TRANSMITTAL #:  126

DATE: 05/09/2011

TRICARE CHANGE #: N/A

 

CHAMPVA POLICY MANUAL

CHAPTER 3

SECTION 4.1

TITLE:  OHI (OTHER HEALTH INSURANCE)

 

AUTHORITY: 38 CFR 17.270(a)(b); 17.272(b) and 17.277

 

RELATED AUTHORITY: 32 CFR 199.8

 

I. EFFECTIVE DATE(S)

A. October 1, 1987, for claims processed under the DRG- (Diagnostic Related Groups) based inpatient payment system.

B. January 1, 1999, the OHI (Other Health Insurance) calculation was changed for Medicare-primary claims processed under the DRG-based inpatient payment system.

C. November 1, 2006, the OHI calculation was changed so that all claims regardless of type of service or OHI type will be processed using the same three-step method.

II. DESCRIPTION(S)

 

A. OHI (Other Health Insurance).  OHI to include Medicare, are health insurance plans or programs designed to provide compensation or coverage for expenses incurred by the beneficiary for medical services and supplies.  These plans or programs, for which the beneficiary pays a premium to an issuing agent, are those plans and programs that the beneficiary is entitled to by law, employment, and membership, association with an organization, group, and student insurance, due to “student status.”  Additionally, managed-care plans that provide comprehensive services at discounted rates or set co-payments depending on the type of service and supply provided are included.  These plans further include HMO’s (Health Maintenance Organizations), PPO's (Preferred Provider Organizations), and Paid Prescription Plans.

 

1. Medical service or health plan.  A medical service or health plan is any plan or program of an organized health care group, corporation, or other entity for the provision of health care to an individual from plan providers, both professional and institutional.  It includes plans or programs for which the beneficiary pays a premium to an issuing agent as well as those plans or programs to which the beneficiary is entitled by law or as a result of employment or membership in, or association with, an organization or group.

 

III. POLICY

 

A. Existence of OHI.  Prior to payment of any claim for services or supplies rendered to a CHAMPVA beneficiary, it must be determined whether other coverage exists under any other insurance plan, medical service, or health plan (to include Medicare):

1. CHAMPVA is always the secondary payer of health care benefits except for Medicaid, CHAMPVA supplemental policies, State Victims of Crime Compensation Programs, and Indian Health Services.

2. Benefits will not be paid until the claim has been filed with the other health insurance and a payment determination EOB (Explanation of Benefits) or remittance advice is issued by the other insurer.   

3. A signed/current OHI Certification (VA Form 10-7959c) is required to be on file for all beneficiaries.

4. When the OHI denies a claim as not a benefit, and it is a benefit under CHAMPVA, the claim will be processed with CHAMPVA as primary payer.  However, if the OHI denies a claim based on a medical necessity determination, CHAMPVA benefits cannot be extended.  The beneficiary may appeal the medical necessity to the OHI (not CHAMPVA).  If, after review of the appeal, the OHI overturns the original decision and determines the service as medically necessary, CHAMPVA will then process the claim as secondary payer.

Note:  In cases of appeal or inquiry, when the EOB or Remittance Advice indicates that some services were not paid because the services are not a covered benefit, the non-covered amount should not be used in calculating the patient responsibility unless the service is covered under CHAMPVA.

5. CHAMPVA cannot pay the beneficiary’s OHI premiums.

6. When an OHI benefit period is exhausted and the service is otherwise covered by CHAMPVA, CHAMPVA will become the primary payer during the period of exhaustion.

B. Waiver of Benefits.  Beneficiaries do not have the option of waiving benefits of another insurance plan or health plan in order to place CHAMPVA as the primary payer:  

1. CHAMPVA will deny payment on a claim submitted by the beneficiary, if the beneficiary’s OHI denies payment for service or supplies that do not meet the OHI requirement of “medical necessity.”  

2. CHAMPVA will also deny payment on a claim submitted by the beneficiary, if the beneficiary’s OHI denied payment because the beneficiary obtained the medical services or supplies outside the OHI (HMO, PPO, and Medicare) carrier providers plan (i.e., provider not eligible to perform the service billed).

Note: If the beneficiary appeals the disputed issue to the OHI (HMO, PPO, and Medicare) and the insurance carrier reverses their decision, and the service is a covered benefit, CHAMPVA will then process the claim as secondary payer.

