Billing Medicare is a standard part of practice for providers, but setting up claims for reimbursements can be a learning curve, owing to system technicalities.
Since wrong codes or missing information can mean the insurance companies send the claim back to you, finding a way around it is crucial.
When the provider is new to the system, its money can stay stuck in the system, and that’s why this handbook on how to bill Medicare as a provider is here.
Keep reading to understand the system and get paid on time!
Terms to Remember So You Don’t Get Lost in the Jargon
| Acronym | Full Name | What it Does |
| CMS | Center for Medicare & Medicaid Services | Sets the policy and pays providers via regional contractors. |
| MACs | Medicare Administrative Contractor | The regional contractor mentioned above, whose role is to clear payments for Medicare providers. |
| MBI | Medicare Beneficiary Identifier | It’s an exclusive number allotted to each Medicare beneficiary that they must use on claims. |
What is Medicare?
Medicare is a US federal health insurance program for people over 65 needing healthcare services. However, certain younger people with disabilities or Renal diseases (that need dialysis or transplant) also qualify for Medicare.
The beneficiaries pay Medicare taxes when they’re young and working through payroll deductions and put money into a system they might need later. Unlike private insurance, they don’t get bills for their Medicare premiums; instead, it’s deducted like a tax, and they can reap its benefits during their twilight years.
Here are four pillars of the Medicare program:
| Part A | Part A is for hospital insurance to cover costs of inpatient stays, nursing facility care, and hospice care, etc. |
| Part B | Medicare’s second pillar is medical insurance, which essentially provides coverage for the services you acquire. For instance, it pays for the hospital staff’s time, tests performed, ambulance services, and hospital equipment used to treat you. |
| Part C | While the original Medicare plan covers A and B parts only, some Medicare-approved companies can offer a third pillar, called Medicare Advantage. This system offers all the original benefits with add-ons like hearing care, dentures, and vision care. |
| Part D | Since prescription drugs are not covered in the OG Medicare insurance, beneficiaries can enroll in its Part D to cover medicine costs. |
Everything You Need to Know About Billing Medicare as a Provider
Medicare is the largest single health insurance program in the USA, as more than 66 million people in the country benefit from Medicare. However, billing Medicare can be a mental labyrinth because of all the bureaucratic talk and code words that only expert coders understand.
Therefore, this guide breaks down the medicare billing process in steps so the average American can understand it. Here is how a provider bills Medicare:
1. Apply for a National Provider Identifier
The National Provider Identifier (NPI) is a unique 10-digit code for Medicare-covered providers. They must use this number under the administrative and financial transactions under the Health Insurance Portability and Accountability Act (HIPAA). Therefore, to become a part of Medicare, apply for this number first.
You can apply for NPI through the National Plan and Provider Enumeration System (NPPES) online. But if you want to fill out a paper application, obtain a CMS-10114/National Provider Identifier form and mail its filled and signed copy to the NPI Enumerator.
2. Apply for Enrollment in the Medicare Program
The next step of mandatory paperwork is to enroll in the Medicare Program via the Provider Enrollment Chain and Ownership System (PECOS) or a paper copy of the CMS-855 form. The CMS collects a provider’s information and documentation to check its eligibility for the wider program. The form you select will depend on the type of provider you are: for example, the CMS-855I form is for individual practitioners, and the CMS-855B is for group practices (hospitals where multiple doctors sit).
If you visit the PECOS website, you can fill out the provider application via the given portal and update the requested details electronically.
The application process is lengthy, and you must get the details right to speed up the acceptance. But if the details seem overwhelming, a medical billing company will get things done for you.
3. Choose Participation Status (PAR or Non-PAR)
Besides the standard provider details (like the healthcare services you offer, the staff your facility employs, ownership details, etc.), you must also clarify your participation in the Medicare Program. Here are two main categories or providers (you can opt for either one and specify it in the application form):
Participating Providers
Participating providers (PAR) sign a contract with Medicare to accept assignment of all services. From the assignment, it means that a provider takes what Medicare says a service is worth, along with the patient’s share of deductibles.
| Note: Medicare never pays what a provider asks for, and both parties negotiate to settle for a certain amount, which is almost always lower than the original ask. |
The participating arrangement means that the provider cannot charge more than the set rate, and the patient is only responsible for their share (the standard is 20% of the approved amount plus any deductible).
Medicare will pay the remaining 80% and the provider won’t do balance-billing, which means lower out-of-pocket costs for the beneficiaries.
| Note: Balance billing is when a hospital charges a patient the difference between what it originally asked for and what the patient’s insurer (Medicare in this case) approves. |
Non-Participating Providers
The second category of providers is non-participating (Non-PAR), which does not sign a blanket agreement with Medicare. Instead, they decide on a case-by-case basis if they wish to take the assignment (i.e., accept Medicare’s amount as full).
