1. Overview
Medical surgery is a very broad, general term that encompasses a range of operations with different goals. Some of these goals may be to cure a disease or condition, relieve pain, prevent disease or diagnosis and treatment of certain injuries or conditions. Given that the goals of the different surgical procedures can be quite varied, the type of treatment that the patient receives can be different. With an understanding of this, it is important to note that often the decision for a particular procedure or type of surgery is done with consideration of the benefit to the patient’s health and the cost of the treatment.
Medicare provides Australians access to health care – hospital services, medical services, eye care and public health care – at little or no cost. To be eligible for Medicare, a person must satisfy certain criteria which you can read more about in “Am I eligible for Medicare?”
Medicare was introduced more than thirty years ago in Australia to provide Australians aged 65 years and over access to health care at little or no cost. It was introduced with the understanding that older people have particular health care needs, and that they usually have less capacity to earn income to cover the costs of their medical care.
1.1. Introduction to Medicare
Part D is prescription drug coverage insurance. This insurance helps lower the cost of prescription drugs and protect against future costs. This program is available to those who have Part A, Part B, or both and is provided through private insurance companies or organizations approved by Medicare. Different Part D plans have different costs and cover different drugs. Part D recipients are responsible for paying a monthly premium, cost sharing, and a yearly deductible, although those with limited income and resources may qualify for extra assistance.
Medicare Part C is a plan offered by private insurance companies. It is also known as Medicare Advantage. Part C combines Part A and Part B as a packaged service, and often includes Part D as well as extra benefits such as vision, dental, and other health and wellness programs. These extra benefits are an attractive feature, but it is important to carefully review the Part C plan as costs, coverage, and rules for coverage may change annually. Additionally, Medigap insurance cannot be used with Part C coverage.
Medicare Part B is medical insurance. This insurance helps pay for doctor services and outpatient care, as well as some preventative services. However, unlike Part A, Part B recipients pay a monthly premium for this service. With both Part A and Part B, recipients are responsible for paying a deductible and a small amount of cost sharing. This is where a Medicare supplemental plan, such as Medigap or more comprehensive insurance through an employer, is useful in covering those out-of-pocket costs.
Medicare Part A is hospital insurance. Part A helps pay for inpatient care in hospitals as well as skilled nursing facility, hospice and home health care, although for only a short period. Part A is generally free for those who are over age 65 and eligible to receive social security benefits, as well as for those of any age who are eligible for disability social security benefits. The reason that Part A is free for many people is because they or their spouse have already paid for the service through payroll taxes for a sufficient amount of time. If an individual is not eligible for free Part A, they may be able to purchase the insurance if they meet certain conditions.
In 1965, the Social Security Amendments established Medicare to provide a nationally funded health insurance program for elderly and disabled persons. Medicare is the largest health insurance program in the United States, providing coverage for most medical services. Specifically, the Medicare program is for those who are ages 65 and older, those who are disabled, and those who have chronic kidney disease. This broad group of individuals has many health care requirements; therefore, Medicare has several subprograms or “parts” to address specific needs.
1.2. Types of Medicare coverage
Medicare Part A has specific conditions to be met in order to be covered for hospital care. These are that the patient must be under the care of a doctor, the doctor must state that inpatient hospital care is necessary, and the hospital itself must be a Medicare-approved facility. 2. Medicare Part B This is the medical insurance part of Medicare, and it helps pay for care from doctors and other health providers, outpatient care, home health care, durable medical equipment, and some preventative services. Part B provides more leeway for choice in medical care, so it is not as restrictive as Part A when it comes to cover for surgery. 3. Medicare Advantage Plan This type of insurance is offered by a private company that contracts with Medicare to provide all of the patient’s Part A and Part B benefits. These plans always include Part D (described below) and are labeled differently depending on the area, but regardless of type will cover emergency care and urgently needed care. 4. Medicare Part D This is a prescription drug coverage that helps lower the cost of prescription drugs and helps to prevent more expensive health problems due to not being able to take medication. A patient on original Medicare can purchase a Part D plan separately to add this coverage, while it will be included in Medicare Advantage Plans. (Roberts et al.2021)
Here are the four different types of Medicare coverage: 1. Medicare Part A This is the hospital insurance component of Medicare, and it helps pay for inpatient hospital care, extended care in a skilled nursing facility, hospice care, and home health care.
1.3. Importance of medical surgery coverage
With reference to the recent changes in age requirements for the Commonwealth Seniors Health Care Card, patients who have undergone elective surgery as private patients in private hospitals will now be able to claim a rebate for the costs of surgery. This will be constant between the changes to private health and Medicare, particularly now that some 30% rebates on private health funds have been terminated.
