Medicare Claims - Understanding them

[zaqxsw]

I've searched the forums and even called Medicare with this question. I can't seem to get an understandable answer. I don't have a problem, I'm just wanting to try to understand the nomenclator.

On any and all Medicare website claim details, they show a "Total Amount Charged" which is almost always sky-high, then a "Medicare Approved" amount. Below that is what "Medicare Paid Provider", and finally the "Total Amount You May be Billed" (I have a Medigap Plan G policy that covers this once my Part B deductible is met).

So, logically, I would think that the amount Medicare paid plus what I owe would equal the "Medicare Approved" amount. Nope. Nobody comes after the missing amount, but I'm confused.

What am I missing in understanding this? Thanks for any replies!

 

[MissMolly]

How about Medicare + Plan G + you. I would think all 3 of them would add up to the Medicare Approved.

 

[zaqxsw]

Nope, here is a very recent, extreme example from this month:

Total Amount Charged: $3,245.58
Medicare Approved: $3,245.58
Medicare Paid Provider": $102.63
Total Amount You May be Billed: $118.66

 

[pacergal]

^^Are you missing what your Plan B has or will pay./

 

[zaqxsw]

No, I had $93.00 left on my deductible and Medigap will pay the remaining $118.66 - $93.00 =$25.66.

Surely, this isn't a new question on explaining Medicare claims?

 

[MichaelB]

Nope, here is a very recent, extreme example from this month:

Total Amount Charged: $3,245.58
Medicare Approved: $3,245.58
Medicare Paid Provider": $102.63
Total Amount You May be Billed: $118.66

My guess is there is an issue with the billing code and the provider needs to resubmit a corrected request for reimbursement. I’ve seen this a number of times with my DM’s Medicare Advantage account, and most of the time there is a subsequent invoice for the same amounts and service date, this time paid.

I suggest you check back in 30 to 45 days and see if was billed again,

 

[Sarah S]

I have just started medicare so no experience but I googled and found this https://insurance-forums.com/commun...s-medicare-paid-amount-whats-the-diff.100733/
So your question isn’t new. I skimmed and there was a suggestion it had to do with the max amount that could be billed if the provider didn’t accept assignment but I don’t know if that was correct

 

[zaqxsw]

This isn't an exception or mistake. Another example:

Total Amount Charged: $324.00
Medicare Approved: $324.00
Medicare Paid Provider: $132.00
Total Amount You May be Billed: $33.00

Again, not a problem, just curious.

 

[Venturer]

Have you met your deductible for the year? If not that could be the difference.

 

[zaqxsw]

I have just started medicare so no experience but I googled and found this https://insurance-forums.com/commun...s-medicare-paid-amount-whats-the-diff.100733/
So your question isn’t new.

Interesting discussion. The application of some kind of negotiated "discount” to the Medicare Approved Amount is somewhat vaguely like what Medicare was trying to explain to me, but really couldn’t. They gave up and just said it was complicated.

 

[zaqxsw]

Have you met your deductible for the year? If not that could be the difference.

Yes, and no it wouldn’t have explained the differences I see across multiple claims.

 

[bizlady]

DH has an advantage plan and we see the exact same thing. Since he just started earlier this year, I panicked at first. I don't understand it, but am also not getting billed or having to pay anything more than we expected.

 

[wmc1000]

I see this all of the time. My best guess is that while Medicare "approves" the amount it has an agreement in place with the provider that it will only pay them the agreed upon amount regardless of what is "approved".

 

[ivinsfan]

Are you seeing an alphabet soup of footnotes printed at the bottom of the claim. They usually say things like regional adjustment,blah blah are included in the amount paid.


I don't have an EOB in front of me to be more specific.


IMO this the thing a lot of people going on an advantage plan don't realize. The huge haircuts Medicare gives providers.


My DH had a nightmare heart surgery and the hospital, OR, ICU bills alone came to about 190K of which Medicare paid the hospital some number in the highs 50's this was after the hospital appealed the original number which was even lower.

 

[Bamaman]

I've never professed to understanding Medicare billings, despite reading all about it online.

As far as I can tell, physician offices charge ridiculous amounts for procedures, take what funds Medicare pays and charges off the balance. And in most cases where people have good supplements, they'll owe just a little.

I'm type II diabetic on insulin and my wife has had many medical problems recently. We went with Plan F which is the most extensive (and expensive) plan. We have not received any substantial bills for procedures in years, even when she had a $95K knee replacement.

Medicare simply works in mysterious ways.

My father had heart issues and was on dialysis for 4 years. Medicare paid ridiculous amounts to cardiologists and nephrologists. And they pay for 6 ambulance trips a week for many patients to go to dialysis. But to an Internal Medicine practice, they pay almost nothing for office visits and routine testing. And they won't pay for physicals. There's just little consistency in Medicare.

 

[GalaxyBoy]

I think you might have better luck understanding the theory of relativity being discussed in another forum.

 

[zaqxsw]

I think you might have better luck understanding the theory of relativity being discussed in another forum.

Very good point! I no longer have this question. It's just another one of life's mysteries that you just accept...

I appreciate all of the replies, and the similar confusion! As I started out saying, I have no problem...

 

[Katsmeow]

I've searched the forums and even called Medicare with this question. I can't seem to get an understandable answer. I don't have a problem, I'm just wanting to try to understand the nomenclator.

