HOW LONG DOES IT TAKE FOR MEDICARE TO PAY A PROVIDER?

Medicare is America’s national health insurance program run by the CMS to provide health coverage to people who are 65 or older, under 65 with ESRD, or under 65 and receiving SSDI. It is categorized into four parts to cater for the health needs of the people. The healthcare providers who agree to the terms of Medicare are considered as Medicare participating providers. Medicare pays these providers based on the services rendered.

The article will talk about how the Medicare-participating healthcare providers get paid and how long does the Medicare program take to pay a provider?

How does Medicare pay healthcare providers?

• Part A (Hospital Insurance) – It’s designed to provide inpatient hospital stays, skilled nursing facilities, hospice care, and limited home health care as well.
• Part B (Medical Insurance) – It’s designed to provide outpatient medical care, medical supplies, and limited doctors’ services.
• Part C (Medicare Advantage Plan) – It’s designed to offer Medicare benefits through a Medicare Advantage Plan, also known as Medicare private health plan.
• Part D (Prescription drug coverage) – It covers prescription drugs including some recommended vaccines or shots.

Medicare uses different approaches and relies on multiple price systems to pay the participating healthcare providers.

How long does it take Medicare to pay a provider?

Medicare Administrative Contractor (MAC) is responsible to process every claim submitted to Medicare. MAC evaluates every claim before processing it. This process usually takes around 30 days. And, this is the usual time taken by Medicare to pay the providers. However, the time may differ with each part of Medicare as some providers are directly paid by Medicare that takes less time than usual.

Medicare reimbursement for each Part (Part A, B, C, & D)

The healthcare providers falling in Part A of Medicare receive direct payment from Medicare. In a Part B claim, the reimbursement depends on who has accepted the assignment of the claim. The healthcare provider receives 80% of the procedure if it accepts the assignment of the claim. The patient bears the remaining 20% of the cost.

Medicare uses Inpatient Prospective Payment System (IPPS) to pay to the providers furnishing hospital-based services i.e. Part A. Under the IPPS, Medicare pays prospective payment per beneficiary discharge to the hospitals. Medicare also pays supplemental Medicare reimbursement under the IPPS to some hospitals. For the hospitals treating a high volume of patients with low income, Medicare pays the facility an add-on payment, known as the Disproportionate Share Hospital adjustment.

As mentioned earlier, Medicare Part B covers outpatient care and supplies. The hospital Outpatient Prospective Payment System (OPPS) or the Physician Fee Schedule is used to pay the medical service providers falling in the Part B category.

The Part C of Medicare covers private healthcare providers using Medicare Advantage plans. Medicare reimburses them with a capitated amount per beneficiary for Part A and B benefits. A bidding process is used by Medicare to determine the capitated amounts in each area. Using the capitated payments, Medicare Advantage plans reimburse the healthcare providers through individual contracts.

Medicare Part D provides coverage on prescription drugs and uses private drug plans to avail voluntary benefits on prescription drugs. Medicare pays plan sponsors a capitated per-member, per-month payment for benefits management.