If you’re enrolled in a Medicare plan, you may have come across the term “Medicare-approved amount.” The Medicare-approved amount is the amount that Medicare pays your provider for your medical services. Since Medicare Part A has its own pricing structure in place, this approved amount generally refers to most Medicare Part B services.
In this article, we will explore what the Medicare-approved amount means, as well as how to find out how much your Medicare-approved amount might be.
In order to understand exactly what the Medicare-approved amount refers to, it’s important to also understand the difference between participating and non-participating Medicare providers.
A participating provider is a provider who accepts assignment for Medicare. This means that they are contracted to accept the Medicare-approved amount for your healthcare services. The provider will bill Medicare for your services and only charge you the deductible and coinsurance amount specified by your plan.
A participating provider may charge less for the Medicare-approved amount than they would normally charge. However, when they accept assignment, they agree to take this amount as full payment for the services.
A non-participating provider is a provider who accepts assignment for some Medicare services, but not all. Non-participating providers may not offer discounts on services the way participating providers do. And even if the provider bills Medicare later for those covered services, you may still owe the full amount up-front.
If you use a non-participating provider, they can charge you the difference between their normal service charges and the Medicare-approved amount. This cost, called the “excess fee,” can only be up to an additional 15 percent of the Medicare-approved amount.
So, when does Medicare pay out this approved amount for your services? Medicare works just the same as private insurance, which means that it only pays out for medical services once your deductibles have been met. Your Medicare deductible costs will depend on what type of Medicare plan you are enrolled in.
If you have original Medicare, you will owe the Medicare Part A deductible of $1,408 per benefits period, and the Medicare Part B deductible of $198 per year. If you have Medicare Advantage, you may also owe an in-network deductible, out-of-network deductible, and drug plan deductible, depending on your plan.
Your Medicare-approved services also depend on what type of Medicare coverage you have:
- Medicare Part A covers you for hospital services
- Medicare Part B covers you for medical services
- Medicare Part D covers you for prescription drugs
- Medicare Advantage covers Medicare Parts A and B, as well as prescription drugs, dental, vision, hearing, and other health perks
No matter which type of Medicare plan you enroll in, you can use Medicare’s coverage tool to find out if your plan covers a specific service, test, or item. Here are some of the most common Medicare-approved services:
- cardiovascular screenings
- bariatric surgery
- physical therapy
- durable medical equipment
If you want to know your Medicare-approved amount for these specific services, such as chemotherapy or bariatric surgery, you’ll need to speak with your provider directly.
Medicare Part A has a separate fee schedule for hospitalization. These costs kick in after the $1,408 deductible has been met and are based on how many days you spend in the hospital. These amounts apply for each benefit period and include:
- $0 coinsurance for days 1 through 60
- $352 coinsurance per day for days 61 through 90
- $704 coinsurance per “lifetime reserve day” for days 91 and beyond
- 100 percent of the costs once your lifetime reserve days have been used up
Medicare will pay all the approved costs outside of your coinsurance while hospitalized, except for when you run out of lifetime reserve days. However, if you are enrolled in a Medigap policy, you may be covered for Part A out-of-pocket costs.
After you have met your Part B deductible, Medicare will pay its portion of the approved amount. However, under Part B, you still owe 20 percent of the Medicare-approved amount for your services. The exception to this is if you are enrolled in a Medigap policy that covers your Part B coinsurance costs.
questions for your doctor that may help lessen your costs
You can save money on your Medicare approved costs by asking your doctor the following questions before you receive services:
- Are you a participating provider? Make sure that your provider is a participating provider who has agreed to accept assignment for your services.
- Do you charge an excess charge for your services? Visiting non-participating providers that charge excess charges can increase your medical costs.
- Are you an in-network or out-of-network provider for my plan? If you are enrolled in a Medicare Advantage PPO or HMO plan, your services could be more expensive if you are using out-of-network providers.
- Do you offer discounts or incentives for your services? Most Medicare Advantage plans are sold by larger insurance companies, who may offer further incentives to utilize their medical centers.
Medigap supplement plans are beneficial for people who need help paying Medicare costs, such as deductibles, copayments, and coinsurance. But did you know that some Medigap policies also help cover the cost of services above and beyond your Medicare-approved amount?
When a non-participating provider renders services that cost more than the Medicare-approved amount, they can charge you the excess amount. These excess charges can cost up to an additional 15 percent of the Medicare-approved amount. If you have a Medigap plan, this amount may be included in your coverage.
Not all Medigap plans offer this coverage: only plans F and G do. However, Medigap plan F is no longer for sale to new Medicare beneficiaries. If you are already enrolled in this plan you can continue to use it, otherwise, you will need to enroll in plan G to cover those excess charges.
The first step in figuring out your Medicare-approved amount is making sure that your doctor or provider accepts assignment. You can use the “Find Medicare physicians & other clinicians” tool on Medicare’s website to double-check.
If your provider accepts assignment, the next step is to make sure that they are a participating provider. If they are a non-participating provider, they may still accept assignment for certain services. However, they can charge you up to an additional 15 percent of the Medicare-approved amount for these services.
Finally, the best way to determine the Medicare-approved amount for a service is to ask your provider directly. They can give you all the information you need based on the services you are looking to receive.
The Medicare-approved amount is the amount of money that Medicare has agreed to pay for your services. This amount can differ depending on what services you’re seeking, and who you are seeking them from. Using a Medicare participating provider can help to lower your out-of-pocket Medicare costs. Enrolling in a Medigap policy can also help cover some of the additional costs you might face for using non-participating providers.
To find out exactly what your Medicare-approved costs are, speak with your provider directly for more details.