The Medicare Reimbursement program is a program in the United States that provides health insurance to millions of people (about 28 million as of 2017). The Medicare Reimbursement program is designed to operate uniformly across the country. There is uniform cost-sharing formulas, a uniform set of benefits, and there are also uniform premiums and uniform deductibles and coinsurance. Now though this is what it says it is or this is what it is expected to be, these things vary from state to state (sometimes significantly). This is because of the cost of care and physician prices vary from state to state and vary even within states. There are many factors that influence these variations.

Medicare ReimbursementOutpatient Hospital Medicare Reimbursement

This is a reimbursement situation where outpatient payment systems provide payment for any outpatient services a hospital provides. This could include also partial outpatient hospitalization services rendered.

FAQs about Medicare Reimbursement

How does Medicare reimbursement work?

Medicare reimbursement refers to the payments that hospitals and physicians receive in return for services rendered to Medicare beneficiaries. The reimbursement rates for these services are set by Medicare and are typically less than the amount billed or the amount that a private insurance company would pay. However, this is not always the case. Medicare Reimbursement amounts vary from state to state and even from hospital to hospital. Some physicians also prefer to do things their own way and so they refuse to accept the rates set by Medicare Reimbursement. Physicians who agree to fully accept the rates set by Medicare are referred to as participating providers. These participating physicians or participating providers accept Medicare’s reimbursements for all Medicare-covered services, Medicare patients, and bill Medicare directly for covered services. The Medicare website states that about 96% or physicians in the country are participating providers.

Non-participating Providers

So who are these non-participating providers and why have they decided not to participate? Well, the main reason is that because the rates set by reimbursements are generally lower than what some providers might receive from private insurance companies, some physicians opt not to participate in the reimbursement program. This means they do not accept Medicare reimbursement as payment in full. They may accept it for partial payment but patients they attend to will have to supplement the payment. They might also accept Medicare reimbursement for some procedures. There are cases where patients can receive treatment from these non-participating providers and they can pay out of pocket and seek reimbursements from Medicare. In this case, the providers are paid 95 percent of the fee schedule amount, and can only bill you up to 15 percent more than the Medicare reimbursement amount.

Medicare Reimbursement

 Medicare knew that and has been working for decades with many different providers to discover ways that were effective and could be implemented across the board to help meet these two goals. One of the first areas of interest to investigate was the fee-for-service mentality that is and was so common in the healthcare industry. It isn’t a bad way of handling care and treatment for patients, however, it is ripe for deceit, fraud and extra demands on a patient.

Instead, what Medicare wanted to see was the healthcare community held responsible for the care they provided. For example: if a patient was treated for a heart attack, received significant care and was discharged from a hospital, but returned to the hospital with a staph infection only a couple weeks later, something probably picked up while staying in the hospital the first time. Obviously, there is no way to prevent every negative scenario from happening to patients, however, patients should have some level of expectation of a positive outcome when they have been treated. This patient doesn’t need to be subjected to tons more testing or pay for care that may have been no fault of his own, alternatively, the hospital would be on the hook for this second go-around of treatment(s). This is specifically where improvement to care and treatment would be ramped up for the healthcare industry, and they can be penalized when there are adverse events with a patient.

Medicare Reimbursement Data Sources

Medicare started around 1966 and it has kept a sufficient amount of records since then. Most of these records are payment records. Just like private insurance companies, these records are used to set precedence for future cases and used as reference points when there are cases for which a conclusion cannot be easily reached. The payment records are used administratively to allow The Health Care Finance Administration (HCFA) to equate the amount of reimbursement for bills with the amount the carriers report as disbursed on their monthly financial reports, to validate entitlement to benefits, and to monitor the computation of the reimbursable amount.