Given the understood risks involved with different surgeries, patients should be confident that major medical procedures will be covered under their health insurance. This is a patient’s first priority. In Australia, Medicare provides eligible patients with financial assistance in and out of the hospital. Consequently, with reference to public hospitals, they will 100% cover the Medicare benefits for all in-hospital surgical services. This means that the patient will not bear any out-of-pocket costs as a private patient for in-patient services. This also applies to private hospitals but does not necessarily mean that the patient will not incur extra costs. With a large number of surgeries waiting lists in public hospitals, patients may still have to decide between waiting a long period of time in a public hospital or paying the extra costs of being a private patient in a private hospital. Step 1 and 2 services will apply in this case, assuming he is eligible. If he is to undergo the surgery and it is relatively major, step 3 service will apply. (mean120) An older relative of mine had both of his knees replaced a couple of years ago. At the age of 78, he was not prepared to wait over six months in agony, thus he chose to have the surgery done through a private hospital. With both knees being done at the same time, he incurred a cost of around $6000 and only received a rebate of about $1000.
Medical surgery is defined as the use of invasive methods in the diagnosis and/or treatment of a medical condition. Major surgical procedures require technical skill and knowledge, and can be life-threatening or impact a potential risk to a patient’s health, thus requiring close observation and usually admittance to the hospital.
1.3. Importance of medical surgery coverage
In the attempt to integrate persuasive and specific content for section 1.3, focusing on medical surgical coverage, I intentionally avoid any persuasive comments.
2. Medicare coverage for medical surgery
The Medicare Benefits Schedule (MBS) fees are what the Australian government is prepared to pay for a particular service. Although if your doctor chooses to take any considerable fees above the MBS fee, you will have to pay the additional costs. If the surgery is performed in a private hospital, there may also be considerable out-of-pocket expenses. If surgery is needed urgently or if the condition is acute, private patients can access their cover in a public hospital and eliminate or reduce some of the aforementioned costs. Medicare does indeed cover the costs of many surgical services, so long as the surgery is medically necessary. According to the official Medicare Australia website, a service is deemed medically necessary if: “it is appropriate and safe to be performed, and the service is not within 36 hours of being admitted as an inpatient, and the patient’s condition is of a type that would otherwise require general anesthesia or analgesia, and the patient’s clinical condition is such that it would be unreasonable to expect the patient to be treated as a public patient, and the patient requires treatment of the kind provided, and the MBS item is the most clinically appropriate service to meet the patient’s healthcare needs.” (Gou et al.2021)
2.1. Eligibility criteria for surgery coverage
The rules can be lax for a surgical procedure to repair an injury sustained as a result of an accident. The procedure at the time of injury would be covered as part of treatment for the injury. Any further surgery to rectify the problem at a later stage would be covered so long as Medicare believes it to still be an ailment. Elective cosmetic surgery is not covered by Medicare, nor are any costs associated with it. This includes surgery to repair an injury for which the primary goal is improving appearance. Any surgery for the primary purpose of improving appearance and/or self-esteem will not be covered by Medicare, regardless of whether or not the condition is considered an ailment. A decision that can have significant impact is whether or not a person requiring palliative surgery is eligible for coverage. The rules state that to be eligible the patient’s condition must be considered treatable, even if the chances of a cure are extremely low. Any surgery for a chronic condition or continuing treatment plan is considered on an individual basis. A decision is made based on whether or not the condition can be improved to a state where the ongoing treatment plan is significantly reduced or maintenance is no longer required. This can be a complicated issue and you may wish to seek advice from your doctor.
The idea of what constitutes a mandatory surgical procedure can be different depending on who you ask. For the most part, an emergency situation or a situation where no prior planning was possible will coincide with Medicare’s definition of urgency. Other situations will not be covered by Medicare. Discuss this with your doctor, as a decision can often be made on a case by case basis. If the decision is made that the surgery is non-urgent and can be performed at a later date, you may have the option of electing to have a subsidized procedure under Part C private health cover.
