Don’t leave money on the table this AEP: Sell Hospital Indemnity with Medicare Advantage

My first insurance sales trainer loved to tell me, “Don’t leave money on the table.” When it comes to coupling hospital indemnity plans with Medicare Advantage, his advice resonates a little louder. Hospital indemnity plans are very affordable for your clients and pay excellent first-year commissions, often in the 50 percent range (Of course, commission varies by states).

Most hospital indemnity plans offer inpatient confinement benefits ranging from $100 to $600 as well as an ER benefit. Depending on the carrier, optional features include benefits for skilled nursing facility days, follow-up appointments, outpatient surgery and even payment for the dreaded observation status. A cancer rider is an important option you can review with clients when discussing hospital indemnity.

Guarantee Trust Life, Equitable and Medico are carriers we are proud to affiliate with and offer to our agents. Just click on our Carriers page for more information or contact us at the number below. For those of you who concentrate on the T-65 market, note that GTL’s Advantage Plus plan is guaranteed issue for ages 64 ½ to 65 ½.

Bill Ellsworth, VP of Equitable, recorded an excellent presentation last year on how to give a good explanation of hospital indemnity during a Medicare Advantage appointment. Frankly, it’s the best training example I’ve seen, and I refer all of our Equitable agents to Bill’s training located on the password-protected broker site. My contact information is below if you’re an Equitable agent and are interested in learning more about Bill’s winning presentation.

In fact, Bill came out to our Arizona office last year to give us additional pointers on presenting Equitable’s EquiCash product. He definitely made me a believer. If you follow Bill’s outline, you should be able to double your MA commission for a surprisingly large number of your AEP and Lock-In appointments.

Cross selling you say! Presenting a hospital indemnity plan with a Medicare Advantage plan is totally compliant with the Medicare Marketing Guidelines.
Hospital indemnity plans are right there on the Scope of Appointment form. If the CMS-approved Scope form you are using does not list hospital indemnity, Medicare Supplements and DVH products, I’ll be glad to email you a copy.

Finally, don’t forget the younger members of the household. Many of these hospital plans are offered from 40-80 years of age. They’re particularly reasonable for the younger folks and can really help fill in those hefty ACA deductibles. Just remember that hospital indemnity coverage is not minimum essential coverage.

For contracting opportunities with GTL, Medico and Equitable, and to receive more useful training content, call RB Insurance at (800) 997 3107 or email me.

Educate your clients on hospital observation stays and the NOTICE Act

Congress finally updated the rules hospitals must follow when they keep Medicare beneficiaries for observation.

The NOTICE Act, which is short for “Notice of Observation Treatment and Implication for Care Eligibility,” requires hospitals to provide written notification to patients within 36 hours of beginning observation care that lasts more than 24 hours. Hospitals must explain that patients under observation status have not been admitted and why, and they must also notify patients of the potential financial implications. Hospitals have 12 months to comply with the NOTICE Act, so it may be a while before it’s fully implemented. 

Help your Medicare Advantage clients understand how their plan covers hospital observation stays. A new law requires hospitals to disclose whether a Medicare beneficiary has been admitted or is under observation status. Image courtesy of iStock.

Hospital, Medical, Insurance, Indemnity, Agent, Commission

According to a press release from the American Health Care Association, the House unanimously passed the bipartisan legislation on March 16, and the Senate unanimously passed it on June 24 without amendment. Policy wonks can read the full text of the reform here. President Obama signed the bill into law on August 6.

Prior to the reform, Medicare regulations allowed hospitals to observe patients for up to 72 hours without actually admitting them. Beneficiaries who thought they were admitted to the hospital subject to Medicare Part A billing would be shocked to find their entire stay under observation was actually billed subject to Medicare Part B deductibles and cost sharing.

