How Will Medicare Funding Impact Advance Care Planning?

By: Mike Bush
Bowles Rice Medicare Alert
October 1, 2015

Medicare Alert

Proposed changes to Medicare would provide specific billing codes to compensate medical professionals for time spent with patients to discuss advance care planning.

Advance care planning is the process by which an individual, the principal, designates specific persons to make decisions on behalf of the principal, should he or she become incapacitated in the future.  Advance care planning is typically part of an individual's broader estate plan, which should include a living will, medical and financial powers of attorney, a last will and testament, and perhaps a revocable trust or other more complex planning tools.  Proposed Medicare changes discussed here focus specifically on the medical decision-making portion of an individual's estate plan.

If adopted as proposed, Medicare-funded advance care planning will have a huge impact. According to estimates, 55 million Americans are covered by Medicare and 80% of individuals who die each year in America are covered by Medicare. For these individuals and their loved ones, here are a few benefits:

First, patient autonomy increases, as individuals will have more opportunity to consider and decide tomorrow's medical decisions today. Individuals can coordinate their medical decisions with other aspects of their estate plan, allowing professional advisors and loved ones to coordinate services.  Advance care planning allows the principal to achieve greater peace of mind by memorializing express, legally-binding decisions prior to any future onset of diminished capacity resulting from illness or injury.

Second, the principal's medical treatments more accurately reflect his or her wishes. Medical decision-making is becoming more prevalent, as the aging population of Americans is more likely to be faced with illness and injury. Executing advance planning documents removes much of the guesswork for those who act on behalf of the principal. In addition, discussing these issues in the confidence of the principal's medical advisors provides the opportunity for thoughtful decision-making. 

Third, private-pay insurance may follow suit. Advance care planning, paid for by Medicare or private-pay insurance, will provide millions of Americans the opportunity to craft estate plans for the first time, or revise current estate plans.

Advance care planning services may constitute a stand-alone medical appointment and are completely voluntary. If adopted as proposed, the new billing codes will be effective January 1, 2016.

Even the simplest medical decisions are impacted by complex structures of law and medicine. With projected Medicare amendments, more individuals than ever will engage in estate planning, a process that requires a sound understanding of complex medical and legal nuances. Patients and their trusted advisors will have a unique opportunity to participate, together, in crafting tailor-made estate plans.

Update: Effective January 1, 2016, Medicare offers reimbursement to medical professionals that discuss advance care planning with their patients.  In addition to the traditional “Welcome to Medicare” appointment, these discussions may occur during the Medicare patient’s annual visit or by a separate appointment.