E6-13801. Medicare-Equivalent Remittance Advice; Use by the Department of Veterans Affairs

AGENCY:

Department of Veterans Affairs.

ACTION:

Notice.

SUMMARY:

The Department of Veterans Affairs (VA) is making a change in its procedures for seeking reimbursement from third-party insurers for certain medical care and services provided to Medicare-eligible veterans for nonservice-connected disabilities, to add a Medicare-equivalent remittance advice (MRA) as an attachment to each bill for such care and services provided by VA, with the exception of those services noted in the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

Barbara C. Mayerick, VHA Chief Business Office (161), Veterans Health Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420, Telephone: [phone]. (This is not a toll free number.)

DATES: Effective:

August 22, 2006.

SUPPLEMENTARY INFORMATION:

Section 1729, Title 38, United States Code, is VA's authority to seek reimbursement from third-party insurers, including Medigap and other Medicare supplemental insurers, for the cost of medical care or services furnished to veterans for nonservice-connected disabilities as described below. Section 17.101 of title 38 of the Code of Federal Regulations sets forth VA's methodology for “reasonable charges” for medical care or services provided or furnished by VA to a veteran for nonservice-connected disabilities:

—For a nonservice-connected disability for which the veteran is entitled to care (or the payment of expenses of care) under a health plan contract;

—For a nonservice-connected disability incurred incident to the veteran's employment and covered under a workers' compensation law or plan that provides reimbursement or indemnification for such care and services; or

—For a nonservice-connected disability incurred as a result of a motor vehicle accident in a State that requires automobile accident insurance in a State that requires automobile reparations insurance.

VA has entered into an interagency agreement (IA) with the Centers for Medicare and Medicaid Services (CMS) which allows VA to work with the CMS fiscal intermediary and carrier, currently TrailBlazer Health Enterprises (TrailBlazer), in processing VA claims on a no-pay basis and produce Medicare-equivalent Remittance Advice (MRA) notices for the cost of medical care furnished to Medicare-eligible veterans for nonservice-connected treatment. The MRA reflects the payment that Medicare would have made, along with the deductible and coinsurance amounts applicable, for an equivalent service rendered by a Medicare provider. VA's bills are processed according to Medicare's coverage and payment policies, as well as claims processing guidelines and timeframes. Supplemental insurers will use this information to reimburse the VA coinsurance and deductible amounts they would have paid had the claims been payable by Medicare.

VA attaches the MRA provided by TrailBlazer to VA's secondary claim and both are submitted to the Medigap or other Medicare supplemental insurer either via the standard 837 transaction or via a print/mail function at the clearinghouse.

The attachment of the MRA to VA's bills submitted to Medigap or other Medicare supplemental insurers will improve VA's collection from these insurers. The MRA will correct the practice of overstating VA's outstanding accounts receivable by recording the expected supplemental payment rather than 100 percent of VA's billed charges. The submission of the MRA with a claim to Medigap or other Medicare supplemental insurers is expected to reduce the number of denials VA receives from supplemental insurers, since it will be obvious from the bill and the MRA that VA intends to collect only the supplemental payment.

Effective August 22, 2006, with the exception of the following services, all VA Medical Centers will submit an MRA along with bills to Medigap or other Medicare supplemental insurers:

√	Claim type	Reason for exclusion
1	Purchased Services (fee-basis, contracted out)	Centers for Medicare and Medicaid (CMS) and VA policy differences.
2	Mammography Services	CMS and VA policy differences.
3	Institutional (Part A) Adjustments	Updates in process: Expected to be included October 2006.
4	Skilled Nursing Facilities (SNF)	Not currently covered by CMS/VA Interagency Agreement.
5	Ambulance	CMS and VA policy differences.
6	Rehab Services	Not currently covered by CMS/VA Interagency Agreement.
7	Professional (Part B) Durable Medical Equipment (DME) and Prosthetics & Orthotics (P&O)	Not currently covered by CMS/VA Interagency Agreement.
8	Hospice/Respite Care	Not currently covered by CMS/VA Interagency Agreement.
9	Home Health Care (HHC)	Not currently covered by CMS/VA Interagency Agreement.
10	Maintenance/Routine Dialysis	Not currently covered by CMS/VA Interagency Agreement.
11	Patients with Medicare Health Maintenance Organization (HMO) Policies	Not currently covered by CMS/VA Interagency Agreement.
12	Independent Laboratories	Not currently covered by CMS/VA Interagency Agreement.
13	Ambulatory Surgical Centers	Not currently covered by CMS/VA Interagency Agreement.

VA continues to work with CMS to add these claim types to our program; in the interim, we expect that all Medicare supplemental insurers will continue to process these claims for payment under their previous methodology and based on the provisions of 38 U.S.C. 1729.

Authority: 38 U.S.C. 1729.

Approved: August 10, 2006.

Gordon H. Mansfield,

Deputy Secretary of Veterans Affairs.