A Non-Participating Physician Provides Services To A Medicar

A Non Participating Physician Provides Services To A Medicare Patient

A non-participating physician provides services to a Medicare patient who has total charges of $100 (before Medicare’s limiting charge is applied). The physician does not accept assignment, charges the maximum allowable, and submits the claim to Medicare. Assume Medicare’s approved schedule for these services is $80. What is the maximum amount the physician is allowed to charge the patient? What is the Medicare portion of the physician payment (which Medicare sends to the patient)?

What is the patient’s portion of the payment to the physician (net of the reimbursement from Medicare in the previous question)? Would the physician have been better off by accepting assignment on this case? Why or why not? How do a high percentage of Medicaid (not Medicare) patients influence a hospital’s prices?

Paper For Above instruction

The scenario involving a non-participating physician providing services to a Medicare patient highlights critical aspects of Medicare billing, physician reimbursement, and patient financial responsibility. This case illustrates the importance of understanding Medicare's fee structure, limits on charges, and the strategic decisions physicians face regarding accepting assignment. Additionally, the broader impact of Medicaid prevalence on hospital pricing strategies ties into healthcare economics and the dynamics of public versus private payer behaviors.

In Medicare billing, non-participating physicians (non-participants) have the option to charge patients up to 115% of the Medicare-approved amount, known as the "limiting charge." Since the Medicare-approved schedule for services is $80, the maximum permissible charge for a non-participating physician is calculated as $80 plus 15%, equaling $92. This charging limit safeguards patients from excessive out-of-pocket costs, especially when the physician chooses not to accept assignment.

When the non-participating physician submits a claim for services with a charge of $92, Medicare reimburses 80% of the approved amount, which is $80. The remaining 20%, or $16, is the beneficiary's responsibility, payable directly to the physician. The patient pays the difference between the physician’s charge ($92) and Medicare’s approved authorized payment ($80), which is $12. This discrepancy arises because the physician opts not to accept assignment, leading to potential additional costs for the patient.

Had the physician accepted Medicare assignment, the billing process would change substantially. Acceptance of assignment means the physician agrees to accept Medicare's approved amount as full payment. Consequently, the physician would only charge the patient the deductible amount, which is typically $20 for Part B services, although this varies by specific service. In this scenario, the physician would have charged $80, received $64 (80% of $80, after deducting the Part B deductible from the patient's payment), and the patient would have paid only the deductible amount, resulting in lower out-of-pocket costs for the patient.

The decision to accept assignment influences the physician's earnings. Non-participating physicians often charge higher fees to compensate for the limited reimbursement and potentially lower patient volume, which might be offset by higher charges. However, the total receivable might be less than if they accepted assignment, especially since Medicare's limits restrict the amount that can be billed and reimbursed. Moreover, accepting assignment simplifies billing, reduces legal risks related to exceeding allowed charges, and can foster patient trust, possibly leading to increased patient volume. Therefore, from a financial and ethical perspective, accepting assignment might have been advantageous, reducing the patient's burden and streamlining reimbursement processes.

On a broader level, the prevalence of Medicaid patients significantly influences hospital pricing strategies. Hospitals serving high percentages of Medicaid patients often face lower reimbursement rates due to Medicaid's Medicaid's fee schedules, which are typically less generous than Medicare or private insurers. Consequently, hospitals might counterbalance these lower payments by increasing prices for private payers or those with insurance plans that reimburse at higher rates. This practice, known as cross-subsidization, allows hospitals to maintain financial viability amid reimbursement constraints. Furthermore, a high Medicaid population can increase administrative and operational costs, compelling hospitals to adjust their pricing policies to sustain financial health, often resulting in elevated prices for privately insured patients and potential barriers to access for uninsured or underinsured populations.

References

• Centers for Medicare & Medicaid Services. (2023). Medicare Billing and Payment Policies. CMS.gov.
• Kongstvedt, J. R. (2019). The Managed Care Pharmacy Practice. Jones & Bartlett Learning.
• Marmor, T. R., & Wofsy, C. A. (2018). Medicare and Medicaid: The Politics of State and Federal Policy. The Milbank Quarterly, 96(4), 720-722.
• Ginsburg, P. B., & Bindman, A. B. (2020). Medicare Physician Payment and Physician Choice. JAMA Internal Medicine, 180(1), 81-82.
• Harrington, C., et al. (2019). The Impact of Medicaid Expansion on Hospital Finances and Access. Health Affairs, 38(2), 215-222.
• Long, S. H., et al. (2017). Healthcare Finance: Challenges and Opportunities. Journal of Health Economics, 50, 27-42.
• Xu, J., & Liu, S. (2021). Impact of Medicaid Payment Policies on Hospital Financial Performance. Medical Care Research and Review, 78(4), 433-441.
• Newhouse, J. P. (2017). The Role of Public and Private Payers in Healthcare. The Journal of Law, Medicine & Ethics, 45(3), 369-371.
• American Hospital Association. (2022). Hospital Price Trends and Payment Data. AHA.org.
• Reinhardt, U. E. (2020). The Economics of Healthcare: Price, Quality, and Access. Modern Healthcare Journal, 50(4), 56-62.