\ Non-Participating Physician and Medicare Billing

Let’s break down the scenario and answer your questions:

1. Maximum Charge to Patient:

• Medicare’s approved amount (schedule) = $80
• Non-participating physician limiting charge = 115% of Medicare’s approved amount (Important: This is not 15% above the total charges)
• Limiting charge = 1.15 * $80 = $92

The physician can charge the patient a maximum of $92.

2. Medicare Payment to Patient:

• Medicare typically reimburses 80% of its approved amount to the patient after they pay their deductible and coinsurance.

Assuming the patient has already met their deductible and there’s no coinsurance for this service:

• Medicare payment = 80% of $80 = $64

3. Patient’s Payment to Physician:

• Maximum allowable charge = $92
• Medicare payment = $64
• Patient’s responsibility = $92 – $64 = $28

4. Accepting Assignment?

No, in this scenario, the physician wouldn’t have been better off accepting assignment.

• If they accepted assignment, they would have agreed to receive Medicare’s approved amount ($80) as full payment.
• By not accepting assignment, they collected an additional $12 ($92 – $80) from the patient.

5. High Medicaid Patients and Hospital Prices:

Hospitals receive lower reimbursement rates from Medicaid compared to Medicare or private insurance.

A high percentage of Medicaid patients can influence hospital prices in a few ways:

• Cost-shifting: Hospitals may raise prices for services covered by Medicare and private insurance to compensate for lower Medicaid reimbursements.
• Negotiation leverage: If a hospital has a high Medicaid population, it may have less bargaining power when negotiating reimbursement rates with private insurers.
• Uncompensated care: Medicaid may not cover all costs associated with a patient’s care, leaving the hospital to absorb some of the financial burden.