.00.

Hospitals are advised to assure that applicable deductible and coinsurance amounts are applied to each inpatient stay, particularly those that cross over from one calendar year to another.