Medicare and Medical Billing

Medicare Basics

Medicare is federal health insurance for people 65+ and certain younger people with disabilities. Understanding its parts helps you manage your healthcare costs.

The Four Parts of Medicare

Part A: Hospital Insurance

What it covers:

• Inpatient hospital care
• Skilled nursing facility care
• Hospice care
• Some home health care

Cost-sharing (2024 standard):

• $1,632 deductible per benefit period
• Days 1-60: $0 after deductible
• Days 61-90: $408/day
• Beyond 90: Lifetime reserve days

Premium: Usually $0 if you or spouse paid Medicare taxes for 10+ years

Part B: Medical Insurance

What it covers:

• Doctor visits
• Outpatient care
• Preventive services
• Medical equipment
• Some home health care

Cost-sharing (2024 standard):

• $240 annual deductible
• 20% coinsurance for most services
• 100% coverage for many preventive services

Premium: $174.70/month (standard; higher for higher incomes)

Part C: Medicare Advantage

What it is:

• Private insurance alternative to Original Medicare
• Combines Part A and Part B coverage
• Often includes Part D drug coverage
• May include extra benefits (dental, vision, hearing)

How it works:

• You pay Part B premium plus plan premium (sometimes $0)
• Must use plan's network (usually)
• Different cost-sharing than Original Medicare
• Has out-of-pocket maximum (Original Medicare doesn't)

Part D: Prescription Drug Coverage

What it covers:

• Prescription medications
• Each plan has a formulary (drug list)
• Costs vary by plan and drug

Cost structure:

• Monthly premium (varies by plan)
• Annual deductible (up to $545 in 2024)
• Copays or coinsurance for drugs
• Coverage gap ("donut hole")
• Catastrophic coverage after high spending

Original Medicare vs Medicare Advantage

Original Medicare (Parts A + B)

Pros:

• Any Medicare-accepting provider
• No network restrictions
• Predictable, standard benefits
• Add Medigap for coverage gaps

Cons:

• No out-of-pocket maximum
• 20% coinsurance adds up
• Need separate Part D
• No extra benefits

Medicare Advantage (Part C)

Pros:

• Out-of-pocket maximum
• Often includes drugs, dental, vision
• May have lower costs
• Extra benefits like gym memberships

Cons:

• Network restrictions
• May need referrals
• Prior authorization often required
• Coverage can change annually

Medigap (Medicare Supplement Insurance)

What It Is

Private insurance that helps pay costs Original Medicare doesn't cover:

• Part A and B deductibles
• Coinsurance and copays
• Coverage when traveling abroad

How It Works

• You pay a monthly premium
• Medigap pays after Medicare pays
• Covers "gaps" in Original Medicare
• Standardized plans labeled A through N

Who Can Buy It

• Must have Part A and Part B
• Best time: Open Enrollment Period (first 6 months after Part B starts at 65)
• After that, may face medical underwriting

Popular Plans

• Plan G: Covers almost everything except Part B deductible
• Plan N: Lower premium, some copays apply

Common Medicare Billing Issues

Balance Billing

Medicare-accepting providers:

• Participating: Accept Medicare's approved amount
• Non-participating: May charge up to 15% more

Part B Excess Charges

• Difference between Medicare's approved amount and what non-participating providers charge
• Some Medigap plans cover this

Claim Denials

Common reasons:

• Not medically necessary
• Not covered by Medicare
• Duplicate claim
• Incorrect information

Appeals Process (5 Levels)

1. Redetermination by Medicare Administrative Contractor
2. Reconsideration by Qualified Independent Contractor
3. Administrative Law Judge hearing
4. Medicare Appeals Council
5. Federal court

Tips for Medicare Beneficiaries

Understand Your Coverage

• Know what Part A and B cover
• Check if services need prior authorization
• Understand your cost-sharing

Review Bills Carefully

• Medicare Summary Notice (MSN) comes quarterly
• Compare to your records
• Report fraud (1-800-MEDICARE)

Choose Wisely

• Compare Original Medicare + Medigap vs. Medicare Advantage
• Review Part D plans annually
• Consider your health needs and budget

Use Preventive Services

• Annual wellness visit (free)
• Cancer screenings
• Vaccinations
• Many preventive services at no cost

Understanding Medicare helps you make informed decisions and catch billing errors.