The Medicare system can be daunting at first. However, once you master the enrollment process and billing requirements, you’ll find it manageable. This step-by-step guide helps you learn how to bill Medicare as a provider, from Medicare claim submission to getting paid.

Many new providers struggle with Medicare’s documentation requirements and coding standards. Others face delays because they miss enrollment deadlines or submit incomplete applications. Let us share practical steps to avoid these common pitfalls while maximizing your reimbursements.

How to Bill Medicare as a Provider (Complete Guide)

Medicare billing process for providers requires three essentials:

• Proper enrollment to Medicare
• Accurate claim submission
• And ongoing compliance.

To bill Medicare as a provider, you must obtain an NPI number and enroll through the Provider Enrollment, Chain, and Ownership System (PECOS). Next, you’ll verify patient eligibility and gather required documentation before submitting claims to your Medicare Administrative Contractor (MAC). Finally, you must maintain accurate records and update your enrollment information as needed.

The entire process follows a structured workflow designed to protect both providers and beneficiaries. Medicare uses standardized systems like the resource-based relative value scale (RBRVS) to determine payments. Your MAC processes claims and handles communications throughout the billing cycle. Success depends on understanding each step and following established guidelines consistently.

What is Medicare? And What Does Medicare Billing Mean for Providers?

Medicare serves as America’s federal health insurance program for adults aged 65 and older. The program also covers younger individuals with specific disabilities or permanent kidney failure. The Centers for Medicare and Medicaid Services (CMS) manages this vast system that processes billions of claims annually.

Medicare program divides into three main parts that affect your Medical billing strategy.

For providers, Medicare billing means following federal regulations while serving eligible beneficiaries. You must determine which Medicare part covers each service you provide. Some patients only qualify for certain coverage types, which affects your billing strategy.

Medicare may act as a secondary payer when patients have other insurance coverage.

Understanding Medicare’s structure helps you navigate billing requirements more effectively. Each part has different rules, payment schedules, and documentation needs. Your billing staff must recognize these differences to submit accurate claims and avoid denials.

How to Bill Medicare as a Provider (Step-by-Step)

Successfully billing Medicare requires following a systematic approach from enrollment through payment reconciliation. The process involves multiple steps that build upon each other to ensure compliance and maximize Medicare reimbursement.

Here are the nine essential steps every provider must master:

1. Obtain an NPI Number
2. Enroll in Medicare
3. Verify Enrollment and Maintain Compliance
4. Verify Patient Eligibility and Coverage 
5. Gather Required Documentation
6. Submit Claims to Medicare
7. Respond to MAC Communications and Track Claims
8. Receive Payment and Reconcile Accounts
9. Maintain Records and Compliance

Let us dive a little deeper into these steps to billing Medicare as a healthcare provider.

1. Obtain an NPI Number

Your National Provider Identifier (NPI) serves as your unique healthcare identifier across all transactions. This 10-digit number links all your Medicare billing activities to your practice or facility. Without an NPI, you cannot submit claims or receive payments from Medicare.

Apply for your NPI through the National Plan and Provider Enumeration System (NPPES) website. The application process requires basic information about your practice, including your name, address, and taxonomy code.

Note: Individual providers and healthcare organizations each need separate NPI numbers.

The NPPES system typically processes applications within 10 business days. You’ll receive your NPI via email once approved. Keep this number confidential and use it consistently across all Medicare transactions. Never share your NPI with unauthorized individuals or organizations.

Some providers already have NPI numbers from other insurance billing. You can use the same NPI for Medicare if it’s still active and accurate. Verify your existing NPI information through the NPPES registry before proceeding to Medicare enrollment.

2. Enroll in Medicare

Medicare enrollment establishes your eligibility to bill the program for covered services. The process varies depending on whether you’re an individual provider or institutional facility. Individual physicians typically complete the CMS-855I form, while groups use CMS-855B forms.

Access the enrollment system through PECOS, Medicare’s online platform for provider registration. Create your account using your NPI number and basic practice information. The system guides you through each section of the enrollment application.

Institutional providers face additional requirements during enrollment. Hospitals, skilled nursing facilities, and similar organizations must pay application fees. These fees vary by provider type and are updated annually on the PECOS website.

