What is a Medicare-Approved Amount?
A Medicare-approved amount is what Medicare will pay for a covered service. Healthcare providers that agree to Medicare assignmentAn agreement by your doctor to be paid directly by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance.... accept the approved amount without excess chargesA Medicare Part B excess charge is the difference between a health care provider’s actual charge and Medicare’s approved amount for payment.....1Medicare.gov, “Lower costs with assignment”, Accessed September 29, 2021
Key Takeaways
- Medicare-approved amounts are what Medicare will pay a doctor or other healthcare provider for an approved healthcare service.
- Services not covered by Medicare Part A or Part B are the beneficiary’s responsibility.
- If a doctor does not accept Medicare assignment, they may add Part B excess charges, which the beneficiaryA person who has health care insurance through the Medicare or Medicaid programs.... must pay.
- Medicare Part B has no maximum coverage as long as services are medically necessaryServices or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.....
- Medicare Part A has a coverage limit per benefit periodA benefit period is a method used in Original Medicare to measure a beneficiaries use of hospital and skilled nursing facility (SNF) services. With each new benefit period, the beneficiary is charged a new benefit....
- Medicare Advantage and Medicare Part DMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each... have varying approved amounts depending on the plan.
What Does Medicare-Approved Amount Mean?
A Medicare-approved amount is what the government has agreed to pay healthcare providers for a medical service. Healthcare providers that accept Medicare assignments will take the Medicare-approved amount as payment for the medical services a beneficiary requires. If the service is not fully covered by Medicare then the beneficiary owes the amount that is leftover.1Medicare.gov, “Lower costs with assignment”, Accessed September 29, 2021
For example, after paying the annual deductible for Medicare Part B coverage then Medicare will reimburse the beneficiary’s doctor for 80 percent of the approved services. Beneficiaries are responsible for paying the remaining 20 percent.2Medicare.gov, Medicare costs at a glance, Accessed September 29, 2021
Some healthcare providers do not accept Medicare assignment. These healthcare providers can add up to 15 percent over the Medicare-approved amount. To avoid these excess charges, check with a healthcare provider’s office to see if they accept Medicare assignment.1Medicare.gov, “Lower costs with assignment”, Accessed September 29, 2021
Is There a Maximum Amount Medicare Will Pay?
The maximum amount Medicare will pay all depends on the type of coverage. For outpatient careOutpatient Care is medical care that does not require an overnight stay at the hospital. Medicare Part B provides coverage for Outpatient Care.... like check-ups and lab work, there is no real limit to the amount Medicare Part B will pay. As long as the service is covered by Medicare, proven medically necessary, and the Part B deductible has been met, Part B will provide coverage.2Medicare.gov, “Medicare costs at a glance”, Accessed September 29, 2021
Inpatient careInpatient care refers to care provided in a hospital or other inpatient facility. Inpatients are admitted and stay at least one night depending on their condition.... services at hospitals and nursing facilities have limits under Medicare Part A. When beneficiaries are admitted into a hospital, they start a benefit period that lasts 90 days. Once the deductible has been met during this benefit period, Part A will begin providing complete coverage for the first 60 days.2Medicare.gov, “Medicare costs at a glance”, Accessed September 29, 2021
If a beneficiary has a Medicare Advantage planMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B).... or Medicare Part D prescription drug plan, then the amount of coverage depends on their plan. These factors include their plan’s deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share...., copaymentsA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service...., and/or coinsurances for covered services.2Medicare.gov, “Medicare costs at a glance”, Accessed September 29, 2021
Citations
- 1Medicare.gov, “Lower costs with assignment”, Accessed September 29, 2021
- 2Medicare.gov, “Medicare costs at a glance”, Accessed September 29, 2021