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.

The Office of Inspector General (OIG) has updated its 2025 Work Plan and is focusing on reviewing postoperative services that are part of the global surgery period. With the recent changes in the global surgery coding system for 2025, it’s essential for healthcare professionals to stay up-to-date.

The OIG (Office of Inspector General) is examining how these postoperative services are being provided and billed during the global surgery period. This could involve checking for compliance, accuracy in billing, or identifying issues like overbilling or lack of quality of care.

For healthcare providers, it is important to understand the 2025 global surgery updates as it could impact their practices of documenting the surgery procedures and billing for services. However, for patients it is also vital as it lets them receive proper care during the recovery period and improve transparency.

This guide will help you walk through the new coding requirements, postoperative services, and how to comply with Medicare regulations. But, first let’s discuss the global surgical period.

What Is a Global Surgery Package?

A Global Surgery Package, also known as global surgery or the global period is a Medicare concept where payment for a surgical procedure includes the surgery itself and related services provided before, during, and after the surgical procedure. These services are bundled into a single payment, covering preoperative visits, the surgical procedure, and postoperative care (follow-up visits) within a specified time frame usually ranging from the day of surgery to 10 or 90 days after the surgery.

If providers in the same group and specialty are involved in the surgical procedure, they must submit their bills and accept payment as if they’re one provider. This keeps billing simple and avoids double charges.

Global Surgery Package Duration and Procedure Types

CMS Guidelines for Global Surgery Period—What Is Included in The Global Surgery Package?

For Medicare claims, CMS (Centers for Medicare & Medicaid Services) includes the following services in the global surgery payment:

• Preoperative Visits
• Intraoperative Services
• Other Medical or Surgical Services in the Postoperative Period
• Postoperative Follow-Up Visits
• Post-Surgical Pain Management
• Supplies
• Miscellaneous Services

Preoperative Visits

These are visits that happen after the decision to operate has been made during the evaluation and management process (E/M). This includes minor surgeries or endoscopy procedures performed by the same provider on the same day as the surgery.

Intraoperative Services

These are services provided during the actual surgery, including everything necessary to perform the surgical procedure.

Other Medical or Surgical Services in the Postoperative Period

All other medical or surgical services after the surgical procedure include any additional medical or surgical care that the surgeon provides to the patient during the designated recovery time after the surgery.

Postoperative Follow-Up Visits

These are check-ups or follow-up appointments to monitor the patient’s recovery during the postoperative period. Usually the code 99024 is used to track the follow-up visits. 

Post-Surgical Pain Management

Post-Surgical Pain Management includes care provided to help the patient manage pain after the surgery, such as medication or therapy.

Supplies

These are materials used during the surgery and recovery period, except for certain excluded items. For example, bandages or surgical tools.

Miscellaneous Services

These are smaller, routine tasks related to surgery, such as bandage changing, local incision care, operative pack removal, cutaneous sutures and staples removal, etc.

CMS guidelines for global surgery Period— What Isn’t Included in the Global Surgical Package?

Here are certain services that CMS does not include in the global surgical package, and what providers can bill separately and get paid.

• Initial Evaluation for Surgery
• Services by Other Providers
• Unrelated Visits
• Treatment for Separate Health Conditions
• Diagnostic Tests
• Additional Surgeries
• Complication Treatment in OR (Operating Room)
• Failed Minor Procedure Leading to Major Surgery
• Organ Transplant Medications
• Critical Care Services

Initial Evaluation for Surgery

The surgeon’s decision on the first visit to evaluate if major surgery is needed is not part of the global surgical package. The evaluation visit (E/M) can be billed separately using modifier 57.

Services by Other Providers

If other providers (not the surgeon) perform surgery-related services, these are excluded from the package unless there’s an agreement to transfer care between the surgeon and other providers. This agreement must be documented in the patient’s medical records.

Unrelated Visits

Follow-up visits for conditions unrelated to the surgery or its diagnosis are not included in the global surgery package, except when visits are due to surgery complications.

