Medicare Reimbursement

Medicare reimbursement is an issue within the Medicare system most recipients may not know much about. It is part of what goes on "behind the scenes" in terms of your insurance coverage and which physicians are available for you to visit. In many cases, you will not have to worry about Medicare reimbursement, but it may help you to explain why some doctors participate in Medicare, while others join private insurance programs.

"Medicare reimbursement" is the profit that physicians and care facilities will make when they accept a patient covered under Medicare. When a claim is made on that patient's behalf, the amount paid to the facility is the reimbursement amount. Although the reimbursement amount is low, many doctors choose to accept Medicare because it means a large community of people in need will visit their facility on a regular basis.

What is "Assignment" and How Does it Relate to Medicare Reimbursement?

"Assignment" is a process where the doctor or facility agrees to provide care to a patient in accordance with Medicare's billing standards. Medicare maintains a fee schedule that allows doctors to see how much Medicare will reimburse them for each kind of treatment. Doctors may accept or reject this fee schedule on a case-by-case basis, which is why it is very important for patients to go through "assignment" with each provider.

For example, say you need a medical prosthesis. Prosthetic limbs and eyes are some of the most common materials where assignment is necessary. You receive a prescription for a prosthesis from a doctor, just as you would with a drug. However, then it is up to you to select a provider. You can only choose from the providers accepted by Medicare, but you should also be careful to choose only those willing to go through assignment.

When your provider agrees to assignment, it means that they agree to accept only the amount proscribed by Medicare for the given service or product. This protects you from having to pay an unexpected high amount.

When you have a choice, you should only work with medical equipment suppliers and other medical professionals who are willing to abide by assignment. Those who do not may charge you an unlimited amount. You will not be able to file a grievance to prevent this collection within the Medicare system -- it may become a legal grievance.

What is the Difference Between a Participating and Non-Participating Physician?

A "participating" physician is one who has agreed to accept the Medicare fee schedule for all services he or she provides. When a doctor makes this decision, then he or she is generally required to abide by the fee schedule for a whole year. This is a decision that can also be made on an organization-wide basis (that is, by a whole medical office.)

A "non-participating" physician is one who has not chosen to accept the Medicare fee schedule. He or she uses on the fee schedule on a case-by-case basis, like most providers of medical equipment. Non-participating physicians may choose to limit the number of Medicare patients that they see within a given time frame. If you use such a provider, you may need to select a "secondary" provider who is a participating physician.

Why Do Some Physicians Refuse to Participate in Medicare?

Some physicians are non-participating because they provide advanced services not covered by Medicare. For example, Medicare is notorious for its lack of coverage pertaining to eye care. Specialists in eye care generally provide services that are never or almost never covered under existing Medicare standards. They can save money by opting out of the strenuous reporting expected of all facilities that see Medicare patients.

Other medical organizations limit the number of Medicare patients they see because of concerns over profit. The Medicare fee schedule limits the amount of money that any healthcare organization will see on its "bottom line." This is true for any group that provides services covered by Medicare, whether the community of Medicare patients in the area is large or small. It can drive some doctors away from accepting the insurance.

However, there are many companies around the country that not only accept all Medicare patients unconditionally, but also make a very healthy profit doing so. They rely on a steady flow of visits by Medicare patients.

Because of this, the choice of healthcare provider is generally larger for those covered by Original Medicare than it is for those covered by Medicare Advantage Plans administered by private corporations. Most Medicare Advantage Plans will limit you to visiting their enrolled ("plan") doctors.

What Other Meanings Can "Medicare Reimbursement" Have?

The phrase "Medicare reimbursement" can also refer in a very limited sense to what happens in a Part D Medicare plan when you pay for a covered drug out of pocket and then seek to have your costs reimbursed.

To do so, you must maintain copies of your prescription, any doctor's notes, and your receipt. Under Part D and income-based Medicaid assistance, paying for drugs out of pocket may make it difficult to get reimbursed. You should only do so in an extreme emergency situation when you need the medication immediately.