Medicare reimbursement is when a doctor or healthcare facility receives payment directly from Medicare for providing care to a Medicare enrollee.
Medicare sets reimbursement rates for each of its covered services, so when a provider accepts Medicare assignment, they agree to these rates and may not ask the patients to pay more. A doctor who accepts assignment may only charge the patient for their deductible or coinsurance, filing a claim for reimbursement from Medicare for the remaining charges.
In some cases, however, a doctor who does not accept assignment may still provide care to a Medicare beneficiary and decline to file a claim for Medicare reimbursement. In this scenario, the beneficiary must front the full cost of care, which may exceed Medicare’s set rates, and submit their own claim for reimbursement.
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How Does Medicare Reimbursement Work?
If you have Original Medicare and seek a covered service from a provider who does not accept assignment, you may have to file for Medicare reimbursement. Here’s how reimbursement works for each part of Medicare.
Medicare Part A
Medicare Part A provides hospital insurance. If you seek hospital services from a facility that does not accept assignment and declines to file its own reimbursement claim to Medicare, you may have to seek reimbursement yourself.
Medical services covered by Part A include:
- Inpatient hospital care
- Skilled nursing facilities
- Nursing homes
- Hospice
- Home healthcare
If you seek any of the above types of care from a facility that does not accept assignment, you may have to file for Medicare reimbursement. Medicare might reimburse you directly, or the facility might receive the reimbursement from Medicare and issue you a refund accordingly.
Medicare Part B
Medicare Part B covers medically necessary and preventative health services. You may have to seek Medicare reimbursement under Part B if your provider does not accept assignment or file their own reimbursement claim for the following types of services:
- Ambulance transportation
- Bone mass measurement
- Care as part of a clinical research study
- Clinical lab services
- Counseling to quit smoking
- Durable medical equipment
- Emergency department services
- Health screenings and tests
- Home health services
- Inpatient or outpatient care or partial hospitalization for a mental health condition
- Medical nutrition, occupational, or physical therapy
- Preventative healthcare
- Services and supplies for kidney dialysis
- Surgery
- Vaccinations
When Medicare issues your reimbursement, you may receive it directly or receive it in the form of a refund from your provider.
Medicare Advantage
Unlike Original Medicare, which comprises Part A and Part B, Medicare Advantage (also called Part C) plans come from private insurance companies. All Medicare Advantage Plans provide the same coverage as Original Medicare, plus added benefits like prescription drug coverage, vision, and dental.
If you have a Medicare Advantage Plan, you may not file for reimbursement from Medicare since your health coverage comes from a private insurer. If you seek covered health services and the facility or doctor bills you rather than your insurance company for the cost, you may have to seek reimbursement from your insurance provider.
Medicare Advantage Plans vary by provider, so ask your insurance company how to file for reimbursement should this situation occur.
Medicare Part D
Medicare Part D covers prescription drugs. As with Medicare Advantage, Part D plans come from private insurance providers, so their specific benefits and terms of coverage vary from company to company.
Because you receive Part D coverage through a private company, you will never request Medicare reimbursement for products or services covered under Part D.
If you pay out of pocket for services covered under Part D, you might file for reimbursement from your Part D Plan’s insurance provider. However, this process varies among individual providers; contact yours for detailed guidance on how to request reimbursement.
Medigap
Medicare Part B only pays for 80% of the cost of its covered services. Medigap, also called Medicare supplementary insurance, helps pay for the remaining 20% to reduce the beneficiary’s out-of-pocket expenses.
Medigap plans are only available to Original Medicare enrollees through private insurance companies; if you have a Medicare Advantage Plan, you may not purchase Medigap. If you receive a covered service from a health provider who accepts assignment, Medigap may reimburse you for your portion of the treatment cost.
However, because Medigap plans come from private providers, you will not file claims for Medigap reimbursement to Medicare directly. Contact your Medigap provider to learn about its specific reimbursement process.
How Are Reimbursements Determined?
Medicare revises its established reimbursement rates for covered services on an annual basis. A select committee helps determine these rates each year, with committee members including a mix of medical professionals and other professionals.
The process of determining reimbursement rates is complex and often warrants criticism from the medical community for lacking transparency. Generally, reimbursement rates account for the following factors:
- The type of product or service
- The type of health provider or facility
- How complex the service is
- Where the service takes place
- Adjustments for inflation
The Medicare program is not required to accept the committee’s recommendations for reimbursement rates, but in more than 90% of cases, it has.
What Happens if Medicare Does Not Reimburse You in Full?
Medicare may not provide reimbursement for services that are not medically necessary or covered by Original Medicare. If Medicare denies your request for reimbursement and you disagree with the decision, you may file an appeal.
In some cases, if you file for Medicare reimbursement, you may not receive the full amount you paid out of pocket for your covered service. Remember, Medicare pre-establishes its reimbursement rates. If your health provider does not accept assignment, they did not agree to cap charges at the Medicare-approved rate. For this reason, you may not get all of your money back.
How To Receive Medicare Reimbursement
If you paid out of pocket for a Medicare-covered service from a provider who does not accept assignment, first ask the provider to file the Medicare reimbursement claim. If they decline to do so, it’s up to you to request reimbursement from Medicare. Here’s how to do it:
- Download the Patient’s Request for Medical Payment (Form CMS-1490S) from the Centers for Medicare and Medicaid Services (CMS) website.
- Follow the provided instructions to complete the form, including a detailed explanation of why you are filing the claim instead of your health provider.
- Provide an itemized bill, your provider’s name and address, your diagnosis, details on when and where you received the service, and a description of the service, along with any other information that might support your claim.
- Make a copy of your completed form to keep for your personal record.
- Consult the CMS’s Medicare contractor directory to determine where you should mail your claim.
- Mail a completed Form CMS-1490S to your Medicare contractor.
If you are unable to file the claim yourself, you may designate someone else to do it for you. In this case, make sure to download and complete the Authorization to Disclose Personal Health Information (Form CMS-10106) from CMS’s website.
All in All
As a Medicare beneficiary, you may receive covered services from a medical provider who does not accept assignment from Medicare. For you to get coverage for these services, you or your provider must file a claim for reimbursement from Medicare.
If your provider refuses or otherwise declines to file for Medicare reimbursement, it’s up to you to do so, which involves downloading, completing, and mailing in the appropriate form.
If you have a Medicare Advantage Plan, you must file reimbursement through your private insurance provider rather than through Medicare directly. The same applies if you are seeking reimbursement for services covered by Medicare Part D or Medigap.