C. Last Pay Limitations.

1. In all cases where OHI exists, the CHAMPVA payment will not exceed CHAMPVA allowable. The claim will first be filed with the primary payer. In most cases, the combination of the primary payer and the CHAMPVA payment will result in the provider receiving payment that equals the billed charge. In those rare cases where this does not occur, the provider cannot collect any amount from the beneficiary that would result in payment that exceeds the CHAMPVA allowable amount.

2. For all claims, there is a three-step method to determine the CHAMPVA payment.

STEP

ACTION

1

Determine the allowable amount that would have been paid in the absence of other health insurance.  Do not apply a deductible or cost-share.

2

Determine the outstanding beneficiary liability (amount beneficiary is liable for after OHI payment and any write off/ discount).

3

Compare steps 1 through 2 and pay the lower amount.

 

An example of this payment computation is outlined as follows.  A provider bills $60.00 for a procedure; the OHI allowable amount is $60.00; the CHAMPVA allowable for this procedure is $58.00; and the OHI payment is $48.00.

STEP 1 $58.00 CHAMPVA allowed amount
STEP 2

$ 60.00 Billed amount

-  48.00 Minus OHI payment

$ 12.00 Outstanding Beneficiary Liability

STEP 3 Compare steps 1 and 2.  CHAMPVA will pay the lesser amount or $12.00. In this case, the beneficiary will not have an out-of-pocket expense—the OHI paid $48.00 and CHAMPVA paid $12.00 so the provider received a total payment of $60.00.

 

D. CHAMPVA and OHI Pharmacy Co-payments.  CHAMPVA will reimburse the beneficiary's co-payment expenses for pharmacy prescriptions up to the CHAMPVA allowable.

E. CHAMPVA and Medicare.

 

1. When a Medicare benefit period is exhausted, CHAMPVA will be the primary payer during the period of exhaustion. The Medicare EOB or remittance advice reflecting that benefits have been exhausted is required.

2. CHAMPVA cannot pay the beneficiary’s Medicare Part B premiums.

3. Outpatient services covered by Medicare and CHAMPVA:  When the Medicare EOB/Remittance advice reflects that the beneficiary liability exceeds the billed charges as the result of Medicare paying under the OPPS (Outpatient Prospective Payment System), CHAMPVA will pay the outstanding beneficiary liability (PR or patient responsibility) up to the CHAMPVA allowed amount.  When this occurs the outstanding beneficiary liability will reflect the billed amount regardless of the presence of a payment by Medicare.

4. Inpatient services covered by Medicare and CHAMPVA:  When the Medicare EOB/Remittance advice reflects that the Part A benefits have been exhausted, a Part B EOB/Remittance advice is needed to determine if any services will be considered or paid under Part B.

F. CHAMPVA and Medicaid.  Medicaid is essentially a welfare program, providing medical benefits for persons under various state welfare programs.  In accordance with Public Law 97-377, it was the intent of Congress that no authorized beneficiary should have to resort to welfare programs; therefore, Medicaid was exempted from the double coverage provisions.  Whenever a CHAMPVA beneficiary is also eligible for Medicaid, CHAMPVA becomes the primary payer.  In those instances where Medicaid extends benefits on behalf of a Medicaid eligible person who is subsequently determined to be a CHAMPVA beneficiary, CHAMPVA will reimburse the appropriate Medicaid agency for the amount CHAMPVA would have paid in the absence of Medicaid benefits or the amount paid by Medicaid, whichever is less.

G. CHAMPVA and State Victims of Crime Compensation Programs and Indian Health Services.  CHAMPVA is always the primary payer for beneficiaries who are also eligible under a State Victims of Crime Compensation Program or Indian Health Services.

H. CHAMPVA and Workers’ Compensation.  CHAMPVA benefits are specifically excluded for any medical service and supply provided to a beneficiary to treat a work-related illness or injury for which benefits are available under a workers’ compensation program.  It is the beneficiary’s responsibility to apply for workers’ compensation benefits.  To recover benefits for a work-related illness or injury, a beneficiary must pursue his/her rights under the Workers’ Compensation Act or any of the above provisions that may apply to the illness or injury.  This includes filing an appeal with the

Industrial Commission, if necessary.  Workers’ Compensation applies to illness or injury resulting from occupational accidents or sickness covered under occupational disease laws, employer’s liability laws, Federal, State, or municipal law, and the Workers’ Compensation Act.

