The Empire Plan is a unique health insurance plan designed especially for public employees in New York State. Empire Plan benefits include inpatient and outpatient hospital coverage, medical/surgical coverage, Centers of Excellence for transplants, infertility and cancer, home care services, equipment and supplies, mental health and substance abuse coverage and prescription drug coverage.

New York State Health Insurance Program
The Empire Plan and Medicare+Choice HMOs - October 2002

A Special Report For Participating Agency Retirees
and Dependent Survivors enrolled in the Empire Plan

Know your risk if you are enrolled in the Empire Plan and also join a Medicare+Choice Health Maintenance Organization (HMO).

The Empire Plan and Medicare+Choice HMOs

You may receive information from Medicare and from HMOs in your area describing Medicare options available to you that are not part of NYSHIP. You may wonder whether to join one of these plans to supplement or replace your Empire Plan coverage.

Please be aware that your Empire Plan benefits will be significantly reduced if you join one of these plans. Under a Medicare+Choice contract, you assign your Medicare benefits directly to the HMO. You give up the right to Medicare coverage for services outside the HMO. All benefits must be received from that plan, even if you also have Empire Plan coverage, for example, through your spouse.

If you cancel your NYSHIP coverage, you lose several benefits:

• Your former agency is no longer required to reimburse you or your Medicare-eligible dependents for the Part B premium.
• If your former agency allows your sick leave credit to be used to reduce your premium, it will no longer do so.
• If you wish to re-enroll in NYSHIP, you will be subject to a three-month waiting period before your coverage again becomes effective.
• If you die while you are not enrolled in NYSHIP, your dependents are not eligible for dependent survivor coverage.

Before you choose a Medicare+Choice option outside NYSHIP, check with the Health Benefits Administrator at your former agency to see how your NYSHIP benefits will be affected. Do not sign up for the HMO Medicare+Choice contract coverage until you have considered how joining a Medicare+Choice HMO affects your Empire Plan benefits.

If you are enrolled in the Empire Plan and you or your enrolled dependent also joins a Medicare+Choice HMO, the HMO coverage will replace your original fee-for-service Medicare coverage and drastically reduce or eliminate benefits available under the Empire Plan.

With a Medicare+Choice HMO, Medicare pays the HMO a monthly fee to provide your care. The HMO becomes your Medicare coverage. The only Medicare coverage you have is the HMO coverage with care provided by that HMO’s providers under the rules of that HMO.

You must receive all services available through the HMO from that HMO. And, you must follow the HMO requirements and use their providers. The HMO will not cover unauthorized services, Medicare will not cover the services and the Empire Plan will not cover the services. You are responsible for the costs of unauthorized services.

Questions & Answers

Q. Will the Empire Plan cover services I receive outside the HMO?

A. If you are Medicare-primary, the Empire Plan will not provide benefits for coverage available under Medicare. If you join a Medicare+Choice HMO, your Medicare benefits are provided by the HMO. If you choose to go outside the HMO, you will be responsible for the full cost of services that would have been available from your HMO. The Empire Plan will not pay for those charges even if you use an Empire Plan participating provider.

Q. Does the Empire Plan ever pay secondary?

A. If you receive medically necessary services that are not covered by the Medicare+Choice HMO contract, the Empire Plan will pay for benefits to the extent those services are covered under the Empire Plan. This applies only when there is no coverage available for a service under the Medicare+Choice HMO, not when coverage is available if you use an HMO provider or if you receive authorization from the HMO.

Also, the Empire Plan may provide coverage for care that exceeds the Medicare benefits provided by the HMO (except for skilled nursing facilities).

For example, if your Medicare+Choice HMO contract limits benefits for prescription drugs and you are covered under the Empire Plan Prescription Drug Program, the Empire Plan will cover the cost of prescriptions that exceeds the limitation. Empire Plan Prescription Drug Program rules and limitations will apply.

