Understanding Medicare Billing
To help the person you care for manage medical expenses, it is important understanding Medicare billing.
Knowing about premiums, deductibles, co-insurance, co-payments, and which insurance pays first or second when the person is covered by more than one health insurance plan can help you in the understating of Medicare billing.
Understanding Medical Billing Terms:
Coordination of Benefits
Medicare Summary Notice
Medicare Approved Amount
State Health Insurance Assistance Program
State Medical Assistance Office
A premium is the periodic payment a person makes for health or prescription drug coverage. Most people don’t have to pay a monthly premium for Medicare Part A (hospital insurance), but people who choose Part B (medical insurance) must pay a monthly premium. This monthly premium is paid in addition to any deductibles, co-insurance, or co-payments.
The deductible is the amount that a person must pay for health care or prescriptions before Original Medicare, the person’s prescription drug plan, or other insurance begins to pay. For example, in Original Medicare, the person with Medicare pays a new deductible for each benefit period for Part A and each year for Part B. These amounts can change every year.
Co-insurance is the amount a person may be required to pay for services after he or she pays any plan deductibles. In Original Medicare, this is a percentage (about 20%) of the Medicare-approved amount. The person will have to pay this amount after he or she pays the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan, the co-insurance will vary depending on how much the person has spent.
In some Medicare health and prescription drug plans, a co-payment is the amount the person will pay for each medical service, like a doctors visit or prescription. A co-payment is usually a set amount. For example, this could be $10 or $20 for a doctor’s visit or prescription. Co-payments are also used for some hospital outpatient services in Original Medicare.
When a person with Medicare is covered by more than one health insurance plan, there are rules about whether Medicare or the other insurer pays health care bills first. This is called “Coordination of Benefits.” Sometimes, the other health insurance pays the person’s health care bills first, and the person’s Original Medicare Plan or Medicare Advantage (MA) Plan pays second.
Other insurance that may pay first includes an employer’s or union’s group health plan coverage, no-fault insurance, liability insurance, black lung benefits, or workers’ compensation. If the person has other insurance, it is important to tell his or her doctor, hospital, and pharmacy so that the bills get paid correctly.
If the person you care for is in Original Medicare, he or she will get a Medicare Summary Notice (MSN) in the mail every three months if he or she had a Medicare covered service during that period. The notice lists the services received by the person you care for and the amount he or she may be billed by a hospital, doctor, or other provider. These notices are sent by companies that handle bills for Medicare.
For more information about the Medicare Summary Notice, including a sample MSN and information on how to read it, visit www.medicare.gov and select “Medicare Billing.” Or call 1-800-Medicare (1-800-633-4227) and say “Billing.” TTY users should call 1-877-486-2048.
Notices and bills for Medicare Advantage Plans and Medigap policies will look different than the MSN for people in Original Medicare. If you have a question about a Medicare Advantage Plan or Medigap policy, you will need to call the benefits coordinator at the company or health plan that offers the plan. To locate telephone numbers, you can look at the notice or bill from the plan. Or, you can call 1-800-Medicare (1-800-633-4227). TTY users should call 1-877-486-2048.
A person with Medicare has the right to appeal any decision about his or her Medicare services. This is true whether the person is in Original Medicare, a Medicare managed care plan, or a Medicare prescription drug plan. If the person doesn’t agree with the amount that Medicare paid, or thinks that a service has been unreasonably denied, the person can appeal.
Information on how to file an appeal is on the Medicare Summary Notice (MSN), in the health plan materials, or in the drug plan materials. If the person you care for decides to file an appeal, ask the doctor or provider for any information that may help the case. You can also call the State Health Insurance Assistance Program (SHIP) for help filing an appeal. If the person you care for wants someone to file an appeal on his or her behalf, the person will need to complete an “Appointment of Representative” form.
For more information about appeals, visit http://www.medicare.gov to view or print a copy of “Your Medicare Rights and Protections.” (Under “Search Tools,” select “Find a Medicare Publication.”) You can also call 1-800-Medicare (1-800-633-4227) to find out if a free copy can be mailed to you. TTY users should call 1-877-486-2048.
More Terms to know in Understanding Medical Billing:
Assignment is an agreement between Medicare doctors, health care providers, and suppliers to accept the Medicare-approved amount as payment in full. If a doctor or supplier does accept assignment, Medicare will pay 80 percent of the cost, and the patient pays the rest.
This is the way that Original Medicare measures a person’s use of hospital and skilled nursing facility (SNF) services. (A skilled nursing facility is a nursing facility with the staff and equipment available to give skilled nursing care and/or skilled rehabilitation services such as changing sterile dressings and physical therapy.) A benefit period begins the day a person goes to a hospital or skilled nursing facility. The benefit period ends when the person hasn’t received any inpatient hospital care (or skilled care in an SNF) for 60 days in a row. If a person goes into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins. The person must pay the inpatient hospital deductible for each benefit period.
In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It includes what Medicare pays and any deductible, co-insurance, or co-payment that the patient pays. It may be less than the actual amount a doctor or supplier charges. If a doctor or supplier does accept assignment, Medicare will pay 80 percent of the cost, and the patient pays the rest.
This is a state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare. (In some states, SHIP is known as SHIBA or SHINE.)
This is a state agency that is in charge of the state’s Medicaid program and can give information about programs that help pay medical bills for people with limited income and resources.
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