Non-Participating Physician and Medicare Billing

Here’s the breakdown of the charges and payments:

Scenario:

• Total charges: $100 (before Medicare’s limiting charge)
• Medicare approved amount: $80
• Non-participating physician (does not accept assignment and charges the maximum allowable)

Calculations:

1. Maximum Allowable Charge:

   • Medicare limiting charge for non-participating physicians is 115% of the approved amount.
   • Limiting charge = 1.15 * $80 = $92

2. Medicare Payment:

   • Medicare pays 80% of the approved amount to the patient (assuming no deductible).
   • Medicare payment = 0.8 * $80 = $64

3. Patient Responsibility:

   • Patient pays the balance of the bill after Medicare payment, but not exceeding the limiting charge.
   • Patient responsibility = Minimum ($92 limiting charge, $36 difference between total charge and Medicare payment) = $36

Analysis:

4. Accepting Assignment vs. Non-Participating:
   • In this case, the physician would have been better off accepting assignment.
     • Accepting assignment: Physician receives $80 directly from Medicare, no additional paperwork.
     • Non-participating: Physician collects $36 from the patient, but may have to spend time collecting the remaining balance from Medicare, which might take longer and require additional paperwork.

High Percentage of Medicaid Patients and Hospital Prices:

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

• Medicaid pays lower rates: Hospitals receive lower reimbursement rates for Medicaid patients compared to commercially insured patients. This can lead hospitals to raise prices for commercially insured patients to compensate for the lower revenue from Medicaid.
• Higher administrative costs: Medicaid often has more complex billing requirements compared to private insurance. This can increase administrative costs for hospitals, which may be reflected in higher overall prices.
• Uncompensated care: Some Medicaid patients may not have the resources to cover co-pays or deductibles, leading to uncompensated care for the hospital. This can also contribute to higher overall prices to cover these costs.