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What you should know about Medicare and Medicaid reimbursements

On Behalf of | Apr 18, 2022 | Blog, Health Care |

Most doctors and medical facilities have missions that focus on healing patients. Therefore, many accept Medicare and Medicaid insurance.

Because these are federal and state health insurance programs, some doctors, clinics and hospitals have experienced challenges when they seek reimbursements for patient care. Here is what you should know about these programs.

Federal laws

Medicare and Medicaid set specific costs. While the federal government funds Medicare for elderly and disabled patients, both the state and federal governments fund Medicaid for individuals with low incomes.

In the 1980s, both Medicare and Medicaid underwent significant changes. The government adopted a federal payment system for Medicare reimbursements to improve efficiency, and both programs reduced the allowable, “reasonable,” costs for various procedures and treatments.

Reimbursement factors

Several factors affect medical providers’ reimbursements. The patient’s insurance type and amount, especially federally funded medical programs, impact cost recovery. In addition, insurance companies evaluate the medical necessity of procedures.

Fiscal intermediaries, not the government, determine medical reimbursements based on the patient’s condition. These individuals consider the treatment length, the severity of the condition and the impact it has on the patient’s life prior to approving payments. They also set reasonable costs of treatments.

Reimbursement challenges

Medicare and Medicaid payments tend to be significantly less than those submitted by private insurance, and Medicaid payments are the lowest. In addition, many Medicare and Medicaid claims (eight and 19%, respectively) are initially rejected or not paid in full, costing up to $10-16 per visit in additional time and research. These added costs and reimbursement issues affect doctors’ willingness and ability to accept Medicare and Medicaid patients.

Before you challenge a Medicare or Medicaid claim reimbursement, learn how governmental medical coverage works and what payments and remedies you may expect.