Prepare supporting documentation before starting your application. You’ll need copies of your professional license, malpractice insurance, and curriculum vitae. Some provider types require additional certifications or accreditations. Having these documents ready speeds up the enrollment process.

3. Verify Enrollment and Maintain Compliance

Your Medicare Administrative Contractor (MAC) reviews your enrollment application and may request additional information. Respond promptly to any MAC communications to avoid processing delays. The review process can take several weeks depending on your provider type and application completeness.

Once enrolled, you must keep your information current in the PECOS system. Report ownership changes, legal actions, or address updates within 30 days. Other enrollment changes must be reported within 90 days. Failure to maintain current information can result in payment delays or enrollment termination.

Institutional providers may undergo site visits or surveys during the enrollment process. Your CMS Location and State Agency coordinates these evaluations. Prepare your facility for inspection and ensure all required documentation is readily available.

Monitor your enrollment status regularly through PECOS. The system shows your current status and any pending actions. Address any issues immediately to maintain uninterrupted billing privileges. Set calendar reminders for important deadlines and renewal dates.

4. Verify Patient Eligibility and Coverage

Patient eligibility verification prevents claim denials and ensures proper billing. Check each patient’s Medicare status before providing services. Use your MAC’s portal or eligibility verification tools to confirm coverage details.

Determine whether Medicare serves as the primary or secondary payer for each patient. Other insurance coverage may take precedence over Medicare in certain situations. Workers’ compensation, employer group health plans, and auto insurance often pay before Medicare.

Collect comprehensive insurance information from every patient. Use the CMS Questionnaire or similar forms to gather employment and coverage details. Ask about spouse’s insurance, recent accidents, and work-related injuries. This information helps identify other potential payers.

Document your eligibility verification efforts in the patient’s record. Note the date, method, and results of your verification. This documentation supports your billing decisions and helps during audits or appeals. Update eligibility information if the patient’s circumstances change.

5. Gather Required Documentation

Accurate documentation forms the foundation of successful Medicare billing. Collect all necessary information before submitting claims to avoid delays or rejections. Your documentation must support the medical necessity of services provided.

Start with basic patient demographics including name, date of birth, and Medicare Beneficiary Identifier (MBI). Verify the patient’s address and contact information. Ensure the MBI matches exactly with Medicare’s records to prevent processing errors.

Select appropriate diagnosis codes using the current ICD-10 system. Choose codes that accurately reflect the patient’s condition and support the services provided. Use the most specific code available and include secondary diagnoses when relevant.

Identify correct procedure codes using CPT or HCPCS Level II codes. Match procedures to appropriate diagnosis codes to demonstrate medical necessity. Apply modifiers when required to clarify services or indicate special circumstances. Review coding guidelines regularly!

6. Submit Claims to Medicare

Electronic claim submission offers the fastest and most reliable method for Medicare billing. Use HIPAA-compliant systems that meet federal privacy requirements. Most practice management systems include Medicare billing capabilities.

Submit claims through your MAC using approved Electronic Data Interchange (EDI) formats. The standard format for professional claims is the 837P transaction. Institutional claims use the 837I format. Ensure your medical billing system supports these formats.

Paper claims serve as a backup option when electronic submission isn’t possible. Use the CMS-1500 form for professional services or the UB-04 form for institutional services. Complete all required fields and include supporting documentation when necessary.

Medicare Advantage patients require different claim submission procedures. Send these claims directly to the patient’s specific plan administrator, not to traditional Medicare. Each Medicare Advantage plan has its own submission requirements and contact information.

7. Respond to MAC Communications and Track Claims

Your MAC processes all Medicare claims and manages communications throughout the billing cycle. Monitor your submissions regularly and respond promptly to any requests for additional information. Delays in responding can result in claim denials.

Track claim status through your MAC’s provider portal or electronic systems. Claims typically process within 14-30 days depending on complexity. Follow up on any claims that exceed normal processing times.

Address claim rejections immediately by reviewing error messages and correcting problems. Common rejection reasons include invalid patient information, coding errors, or missing documentation. Resubmit corrected claims as soon as possible.