Treatment for Separate Health Conditions

If a patient needs treatment for an underlying or unrelated health condition, or begins a new treatment unrelated to surgery recovery, it’s billed separately.

Diagnostic Tests

Tests or procedures to diagnose issues (like X-rays or other scans) are not included in the package and require separate billing.

Additional Surgeries

Surgeries performed during the recovery period that are not part of the original surgery or related to surgery complications are excluded from the Medicare global surgery package. 

Complication Treatment in OR (Operating Room)

If the patient needs to return to the OR for postoperative complications, the treatment is billed separately.

Failed Minor Procedure Leading to Major Surgery

When a less serious surgery doesn’t work and a major surgery is needed, Medicare covers the major surgery separately.

Organ Transplant Medications

Medications used to manage the immune system after an organ transplant are not part of the global surgical package.

Critical Care Services

Critical care provided (CPT codes 99291 and 99292) after surgery for issues unrelated to the surgical procedure is excluded. These services should be billed separately using modifier FT.

2025 Global Surgery Updates

The 2025 global surgery package updates bring key changes, including the introduction of HCPCS code G0559, which is used for postoperative follow-up visits provided by a different healthcare professional who didn’t perform the surgery, within the 90-day global period, and without a formal transfer of care.

Modifiers 54, 55, and 56 are now more strictly required for managing preoperative, surgical, and postoperative care within 90-day global packages, with modifier 56 now requiring formal documentation for preoperative care transfers.

The updates also focus on the Office of Inspector General’s (OIG) review of postoperative services, ensuring proper reporting and preventing overreporting of services during the global period. These updates aim to improve billing practices and ensure accurate Medicare reimbursement for global surgeries.

The Role of the OIG and CMS in Global Surgery Coding 2025

The Office of Inspector General (OIG) is investigating how well postoperative services are reported under Medicare’s global surgery payment system. Since July 1, 2017, Medicare requires healthcare providers to report follow-up visits after surgery using a specific code, CPT code 99024. This code is for postoperative visits where the doctor checks the patient’s recovery after surgery.  Although these visits are part of the global period and aren’t paid separately during the global period, reporting them helps Medicare track how often patients need follow-ups after surgery.

Here is when providers have to report postoperative visits using code 99024 under specific conditions:

• Practitioners in certain states (like Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, Rhode Island) who work in groups with 10 or more practitioners.
• Providers in those states need to check a list from Medicare each year to see if their surgeries are on the list of surgeries that need the code.
• This code applies only to specific types of surgeries or procedures. These procedures are selected by Medicare because they are either very common (performed over 10,000 times a year) or very expensive (with charges over $10 million a year).

The OIG (Office of Inspector General) is monitoring that doctors are reporting these follow-up visits correctly. They will look at a sample of global surgeries, compare the number of follow-up visits in the CMS records with what doctors reported to Medicare, and verify if the payments made for the surgeries match the actual care provided to Medicare beneficiaries. If doctors don’t report this information properly, it could lead to Medicare paying less for those surgeries. If providers don’t report this information properly, it could lead to devaluation of the Medicare global surgery payment.

Basically, Medicare wants to check the follow-up visits after surgery are being properly tracked, and if doctors aren’t reporting them correctly, it might affect their payment.

Importance of Using Modifiers During Global Surgery Period 

Sometimes, a patient may need other procedures that aren’t related to the surgery they just had, but these procedures still happen during the global period. The usage of global surgery modifiers (24, 25, 54, 55, 57, 58, 78, 79, FT) facilitate healthcare providers to get paid for these services. These modifiers are used to separate unrelated procedures from the global surgery, so they can be paid for separately, even if they happen during the global period.

In the Medicare Physician Fee Schedule (MPFS), there are certain payment policy indicators that show which services are billable (can be paid for) and whether a modifier is needed.

Some examples of global modifiers include:

• Modifier 24: Used for services unrelated to the surgery but happening during the global period.
• Modifier 25: Used for an unrelated service provided on the same day as the surgery.
• Modifiers 54, 55, 57, 58, 78, 79: Indicate different situations where services are not included in the global period.
• Modifier FT: Used for specific cases defined by Medicare.

