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Insurance Coverage
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Introduction

Our national patchwork of insurance programs presents special challenges in reimbursement for dementia care. The Alzheimer's Association advocates before legislative bodies and in other public forums on the need for more equitable coverage and reimbursement of professional care for Alzheimer's disease and related disorders.

This section contains a brief overview of Medicare and Medicaid, the two publicly funded programs with significant applicability to dementia care, as well as links to sources of more detailed information.


Medicare

In collaboration with the American Bar Association's Commission on Legal Problems of the Elderly, the Alzheimer's Association has initiated a Medicare Advocacy Project to gather information and identify problems encountered by beneficiaries and providers.

The project's director works closely with Alzheimer's Association public policy staff on the identification of Medicare trends, problems and patterns of recurring issues, and assists with the development of appropriate federal policy positions related to Medicare and health care delivery. Professionals who would like to report issues can email rconant@alz.org.

Coding and reimbursement for Alzheimer's care: The most appropriate code for diagnosis and management of Alzheimer's disease is 331, which is reimbursed at the usual Medicare rate of 80 percent. Alzheimer's can also be billed under diagnostic code 290 (presenile dementia), an older category that falls under the mental health classification.

Because Medicare, like many private health insurance plans, reimburses mental health care at 50 percent, bills submitted under the 290 code are reimbursed at the lower rate. The 331 code should be used to ensure appropriate reimbursement.

Physical, occupational, and speech therapies: In one of its first significant victories, the Medicare Advocacy Project won reversal of a long-standing policy that automatically denied reimbursement for rehabilitative services for beneficiaries who had been diagnosed with dementia.

In the fall of 2001, Medicare issued a program memorandum prohibiting denial of these services based exclusively on a dementia diagnosis. The reversal hinged on the recognition that health care professionals now can often diagnose dementia in its earliest stages, when some individuals can derive significant benefit from rehabilitative services.

Payment for medical services and procedures will now be determined on a case-by-case evaluation of an individual's needs and capabilities rather than solely on a dementia diagnosis.

Psychiatric and mental health services: Medicare often denies mental health claims for beneficiaries with a primary or secondary diagnosis of dementia. These claims should not automatically be rejected, but should be evaluated and reimbursed on a case-by-case basis.

Individuals with Alzheimer's may develop a treatable mental illnesses such as depression that should be covered by Medicare. Medicare pays mental health claims at 50 percent rather than the 80 percent rate for other conditions, so allowable mental health services will be reimbursed at 50 percent.

Home health care: Only Medicare beneficiaries who are "homebound" are eligible for Medicare home health care benefits. Medicare's definition of "homebound" has always been extremely strict, stipulating that leaving the home must involve "considerable and taxing effort."

As of December 2000, the application of the definition was broadened to permit some individuals who attend adult day care to qualify as homebound if their day care program meets certain guidelines.

For more information:


Medicaid

Because Medicaid is a federal/state collaboration typically administered by each state’s welfare agency, eligibility and benefits vary from state to state.

Medicaid covers all or a portion of nursing home costs for individuals with Alzheimer's who meet income and asset eligibility guidelines. For more information, visit the Web site of the Center for Medicare and Medicaid services at www.cms.hhs.gov.

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Alzheimer's Association

Our vision is a world without Alzheimer's
Formed in 1980, the Alzheimer's Association is the world's leading voluntary health organization in Alzheimer's care, support and research.