Q:

How are Medicare insurance providers reimbursed?

A:

Quick Answer

Medicare reimburses insurance providers for claims automatically according to its reimbursement rates. Generally this is done when a provider submits claims to Medicare electronically, although in some cases providers must submit paperwork by postal mail before being paid.

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Full Answer

Medicare reimbursement rates are set by federal legislation. These rates determine how much a health care provider or insurance provider is eligible to receive for services provided and are applied to charges related directly to medical care.

In rare situations, patients must file a claim for reimbursement. This occurs when they receive services from a health care provider who does not have a Medicare assignment, and therefore does not have a contract with Medicare. In these instances, the provider must accept payment at approved Medicare rates, regardless of whether or not those rates match hers. When there is a discrepancy, the patient is responsible for paying the difference.

Non-participating health care providers are allowed by law to charge patients up to 15 percent more than the approved Medicare rate for a given service. It is not uncommon for some doctors to complain about treating Medicare patients for this reason. In many cases, the approved Medicare rate for a procedure or test is less than the rate hospitals and clinics charge.

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