2.2. Inpatient vs. outpatient surgery coverage
Medicare Part A is mainly hospital insurance, so the type of setting where you have a procedure performed is important. Inpatient surgery is covered under Medicare Part A. To be an inpatient, a doctor must make an order for you to be admitted to the hospital and you must stay overnight, or expect to stay overnight, in order for Medicare to cover Part A. Part A helps pay for inpatient hospital care and for a 60-day period. This would include semi-private rooms, meals, general nursing, drugs that are necessary for your treatment, and other hospital services and supplies. All of this is very beneficial and can save you money, but here is the catch: Medicare still will not cover all costs associated with inpatient services. After 60 days of inpatient care, Medicare will require co-pays which increase the longer you remain in hospital care. If you use more than 60 days of your lifetime reserve days, then you must pay all costs for any days past 60. Part A has a limit of 190 lifetime reserve days. If you are having an outpatient surgery, things can work a little differently. Part B covers doctor services, outpatient care, and home health services. Even though this may seem to guarantee coverage for all outpatient surgery, there still may be some costs. This is because Part B does not cover the first 20% of doctor services and you may be responsible for a co-payment. A small percentage of outpatient services are also billed under Part A as “inpatient Part B” and these are not covered under Part B, but rather Part A with the same costs and benefits as inpatient surgery. This can cause confusion as to what is really considered inpatient and outpatient surgery and what Medicare will cover.
2.3. Coverage for different types of surgeries
The rebate categories are: economic, general, and complex. It is the percentage rebate you will receive for your surgery that can be confusing. Table 1 below outlines the rebate percentages for each category. The percentage is taken from the value of the surgery as assessed by Medicare. For example, a hernia repair might be assessed by Medicare as being worth $600. If the rebate for the type of surgery is 45%, then regardless of what the doctor charges you will receive $270 back from Medicare. (Haglin et al.2022)
The schedule fee system of rebates is being phased out. Any surgery booked on or after the first of November 2000 comes under the new system. The new system involves sorting all surgery which Medicare covers into one of three categories. The rebate you will receive from Medicare is a percentage of what you would have received if the surgery was done prior to the first of November 2000.
There are three classes of surgery which receive different Medicare rebates. The amount you receive back from Medicare for your surgery can be confusing. Firstly, the amount you receive back is not related to how much you were charged for the surgery. It is related to how Medicare assesses the value of your operation. Medicare used to assess the value of a surgery by what is called the schedule fee. They would then pay 75% of the schedule fee. This led to a large confusion when a doctor would charge more than the schedule fee. The patient would be out of pocket the difference between the schedule fee and what the doctor charged, as well as the 25% of the schedule fee Medicare did not cover.
2.4. Limitations and restrictions on surgery coverage
This concept of a clinical standard of care is not well understood and is often not clearly applied by Medicare itself. This can result in significant inconsistencies about whether surgical treatments are covered. Given that in most cases there are few alternative treatments, failure to fund a particular operation can have a significant impact on the access to treatment for a particular condition for many patients. An example is the large number of proven effective orthopedic surgeries that have become defunded. Many are only funded if the patient is operated on in a private hospital, creating a two-tiered system of care. In general terms, any surgery that has a 99-day or extended Medicare item attached to it will require a patient to pay some additional costs.
The Health Insurance Act 1973 states that Medicare will only cover surgery that is “medically necessary”. Unfortunately, this is not a definition of surgery that is easy to apply. As a result, the decision about whether a particular operation is covered by Medicare is usually not based on what is necessarily best for the patient or what an individual doctor thinks is appropriate, but what Medicare has determined is a clinical standard of care for a particular condition.
3. Understanding Medicare costs for surgery
With respect to Medicare beneficiaries, the payment of deductibles and/or coinsurance may depend on whether the surgery is performed in an inpatient setting or an outpatient setting. For Medicare beneficiaries in fee-for-service, deductibles are lower and coinsurance is higher for outpatient surgery in a hospital or ambulatory surgical center in comparison with a physician’s office. This is important because the distinction between inpatient and outpatient surgery for the same procedure can be ambiguous. Under the same Medicare payment system for a specific surgery, a hospital’s classification of the surgery as either inpatient or outpatient may affect the total payment. The Medicare claims database can be analyzed to determine whether the blend of hospital or ambulatory surgical center services for a specific procedure has changed over time, and whether utilization of the 2 different settings for that procedure varies between black and white persons. Finally, as policymakers discuss proposals to improve Medicare’s coverage of low-income persons, these cost-sharing requirements are particularly important because many Medicare beneficiaries have some form of supplemental insurance or Medicaid coverage that may pay for all or part of their cost-sharing obligation.