Q. How would this affect me financially?

A. Going outside the HMO for services could be very costly. For example, a hospital stay that your HMO has not approved could cost you thousands of dollars: Medicare will not pay because the HMO is now your Medicare coverage. The Empire Plan will not pay because the Empire Plan does not provide any benefits for coverage available under Medicare.

Q. What if a Medicare+Choice HMO contract allows for out-of-network services?

A. Sometimes a Medicare+Choice HMO has a Point-of-Service (POS) option that allows you to go out of the HMO network for covered services at a reduced benefit level. If you use the POS option, the Empire Plan will pay the difference between the HMO payment for the care and the amount of covered expenses under the Empire Plan. But not all HMOs offer this option. And services must be medically necessary to be covered under the Empire Plan.

Q. If I join a Medicare+Choice HMO and keep my Empire Plan coverage, will my former agency still reimburse me for the Medicare Part B premium?

A. Yes, as long as you are enrolled in the Empire Plan and have primary Medicare coverage, your former agency reimburses you for the Medicare Part B premium unless you receive reimbursement from another source.

Q. How will anyone know that I’ve enrolled in a Medicare+Choice HMO?

A. You are required to notify the Empire Plan carriers and your former agency’s Health Benefits Administrator of any other health insurance coverage you have. In addition, your Medicare records show your HMO enrollment. When you are Medicare-primary, the Empire Plan requires a Medicare Explanation of Benefits before considering your claim.

Q. How and when can I cancel my coverage under a Medicare+Choice HMO?

A. Effective January 1, 2002, you can leave a Medicare+Choice plan and join another plan once each year. After you have made one change (including changing to the original Medicare Part A and Part B), you must stay in that plan for the rest of the year.

Example: Mrs. Smith belongs to the Alpha managed care plan. She leaves the Alpha managed care plan in May 2002 to join the Beta managed care plan. She must now stay with the Beta plan for the rest of the year.

Call or write the Medicare+Choice plan for information on how to leave the plan.

When you cancel your enrollment in the Medicare+Choice HMO, you restore your original fee-for-service benefits under Medicare Part A and Part B. You also restore the Empire Plan’s coordination of benefits with Medicare if you have not cancelled your Empire Plan coverage.

Q. What if I cancel my Empire Plan coverage and join a Medicare+Choice HMO?

A. If you cancel your Empire Plan coverage, and your former agency allows your sick leave credit to be used to reduce your premiums, your sick leave credit will no longer be available for that purpose. You will lose your reimbursement for the Medicare Part B premium. If you wish to re-enroll in the Empire Plan and are eligible to, there is a three-month waiting period before coverage begins. And, if you die while you are not enrolled in the Empire Plan, your dependents are not eligible for any dependent survivor coverage under the Empire Plan.

Q. Whom should I call if I have questions?

A. If you have questions, call your former agency’s Health Benefits Administrator during normal business hours.

Calvin

Calvin became a “snowbird” when he retired from local government. He enjoys winters in the sunbelt and summers in the North.

Calvin, age 67, is enrolled in Medicare Parts A and B. Medicare is now Calvin’s primary coverage and the Empire Plan is his secondary coverage. Because Medicare pays first, Calvin’s former agency reimburses him for his Medicare Part B premium.

What would Calvin gain or lose by replacing his Medicare fee-for-service coverage with a no-cost or low-cost Medicare+Choice HMO near his winter home? If Calvin has outpatient surgery done through the HMO, he pays a $10 copayment. The Empire Plan will consider the $10 copayment after Calvin meets the Empire Plan’s Basic Medical annual deductible for services by non-participating providers. Calvin may also need prescription drugs. If the HMO Medicare+Choice Contract does not cover prescription drugs, the Empire Plan will cover Calvin’s prescription drugs.

But what if Calvin has a surgical procedure when he is summering in the North, away from the HMO’s service area, and he sends the bill for $5,000 to the Empire Plan? The Empire Plan will pay only the amount of any copayment or coinsurance that would have been Calvin’s responsibility under the Medicare+Choice contract had he used an HMO network hospital.

