Does Medicare really pay 80% Really?

[Steve s]

Received bill for ct scan Approved amount by Medicare is $1594. My portion at 20% is $318. Medicare paid $406.15 because the amount Medicare paid was reduced due to federal, state and local rules? Say what? That's not 80%. More like 56%. Total paid to hospital is $724.95. Someone got a break and it wasn't me.
Deductible was met earlier in year so doesn't figure in.
Thought when I got on Medicare it would be pretty simple I pay 20% Medicare pays 80%. Apparently Medicare has ways around their 80%.
If anyone has any information at why I am looking at this wrong would appreciate your comment.
Tried to find out what federal, state and local rules lowered their amount but couldn't find anything.
Suppose I should be happy the government is saving money but it just doesn't feel right when Medicare states they pay 80%. Thanks for letting me vent......steve

 

[audreyh1]

Are you saying you owe more than 20% of the Medicare approved amount? No - I see you don't.

 

[Fedup]

No I read that he says the ratio of what Medicare pays to the total bill, $724.95 is not 80%.

 

[kaneohe]

Never seen anything like that....
typical bill(ratios): Gross bill 10K
Medicare approved 5K (typical reduction factor of 2-3)
Medicare pays 4K
I (or supplement) pay 1K

The EOB typically has lots of explanatory footnotes....does yours have any?

 

[imoldernu]

Personal observation.:

We don't try to figure out who pays what. Would like it if someone would share a an actual bill with multiple charges, and then explain what the patient pays, what medicare pays, and what a medicare supplement pays.

Then there's another.... "other party pays".

Learned a very long time ago...25 years, first... not to pay the first bill that comes in the mail, nor the second.

Somebody once said... "Good accounting takes time to prepare".

 

[gauss]

Is this traditional Medicare, or some type of Medicare Advantage (MA) plan?

 

[Steve s]

Medicare portion $1276 is lowered to $406 due to federal, state and local rules noted as footnote on EOB. It still doesn't sit right. The hospital got paid a total of $724.95 and I paid $318 of this because the Medicare portion is lowered due to federal...….local rules. Yes I feel on the total amount paid to hospital I paid more then 20% of this amount because Medicare got a break on their portion and I didn't. Don't get it. I have plan f High ded. So supplement has not paid anything to date.

 

[ivinsfan]

If you can figure that all out you are a better person then I am...


Here's one for you an outpatient cardio rehab session....Amount Charged 279...Medicare Approved amount 279...amount Medicare paid 99.00 amount you owe 25.00 so I owe less then 10% of the approved amount but more then 20% of the Medicare paid amount..

On your CAT scan what did the facility actually try and charge you, compared to the Medicare approved amount?

 

[Steve s]

ivinsfan The bill and the approved amount are the same on this procedure.

 

[ivinsfan]

OK I see where that doesn't feel right as it looks like you didn't get any pricing break at all. One of my DH is provider charged 1675 Medicare Approved 361 Medicare payed 283 and we owe 72.33 in this case we feel okay about it because the original charge of 1675 got knocked down to 361 dollars..

 

[joeea]

Thought when I got on Medicare it would be pretty simple I pay 20% Medicare pays 80%.

Apparently you thought wrong.

 

[Car-Guy]

I've only been on Medicare a few years now and I have been happily surprised by the coverage (so far). I've been to four different doctors in that time frame, and they all took medicare and all I paid was the office copay. The last visit was to one of those "walk in" clinics and I didn't even pay a co-pay there.


I never thought I'd say anything positive about a US government run program, but it's been great. (so far)

 

[REWahoo]

Steve S, don't pay anything until you get an EOB from Medicare. It will show you the amount you may owe the provider.

 

[Steve s]

Rewahoo the information I posted is from my Medicare Statement. Looked at past statements and whenever the 80% of the approved amount wasn't paid completely the footnote would state their payment was lowered due to federal state and local rules.
Now I am aware I am just paying 20% of the approved amount but I guess it bothers me that Medicare gets a break from their 80% due to fed, state, local rules and what are these rules? Is it just in Iowa?
Now if I had supplement plan n or g I would not even notice because it would have been picked up by the supplement. But until I reach my $2000+ coinsurance I take notice.
I want to thank everyone for their replies. Interesting.