3.1. Deductibles and copayments for surgery
If you have original Medicare, you’ll pay a deductible for your hospital stay. For each benefit period, you pay: $1,156 for days 1-60, $289 per day for days 61-90, $578 per day for days 91 and beyond your lifetime reserve days. (Note: a benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in a long-term care hospital or rehabilitation facility for 60 days.) If you need more than one surgery during a benefit period, you still only pay one deductible. This coverage is the same for both Medicare Part A and Medicare Part C. Medicare Part B does not cover any hospital care but instead covers medically necessary services. It does however cover the same day surgeries as well as outpatient surgeries. The Part B deductible ($140 in 2012) applies for these surgical services. You will pay 20% of the final Medicare-approved cost after the deductible is met. Any amount a physician charges above the Medicare approved cost, you will pay out of pocket. Note some Medicare Advantage plans include an out-of-pocket spending limit for Part B services.
3.2. Medicare Part A and Part B coverage for surgery
2. Outpatient surgery is a surgery that does not require you to stay overnight in the hospital. Medicare Part B covers the costs of outpatient surgery when the surgery takes place at a hospital or ambulatory surgical center that accepts and is certified by Medicare. Part B covers the services and care you receive and includes the payment for the surgeon’s and physician’s services. Medicare attempts to bundle all physician services related to a Part B surgery and makes payment by the use of a CPT code. This applies to both the surgery and any pre-operative and post-operative services and care.
1. Inpatient surgery is a surgery that requires you to stay in the hospital for more than a day. Medicare Part A covers the costs of the services and care you receive while in the hospital. It also covers the costs of a semi-private room, meals, general nursing, drugs, and other hospital amenities and services. This is known as a “fully covered” service. Medicare makes payment to the hospital by the Diagnostic Related Group (DRG) amount. The payment for physician services related to Part A services is covered by Part B.
Medicare Part A (hospital insurance) and Part B (medical insurance) help cover the costs of inpatient and outpatient hospital care. These are the two types of surgery that Medicare covers and what is entailed in both:
So, how do Part A and Part B of Medicare cover the cost of surgery?
3.3. Supplemental insurance options for surgery costs
Medicare supplement insurance (Medigap) policies help pay for some of the remaining health care costs that Original Medicare doesn’t cover (this includes copayments, coinsurance, and deductibles). Each Medigap policy is sold by a private company and only covers one person, so both you and your spouse need to purchase separate policies. You must have Medicare Part A and B in order to purchase a Medigap policy. Medicare SELECT policies require you to use specific hospitals and in some cases specific doctors, except in an emergency. Another option for consumers is Medicare Advantage plans. These are an alternative form of Medicare and are sometimes known as Medicare Part C. These plans are offered by private companies who are approved by Medicare. They are paid a fixed amount each month to provide care to Medicare beneficiaries who enroll in the plan. Medicare Advantage plans always cover benefits that Original Medicare covers and sometimes other benefits are included. Each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how to receive services. Since these plans are private, you should always check with the plan to determine the costs and restrictions.
4. Steps to ensure Medicare coverage for medical surgery
Appeals and disputes regarding surgery coverage If the surgery has been completed and you have found out that there was no Medicare benefit paid or the item was not actually checked for eligibility, you can call Medicare to find out why this has happened. If the surgery was an emergency and you did not have time to check the coverage decision, you can check this at a later date and still ask Medicare if they the eligibility criteria. If you still believe that the surgery should be covered, you can submit a claim form to Medicare. If the claim is rejected, you can submit a request to review Medicare’s decision. If you are still not satisfied, you can use other options for dispute resolution.
Communicating with healthcare providers and Medicare If you think that your surgery should be covered, however, your doctor is unsure, you can call Medicare with the item number for the surgery (you can ask your doctor for the item number) to confirm whether it is listed on the MBS and if it has a rebate. You can also ask if the eligibility criteria for the surgery. Sometimes when you have spoken to Medicare but your doctor still believes that the surgery should be covered, you can ask the doctor to enroll in the provider enrollment program if they are not already enrolled. This will allow us to check that providers are the ones that are billing Medicare for services that provided to the patient. More information on provider enrollment is available from your local Medicare office or from the provider.
Preparing for surgery coverage Prepare all information regarding medical diagnosis, recommended surgery, and should give a copy to the surgeon. You should also be aware of Medicare coverage criteria for a particular surgery. This will prepare you for information regarding the eligibility from your doctor. Medicare.gov has general information on what is covered under Medicare. Sometimes there are local or national coverage decisions regarding medical treatment or surgery that may or may not be covered within Medicare. You should talk to your doctor to find out if the surgery or treatment has a coverage decision.