Appeal denied claims when you believe Medicare’s decision is incorrect. Submit additional documentation or clarification to support your position. Follow the appeals process outlined by your MAC and meet all required deadlines.

8. Receive Payment and Reconcile Accounts

Medicare payments arrive via electronic funds transfer to your designated bank account. Payment amounts reflect the Medicare fee schedule minus any applicable deductibles or coinsurance. Reconcile payments against your submitted claims to identify any discrepancies.

Review your Medicare Summary Notice (MSN) or Electronic Remittance Advice (ERA) for payment details. These documents explain what Medicare paid, what the patient owes, and any claim adjustments. Use this information to bill patients for their portion of costs.

Handle patient billing carefully to comply with Medicare regulations. You cannot bill patients for services that Medicare doesn’t cover unless you provide proper advance notice. Use Advance Beneficiary Notices (ABNs) when services may not be covered.

Track your accounts receivable to ensure timely payment collection. Follow up on unpaid claims and patient balances according to your practice’s policies. Maintain detailed records of all collection efforts for audit purposes.

Tip: Some visits can be billed incident-to and pay the full doctor rate even if a nurse practitioner saw the patient. Learn the rules here → [Medicare incident-to billing guide]

9. Maintain Records and Compliance

Medicare requires providers to maintain comprehensive records for audit and compliance purposes. Keep all billing documentation, patient records, and correspondence for at least five years. Some states have longer retention requirements.

Update your PECOS enrollment information whenever changes occur. Report new locations, ownership changes, or changes in services provided. Keep your contact information current to ensure you receive important Medicare communications.

Participate in Medicare audit requests promptly and thoroughly. Provide requested documentation within specified timeframes. Maintain organized records that allow quick retrieval of information during audits.

Stay informed about Medicare policy changes and updates. Subscribe to your MAC’s newsletters and attend provider education sessions. Changes in coverage, coding, or billing requirements can affect your reimbursement if not implemented properly.

Medicare Provider Billing Guidelines

Medicare billing guidelines are a set of rules that providers must follow when submitting claims for reimbursement. Following these guidelines helps providers submit claims accurately. This also protects healthcare providers and beneficiaries.

Key Medicare provider billing guidelines include:

• Document medical necessity for all services in patient records
• Use accurate CPT, HCPCS, and ICD-10 codes for all procedures and diagnoses
• Apply modifiers correctly to indicate service variations or special circumstances
• Submit claims within 12 months of service date
• Determine primary vs. secondary payer status for each patient
• Bundle services appropriately and avoid improper unbundling
• Accept Medicare’s approved amounts when participating in the program
• Maintain accurate patient insurance and employment information
• Coordinate benefits with other insurance carriers when applicable
• Respond promptly to MAC requests for additional information
• Keep detailed records for audit and compliance purposes
• Update enrollment information within required timeframes
• Follow appeals procedures for denied claims
• Bill patients appropriately for non-covered services with proper notices
• Use electronic submission methods when possible
• Protect patient information according to HIPAA requirements

Common Medicare Medical Billing Questions

Let us answer some of the most common Medicare billing questions for providers.

1. What is the Medicare billing process?

The Medicare billing process involves submitting claims electronically to your assigned Medicare Administrative Contractor (MAC) for covered services. You must first enroll in Medicare, obtain an NPI number, and verify patient eligibility before providing services.

After treatment, you code the services using appropriate CPT and ICD-10 codes and submit the claim within one year. Your MAC reviews the claim for accuracy and compliance with Medicare guidelines. They may request additional documentation or clarification before processing payment. Once approved, Medicare pays 80% of the approved amount for Part B services. Patients remain responsible for deductibles and coinsurance.

2. What providers can bill Medicare?

Medicare accepts claims from a wide range of healthcare providers including physicians, nurse practitioners, physician assistants, and clinical specialists. Hospitals, skilled nursing facilities, home health agencies, and hospice organizations also qualify for Medicare billing.

Other eligible providers include physical therapists, occupational therapists, speech-language pathologists, and clinical social workers.

