Tuesday, April 2, 2024

Medicare Billing and Medicaid Billing

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Medicare, Medicaid, and Billing are two things that are closely related. Yes, they both belong to the government health program file. However, these two programs are different from each other.

Medicare is a federally administered program. That is, the rules for this are uniform throughout the country. Also, Medicaid is a state-run program, but its laws vary from state to state. That is, the Medicaid laws in one state are not the same as those in another. Let’s look at some significant reimbursement changes in Medicare, Medicaid, and Billing.

Read More: Medicare Vs Medicaid: What’s The Difference

Medicare Billing

Medicare programs originally started in 1965. They primarily aim at investors to help seniors in a country pay their inpatient and outpatient medical bills. However, there are a few special categories that Medicare currently covers.

Those aged 65 and above, people with lifelong disabilities, and people with end-stage kidney disease are among them. Medicare updates the latest billing rules every year. The laws cover many things like coding and billing changes, the latest changes in reporting, etc.

In the Medicare Billing function, when we send a claim to Medicare, it is processed by the Medicare Administrative Contractor. They then evaluate every claim we send to MAC Medicare. Although this is a minor process, it takes about 30 days.

Billers generally follow the same protocol for third-party payers when billing Medicare. 

You can get all the relevant data from the super bill you receive. Billers also enter patient data, procedure, NPI, diagnosis, etc.

Find more on: Medical Billing and Coding Courses In 2022

Basics of the Medicare Billing Program

We introduced Medicare to you as the most memorable part of Medicare, Medicaid, And Billing. The entire program consists of four different plans. We can identify them as parts A, B, C, and D. According to HHS; we can identify their exact functions. That is, A covers the provision of inpatient treatment in a hospital or any other health facility. 

Also, Part B of Medicare covers expenses for medical needs not covered by Part A. Outpatient doctors, physical therapy services, and other medical facilities fall under it. Part C is what we call Medicare Advantage. It also brings together prescription drug plans to provide inpatient and outpatient coverage through other external entities that have partnered with Medicare organizations.

Finally, Part D is a prescription medicine provided by private companies. When billing for Part D, only providers can bill Medicare for vaccines or prescription medicines covered under that part. However, there are cases where the provider is not a licensed Part D provider. In such a case, the biller should give the amount to the patient.

When Medicare makes a Part A claim, it pays the provider directly for the service provided by the provider. In Part B, the person who accepts the assignment of the claim is determined by one person who pays that share. Imagine a scenario in which the supplier somehow agrees with the grant of rights. Then, Medicare pays the provider 80% of the cost of the procedure. After that, they give the patient 20% of the remaining price.

Medicare Billing Reimbursement

We mentioned that the rules of Medicare, which is the most critical part between Medicare, Medicaid, and Billing, change annually. They had finally made a clear announcement about the OTA starting in 2022. Medicare’s reimbursement rate is slightly lower than the local payer’s. That said, the 2019 Medicare payments will not cover the cost of providing care to beneficiaries for two-thirds of medical practices.

In some instances, the supplier refuses to assign the title. Medicare can then transfer payment directly to the patient. In such cases, the patient, rather than the payer, must fully reimburse the provider for their services.

Medicaid Billing

Medicaid is the other special section for you in the complete content of Medicare, Medicaid, And Billing. The Medicaid program began in 1965 under CMS. It is a Medicare program company. The primary purpose of Medicaid was to help poor citizens in America pay their inpatient and outpatient medical bills. Accordingly, in 2019, more than 75 million Americans strongly believed in this program.

Individuals are eligible for Medicaid coverage only if they make less than 100% to 200% of the federal poverty level, are elderly, pregnant, disabled, and have no parents.

Basics of the Medicaid Billing Program

State governments should be held accountable for all administrations of the Medicaid program, which we embraced as the primary cause of Medicare, Medicaid, and Billing. These programs receive both federal and state funding opportunities. Trends in Medicaid vary from state to state. You know physical therapy services are not a mandatory or essential procedure in the states. Because of this, Medicaid covers physical therapy services in only 33 states.

We understand that billing in Medicaid is a bit more complex than Medicare. That is, Medicaid’s regulations and billing requirements are different. Due to this, the claim form to be used by the biller is also different. In such cases, the biller needs to have a good understanding of the formats and protocols followed by the state.

Here the medical biller creating the claim is also different from Medicare. In Medicare, as mentioned above, a claim is made for parts A, B, or any third-party payer. It contains a lot of different information. But when billing for Medicaid, they cover a more significant amount of medical services than Medicare. 

If you ever decide between state and federal guidelines, you should follow the strictest. Medicaid claims must comply with both federal and state guidelines. Also, assume that a patient has coverage outside of Medicaid.

Then the provider must bill the other payer first. That is, Medicaid is the payer of last resort for a claim. If we describe it further, imagine a situation where there are other health coverages for certain services received by an individual. Then, you have to bill those institutions in advance. You can use the right software to meet the exact Medicare, Medicaid, and Billing requirements.

Medicaid Billing Reimbursement

As mentioned above, Medicaid rules and reimbursements vary from state to state. That’s because states can set their own Medicaid provider payment rates according to federal requirements but are free to set their reimbursement rates. But, the majority of the states regularly set the reimbursement rates lower.

Medicaid programs paid 72% of Medicare fees. A Medicaid provider generally cannot accept out-of-pocket payments. Because of this, they cannot demand additional compensation from patients.

Similarities in Medicare, Medicaid, and Billing

Generally speaking, Medicare and Medicaid are similar. That said, both programs are shifting to value-based payment models. That is, CMS aims to encourage Medicare and Medicaid providers to focus on the quality of care rather than the quantity of care. 

That means they should be the same when working with each other’s reimbursement rates. Although there are no more widespread Medicaid value-based programs, various states have implemented many of their value-based programs.

However you sign contracts with Medicare, Medicaid, and Billing, the future will see greater penetration of value-based payment models. Due to these factors, we can sometimes say that Medicare, Medicaid, and Billing are not the same. However, both these organizations provide cover for vulnerable people in the country.  


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I am a medical biller, a blogger and have 20 years of experience in medical billing, medical billing management, and medical assistant. My background includes positions as a clinical medical assistant, medical records technician, medical office manager, biller, and coder. I am certified by the American Academy of Professional Coders (AAPC) as a Certified Professional Coder (CPC) and by the Practice Management Institute (PMI) as a Certified Medical Office Manager (CMOM). As an office manager/biller/coder, I was a member of the Michigan Medical Group Managers, Michigan Medical Billers Association. I also served as a committee member of the Michigan Osteopathic Association of Practice Managers Education Committee.

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