Medicare is divided into Parts A, Part B, Part C, and Part D. The medical services patients receive and what Part is being used determines what is the Medicare patient’s responsibility. Broadly speaking, Part A covers inpatient hospital stays, home health services and hospice care. Part B covers professional physician services, laboratory tests, and medical supplies. Part C is a special program in which commercial insurance carriers provide standard Medicare benefits and additional services according to guidelines run by that carrier. Part D covers prescription medications.
Medicare maintains a data base of the services it considers medically necessary and a fee schedule determined to be reasonable for those services. If a physician or institution does not participate in the Medicare program, Medicare patients are never responsible for more than 15% above what Medicare has determined is a reasonable fee for services. If a physician or institution does participate, a Medicare patient is only responsible for a small annual deductible and then a percentage of the allowable fee after that deductible is met. By law, health care providers cannot charge a patient more than what Medicare determines is reasonable reimbursement.
Part C Medicare patients are governed by the policy they purchase from a third party commercial intermediary. Their benefits are determined by that policy’s terms. There is usually a set copayment due for each service rather than a percentage of total approved charges. In addition, preventative services may be covered in full. Under Medicare Part B, many preventative and screening services are not covered at all.