There are over 43 million Americans who receive Medicare coverage and over 250,000 members of the American Medical Association who have the option of participating in the Medicare program. Medicare reimbursement is typically paid to hospitals and physicians after services have been provided to patients through the Medicare program but they can also be paid directly to the Medicare recipient.
Physicians have a choice of whether or not to participate in the Medicare reimbursement program. Providers and suppliers who agree to accept Medicare receive direct payment from the program. Those who do accept have to agree to the fee schedule as set forth by the program. They are then reimbursed 80% of the amount on the schedule. Physicians who do not participate may still accept Medicare patients but they are only allowed to charge 95% of the amount on the fee schedule. Medicare reimbursement is 80% of this amount. Rates on the fee schedule are based on a formula linked to the national economy and are adjusted annually.
For hospitals and nursing homes, care costs are based on the initial diagnosis and fees set on a list of “diagnosis related groups” (DRG). If the patient receives less care than initially thought, the institution gets to keep whatever amount in on the DRG. If the care is more, then the hospital or nursing home loses money. Oftentimes the physician will try to offset potential losses by making a more serious initial diagnosis.
If your provider doesn’t accept Medicare, you will have to pay the bill at the time service is rendered or supplies are received. The provider or supplier is then required to file a claim on your behalf and Medicare will pay its share of the bill directly to you. If there is a problem with the claim being filed the Medicare recipient may need to file it. Medicare recipients can file by printing and completing a form called “Patient’s Request for Medical Payment” that is available online. The form is then mailed in to Medicare and the claim will be processed and reimbursement sent directly to the Medicare recipient. Medicare claims must be filed within a calendar year of the date services were rendered.