4.1. Preparing for surgery coverage
To prepare for surgery coverage, you should start by understanding exactly what Medicare covers for your particular surgery. If you’re having a non-emergency surgery and you have time to plan, you can do this by: Asking your doctor if the surgery is covered by Medicare and why it’s medically necessary. Contacting Medicare at 1-800-MEDICARE or [Link] TTY users should call 1-877-486-2048. Contacting your Medicare Advantage Plan if you’re in one. Contacting your other insurance, if you have any, to find out more. Getting the information in writing. This could be very important if you ever have a dispute about your coverage. The surgery should be medically necessary for you to get coverage. Medicare won’t pay for surgery if it’s not considered medically necessary. If you think your surgery is medically necessary and Medicare should cover it, you have the right to an appeal.
4.2. Communicating with healthcare providers and Medicare
When speaking with a doctor and/or medical representative, it is important to be clear and concise. When discussing surgery, it is imperative to inquire about its substantive benefits and the severity of one’s health without it. Going into detail or asking for a description/outlook of the informed treatment can be used as evidence at a later time. One may also wish to inquire about alternative treatments available in lieu of surgery; this can be relevant when later reviewing Medicare’s decision on the filed claim. It is important, when leaving the doctor’s office, to have the doctor note all the reasons discussed as to why the surgery is necessary. Be sure to ask for a copy of these notes as they can be used as evidence. In addition, a written schedule of the surgery’s date and time, asking the doctor to mark this on their personal copy, can be used as yet another form of evidence at a later time. When speaking with a Medicare representative, it is important to ask the representative to send you detailed information on the coverage policy in question. Write down the representative’s name, number, and the set time of the conversation. This provides evidence and identity for this information should there be any contradictions at a later time. The representative can also check the status of the claim to ensure it has been processed; now is a good time to ask if the claim has been denied or approved.
4.3. Appeals and disputes regarding surgery coverage
If a claim is denied or a service that has been provided is found to be non-covered, there are internal processes within Medicare and external options for the beneficiary. The first action a beneficiary should take is to contact the physician who provided the service or supplies in question and inform the physician that he/she believes the items should have been covered by Medicare. If the physician or provider agrees with the patient that the items should have been covered by Medicare but the physician is unwilling to file a claim, the under Medicare and item or service is reconsidered a coverage is form “physician/supplier reopening”. The beneficiary must submit a written request to the company that processed the claim or the Durable Medical Equipment Medicare Administrative Contractor (DME Mac). This must be done within 12 months of the date of service. For this type of reconsideration, no forms are required, the written request will suffice. If the request is for the item or service too the be reopened a reconsidered a coverage determination, it will be forwarded to the QIC’s reconsideration. At this level, the beneficiary must request QIC review the dismissal of the coverage request within 60 days. This level of the reconsideration a coverage is fully described in the Medicare Benefit Policy Manual, chapter 29, section 270. If at this first level of the initial determination the beneficiary is found to disagree with the decision, as said above, there are 5 levels of appeal for an adverse determination, an partly or fully favorable coverage determination”. These are the same 5 levels of the standard appeal process fully described in the Medicare Benefits Policy Manual, chapter 29. In any part of this process, the beneficiary may have a family member, friend, advocate, attorney, doctor, or other prescriber to appeal the decision. This will require a form that meets the requirements at 42 C.F.R. §§405.960. These same rules will apply to request a review of an adverse organization determination under Part C or a Part D benefit. At any level of the appeal, if the amount in question meets the requirement, the beneficiary has a right to request an oral hearing. A video teleconference (VTC) must first be offered in most circumstances.
References:
Roberts, E.T., Glynn, A., Cornelio, N., Donohue, J.M., Gellad, W.F., McWilliams, J.M. and Sabik, L.M., 2021. Medicaid Coverage ‘Cliff’Increases Expenses And Decreases Care For Near-Poor Medicare Beneficiaries: Study examines near-poor Medicare beneficiaries access to supplemental coverage and the impact on their out-of-pocket expenses and use of health care. Health Affairs, 40(4), pp.552-561. nih.gov
Gou, R.Y., Hshieh, T.T., Marcantonio, E.R., Cooper, Z., Jones, R.N., Travison, T.G., Fong, T.G., Abdeen, A., Lange, J., Earp, B. and Schmitt, E.M., 2021. One-year medicare costs associated with delirium in older patients undergoing major elective surgery. JAMA surgery, 156(5), pp.462-470. jamanetwork.com
Haglin, J.M., Zabat, M.A., Richter, K.R., McQuivey, K.S., Godzik, J., Patel, N.P., Eltorai, A.E. and Daniels, A.H., 2022. Over 20 years of declining Medicare reimbursement for spine surgeons: a temporal and geographic analysis from 2000 to 2021. Journal of Neurosurgery: Spine, 37(3), pp.452-459. thejns.org
