The way Medicare Claims are processed depends on the type of Medicare Service. In the following post we will consider four Medicare Services: Original Medicare (Part A and B), the Medicare Advantage Plan (MA), the Part D Prescription Drug Plan, and Medicare Supplements, such as Medigap or the Retiree Plan. Keep in mind that these are not exclusive and several options may coexist (e.g. Original Medicare, Part D, and Medigap).
To learn how Medicare claims are reported, read How Medicare Claims Are Reported – the Medicare Summary Notice (MSN).
Original Medicare (Medicare Part A and Medicare Part B)
Claims are submitted directly by your provider (hospital, doctor, lab, etc.). It takes Medicare approximately 30 days to process each claim. Medicare pays Medicare Part A claims directly to the provider (such as inpatient hospital care). You are responsible for any deductibles, copayments, and services not covered by the plan. Medicare pays Medicare Part B claims (for doctor’s services or outpatient hospital care) either directly to the provider or to you. The difference depends on whether the provider agrees to accept the Medicare approved amount (called the assignment) as full payment:
- If the provider accepts the assignment, he is paid 80% of the Medicare approved amount. You pay 20% coinsurance (after paying a deductible).
- If the provider does not accept the assignment, he is required to submit a claim to Medicare, and the payment will be sent to you. You are responsible for paying the provider the full Medicare-approved amount plus (in states where it is allowed) the extra charge, which is not more than 15% of the full Medicare approved amount.
Each quarter, Medicare will send you a list of claims, known as a Medicare Summary Notice (MSN), for this period. It is NOT a BILL.
Medicare Advantage (MA) and Part D Plans
If you have a Medicare Advantage Plan, no claims need to be filed because Medicare pays private insurance companies a set amount every month. The MA plans process claims internally. You may get an Explanation of Benefits (EOB) from your plan that explains your claims. The same is true for Part D: the paperwork is processed internally. You will get an EOB every month showing how much you and your plan have paid for your prescriptions.
Medicare Supplement Plans (Medigap Plans)
If you have Medigap, your Medigap Plan may receive claims in one of 3 ways:
- Directly from Medicare through electronic claims processing.
- Directly from your provider, through the Internet, fax, or regular mail. This is allowed only if your provider accepts Medicare assignments.
- On very rare occasions, when neither Medicare nor your provider files the claim, you will need to file the claim yourself.
You are supposed to get an EOB from your Medigap plan with the details of your services and the amount paid. You should receive the EOB within 30 days of the date of service.
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