Calvin’s Expenses:

Surgery $5,000
HMO pays $0
Empire Plan allows $10 ($10 is applied toward the Basic Medical deductible)
Calvin pays $5,000

Marie

Marie has the same broad coverage as Calvin – Medicare is primary and the Empire Plan is secondary. She joins a Medicare+Choice HMO with a Point-of-Service (POS) option to provide Medicare coverage and stays enrolled in the Empire Plan.

Marie needs surgery and the HMO authorizes hospitalization. For her surgery, Marie wants to be near her daughter’s home. She goes to a hospital outside the HMO’s network and uses her POS benefits. The HMO reimburses Marie for the amount they allow under their POS option. Marie then submits a claim to the Empire Plan. The Empire Plan will treat the HMO’s partial payment as Medicare’s coverage for the surgery and then will consider Marie’s claim for the difference between the HMO payment and the amount of covered expense under the Empire Plan. The Empire Plan will cover Marie’s prescription drugs if the HMO’s POS contract does not cover them.

Marie’s Expenses:

Surgery $5,000
HMO pays $3,500
Empire Plan allows $1,040 (The Basic Medical deductible plus any applicable coinsurance amount)
Marie pays $460

Terms To Know

Fee-for-service – A method of billing for health care services under which a provider charges a fee each time you receive a service.

Centers for Medicare and Medicaid Services (CMS) – formerly Health Care Financing Administration (HCFA). The federal agency that directs the Medicare program.

Medicare – A federal health insurance program that covers certain people who are age 65 or older, disabled persons, or those who have end stage renal disease (permanent kidney failure). Medicare is directed by the federal Centers for Medicare and Medicaid Services (CMS) and administered by the Social Security Administration.

Health Maintenance Organization (HMO) – A managed health delivery system organized to deliver health care services in a geographic area. An HMO provides a pre-determined set of benefits through a network of selected physicians, laboratories and hospitals for a prepaid premium. Most HMOs charge a copayment for certain services. Except for emergency services, you and your enrolled dependents may have coverage only for services received from your HMO’s network.

Medicare Part B Premium – This is the amount charged by CMS and paid by the Medicare enrollee to help pay for doctors’ services, outpatient hospital services and home health care services, for example. If you are enrolled in NYSHIP, your former agency reimburses you for this premium directly.

Medicare+Choice HMO – The HMO agrees to accept a fixed monthly payment for each Medicare enrollee. In exchange, the HMO provides or pays for all medical care needed by the enrollee. If you join a Medicare+Choice HMO, you are replacing your original Medicare coverage with the benefits offered by the HMO. You must receive all of your benefits through that plan.

Medicare Cost Contract – Same as a Medicare+Choice plan; however, you still qualify for original fee-for-service Medicare benefits. If you receive treatment outside your HMO, you are responsible for the Medicare deductible, coinsurance and claim submissions.

Network – A group of doctors, hospitals and/or other health care providers who participate in a health plan and agree to follow the plan’s procedures.

Point-of-Service (POS) – This option allows you to receive covered services outside a provider network in return for higher out-of-pocket expenses.

Primary/Medicare-Primary – A health insurance plan is primary when it is responsible for paying health benefits before any other group health insurance. If you are not actively employed by your former participating agency, Medicare becomes primary to NYSHIP when you or your spouse (or domestic partner if your former agency offers domestic partner coverage) turns 65, becomes disabled, or has end stage renal disease. Read plan documents for complete information.

If You Have Questions

If you have questions about information in The Empire Plan and Medicare+Choice HMOs, please call the Health Benefits Administrator of your former agency before you enroll in one of these plans.

Information in this document is provided to help you understand how your Empire Plan health insurance benefits will be affected if you join a Medicare+Choice HMO. Care has been taken to ensure accuracy. However, the HMO contracts and the Empire Plan Certificate of Insurance and amendments are the controlling documents for benefits available under NYSHIP. Read your Empire Plan Certificate and Empire Plan Reports for complete information.