Structure
Medicare is a federal health insurance program for people who are age 65 and older, disabled or suffer from chronic renal disorders. The Health Care Financing Administration (HCFA), which is a division within the Department of Health and Human Services, is tasked with administering the Medicare program. However, HCFA contracts with various health care insurance agencies across the country, like Blue Cross and Blue Shield, to manage the program locally. Insurance agencies contracted to handle Medicare Part A claims are referred to as "Fiscal Intermediaries," while those agencies contracted to handle Part B claims are called "Carriers" (see "The Parts of Medicare" below). As a result, while there are national Medicare policies, there are also Local Medical Review Policies (LMRPs) that may be unique to a particular state. These policies can differ in terms of utilization parameters (number of sessions allowed) or other types of coverage issues (e.g. covered diagnoses, supervision requirements, etc.). Because services provided by psychologists are covered under Medicare Part B, it is very important to read and keep all bulletins sent by your local Medicare carrier because you will be held accountable for this information when services are reviewed or audited. Check with your State Association regarding LMRPs and trends related to denials of services provided.

The Parts of Medicare
All Medicare beneficiaries automatically receive the Part A Hospital benefit which provides coverage of inpatient hospital services, skilled nursing facilities, home health services and hospice care. However, individuals must apply for and pay an additional fee to receive Part B benefits. Part B is a supplemental insurance package that helps pay for the cost of physician and other provider services (including psychologists), outpatient hospital services, medical equipment and supplies and other health services and supplies. The services of a clinical psychologist are paid for out of the Part B funds.

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