Medicare is a federally funded health insurance option, and since Medicare is responsible for reimbursing all participating healthcare facilities, the billing process is very particular. Medicare is a high-volume payer, and billing must be completed accurately and specifically based on the exact services received and the relationship the provider has with Medicare.

Understanding Medicare Providers and Accepting Assig
Whether a provider bills Medicare or the patient is determined by whether the provider accepts Medicare assignment. Participating providers are those that fully accept Medicare assignment. This means that they have agreed to charge only a preset price, also known as the Medicare approved amount, for all procedures that fall under Medicare coverage.

Some providers only accept assignment for certain procedures and are known as non-participating providers. For the procedures they do accept assignment for, the billing is sent to Medicare just like full participants. However, for alternative procedures, the provider can bill up to 15 percent more than the Medicare approved amount, and the bill is sent directly to the patient who will seek reimbursement from Medicare. Medicare will also only reimburse up to 95 percent of the approved amount for these procedures.

Some providers may completely opt out of Medicare, meaning that they are not able to bill Medicare for any services. This means that the patient is responsible for paying for all costs out of pocket. In addition, there is no limit to the amount that the provider can charge for a procedure.

How Does Medicare Insurance Billing Work?
Medicare manages a series of contractors that work to process claims. These contractors are known as Medicare administrative contractors. They obtain claims from medical billing officials after a Medicare recipient has received care at a participating facility. This process generally takes around 30 days.

The claims contain a series of relevant billing codes that are standardized across Medicare insurance providers. The process is the same as is used for private insurers. Patient information, provider information, NPI numbers, procedural codes, diagnosis codes, prices, and Place of Service codes must all be entered in, and the majority of this information is obtained from the super-bill that is received from the facility. For electronic billing, this information should automatically be transferred over.

Part A
Original Medicare coverage consists of Part A and Part B. For Part A claims, which are for care provided in an inpatient facility, such as a hospital, the provider is paid directly by Medicare. Once Medicare has reimbursed the facility for the appropriate services, any remaining balance, including deductibles, copayments, coinsurance payments, or other fees, must be taken care of by the facility by billing the patient directly.

These claims are filed using the UB-04 or CMS-1450 forms. This form is a uniform hardcopy claim form that is used for third-party providers. This is the only form that is accepted by Medicare from hospitals and skilled nursing facilities.

Part B
For Part B services that cover outpatient procedures and testing, reimbursement depends on whether or not the provider accepts Medicare assignment. For providers that accept assignment for the specific claim, Medicare will reimburse them for 80 percent of the Medicare approved amount. Then, the provider will bill the patient for the remaining 20 percent of the procedure cost.

Part B claims are filed using the CMS-1500 form. This is the standardized claim for that is used by healthcare providers that contract with Medicare.

For providers that do not accept assignment for the specific procedure, Medicare will pay the patient directly for the reimbursement amount. Then, the patient will be responsible for providing the full payment to the provider.

Part C
Medicare Part C is also known as Medicare Advantage. These plans are offered through private insurers, so the billing is not filed directly though Medicare. Instead, these are claims are filed to the specific private insurance companies, who will then file a claim with Medicare for the services that qualify.

Related articles:

How Does Medicare Pay Hospitals?(Opens in a new browser tab)

Does Medicare Part D Cover Me in a Skilled Nursing Facility?(Opens in a new browser tab)