2.3 Government payers (Medicare A/B/C/D, Medicaid, TRICARE, workers' comp)

Government payers cover a large share of U.S. patients, and each program has distinct eligibility, coverage, and billing rules the CBCS must know. The major federal and state programs are Medicare, Medicaid, TRICARE/CHAMPVA, and workers' compensation.

Medicare

Medicare is the federal health insurance program administered by the Centers for Medicare & Medicaid Services (CMS), primarily for people age 65 and older, and for certain younger people with disabilities or end-stage renal disease (ESRD)/ALS. It has four parts:

• Part A – Hospital Insurance: covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health. Most beneficiaries pay no premium for Part A because they or a spouse paid Medicare taxes while working. It carries a per-benefit-period deductible.
• Part B – Medical Insurance: covers physician services, outpatient care, preventive services, durable medical equipment (DME), and lab tests. Part B requires a monthly premium, an annual deductible, and generally 20% coinsurance after the deductible (Medicare pays 80% of the approved amount).
• Part C – Medicare Advantage: private plans (HMO/PPO) that contract with Medicare to deliver Part A and Part B benefits, usually with Part D drug coverage bundled in. Members receive care through the private plan's network and rules rather than directly from Original Medicare.
• Part D – Prescription Drug Coverage: an optional outpatient prescription drug benefit offered through private, Medicare-approved plans; it requires a separate premium.

Part A and Part B together are called Original Medicare, the government-run fee-for-service program; claims are processed by regional contractors called Medicare Administrative Contractors (MACs), and providers who accept assignment agree to accept Medicare's approved amount as payment in full. A Medigap (Medicare Supplement) policy is separate private insurance that helps pay Original Medicare's deductibles and coinsurance; it is not one of the four parts. A useful memory aid: A = hospital (Admission), B = medical (Both office and outpatient), C = Choice (Advantage), D = Drugs.

Medicaid

Medicaid is a joint federal and state program that provides coverage to low-income individuals and families. Because it is state-administered, eligibility, covered services, and reimbursement vary by state, and the program may go by different names locally. The single most testable fact: Medicaid is the payer of last resort. When a patient has Medicaid plus any other coverage (Medicare, commercial, or TRICARE), the other plan pays first and Medicaid pays last. Some Medicaid services require prior authorization, and providers must be enrolled in the state Medicaid program to bill it. Patients who qualify for both Medicare and Medicaid are called dual-eligible beneficiaries.

TRICARE and CHAMPVA

TRICARE is the health program for active-duty and retired uniformed service members and their families. It offers plan options such as TRICARE Prime (managed care, HMO-like with a PCP) and TRICARE Select (fee-for-service/PPO-like). Active-duty members must generally use military treatment facilities or obtain authorization for outside care.

CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) covers the spouse and dependent children of veterans who are permanently and totally disabled from a service-connected condition, or the survivors of veterans who died from such conditions. CHAMPVA is administered by the VA, not by TRICARE. A key distinction: TRICARE covers service members and families tied to active or retired service, while CHAMPVA covers certain dependents and survivors of disabled or deceased veterans and generally acts as secondary to other coverage such as Medicare.

Workers' Compensation

Workers' compensation is state-mandated insurance that covers job-related injuries and illnesses—for example, a back injury from lifting equipment at work or an occupational respiratory condition. Key billing rules set it apart from group health:

• It is billed to the workers' compensation carrier, not the patient's health plan.
• There are usually no patient copays, deductibles, or coinsurance—the employer's carrier pays 100% of approved job-related care.
• Care typically requires a claim number and often prior authorization for procedures; the injury must be reported to the employer.
• Only conditions related to the workplace injury are covered; unrelated care is billed to the patient's regular insurance.

Quick-Reference Table

Because government programs set their own coverage and documentation rules, using the wrong claim form or omitting an authorization number leads to rejection. The CBCS should note that Medicare generally uses the CMS-1500 for physician/professional services and the UB-04 for institutional (Part A) claims. For billing accuracy, the CBCS must identify the correct primary payer, apply each program's cost-sharing rules, and attach any required claim or authorization numbers—especially for Medicaid (last resort) and workers' compensation (separate carrier and claim number).