What’s Medicare Reimbursement?

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Medicare reimbursement pays doctors and hospitals for services rendered to patients, but doesn’t cover the full amount. Participating doctors must accept Medicare’s pricing schemes, while non-participating doctors can charge 115% of the Medicare-approved rate and are refunded 95%. Some doctors opt out of the program due to inadequate fees.

Medicare reimbursement is the name applied to the payments doctors and hospitals receive for services rendered to patients covered by the Medicare program. The money will go directly to your billing provider, but Medicare insurance doesn’t pay the full amount. Because of the fees set by Medicare, the Medicare reimbursement program can often be highly controversial and a hotbed of political exploitation.

Those doctors who want to participate in the Medicare reimbursement program have a couple of options. One of those options is to look at the commission schedule and take the job. Any participating physician who accepts the referral must agree to the rate set by Medicare as the price for that service. Medicare will take that amount and pay 80%. The patient will be responsible for the rest.

Once a doctor becomes a participating doctor in the Medicare reimbursement program, all pricing schemes for the services offered must be accepted. That doesn’t mean the doctor will have to accept all Medicare patients, however. Once a physician becomes a participating physician, they are usually locked into that role for one year.

Some doctors feel unable to make an adequate profit under the pricing plan provided through Medicare’s reimbursement policy and therefore may opt out of the program. These nonparticipating physicians can then accept Medicare pricing plans on a case-by-case basis. They can then charge 115% percent of that rate schedule and are refunded 95% of the approved rate.

The best way to illustrate what this means for the patient and the doctor is to use an example. If a procedure you perform has an acceptable fee of $200 US dollars (USD) to Medicare, Medicare coverage will pay 80 percent of that amount, or $160 USD. The patient is responsible for an additional $40 USD. If the doctor is a nonparticipant doing this procedure for Medicare, he or she may charge 115% of the Medicare-approved 95% or $218.50 USD. Medicare will then pay out $152 USD, leaving the remaining $66.50 with the patient or secondary insurance coverage. Your doctor also has the option not to file a Medicare claim if you are a nonparticipating doctor.

Some doctors say Medicare’s reimbursement fee plans are inadequate and they can’t make a profit or even break even if they used them. This is one reason why many may choose not to participate. In other cases, they may simply limit the number of Medicare patients they see.

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