HLTH 3510 Week 7 Medicare Program Brief Example

If Maria Were on Medicare: A Public Program Brief on Screening Colonoscopy Coverage, the Polyp Coinsurance Rule and Its Phase-Out

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Walden University

HLTH 3510: Health Insurance and Reimbursement

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Month Day, Year

If Maria Were on Medicare: A Public Program Brief on Screening Colonoscopy Coverage, the Polyp Coinsurance Rule and Its Phase-Out

Why Compare a Public Program

Private plans are contracts governed by plan documents and federal rules layered on top. Public programs are written into statute, funded through mixed arrangements and administered by more than one authority. This brief asks what would happen if a patient like Maria, with the same screening colonoscopy and the same polyp, were covered by traditional Medicare instead of an employer plan. The answer shows how a public program's rules can differ from the commercial preventive services rule, and how Congress changed one of those differences. The patient is hypothetical; the rules described are those Medicare has published.

The comparison matters for administrators because many practices serve both commercially insured and Medicare patients in the same clinic, on the same day, often with the same staff answering cost questions.

How Medicare Is Built, Briefly

Traditional Medicare has several parts. Hospital stays fall under Part A, which payroll taxes mostly fund. Doctors' services, outpatient care and most preventive services fall under Part B, paid for by beneficiaries' monthly premiums together with general federal revenue. A colonoscopy performed in an ambulatory surgery center or hospital outpatient department, and the physician and anesthesia services that go with it, fall under Part B. Medicare is administered by the Centers for Medicare & Medicaid Services, which contracts with regional Medicare Administrative Contractors to process claims. Many beneficiaries instead choose Medicare Advantage plans run by private insurers, which must cover what traditional Medicare covers but may have different cost-sharing within limits (Shi & Singh, 2022). This brief describes traditional Medicare.

Medicare Advantage plans may also cover the colonoscopy differently in detail.

Medicare's Coverage of Screening Colonoscopy

Medicare Part B covers screening colonoscopy for beneficiaries at average risk at set intervals and more frequently for those at high risk, and it covers a follow-on colonoscopy after a positive non-invasive stool-based test as part of screening (Centers for Medicare & Medicaid Services, n.d.-a). When a screening colonoscopy finds nothing, or finds something that does not require removal, the beneficiary generally pays nothing for the physician's service if the physician accepts assignment, because the Part B deductible and coinsurance are waived for the screening.

This matches what Maria's commercial plan provided. The difference appears when a polyp is removed.

The Polyp Rule and Why It Existed

For years, Medicare treated a screening colonoscopy that included removal of a polyp as a diagnostic or therapeutic procedure for cost-sharing purposes. The Part B deductible still did not apply, but the beneficiary owed coinsurance, traditionally 20% of the allowed amount, for the physician's service and the facility fee. Beneficiaries often learned about it only after the procedure, when a bill arrived for a test they had been told would be free. The difference arose because Medicare's screening benefit was defined in its own statute, and the private-plan rule that treated polyp removal as integral to screening did not apply to Medicare.

Patient groups and clinicians argued that the rule discouraged screening and penalized patients for an outcome they could not control. A patient could not know in advance whether a polyp would be found.

Congress Changes the Rule

The Consolidated Appropriations Act, 2021 changed this by phasing down the coinsurance for screening colonoscopies that become diagnostic or therapeutic (Pub. L. No. 116-260). Under the change, the coinsurance fell from 20% to 15% for 2023 through 2026, falls to 10% for 2027 through 2029 and is eliminated beginning in 2030, according to Medicare's published description of the benefit (Centers for Medicare & Medicaid Services, n.d.-a). A Medicare patient like Maria who had this procedure in 2026 would owe 15% of the allowed amounts for the procedure and facility; the same patient in 2030 would owe nothing.

Coding still matters. Medicare requires that a screening colonoscopy that becomes a polyp removal be reported with the procedure code and the PT modifier, which tells the contractor the visit started as a screening and switches on the waiver of the deductible and the reduced coinsurance (Centers for Medicare & Medicaid Services, n.d.-b). A claim submitted without the modifier could be processed with the full deductible and coinsurance.

A Worked Example in 2026

To make the rule concrete, suppose a Medicare beneficiary has a screening colonoscopy in 2026 at an ambulatory surgery center, and a polyp is removed. Illustratively, Medicare's allowed amounts are $480 for the physician's service and $450 for the facility. The Part B deductible does not apply, because the procedure began as a screening. The beneficiary owes 15% coinsurance on each: $72 for the physician and $67.50 for the facility, $139.50 in total. If the polyp had not been removed, the beneficiary would have owed nothing for either service. In 2030, with the coinsurance eliminated, the beneficiary would owe nothing in either case.

Many beneficiaries have supplemental coverage, such as a Medigap policy or Medicaid, that pays some or all of the coinsurance. For them, the out-of-pocket difference may be small or zero. For beneficiaries without supplemental coverage, the $139.50 is the kind of unexpected bill that may make them hesitate before their next screening, which is the concern that led Congress to change the rule.

What the Comparison Teaches

Three lessons follow. First, a public program's rules can diverge from the rules imposed on private plans, because each rests on its own statute; protections that apply to employer plans do not automatically apply to Medicare. Second, closing such a gap required an act of Congress and was phased in over a decade, which shows how public program changes are often slower and more explicit than changes in private plan practice. Third, patients and staff need to know which program a patient is in before answering questions about cost. A front-desk worker who told a Medicare patient in 2026 that a screening colonoscopy would cost nothing even if a polyp were removed would be giving wrong information, while the same statement would be right for Maria under her commercial plan.

References

Centers for Medicare & Medicaid Services. (n.d.-a). Colorectal cancer screenings. Medicare.gov. https://www.medicare.gov/coverage/colorectal-cancer-screenings

Centers for Medicare & Medicaid Services. (n.d.-b). Medicare claims processing manual: Chapter 18, preventive and screening services. https://www.cms.gov/regulations-and-guidance/guidance/manuals/internet-only-manuals-ioms-items/cms018912

Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1182 (2020).

Shi, L., & Singh, D. A. (2022). Delivering health care in America: A systems approach (8th ed.). Jones & Bartlett Learning.