Suppliers such as ambulance services, durable medical equipment companies, and independent diagnostic testing facilities can also bill Medicare. Healthcare providers must enroll in the Medicare program and meet requirements established by CMS. Enrollment requirements vary by provider type and may include licensing, accreditation, or certification standards.

3. Is provider based billing only for Medicare?

Provider-based billing extends beyond Medicare to include Medicaid and some Medicare Advantage plans. This billing method separates professional and facility charges for services provided in hospital-based outpatient clinics or departments. CMS requires this approach for government programs. But some insurance companies also use provider-based billing models.

The requirement affects facilities that have relationships with hospitals and bills under the hospital’s NPI number. Private insurance plans may combine professional and facility charges into single bills, but Medicare and Medicaid maintain separate billing requirements.

4. Are providers required to bill Medicare?

Most providers must submit claims to Medicare for covered services provided to Medicare beneficiaries, regardless of their participation status. Participating providers agree to accept Medicare’s approved amounts and must file claims for all covered services. Non-participating providers can accept assignments on a case-by-case basis but must still submit claims.

Providers can opt out of Medicare entirely by entering into private contracts with patients. In this arrangement, providers cannot bill Medicare and patients pay entirely out-of-pocket. Certain exceptions exist for small providers, roster billing, and demonstration projects. But the general rule requires claim submission for covered services.

5. How to Bill Medicare Electronically?

Electronic Medicare billing uses HIPAA-compliant systems to submit claims through Electronic Data Interchange (EDI) transactions. Providers transmit claims to their MAC using direct data entry screens or practice management software. The system automatically checks claims for errors and returns rejected submissions for correction before final processing.

Most healthcare facilities use clearinghouses or billing services that handle electronic transmission. These intermediaries convert claims into proper EDI formats and manage the submission process. Electronic billing reduces processing time, minimizes errors, and provides faster payment compared to paper submissions.

6. What Payment Will I Receive From Medicare?

Medicare payments follow the resource-based relative value scale (RBRVS) system that calculates reimbursement based on resources required for specific services. Payment amounts vary by geographic location, provider specialty, and service complexity. The Medicare Physician Fee Schedule provides specific payment rates updated annually.

Medicare pays 80% of approved amounts for Part B services, with patients responsible for remaining costs. Part A payments vary by service type and may include deductibles or coinsurance. Providers who accept assignments agree to Medicare’s approved amounts as full payment. Non-participating providers can charge limited additional amounts above Medicare’s rates.

Physicians usually avoid providing health care services to Medicare patients—those of 65 years or older and some younger people with disabilities. Because Medicare offers low reimbursement rates.

The Medicare reimbursements are even insufficient to cover practice costs. As a result, the doctors lose money on Medicare patients.

Furthermore, it also causes a decrease in revenue for healthcare practices as they likely treat fewer patients because of low Medicare reimbursement rates for physicians.

However, while some doctors do not lose money on Medicare patients, they often face challenges affecting their performance of practice sustainability, and they face financial strains.

Here, we discuss the reasons why doctors lose money on Medicare patients and are reluctant to provide services to Medicare patients.

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Why Do Doctors Lose Money on Medicare Patients?

Physicians often face financial challenges and lose money for several reasons when providing care services to Medicare patients:

1⃣ Low Reimbursement Rates

Medicare typically reimburses healthcare providers at lower rates than private insurance companies. This means that the payments physicians receive for healthcare services provided to Medicare patients may not cover the full cost of care, or sometimes, doctors face deficits while managing their practices’ expenses. However, Medicare offers low reimbursements but provides stability and predictability in payments.

Payment rates under the Physician Fee Schedule dropped down by 2.93% in 2025, which went into effect on January 1, compared to 2024 rates. As a result, the conversion factor will decrease from $33.29 in 2024 to $32.35 in 2025, a reduction of $0.94 (2.83%).

In addition, one reason for avoiding treating Medicare patients is affordable care. CMS Administrator Chiquita Brooks-LaSure said, “CMS remains committed to delivering affordable, high-quality care to all Americans while continually driving innovation to help better meet the individual needs of every person with Medicare.” As a result, physicians should expect less from CMS to pay for services provided to Medicare Patients.

