How Are Providers Reimbursed by Medicare?


Quick Answer

Medicare reimburses healthcare providers after they give medical services or supplies to Medicare beneficiaries and submit reimbursement claims directly to Medicare. The reimbursement rates that are a part of the Medicare fee schedule determine how much Medicare pays healthcare providers for services rendered.

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Full Answer

Once they provide healthcare services to patients who have Part A, Part B or Original Medicare, providers are legally bound to submit reimbursement claims. By accepting a Medicare assignment, healthcare providers enter a contractual obligation with Medicare and thereby agree to accept the reimbursement rates of a specific program in lieu of the full payment for the services and supplies that they provide. This often leads to situations in which Medicare reimburses providers for an amount of money that is lower in comparison to the typical price of a service.

Healthcare providers who accept all Medicare assignments enjoy 5 percent higher reimbursement rates relative to those providers who retain the option to reject an assignment on Medicare claims. Additionally, Medicare lists them on the directory of participating practitioners and provides faster processing times for their reimbursement claims. However, non-participating providers can charge a patient up to 115 percent of the reimbursement rate. The downside is that they have to submit the claims to their Medicare contractors and wait for them to forward the claims to the patients.

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