 

[kaneohe]

Received bill for ct scan Approved amount by Medicare is $1594. My portion at 20% is $318. Medicare paid $406.15 because the amount Medicare paid was reduced due to federal, state and local rules? .......................? Total paid to hospital is $724.95.
............................................................

Just speculating because we can't see what you are seeing......
If Medicare paid 406 = 80% , your 20% would be 102 or so. If your portion
is 318, that suggests that your portion is 216 more than you would have expected to pay.

It is interesting however that the Medicare payment of 406 plus your portion
of 318 added together is 724 which is pretty much what you said the hospital received. Is is possible that you were 216 short of your hi-deductible deductible?........that would explain why you are thinking you paid more than 20 %.

Your description is a bit confusing.......in OP you say deductible was already covered but in post above you say you are still short of "2K" coinsurance which I call the hi-deductible deductible. There is a $183 Medicare deductible and then hi-deductible Plan F deductible.

FYI....".amount Medicare paid was reduced due to federal, state and local rules"
is standard language even if nothing special is happening. I am wondering if
your $1594 is not the Medicare approved amount but simply the initial bill.
The Medicare approved amount in my example should be 724 which is typical reduction from the initial bill (factor of 2-3).

It might be helpful to re-look at the Medicare EOB and repost each column number and label. Total paid to hospital is not a Medicare label.....where did you get that from.

Something tells me I'm going to regret switch from Plan F where I never worried about who paid as long as I wasn't billed. I now have Plan G with a deductible so will have to worry for the first few bills about the details.

 

[Steve s]

Kaneohe...Medicare summary notice Service approved ...yes
Amount Facility Charged......1594
Medicare approved amount......1594
Amount medicare paid.....$406.15 NOTE L footnote
max you may be billed......338.80

NOTE L After your deductible and coinsurance were applied the amount medicare paid was reduced due to federal, state and local rules.

338.80 is 20% of the approved amount so I am not paying more then 20% its just that Medicare is not paying their full 80% because their amount was reduced due to federal ……...rules.

My $183 was meet on earlier bills and and I am along way from my $2240 ded for High F.

Again I don't feel I am paying too much but wondering why Medicare gets theirs reduced after their 80% is figured.

 

[Jerry1]

This is interesting to me. I’ve worked in the field for some time and I’ve never known this (I worked on the commercial side). I thought you paid 20% of the amount Medicare pays. Instead, you’re paying 20% of the charges? When I see the discount off of charges that Medicare gets, that makes complete sense to me.
Medicare doesn’t pay charges, they pay their fee schedule. In outpatient settings, I would guess less than 50% of charges. So the amount they paid makes sense. So it seems that they pay their fee schedule and you pay off charges. I would think it would be more like this:

Hospital bills $300.
Medicare approves $100
You pay $20 and Medicare pays $80

Instead, it seems like Medicare is paying $80 and you’re paying $60. Again, I never understood that to be the way it works. It didn’t work that way on commercial contracts. I would call the billing facility and Medicare to get a confirmation that this was done correctly.

If the amount they have listed as approved charges is the same as total billed charges, this sucks.

 

[kaneohe]

Steve....thanks for that resubmission......I assume the 338.80 is a typo for 318.80?
Got me stumped.....I don't recall a major bill where the initial charge and the Medicare approved amount are the same.......usually they are different by a factor or 2 or 3 or more. Might be worth a call to Medicare for clarification. The few times I've called them in the distant past they were accessible and helpful. I don't know how much of those numbers are entered and which are calculated from others. Good luck and pls update when you find out.

 

[MBSC]

Medicare summary notice Service approved ...yes
Amount Facility Charged......1594
Medicare approved amount......1594
Amount medicare paid.....$406.15 NOTE L footnote
max you may be billed......318.80

NOTE L After your deductible and coinsurance were applied the amount medicare paid was reduced due to federal, state and local rules.


--- I have plan f High ded. So supplement has not paid anything to date.

Is the hospital on the list of Critical Access Hospitals (CAH) in the link below? If so, special federal rules apply.

CAH in Iowa: Critical Access Hospital Locations - Flex Monitoring Team

For CAHs, the billed charge is the Medicare approved amount. The Medicare enrollee or their Medigap is responsible for 20% of these amounts. The hospital is paid 101% of their costs, based on annual cost reports, less the enrollee's coinsurance.