➜ Modifiers 24

Modifier 24 is used when a doctor or healthcare provider performs unrelated evaluation and management (E/M) service. These services must be after the procedure but within the global period and are unrelated to the original surgical procedure.

For example:

On March 10, a patient visits their orthopedic surgeon for a knee arthroscopy (CPT 29881), which has a 90-day global period. On March 15, the patient returns to the same surgeon, complaining of new back pain unrelated to the knee surgery. The surgeon evaluates the patient’s back condition and recommends physical therapy for the back pain. Since this visit is not related to the knee arthroscopy, the surgeon will code the appropriate office visit E/M code with modifier 24. This allows the surgeon to be separately paid for the back-pain evaluation, even though it falls within the global period for the knee surgery.

➜ Modifier 25

This modifier is used when the same physician or other qualified healthcare professional performs a significant, separately identifiable evaluation and management (E/M) service on the same day as a procedure or other service.

For example:

A patient arrives at the doctor’s office on the same day they are scheduled for gallbladder removal surgery (CPT 47562 – Laparoscopic Cholecystectomy). During the pre-surgery evaluation, the doctor notices that the patient has significantly high blood pressure. The doctor spends extra time assessing the patient’s blood pressure, determining the cause, and prescribing immediate medication to stabilize the patient before proceeding with surgery.

In this case, the additional evaluation and management (E/M) service for high blood pressure is beyond the usual preoperative care related to the gallbladder surgery. The doctor can use Modifier 25 to bill separately for the extra E/M service.

➜ Modifier 57

Use of Modifier 57 indicates that a decision for surgery was made during an evaluation and management (E/M) service, and that the decision occurred on the same day as the E/M service. This modifier tells the payer that the E/M visit led to a decision for surgery, and because the decision was made during the same visit, the surgery is being reported separately from the usual preoperative care.

For example:

A patient arrives at the emergency room (ER) after experiencing severe abdominal pain. The ER physician performs an evaluation and determines that the patient may have acute appendicitis. After a thorough examination and some tests, the physician discusses the situation with the patient and recommends immediate surgery to remove the appendix.

The decision for surgery is made during the evaluation and management (E/M) service in the ER. The patient is then taken to the OR on the same day for an appendectomy (removal of the appendix).

Since the decision for surgery was made during the E/M service on the same day, the ER physician uses Modifier 57 when reporting the E/M code. This modifier indicates that the E/M visit led directly to the decision for surgery, which occurred on the same day.

➜ Modifier FT

Using Modifier FT indicates an unrelated evaluation and management (E/M) visit during a postoperative period or on the same day as a procedure or another E/M visit. The key aspect here is that the E/M service is unrelated to the procedure that was performed or is planned, and it may be billed separately. This modifier applies when an E/M service is provided that is unrelated to the surgery or procedure performed on the same day or within the global surgical period. It is particularly relevant when a patient requires critical care during the postoperative period, which is unrelated to the surgery.

For example:

A patient undergoes gallbladder surgery (CPT® 47562) on March 10. On the same day, the patient develops a severe allergic reaction unrelated to the surgery, requiring urgent treatment and evaluation. The physician uses Modifier FT to report the E/M service provided on March 10 for the allergic reaction as unrelated to the gallbladder surgery. This ensures the physician gets reimbursed for both the surgery and the unrelated E/M service provided on the same day.

Procedural Modifiers 54, 55, 56

Modifiers 54, 55, and 56 are used to split reimbursement between two different healthcare providers when the surgical procedure and preoperative/postoperative care are managed by separate physicians. This is often referred to as a “transfer of care” and helps ensure that both the surgeon and the other providers (such as a primary care physician) are appropriately reimbursed for their role in the patient’s care.

• Modifier 54 (Surgical Care Only)

Modifier 54 is used by the surgeon who performs the surgery but does not provide preoperative or postoperative care.

