Approved Amount: The amount Medicare determines to be reasonable for a service that is covered under Part B. This may be less than the actual amount charged. For many services, including doctor services, the approved amount is taken from a fee schedule that assigns a dollar value to all Medicare services covered. How much of a physician’s bill you will have to pay depends on whether or not the doctor accepts assignment. Doctors can choose whether or not to accept Medicare’s allowable charge schedule. If a doctor always accepts what Medicare is willing to pay, then the doctor is called a Medicare Participating Physician.
Assignment/Participation: An arrangement in which a doctor or medical equipment supplier agrees to accept the Medicare-approved amount as full payment for services and supplies covered under Part B. If your doctor does not accept Medicare Assignment, you will be responsible for paying not only 20 percent of the doctor’s charge, but also the full amount that is above Medicare’s highest allowable charge. (See the table below to help you calculate your out-of-pocket expense.) But keep in mind that even doctors who are not Medicare participating physicians may agree to accept assignment for certain individual patients. And there is a limit to what any doctor or health care professional can bill for services provided to Medicare patients: no more than 15 percent above Medicare’s maximum, or allowable rate.
|Doctor’s fee is:||$575|
|Medicare’s allowable fee is:||$500|
|Medicare pays the doctor:||*$400|
|WITH Assignment you pay:||**$100|
|WITHOUT Assignment you pay:||$175|
|TOTAL SAVINGS WITH ASSIGNMENT:||$75|
*(80% of $500)
**(20% of $500)
(20% of $500 PLUS the entire difference between Medicare’s allowable fee and the doctor’s fee)
Benefit Period: Medicare hospital and skilled nursing facility benefits are paid on the basis of benefit periods or “spell of illness.” A benefit period begins the first day you receive a Medicare-covered service in a qualified hospital or skilled nursing care facility. It ends when you have been discharged for 60 days in a row. It also ends if you remain in a facility (other than a hospital) that primarily provides skilled nursing or rehabilitative services, such as a nursing home but do not receive any skilled care there for 60 days in a row. If you enter a hospital again after 60 days, a new benefit period begins. With each new benefit period, Part A hospital and skilled nursing facility benefits are renewed except for any lifetime reserve days or psychiatric hospital benefits you used. There is no limit to the number of benefit periods you can have for hospital or skilled nursing facility care.
Co-payment: The portion or percentage of the Medicare-approved amount that a beneficiary is responsible for paying.
Deductible: The amount of expense a beneficiary must pay before Medicare begins payment for covered services.
Excess Charge: The difference between the Medicare-approved amount for a service or supply and the actual charge, if the actual charge is more than the approved amount.
Limiting Charge: The maximum amount a doctor may charge a Medicare beneficiary for a covered service if the doctor does not accept assignment of the Medicare claim. The limit is 15 percent above Medicare’s approved amount for a particular service. Limiting charge information appears on the Explanation of Medicare Benefits (EOMB) form sent beneficiaries after they receive services covered by Part B.
Medicaid: A federally aided, state operated program that provides medical benefits for certain low-income persons.
Medicare Carrier: An insurance organization under contract to the federal government to process Medicare Part B claims from physicians and other suppliers. The names and addresses of the carriers and areas they serve are listed in the back of The Medicare Handbook, available from any Social Security Administration office.
Medicare Hospital Insurance: This is Part A of Medicare. It helps pay for medically necessary inpatient care in a hospital, skilled nursing facility or psychiatric hospital, and for hospice and home health care.
Medicare Medical Insurance: This is Part B of Medicare. It helps pay for medically necessary doctor services and many other medical services and many other medical services and supplies.
Medigap Insurance: These policies are sold by private insurance companies. They are specifically designed to help pay health care expenses either not covered or not fully covered by Medicare.
Open Enrollment Period: Open enrollment starts the first month you are at least 65 and enrolled in Medicare Part B, and ends six months later . During those six months, you have the right to buy the Medigap policy of your choice regardless of your health status. Until a few years ago, disabled Medicare members were not eligible for Medigap open enrollment when they turned 65. As of November 1994, however, all insurance companies must accept a disabled Medicare recipient regardless of health status for six months after they turn 65.
Participating Doctor or Supplier: A doctor or medical supplier who agrees to accept assignment on all Medicare claims.
Psychiatric Hospital Benefits: In addition to covering care in a general hospital, Part A helps pay for care in a Medicare-participating psychiatric hospital. Coverage is limited to a lifetime maximum of 190 days of care. Psychiatric care provided in a general hospital is not subject to the 190-day limit.
Reserve Days: You have a supply of 60 reserve days. In the unlikely even that you are in the hospital for more than 90 days in a benefit period, you can use your “reserve days” to help pay the bill. When a reserve day is used Medicare pays all costs normally covered. But once a reserve day is used, it is not renewed. So if you use 10 reserve days, you’ll have 50 left to use during the rest of your lie.