For outpatient acute care hospitals, Medicare pays 78.4% (98% of 80%) due to 2% sequestration.

If it is a CAH, you should have been warned they are "different". You really, really, really do NOT want to use a CAH in combination with Medigap HD-F. This is generally invisible with other Medigaps since they cover the 20% coinsurance.

CAHs are paid for most inpatient and outpatient services to Medicare patients at 101 percent of reasonable costs.

The copayment amount for most outpatient CAH services is 20 percent of applicable Part B charges and is not limited by the Part A inpatient deductible amount.

The Centers for Medicare & Medicaid Services (CMS) encourages CAHs to engage in consumer-friendly communication with patients about their charges to help patients understand their potential financial liability for services they may obtain at the CAH.

Reference: https://www.cms.gov/Outreach-and-Ed...LNProducts/downloads/CritAccessHospfctsht.pdf

 

[wmc1000]

Is the hospital on the list of Critical Access Hospitals (CAH) in the link below? If so, special federal rules apply.

CAH in Iowa: Critical Access Hospital Locations - Flex Monitoring Team

For CAHs, the billed charge is the Medicare approved amount. The Medicare enrollee or their Medigap is responsible for 20% of these amounts. The hospital is paid 101% of their costs, based on annual cost reports, less the enrollee's coinsurance.

For outpatient acute care hospitals, Medicare pays 78.4% (98% of 80%) due to 2% sequestration.

If it is a CAH, you should have been warned they are "different". You really, really, really do NOT want to use a CAH in combination with Medigap HD-F. This is generally invisible with other Medigaps since they cover the 20% coinsurance.

MBSC, Another wrinkle to consider in the Medicare Supplement decision process. Thanks for the info which I and probably others didn't know about.

 

[ivinsfan]

Looking at my state these CAH are smaller town hospitals and clinics who are the only providers in town, so you might not have a choice about using them. My town of 15K has a regional hospital and clinic and isn't included as a CAH.

Going back to the long thread we had about government subsidies this appears to be yet another hidden government subsidy.

So apparently the actual hospital cost of this CAT scan was around 400 dollars and they received around 725. In this case the subsidy flows from the Medicare recipient to the hospital thru government billing.

All the reading I did before I signed up for a Medigap plan and I never saw one mention of this oddity.

 

[kaneohe]

Is the hospital on the list of Critical Access Hospitals (CAH) in the link below? If so, special federal rules apply.

CAH in Iowa: Critical Access Hospital Locations - Flex Monitoring Team

........................................

yes, thanks for the education. Had never heard of this. Fortunately in my state, they appear to be mostly (only) in rural areas, not where I live.

 

[Steve s]

MBSC... my hospital is listed so that very well could be the reason.
I just got off with Medicare Chat and it appears Original Medicare uses the outpatient prospective payment system (OPPS) and the amounts paid are preset ahead of time.
Also because my hospital is listed under CAH that MBSC wrote about would explain the footnote on my Medicare statement that the amount Medicare paid was reduced due to federal, state and local rules.
Of course I am not pleased with this. Since Medicare has a fixed amount why should they push for a lower Approved Amount since I'm the only one that has to pay toward this amount of 20% where they already have a big discount preplanned. Medicare doesn't have any bargaining power on the Approve Amount on my behalf because of their established discount.
Medicare should let us know in their manual that you will be responsible for 20% of Approve Amount and Medicare will be responsible for 80%...…. maybe.
This will end this rant. Thanks for letting me vent! Not a big contributor but follow this site daily. Thank you.
steve

 

[audreyh1]

Well you certainly made a huge contribution with this thread! If it hadn’t been for your rant, none of us would have known about these special case hospitals as MBSC explained.

Medigap is priced by region, so probably takes this into account.

It certainly is another factor to consider when choosing a Medigap plan.

 

[ivinsfan]

Medicare will tell you that you did only pay 20% of the approved amount so you payed exactly what you were supposed to pay. The fact that they got a discount on their 80% has nothing to do with your end of the bargain. As I stated earlier your payment is an involuntary subsidy to your hospital or clinic.