It is well known that Medicare prohibits charging for services to immediate family members, but what does this really mean for a retina practice?

Q. Why doesn’t Medicare allow claims for services to family members?

A. According to the Centers for Medicare & Medicaid (CMS) Medicare Benefits Policy Manual (MBPM), the intent of the exclusion is to bar Medicare payment for items and services that would ordinarily be furnished without charge because of the relationship of the beneficiary to the provider.¹ In other words, if your mother didn’t have insurance, CMS recognizes that you would care for her without charge.

Q. What are the excluded relationships?

A. The exclusion applies to immediate relatives of the owner(s) of the provider as well as the provider him- or herself — and to members of the provider’s household.

Q. How does Medicare define “immediate relative”?

A. With few exceptions, these relationships are included:

• Spouse
• Natural parent, child, and sibling
• Adoptive parent, child, and sibling
• Stepparent, stepchild, stepbrother, and stepsister
• Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, and sister-in-law
• Grandparent and grandchild
• Spouse of grandparent and grandchild

The instruction notes that a step relationship or an in-law relationship continues to exist even if the marriage that created the relationship is terminated through divorce or death of one of the parties. In other words, the step or in-law relationship continues even when the individual who created the relationship is gone.

Individuals who are not considered in-laws include:

• Provider’s spouse’s brother-in-law or sister-in-law
• Provider’s spouse’s stepfather or stepmother

Q. Who does CMS consider to be members of a household?

A. Persons sharing a common abode as part of a single-family unit are included. This means those related by blood as well as by marriage or adoption. It also includes domestic employees and others who live together as part of a single-family unit. It does not include roommates or someone renting a room.

Q. Does the exclusion apply to other providers in the practice?

A. Yes. Immediate relatives, or other excluded individuals, of the owner(s) of the provider are excluded. If the physician is part of a partnership in which even one of the partners is related to the patient (as described above), then the exclusion applies to all partners.

Q. What about corporations?

A. The services of a physician who belongs to a professional corporation are subject to the same exclusion rules for immediate relatives. Services furnished incident to those services (for example, by the physician’s nurse or technician), if the physician who furnished the services or who ordered or supervised incident to services has an excluded relationship with the patient, are also excluded.

A professional corporation is an entity that is completely owned by one or more physicians and is operated for conducting the practice of medicine. Optometry, as well as ophthalmology, could be included in a professional corporation depending on state laws.

This rule does not apply to charges imposed by a corporation, other than a professional corporation, regardless of the patient’s relationship to any of the stockholders, officers or directors of the corporation, or to the person who furnished the service. So, a publicly held corporation is not included in the above discussion. In ophthalmology, however, most physicians are either partnerships or professional corporations, and are included.

Q. What about Medicare Advantage (Part C) plans?

A. Medicare Advantage plans are generally required to cover all medically necessary and appropriate services that are covered by regular Medicare. The same non-coverage exclusions apply, so Medicare Advantage plans will also exclude coverage for family members as discussed here. RP

REFERENCE

1. Centers for Medicare & Medicaid Services. Medicare benefits policy manual chapter 16 - general exclusions from coverage. Accessed August 18, 2021. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c16.pdf