2⃣ High Practice Costs Compared to Reimbursements

The physician practice costs portion of the current MEI includes components for non-physician compensation (including fringe benefits), medical supplies, professional liability insurance, and other expenses (including other professional services, salaries for staff, and overhead expenses). They have been increasing. These rising costs can make it difficult for physicians to break even or profit when providing healthcare services to Medicare-covered patients.

CMS acknowledged that the costs incurred by physicians to deliver healthcare went up by 3.5% in 2025, as determined by the Medicare Economic Index (MEI). However, as CMS finalized the 2025 Medicare physician pay schedule, there will also be a 2.85% cut in pay. This proportion of pay cuts and cost rise can significantly impact practice revenue. Therefore, physicians are less likely to accept Medicare patients.

Increasing costs make it harder for physician practices running on small margins to acquire new equipment, retain staff members, and keep doors open for new Medicare patients. If the gap between what Medicare pays physicians and what it costs to provide high-quality care continues to grow, it will limit access to healthcare for senior Americans and persons with disabilities.

3⃣ Administrative Burden

Dealing with Medicare claims and paperwork can be time-consuming and costly. Physicians often need additional staff to handle the administrative workload, which adds to their practice expenses. Furthermore, physicians spend considerable time on administrative tasks such as filling out forms, managing electronic health records (EHRs), and complying with regulatory requirements. This time away from patient care means fewer billable hours, directly impacting their income.

Many practices need to hire additional staff, such as medical billers, coders, and administrative assistants, to handle the administrative workload. These additional salaries and benefits add to the practice’s overall operating costs.

4⃣ Payment Cuts and Inflation

Over the years, multiple cuts to Medicare reimbursement rates have been made, further reducing physicians’ income from treating Medicare patients. For example, in the last twenty years, from 2021 to 2025, Medicare payments to healthcare providers have dropped by 33% after accounting for rising costs, making it harder for doctors to care for their Medicare-covered patients.

“This actual dollar amount is something that physicians have to sort of fight for year after year. It’s a constant issue with reimbursement. If you look at how physicians have been reimbursed since 2001, once you’ve adjusted for inflation, there’s been a 30 percent decrease in physician reimbursement for Medicare patients,” Dr. Chang.

The table below shows the comprehensive details of practice cost inflation according to MEI and physician payments according to the Physician Fee Schedule (PFS).

Medicare Updates Compared to Inflation in Practice Costs (2001 to 2025)

Moreover, here we mention some crucial reasons physicians are less likely to accept Medicare patients:

• Medicare pays doctors about 80% of the “reasonable charge” for services it covers. At the same time, private insurance companies pay almost twice what Medicare pays for hospital services.
• CMS releases the Physician Fee Schedule each year. Medicare physicians must be participating providers by agreeing to the PFS and not charging more than the amount. However, non-participating providers can charge up to 15% more. Participating providers accept Medicare’s approved amount as full payment and bill Medicare directly. In contrast, non-participating providers can charge up to 15% more than the agreed amount and require patients to pay upfront.
• It can often take months for physicians to receive their payments. However, sometimes, they can receive payment within 14 days after electronic claim filing and within 28 days after paper filing.
• The estimated loss of Medicare claims due to billing problems is 7.3%. The loss is reduced to an estimated 4.8% with private insurers.

Do Physicians Really Lose Money on Medicare Patients?

According to the NYT, it is not always correct that doctors lose money on Medicare patients. Many physicians claim that insurance companies are not paying enough for doctors for care services they provide to seniors or disabled residents—Medicare-covered patients. As Dr. Barbara L. McAneny claims, “Insurers in the New Mexico exchange reimburse doctors at Medicare levels, which were ‘often below our cost of doing business, and definitely below commercial reimbursement rates.”

However, this claim seems doubtful since many doctors accept Medicare patients. Doctors earn over $200,000 annually, putting them in the top 1% of earners. Because they make so much money and work hard to keep out competition, it is hard to believe that many doctors would want to lose money by treating Medicare patients.

However, doctors receive less than expected pay when they provide healthcare services to Medicare patients. It is baseless to say that they completely lose money.