1. When a legitimate dispute exists as to whether an injury or illness is work-related, CHAMPVA will provide benefits during the appeal process.

2. Recoupment action will be taken as appropriate in instances where CHAMPVA assumed the role as primary payer when Workers’ Compensation is involved.  

3. If a beneficiary exhausts available Workers' Compensation benefits, CHAMPVA will assume benefits for otherwise covered services and supplies.

4. CHAMPVA benefits will not be extended for work-related illness or injury when the beneficiary fails to file a claim with Workers’ Compensation within the filing period allowed by law or the beneficiary obtains care for the work-related injury or illness that is not authorized by Workers’ Compensation and is not a covered benefit under CHAMPVA.

I. CHAMPVA and Third Party Insurance.  CHAMPVA will be secondary payer in all instances where there is third party liability.  For example, a beneficiary who is involved in an automobile accident is required to file their medical claim with their (or responsible party’s) automobile insurance before submitting it to HAC.  Upon receiving the EOB statement from the automobile insurance company, a claimant may file a CHAMPVA claim for any remaining balance.  

1. If necessary to ensure the medical needs of the beneficiary are met, CHAMPVA will provide payment for medically required services until a determination has been made regarding third party liability.

2. Recoupment action will be taken as appropriate in instances where CHAMPVA has assumed the role as primary payer where third party insurance is involved.

3. A claim that reflects OHI involvement will be processed under the same payment methodology as previously described.

J. Claims processed under the CHAMPVA DRG-based payment system or the inpatient mental health per diem payment system.  When OHI exists and the primary EOB shows no outstanding beneficiary liability, no additional payment will be made by CHAMPVA.  By regulation, the hospital cannot bill the beneficiary for any additional amounts.

K. CHAMPVA and OHI Write-Offs/Network Discounts.  In all cases where OHI exists, CHAMPVA will pay the outstanding beneficiary liability up to the CHAMPVA allowable amount.  If the existence of a participating agreement or other similar agreement that would limit the liability of a beneficiary is evident on the EOB (Explanation of Benefits) from the OHI (write-off or discount), the reduced amount is to be used in lieu of the hospitals/providers actual charge.

L. The OHI co-payment, co-insurance, and deductibles are part of the beneficiary’s patient responsibility and should be used in calculating payment of claims.  

M. Surrogate arrangements.  A contractual arrangement between the surrogate mother and the adoptive parents is considered other health coverage.  As such, the claims will be processed under the three-step methodology.  CHAMPVA will cost share the remaining balance of covered benefits related to the surrogate mother's medical expenses after the contractually agreed upon amount has been exhausted.  This is applicable regardless if the contractual arrangement requires for the adoptive parents to pay all or part of the medical expenses.  When the contractual arrangement does not specifically address reimbursement for the surrogate mother's medical care, the claim will be processed under the DRG payment methodology.

IV. EXCLUSION(S)

 

A. CHAMPVA supplemental insurance plans that, for all categories of beneficiaries, provide solely for cash payment of deductibles, cost shares, and amounts for non-covered services due to program limitations or for which the enrollee is liable.

B. HSA (Health Savings Account).  A HSA is a tax free savings account funded by the owner and in some cases, the owners employer.  The owner of the HSA is responsible for paying his/her medical expenses using a Debit Card, Credit Card or Check Pad supplied by the HSA’s Account Administrator.  This account cannot be directly billed by any healthcare provider, including VA.  HSA is not considered as OHI.

C. Income maintenance programs that provide cash payments for periods of hospitalization or disability, regardless of the amount or type of services required or the expenses incurred.  These plans are not intended to actually pay for medical services, but are intended only to supplement the beneficiary's income during a time of increased expenses and/or lowered income.  On the other hand, a plan that varies its benefits, depending upon the care received or the patient's diagnosis, is considered to be health insurance coverage as opposed to an income supplement, and would be primary payer to CHAMPVA.  Any payment made directly to the provider of care, as opposed to the beneficiary, can be assumed to be an insurance plan and not an income supplement.

D. Certain federal government programs and health care delivery systems not considered within the definition of OHI, include Medicaid, Workers' Compensation, State Victims of Crime Compensation Programs, Maternal and Child Health Program, and Indian Health Services.  Programs such as these are designed to provide benefits to a distinct beneficiary population and for which entitlement does not derive from either premium payment or monetary contribution.

*END OF POLICY*