• Modifier 55 (Post-Operative Management Only)

Modifier 55 is used by the physician or provider who takes over post-operative care after the surgery is completed. It applies when the provider does not perform the surgery but manages the recovery phase instead. After a surgery is performed in one hospital, the patient may be transferred to a different location, and a different physician will provide follow-up care for the post-operative recovery period.

• Modifier 56 (Pre-Operative Management Only)

This modifier is used when the physician or provider who manages the preoperative care of the patient. It applies when the provider does not perform the surgery but is responsible for preparing the patient before the surgery, such as clearing them for anesthesia or managing their health conditions. For example, a primary care provider may ensure the patient is ready for surgery, while a different physician performs the procedure.

These modifiers are used when two different healthcare providers (such as a surgeon and a hospitalist or a primary care physician) are involved in a patient’s surgical care, especially when the care is split between preoperative, surgical, and postoperative periods.

According to 2025 global surgery updates, CMS will require these modifiers for all 10 to 90-day global surgical packages, ensuring accurate reimbursement for each phase of surgical procedure.

For example:

A patient comes to the ER with a dislocated shoulder. The ED physician performs a closed reduction and reports the procedure with Modifier 54 for surgical care only. The patient is then referred to an orthopedic specialist for postoperative care, and the orthopedic doctor reports the same procedure code with Modifier 55. If the patient had seen a primary care provider (PCP) before the surgery for preoperative management, the PCP would have reported their care with Modifier 56 for preoperative care only. All providers use the same date for the procedure on their claims.

➜ Modifier 58

Adding modifier 58 indicates that a staged or related procedure was performed by the same physician (or other qualified healthcare professional) during the post-operative period of a previous procedure. This modifier specifies that the new procedure or service is planned, expected, or necessary due to the patient’s condition and is related to the initial surgery. Modifier 58 resets the global period, starting a new one for the next procedure.

For example:

A patient undergoes a knee replacement surgery. As part of the surgical plan, the surgeon schedules a follow-up arthroscopic procedure to inspect and adjust the placement of the knee prosthesis after the initial healing phase. This follow-up procedure is planned in advance and is related to the initial surgery. When the patient returns during the global period of the knee replacement for the planned arthroscopic procedure, the surgeon reports the follow-up procedure with Modifier 58 to indicate that it is a staged and related procedure.

➜ Modifier 78

Modifier 78 is used for an unplanned return to the operating room when a patient requires a related procedure during the postoperative period due to complications from the initial surgery, such as infection or bleeding. This modifier indicates that the same physician, or a healthcare professional from the same specialty group, performs the second procedure to address the issue. The second procedure is considered part of the original surgery and does not start a new global period. For repeat procedures, Modifier 76 should be used. 

For example:

During the global period of a surgery, the patient experiences excessive bleeding, requiring the surgeon to return to the operating room to control it. This procedure is reported with Modifier 78 to indicate it is an unplanned related procedure performed during the postoperative period.

➜ Modifier 79

Modifier 79 is used when a physician performs an unrelated procedure or service during the postoperative period of a prior surgery. This procedure is not related to the initial surgery and must be billed separately, as it is not covered by the original surgery’s global package. If a procedure is repeated on the same day, Modifier 76 should be used.

For example:

On March 5, a patient undergoes knee replacement surgery on the right leg. On April 5, the patient undergoes the same surgery on the left leg. Even though it’s the same procedure for the same diagnosis, the surgeries are performed on two different surgical sites, making them unrelated. Modifier 79 is appended to the medical code for the surgery on April 5 to indicate it is a separate, unrelated procedure performed during the postoperative period of the first surgery.

Best Practices for Global Surgery Coding Compliance

By following these best practices, healthcare providers can stay compliant with global surgery coding requirements:

Use Proper Documentation

• Keep complete and accurate documentation for all care services provided before, during, and after the surgical procedure.
• Maintain clear records for transfer of care, especially when other providers are involved in preoperative, surgical, or postoperative care.