When these participants don’t accept Medicare’s amount, they can charge the patient up to 15% more than Medicare’s approved amount (called a limiting charge).
The patient has to pay that extra amount along with their regular coinsurance and any deductible. But even in these cases, Medicare calculates its payment based on the approved amount, not the provider’s full sticker price.
After getting approved, the provider may receive part of the payment from Medicare and the rest directly from the patient.
| Note: The limiting charge is the highest extra amount a non-participating Medicare doctor can add to a patient’s bill. Mostly, it’s up to 15% more than Medicare’s decided amount. |
4. Set up Payments and Claim Submission with Your MAC
The MAC is Medicare’s regional contractor that will review your application, and after the approval, sets up how you (as the provider) will get paid. The provider should opt for Electronic Funds Transfer (EFT), so Medicare deposits payments directly into your bank account instead of mailing checks.
The MAC will also set up your facility’s Electronic Remittance Advice (ERA). It’s a detailed electronic statement that explains what Medicare paid and what’s left, along with the reasons for non-payment.
5. Verify Patient Eligibility and Get Their MBI
Before billing Medicare as a provider, you must confirm two things:
- Does the patient have Medicare insurance (obviously)?
- Do the services a patient acquired something Medicare will pay for?
That’s when a Medicare Beneficiary Identifier (MBI) simplifies things. Every registered Medicare beneficiary has a unique number (it’s not the same as a Social Security number), and the provider has to log that into Medicare’s system.
Medicare will give the provider access to a secure provider portal, or the MAC might give you the needed details. Running a beneficiary’s MBI will also show if they have met their deductible or if there are any coverage limits.
6. Code and Document the Service
Coding in medical bills is arguably the most important part because, without codes, the payment claim is just words. Medicare systems need codes to process payment, and will only pay for a service if it matches a covered diagnosis.
Here’s what a code in your Medicare bill looks like:
- CPT® 99213 = A patient’s office visit for 15–29 minutes.
- HCPCS E0114 = Pair of underarm wooden crutches with pads, tips, and handgrips.
And since wrong or missing codes mean rejected claims, any provider must get them right. Luckily, professional medical coders can put the jargon into system-ready codes in seconds and make sure your claim goes through.
7. Submit the Claim
After coding a patient’s visit and treatment services, send the bill to your MAC through your medical billing software. Now that payment management is all electronic, sending the claims is faster, and you get to keep tabs on their status. Because even 1 type can get the Medicare bill kicked back, check if the beneficiary’s MBI, Medicare codes, and dates are correct.
8. Track the Claim
A provider can check their claim’s status from the same software they sent it through and fix or resubmit if it’s rejected.
Here are some reasons your bill to Medicare might be reversed:
- Incomplete or incorrect info
- Coding mistakes
- Late filing
- Multiple claims for the same payment
- The services are not necessarily payable by Medicare
- Exceeded limits
9. Appeal it to Medicare if Claim Denied
Your MAC will state the reason(s) why a bill isn’t processed further, so there’s still time to fix it. If your application had problems like incorrect or missing information, you can fix and resend it. However, a provider must appeal within 12 months of a patient acquiring services because after that, the claims are automatically discarded.
Final Thoughts
Billing Medicare as a provider means you have to deal with more paperwork, more jargon, and more compliance issues. Even one mistake can delay payments or result in rejected claims, all of which cost your facility time and revenue.
Therefore, trusted medical billing companies like BilNow do the hard work for hospitals, clinics, and nursing facilities.
BilNow checks patient eligibility, codes big things into standard formats, fixes rejections, and handles appeals for a provider.
If you want to get paid faster and see up to 25% revenue increase within 3 months, get a free billing demo, and let’s take things from there.
Rest assured, you won’t be chasing Medicare payments anymore!
FAQs
Does a provider have to accept every Medicare patient who comes in?
No, even if the provider is a participating one and accepts the assignment, it doesn’t have to accept every patient who comes in. Doctors can limit the number of patients with Medicare they see each day/week, according to the American Medical Association. That’s why it’s better for patients to check if a facility accepts Medicare, and if it does, whether it is taking in new patients with Medicare or not.
How quickly does Medicare pay once a provider submits a claim?
Medicare pays approved claims pretty fast. But it can’t pay before 14 days for electronic claims or 29 days for paper ones. Simply put, most payments are made within about 30 days unless there’s a review or delay.
What happens if a provider misses the 12-month claim filing deadline?
If a claim isn’t received within 12 months (one full calendar year) from the service date, Medicare denies it for untimely filing, and such denials aren’t appealable. For a provider, it means lost revenue, but the patient won’t have to pay because the hospital failed to file a claim on time.