On any and all Medicare website claim details, they show a "Total Amount Charged" which is almost always sky-high, then a "Medicare Approved" amount. Below that is what "Medicare Paid Provider", and finally the "Total Amount You May be Billed" (I have a Medigap Plan G policy that covers this once my Part B deductible is met).

So, logically, I would think that the amount Medicare paid plus what I owe would equal the "Medicare Approved" amount. Nope. Nobody comes after the missing amount, but I'm confused.

What am I missing in understanding this? Thanks for any replies!

I have wondered the same thing! The first time I saw it I almost panicked wondering what was going on.

I will say that I don't actually know the answer. But, after watching this the last 2 years I think what is going on is something like this:

1. Provider Bills $X for a particular procedure.

2. Medicare agrees that procedure is covered and so "approves it."

3. Medicare pays the provider a much lower number because that is the amount that medicare pays providers for that procedure. For Part B charges that is typically 80% of the total amount allocated for that procedure.

4. The amount that you are responsible for (Part B) is the remaining 20%. That is, 1/4 of what Medicare pays (assuming the deductible has been met). If you have a supplemental carrier who pays that then they do pay it and you pay nothing.

I've followed this on bill after bill and that is how it seems to work. The supplemental carrier pays its 20%.

From the above, I have concluded that when it says medicare approved amount, it isn't really the amount being approved so much as the procedure itself. If, for example, there is a charge that isn't covered by Medicare it won't be approved.

I keep seeing things at various webpages saying that the approved amount is what the 80% is applied to and that is the amount the provider will received, but that isn't the case in my experience. For example, here is one I just received:

Service is approved? Yes
Amount Facility Charged - $3287.00
Medicare-Approved Amount - $3287.00
Amount Medicare Paid - $1126.33
Maximum you May be Billed - $281.60

That last column is what is important which is the maximum you may be billed. In this case, I expect all of that to be paid by my supplemental policy.

 

[EastWest Gal]

Insurance works the same way. Doctors who take Medicare agree to accept Medicare rates. The bill may be 200% of what Medicare pays. In the case of private insurance the bill may be 150% of what the insurance pays, but the physician accepts what the insurance pays. Medicare has a fee schedule they publish yearly. Fees are based on relative value units, or RVUs.

The charges are always much higher than what insurance or Medicare pays. It’s a stupid game, IMO.

There is a clothing store near us that always has stuff “on sale”. They post a jacked up price then post the discounted price. The problem is they NEVER charge the jacked up price.

 

[Telly]

Insurance works the same way. Doctors who take Medicare agree to accept Medicare rates. The bill may be 200% of what Medicare pays. In the case of private insurance the bill may be 150% of what the insurance pays, but the physician accepts what the insurance pays. Medicare has a fee schedule they publish yearly. Fees are based on relative value units, or RVUs.

The charges are always much higher than what insurance or Medicare pays. It’s a stupid game, IMO.

There is a clothing store near us that always has stuff “on sale”. They post a jacked up price then post the discounted price. The problem is they NEVER charge the jacked up price.

I call the original provider's grossly inflated rate, "the rack rate", akin to what hotels often do. I picked that up somewhere.
Years before I was on Medicare, I had an emergency gall bladder removal. ER, In-patient room and services, surgery, etc. etc. About a week later, when I could get around, DW drove me back to the hospital's business office, where they printed out my total "bill". The $$$ were incredible! It would all be submitted to the insurance company first. As the ins. co. coverage was 80/20 after deductible, up to a max OOP, we figured it would be up to the limit. A relative who is in the medical field and has worked in a hospital told us not to worry, just sit tight. After all the number crunching was done, the ins. co. valued all the services at 26.4% of the rack rate.

So as EastWest Gal notes, non-Medicare insurance has worked the same way. So hospitals and other medical care providers are all playing a game, and for once I had something big and scary enough $-wise that we looked under the tarp and saw the incredible multiplier applied to reality!

 

[Telly]

.............From the above, I have concluded that when it says medicare approved amount, it isn't really the amount being approved so much as the procedure itself. If, for example, there is a charge that isn't covered by Medicare it won't be approved.

I keep seeing things at various webpages saying that the approved amount is what the 80% is applied to and that is the amount the provider will received, but that isn't the case in my experience. For example, here is one I just received:

Service is approved? Yes
Amount Facility Charged - $3287.00
Medicare-Approved Amount - $3287.00
Amount Medicare Paid - $1126.33
Maximum you May be Billed - $281.60

That last column is what is important which is the maximum you may be billed. In this case, I expect all of that to be paid by my supplemental policy.

Interesting! I have not seen that (well at least so far!). They show the provider's bogus inflated rack rate, the Medicare Approved Amount, and the amount Medicare paid was always 80% of the Medicare Approved Amount, but dependent on deductible status. Also, there are providers that have met some quality metrics that Medicare uses, and those providers will be paid a bit over the 80% of Medicare Approved Amount, like ~81.5%.

So except for a ~1.5% bobble in $, it has all made sense to me and fit what I expected. I thought everyone on Original Medicare saw this. I guess not! I don't know why.

 

[Alan]

When I opened the ER portal this morning I saw this thread immediately below the Relativity Explained thread. So I have looked at them both just now and think it is easier to understand Relativity than medical billing.