As agents we have a responsibility to make sure our clients know how to use their benefits, especially as the incidence of claims that hospitals submit for observation care continues to skyrocket. According to a Kaiser Health News analysis using the most recently available data from CMS, total claims increased 91 percent between 2006 and 2013 to 1.9 million. Long observation stays, which last 48 hours or more, rose by 450 percent to 170,219 during the same period.

Most Medicare Advantage plans cover hospital observation stays as an outpatient surgery co-pay at an in-patient facility (also known as a hospital). Make sure you check with each individual plan you represent so you can inform your clients before unexpected observation status happens. If they call you in panic after being hopsitalized, you can reassure them of their coverage and how it works. It’s that kind of consideration that can get you friend and family member referrals.

Read more about advising clients on hospital observation status here.

Beneficiaries’ potential liability doesn’t end with hospital costs either. Medicare regulations require an individual be hospitalized for three midnights in order to qualify for Medicare Covered Skilled Nursing  facility (SNF) care. With the high rate of observation stays, more beneficiaries face astronomical costs in a SNF without help from Medicare. Most simply cannot afford the $200+ per day cost of a SNF out of their own pocket.

Fortunately for some, most Medicare Advantage plans waive Medicare’s outdated three-midnight rule. Certain members can go directly to a SNF after 1 day in the hospital. I had a Medicare Advantage client who fell, broke her hip and went from the ER to surgery to recovery to SNF without ever spending the night in the hospital.

As always, you can call RB Insurance at (800) 997 3107 or email me to learn more about the NOTICE Act and other changes in Medicare policy.

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Advise your client on hospital observation stays

Say your Medicare Advantage client goes to the local emergency room with a rapid heart beat and shortness of breath. After triage, the attending ER physician advises her to remain in the hospital for a while so he can make sure she’s stable. For two and a half days, your client is attended to by nurses, administered meds and served meals in her hospital bed. After this period of care the physician determines she is fine and ready for discharge.

Then comes the surprise: When the bill comes, she sees her status is “Under Observation.” The outpatient (Medicare Part B) hospital services benefit of her MA plan averages about a 20 percent patient responsibility versus an inpatient (Medicare Part A) status, which would only incur two days of the plan’s set daily copay. She may have not been expecting to pay the amount she has to because of her observation status.

Do your Medicare Advantage clients understand the “Under Observation” hospital status? Did you discuss the term during your appointment? If your client calls Medicare or the carrier’s customer service department stating she was “never advised of such a thing,” you may be risking a complaint being registered against you in the CMS Complaint Tracking Module (CTM).

Letting your client know about observation status in the event of hospitalization can help him or her avoid surprise and disappointment. Visit RBI’s Carriers page to discover Hospital Indemnity products, which can cover the cost of observation stays. Image courtesy of iStock

Another challenge can arise for your MA client regarding any medications she was administered during her observation stay. Under a full admission status, her drugs would usually be covered under her Part A hospital benefit; that’s not so if she is Under Observation. Medicare Part D may cover some of the costs, but it’s likely she will be responsible a majority of these outpatient medication charges.

Even your clients on a Medicare Supplement Plan F can run into problems with the observation status.

While Plan F will likely cover 100 percent of the Part B charges for observation status, other complications can arise if the patient is transferred to a skilled nursing facility. If the patient is under observation status, he or she will not meet the Medicare Fee-For-Service required three-day inpatient scenario that triggers a covered stay in a skilled nursing facility, potentially resulting in thousands of dollars in uncovered services.

Take care of your clients and avoid risking your reputation by advising your clients on hospital observation status. RB Insurance’s Hospital Indemnity carriers now cover observation stays in the same manner as fully admitted days — click on the Indemnity Products tab on our Carriers page to learn more about immediate contracting opportunities. And for a more detailed presentation regarding observation status, see this AARP article on the subject

RB Insurance-affiliated Agents can call (800) 997 3107 or email me to schedule a special training session that will help you avoid the pitfalls of observation status. Like my post? Simply subscribe to receive a few more, once a week in your Inbox.