Blog

Understanding Medicare Reimbursement Rates


Want to gain a better understanding of Medicare reimbursement rates? You might have better luck trying to win the lottery.

Given that there is a complex system of different hospitals and physicians to deal with, it’s easy to see why it can be so confusing.

“Medicare reimbursement” is the term used for the payments that hospitals or doctors are given in return for the care they administer to a Medicare beneficiary. The Medicare Reimbursement Rates are set by Medicare, and these rates are usually lower than the amount that is billed, or the amount that the healthcare provider would quote a private insurance company.

What is a Medicare Participating Provider?

A participating provider is any facility or physician who agrees to accept the rates that are set by Medicare. This means they accept the Medicare reimbursements for all services that are covered under Medicare, and anyone who is covered by Medicare can apply for them. The facility or physician bills Medicare directly for the covered services.

One recent analysis of the healthcare market (Kaiser Family Foundation) found that 93% of non-pediatric PCPs were classed as participating providers, though, it’s important to note that only 72% of them were currently accepting new patients covered by Medicare. For this reason, if a patient has a doctor they’re happy with, it’s worth trying to stay on their books.

What About Non-Participating Providers

Matters are further complicated when dealing with non-participating providers. There are a number of healthcare providers who are non-participating providers, and this means they do not accept the current Medicare reimbursement rates. If a patient seeks treatment from a facility or physician who is a non-participating provider, that patient may be asked to pay the bill up front,  then turn to Medicare for reimbursement of the amount normally to be paid. The provider will be paid 95% of the amount that is listed on the fee schedule. Then they are allowed to bill no more than 15 percent of the reimbursement amount. Some states set the limit even lower, at around five percent.

Opt-out providers

Lastly, there are some doctors who will not accept Medicare patients at all. It is estimated that roughly one percent of physicians opt out of Medicare completely. It is common for psychiatrists to do this, but some doctors are doing so as well. A physician who has opted out will not accept Medicare payments and will bill the patient directly. There is no limit to the bill that the provider can charge because they are essentially opting as a private business and the matter of billing is between their patients and themselves.

If you have additional questions about Medical Reimbursement Rates, feel free to contact Payer Compass for answers.

Sources: https://www.medicareresources.org/faqs/how-does-medicare-reimbursement-work/