Medicare and the Billing Quandary
Let’s face it: when it comes to Medicare simple questions such as what to bill, how to bill and when to bill can be very confusing. As more and more of the “baby boomer” generation becomes eligible for Medicare, we are seeing an increase in the use of Medicare benefits and questions concerning its use. Consider the following question we received from a provider recently:
“I have a patient whom we billed third party to the attorney. The patient has finished treatment and attorney has requested billing and chart notes and is in settlement at this time. Now I have the attorney requesting we bill Medicare for services. Are we actually required to bill Medicare – we have a lien on this account at this time. We are willing to wait for payment rather than to take a reduction in pay. When I look up MSPRC (Medicare Secondary – liability website) it states we are actually supposed to bill third party first and we do not need to bill Medicare. Is this correct?”
“Also are we able to bill the difference of the contracted rate to Medicare and the usual price we charged. Are we able to include something in the patients signature sheet stating they are still responsible for any amounts (including non-allowed amounts)?”
In order to properly answer this question, we need to determine first if the provider has opted out of Medicare. If the provider has not opted out of Medicare, we next need to determine if the provider is a “Par” or “Non-Par” provider.
Opting Out of Medicare:
In order to “opt out” of Medicare, you must first meet the definition of physician as defined by the Medicare Benefits Policy Manual (MBPM). The MBPM defines “physician” as limited to doctors of medicine; doctors of osteopathy; doctors of dental surgery or of dental medicine; doctors of podiatric medicine; and doctors of optometry who are legally authorized to practice dentistry, podiatry, optometry, medicine, or surgery by the State in which such function or action is performed; no other physicians may opt out. Also, for purposes of this provision, the term “practitioner” means any of the following to the extent that they are legally authorized to practice by the State and otherwise meet Medicare requirements:
- Physician assistant
- Nurse practitioner
- Clinical nurse specialist
- Certified registered nurse anesthetist
- Certified nurse midwife
- Clinical psychologist
- Clinical social worker
- Registered dietitian
- Nutrition Professional
Opting out of Medicare is not an option for Chiropractors, Physical Therapists, and Occupational Therapists because they are not within the opt out law’s definition of either a “physician” or “practitioner”.1
As you will see below, opting out and being “non-participating” are not the same things. Chiropractors, Physical Therapists, and Occupational Therapists may decide to be participating or non-participating with regard to Medicare, but they may not opt out.
Are you a “Par” or “Non-Par” provider?
Participating healthcare providers are called “Par” providers. These providers agree to an allowable fee that is determined by Medicare. The fee will be the total amount that the physician accepts in return for services provided to the patient. This means that the physician cannot charge the patient a higher fee. Medicare does, however, only cover about 80% of the “allowable” amount. The remaining 20% of the physicians agreed upon fee will be billed to the patient. By agreeing to be a “Par” physician, Medicare reimburses these physicians directly.
Non participating physicians are called “Non-Par” physicians. A Non-Par provider is actually a provider involved in the Medicare program who has enrolled as a Medicare provider but chooses to receive payment in a different method and amount. These physicians choose not to participate with the Medicare fee schedule and are allowed up to 15% more than Medicare’s allowable amount. The maximum amount is called the limit charge.
Patients are given the opportunity to use a non participating physician and should be aware that they will be charged more for services. Medicare allows for the extra 15% cost but will still generally only reimburse for up to 80% of the total fee. The difference is the responsibility of the patient. Medicare does not reimburse non participating physicians directly. Instead, Medicare reimburses the patient for the allowable costs. The physician will have to arrange for repayment from the patient. This process can cause a delay in payment to the physician because, in most cases, patients wait for the reimbursement from Medicare before paying the physician’s fees.
It should be noted that being “non-Par” does not mean you do not have to bill Medicare. All Medicare covered services must be billed to Medicare, or the provider could face penalties.
So, to answer the above question, assuming the provider has not opted out, the provider can bill the patient the difference between the provider’s fees and the Medicare reimbursement if the physician is a “non-par” provider and does not accept assignment on the claim. However, the provider’s fee for Medicare patients is set at the limiting charge. If the physician is a “par” provider, then he or she cannot bill the patient the difference between the provider’s fees and the Medicare reimbursement.
If you are treating a patient as a result of personal injuries, we recommend that he/she obtain a complimentary legal consultation with an experienced attorney at Adler Giersch ps who can assist all involved in sorting out the details regarding insurance and likely a host of other issues related to the case and claim.
1 “Medicare Benefits Policy Manual (Chapter 15, Section 40; Definition of Physician/Practitioner) at http://www.cms.hhs.gov/manuals/downloads/bp102c15.pdf on the CMS website.