When Doctors Avoid Medicare Patients: The Impact on Access & Care Quality

When doctors avoid accepting Medicare patients due to financial constraints, it can have significant impacts on both patient access and care quality.

Reduced Access to Care

Many Medicare patients, especially those in rural or underserved areas, may find it challenging to find physicians willing to accept them. This can lead to longer wait times for appointments and increased travel distances to see a doctor.

Quality of Care

With fewer doctors available to treat Medicare patients, the quality of care may suffer. Physicians may have less time to spend with each patient, potentially leading to rushed appointments and less personalized care.

Health Outcomes

Limited access to care can result in delayed diagnoses and treatment, which can worsen health outcomes for Medicare patients. Chronic conditions may go unmanaged, leading to more severe health conditions over time.

Financial Strain on Practices

Physicians who continue to accept Medicare patients may face financial strain due to lower reimbursement rates, which can impact their ability to invest in new technologies and maintain high-quality care standards.

Overall, the avoidance of Medicare patients by doctors can create a ripple effect, impacting not only individual patients but also the broader healthcare system. It’s a complex issue that requires thoughtful solutions to ensure that all patients receive the care they need.

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AMA Smoothen Ways for Physicians—Policy and Solutions

Since January 1, doctors have been paid 2.83% less than in 2024 for treating Medicare patients. This is the fifth year in a row that Medicare has cut payments for doctors. Along with not adjusting for rising costs, this is making it very hard, or even impossible, for some doctors to keep their practices running and care for aged patients.

During a webinar, Todd Askew, the senior vice president of AMA advocacy, mentioned that in 2025, the American Medical Association is working toward reversing the 2.83% cut that took effect on January 1 and is aiming for an annual increase tied to inflation. He emphasized the need for bipartisan support in a closely divided Congress, where Republicans have a narrow majority, to achieve these goals and address the key issues faced by patients and physicians.

Further, he explained that their advocacy has consistently prioritized bipartisanship. He noted that nearly every piece of legislation they have supported in the last several Congresses has been bipartisan, as they aim to build support from the center outward.

A bipartisan group of 10 House members introduced a bill in late January to prevent a 2.83% cut in Medicare payments to doctors this year and to give a 2% payment increase. The American Medical Association (AMA) fully supports this bill and will help include it in future laws to fund the government before the March 14 deadline.

Furthermore, Greg Murphy, MD (R-N.C.), and Jimmy Panetta (D-Calif.), along with eight other House members, introduced a bill called H.R. 879, the Medicare Patient Access and Practice Stabilization Act. This bill, starting on April 1, would cancel the 2.83% cut that began on January 1. Similar bills had support from both parties, but Congress did not deal with this issue during the last session.

AMA’s Reforms

In addition, The American Medical Association (AMA) has been advocating for reforms to the Merit-based Incentive Payment System (MIPS) as AMA proposes a new Data-Driven Performance Payment System that aims to:

• Lower the maximum penalty from -9% to -0.5% of a physician’s annual payment update.
• Streamline reporting requirements and recognize quality efforts across performance categories.
• Provide more flexibility and support for small, rural, and safety-net practices.
• Adjust payments based on inflation rates to ensure that physicians are compensated fairly as the cost of living rises.
• Ensure that physicians’ income keeps pace with inflation, preventing a decrease in real income over time.
• Provide a more predictable and stable revenue stream for physicians, which can help them manage financial risks better.

Telehealth Flexibilities and Equity Initiatives

Telehealth has become a crucial tool, especially during the COVID-19 pandemic. The AMA has outlined several steps to ensure equitable access to telehealth services, including:

• Providing internet-connected devices and broadband access to underserved communities.
• Ensuring telehealth solutions are user-friendly and accessible to people with varying levels of digital literacy.

These initiatives aim to address the financial challenges faced by physicians while ensuring that patients continue to receive high-quality care.

Final Words

Doctors treating Medicare patients often face tough financial challenges. While some wonder if they lose money, many say low payments and high costs make it hard to keep up. This leaves some patients struggling to find care. We looked at both sides of this issue and offered solutions to help both doctors and patients.