Medicare Deductible, Coinsurance and Premium Rates

Medicare announced the updates to Medicare deductible, coinsurance, and premium rates for 2016. This provides detailed information on the increases to the yearly premium and deductible Medicare patients will have to face in the coming year.

Just as an FYI, I listed a brief summary of the deductible and coinsurance amounts. This information can be used to inform your patients about their Medicare benefits as well as collecting upfront payments from your Medicare patients.

Make sure your billing staff and front office staff are aware of these changes.

Medicare Part A Hospital Insurance

Hospital. Image courtesy of BSIP/UIG Getty Images

Medicare Part A (Hospital Insurance): Most people get Part A as soon as they turn 65 without having to pay a premium. The only thing that would prevent a person from being eligible for Part A is failure to pay Medicare taxes while they or their spouse was working.

Medicare Part A is called the hospital insurance because it helps pay for the care a patient receives in a hospital inpatient setting, critical access hospital, skilled nursing facility (SNF), hospice and home health care. Some Medicare Part A services include:

Inpatient stay
Skilled nursing and rehabilitation services, supplies and meals
Medical and support of hospice (except home care)
Home health aide services, only part time skilled nursing care, physical, occupational, and speech therapies, durable medical equipment, and supplies

Medicare Part A pays by DRG (Diagnosis Related Groups). DRGs are assigned a classification based on a combination of ICD-9 diagnosis codes, CPT and HCPCS procedure codes, complications or conditions present on admission, discharge status, age and sex. DRGs payments are also based on a certain time period which is an average number of days necessary for adequate treatment.

Deductible

Deductible per benefit period, $1,288.00

Coinsurance

For days 1-60, $0.00 per day
For days 61-90, $322.00 per day
For days 91-150, $644.00 per lifetime reserve day

Skilled Nursing Facility

For days 21 thru 100, $161.00 per day

Premiums

Base Premium - $411.00 per month
Base Premium plus 10% surcharge - $447.70 per month
Base Premium with 45% reduction - $226.00 per month (30-39 quarters of coverage)
Base Premium with 45% reduction and 10% surcharge – $246.40 per month

Patients Waiting in Line at Medical Office — Yellow Dog Productions/Getty Images

Medicare Part B (Supplementary Medical Insurance): This part of Medicare is optional to patients one they reach the age of 65 and charges a monthly premium. Part B covers most services not covered by Part A. Some of these include:

Physician office visits
Outpatient hospital services
Outpatient physical, occupational and speech therapy
Clinical laboratory services
Preventative Care
Durable medical equipment (DME)
Medical supplies, eyeglasses, and prosthetic devices
Ambulance services
For a complete list of items, visit CMS.gov.

Medicare Part B pays by Fee Schedule. A fee schedule is a complete listing of fees used by Medicare on a fee-for-service basis.

Deductible

Deductible per year, $166.00

Coinsurance

20% coinsurance

Premiums

Held harmless - $104.90 per month
Not subject to hold harmless - $121.80

It is important to understand Medicare billing requirements which can be somewhat complex. Consider attending training events and opportunities. Providers must ensure that those responsible for preparing and submitting claims to Medicare are aware of proper submission guidelines and regulations.

There are several vendors available to obtain information up-to-date information regarding a patient’s Medicare benefits and current status.

Patient eligibility
Claim history
Benefits
Medicare Secondary Payer (MSP) Information
MSP enrollment dates
Medicare Advantage Information
Medicare Advantage enrollment dates

More Information on Billing to Medicare

Medical office providers have 365 days from the date the patient is discharged to bill Medicare for payment. Medicare payments are typically made to the medical office 13 calendar days from the date Medicare receives a clean claim.