Coding Q & A
Medicare Basics
It's not uncommon to see things as a little unclear when it comes to dealing with Medicare. Here are some answers to common questions.

BY SUZANNE L. CORCORAN, C.O.E.

What is Medicare's fee schedule?

Answer: Medicare pays you for covered services based on a fee schedule. The fee schedule is published and mailed in December of each year by your local Medicare carrier. This way you know in advance what Medicare expects to pay for a particular service. The fee schedule amount is commonly called the "allowable."

Medicare payment is based on its allowable or your charge, whichever amount is less.

Suppose, for example, Medicare's allowable for a service is $100, but your usual fee is $90. You would submit a claim to Medicare for your usual fee ($90) and then Medicare would pay based on that amount.

Conversely, if your usual fee for the service is $120, Medicare will pay based on the allowable of $100. You're not permitted to have a higher fee schedule for billing Medicare, so use your usual fees.

Why is my check always less than the fee schedule amount?

Answer: Medicare wants its enrollees, called beneficiaries (your patients), to purchase health care prudently. It encourages this caution by requiring patients to pay a portion of their own healthcare costs. In other words, it pays part of the allowable and expects the patient to pay the rest of the sum.

Medicare pays 80% of the allowable. The patient's share, called a "co-payment," is 20% of the allowable. Medicare patients also have an annual deductible amount -- they must pay the first $100 of covered expenses each calendar year.

Many patients have a supplemental, or secondary, insurance policy that pays the co-payment and deductible for them. Most of these secondary plans follow Medicare's rules for coverage, although some are more generous.

What is "assignment?"

Answer: Medicare pays either the patient or you (the doctor who provides the covered service). Because the insurance benefit belongs to the patient, you can't receive payment unless the patient "assigns" the benefit to you.

The patient does this one of two ways: he either signs a HCFA-1500 form (the Medicare claim form) each time you provide a service, or he signs an Assignment of Benefits form. This form is also known as a Signature-on-File form, or a Lifetime Signature form.

The form has specific, required wording (see "Sample Lifetime Signature Form"). It's obviously much more convenient for both you and the patient to use a lifetime signature form because each patient must sign it only once.

Accepting assignment on Medicare services has several very important effects. It means that:

• Medicare pays you directly instead of the patient.
• You agree to accept Medicare's allowed amount as payment in full.
• You agree to collect any deductible and co-payment from the patient (or from the patient's secondary insurance).

You need to know it

Remember, you need to understand the rules to make sure you get paid what you are entitled to receive for excellent patient care.

In next month's article we'll discuss Medicare's participating physician program and what it means to your practice.

SUZANNE CORCORAN IS VICE PRESIDENT OF CORCORAN CONSULTING GROUP. REACH HER AT (800) 399-6565 OR AT SCORCORAN@CORCORANCCG.COM.