Understanding Medicare Reimbursement?

I opened my “Medicare Summary Notice” from CMS (Centers for Medicare and Medicaid Services) with great anticipation to see the explanation of Medicare benefits for my recent medical care. At last, I might have a chance to understand Medicare reimbursement, an understanding that has to date eluded me both as a pediatrician and a hospital administrator

The ER physician’s bill for both the visit and the suturing of three lacerated fingers was $448.00. Medicare “approved” $163.88 and “paid” $131.10. It also stated that I could be billed the $32.78 difference, but I knew I wouldn’t because “balance billing” is not permitted in Massachusetts. A reminder that even though Medicare is a federal program, its reimbursements and reimbursement rules vary by state, by region, and even by county.

Then I noticed a small “a” in the last column to the right that instructed me to “See Note Section”. On the bottom of page 2 that little “a” in the Note Section told me that “Medicare paid the provider for this claim $197.81” a figure quite different than $131.10. I tried, but could not reach the new figure by adding up any of the other amounts. I had no clue as to where that number came from.

Moving on to the next encounter, a scheduled spinal tap in the Ambulatory Procedure Area of my hospital for a different clinical problem, I was surprised to run into more complexity. The hospital charged $697 for the procedure and  $634 for the 6 lab tests done on the spinal fluid for a total hospital charge of $1,331.00. No “approved” amount  nor “paid” amount was listed, but then I noticed…again far over to the right, another set of little letters; “b” and “c”. Note “c” on the bottom of the page told me that Medicare paid $388.23.  There was no clue what that reimbursement of 29% of charges was actually for.

OK, OK, I know that hospital charges and reimbursement are complicated, so I moved along to the physician’s claim summary information. Surely this will be easier to understand.

My physiatrist charged $181 for an office evaluation of the clinical problem that had occasioned my spinal tap. Medicare paid $82.13 as indicated under “Note e” on the bottom of the page. If the physician thinks that his evaluation is worth $181 and Medicare thinks it is worth less than half of that, which one is right? How does that difference get negotiated? Who decides?

This was followed by the whopper of them all. The hospital charged $4090 for a scheduled CT scan and Medicare paid $588.96  or 15% of what the hospital thought it was worth ! The radiologist charged $425 to read the scan, Medicare “approved” $127.59, and “paid” $102.07. It did call to mind that credit card commercial: Hospital $4090, Medicare $588.96, Patient “priceless”.

Thoroughly exasperated by now, I moved on to the summary of other physician visit claims. My neurologist charged $150 for doing the spinal tap. Only $150 for the only action that involved the laying on of hands, that depended on good clinical training, and the only thing that could potentially harm me if not done correctly. The lab charged $275 for just one of the six tests on the spinal fluid; a  test performed by a machine remote from the actual patient at a time convenient for the lab. (But, that is another subject) There was no listing for “Medicare Paid Provider”, and another little letter “a” to the far right led me back to the Note Section: “Medicare paid the provider for this claim $197.81” Sound familiar? See above, different encounter, different claim.

I gave up, stuffed all the papers into a big envelope, just in case I needed to look at them again in the future…and went to bed worrying about the present, health care reform, single payor, and “transparency”.

Herbert Mathewson, MD, blogs at HUB’s LIST, a compilation of medical fun facts gleaned from a variety of medical journals, newspapers, other public and professional sources, and an occasional private communication.

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