What types of services does medicare part A reimburse?

Medicare Part A covers hospital services, palliative care, and limited home health and skilled nursing care. Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). Under this program, your Medicare providers send your claims directly to Medicare and you won't see any bills. You usually pay coinsurance or copayment for Medicare Part A and Part B services, as well as Part A and Part B deductibles.

However, in most cases, you don't have to prepay for all medical services or request reimbursement. Part A covers doctors, equipment, medications, tests, and other services you receive as an inpatient in the hospital. It also covers a limited period of time in a skilled nursing facility after a hospital stay, palliative care, and home health care. Medicare Part A services include inpatient hospitals, skilled nursing facilities, nursing homes, hospice, and home health care.

Providers are primarily reimbursed by Medicare for hospital services under the Prospective Inpatient Payment System (IPPS). You can go to any doctor, other health care provider, hospital, or other facility that is enrolled in Medicare and that accepts Medicare patients. In general, Medicare pays each of these providers separately, using rates and payment systems that are specific to each type of provider. In return, Medicare would seek the allowable charge for that procedure and then reimburse the doctor for the amount of money.

Under current law, Medicare medical fee schedule payments are subject to a formula, called the Sustainable Growth Rate (SGR) system, enacted in 1987 as a tool to control expenses. In this scenario, the provider would continue to provide you with the health service, but you are allowed to charge more. Medicare and most health insurance plans don't pay for this type of care, sometimes called “custodial care.” Medicare allows out-of-network health care providers to charge up to 15% more than the approved amount for their services. Each APC receives an escalated relative pay weight that represents the average healthcare costs of the services included in the package.

If a person has traditional Medicare and a Medigap plan, the law requires a health care provider to file claims for their services. First, some states use a comprehensive risk-based managed care model in which plans receive a capita fee for services covered by Medicaid. Providers can also bill Medicare under the Physician Fee Program for services provided in a variety of settings, including hospitals, doctors' offices, ambulatory surgical centers, post-acute care facilities, and patient homes. Providers (such as doctors, hospitals, skilled nursing facilities, and home health agencies) and providers are required by law to file claims for covered services and supplies you receive.

Medicare allows you to see any doctor you choose, but that doesn't mean that all providers handle billing the same way.

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