Know the Global Surgery Period

• Understand the global surgery period for each surgical procedure and apply it correctly. For example, some procedures may have a 10-day, 90-day, or 0-day global period as explained in the table above.
• Review the global surgery indicators assigned to each procedure (e.g., 000, 010, 090) to confirm the global period for billing purposes.

Use Proper Modifiers

• Use the correct modifiers when services are provided that are outside the scope of the global surgery package.

Properly Apply HCPCS Code G0559

• According to the 2025 global surgery period, use HCPCS code G0559 for post-operative follow-up visits by a healthcare provider who did not perform the surgery, and there was no formal transfer of care.

Review Medicare Physician Fee Schedule (MPFS)

• Check the MPFS for global surgery package indicators (e.g., 000, 010, 090) and understand the rules for each CPT code.

Comply with OIG Guidelines

• Adhere to Office of Inspector General (OIG) requirements for reporting postoperative services, especially for evaluation and management (E/M) services.
• Use CPT code 99024 for postoperative E/M visits where required, particularly in states that require reporting for global surgeries.

Accurate Reporting of Postoperative Care

• Report only care services that are directly related to the original surgical procedure. Do not report services outside of the global package unless they are unrelated or involve complications.
• If a procedure or service is unrelated to the original surgery, apply the correct modifier (e.g., modifier 79).

Provide Transfer of Care Documentation

• Document formal transfers of care when the patient’s care is transferred between providers, especially for preoperative and postoperative care.
• Use modifier 56 for preoperative services and modifier 55 for postoperative services when the care is performed by different providers.

Stay Updated on CMS and OIG Changes

• Regularly review updates from CMS and the OIG to stay compliant with new coding guidelines or updates as they released global surgery period 2025 updates, such as the use of HCPCS code G0559 for postoperative follow-up visits.

FAQs

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.

As 2025 unfolds, healthcare providers are struggling with a rising wave of claim denials for Durable Medical Equipment (DME). The culprit? Medicare’s opaque frequency limits that dictate DME replacement periods. For providers, this translates to clogged operations and patients left waiting.

But there’s hope on the horizon. Developing expertise in Medicare’s frequency limit nuances is the antidote providers need. With this knowledge, they can comply with requirements, streamline DME delivery, and slash denials.

This blog offers providers a detailed decode of Medicare’s complex frequency rules. Consider it your insider’s guide to seamlessly supplying DME on time, without getting ensnared in Medicare’s red tape. Armed with these insights, providers can meet patient needs promptly and painlessly while keeping denials at bay.

What is meant by Medicare’s “DME Frequency Limits?

Medicare DME frequency limits refer to guidelines determining how often Medicare will cover replacement durable medical equipment (DME) for a beneficiary.

For example, Medicare may allow a new wheelchair every 5 years, a new walker every 3 years, or new diabetic test strips every month. These limits enable Medicare to manage costs and prevent overutilization of equipment.

However, the frequency limits also ensure beneficiaries have access to essential DME on a reasonable replacement schedule. With frequency limits, patients can receive new DME when truly needed, while Medicare can control excessive spending.

Understanding Medicare DME Frequency Limits

➜ Medicare has limits on how often it will cover the replacement of Durable Medical Equipment (DME) such as wheelchairs, walkers, and hospital beds.

➜ These limits are based on the equipment’s Reasonable Useful Lifetime (RUL). The RUL is the expected lifespan of the equipment, calculated from the date it was issued to the beneficiary, not the manufacturing date.

➜ Medicare will typically cover a replacement after the RUL has expired or if the equipment is lost, stolen, or damaged beyond repair.

➜ Your healthcare provider can guide you through the process of obtaining necessary authorizations if your situation warrants an exception to the standard frequency limits.

The following is a table of the specific Medicare frequency limits that have been established for a variety of durable medical equipment (DME). We have grouped the frequency limits based on how long they last. For instance, some items can only be replaced once a month, while others can be replaced only once every few years.

How are the limits for Medicare DME set?

Medicare DME has rules about how often you can get things. These rules help make sure patients get what they need and that costs stay manageable. There are a few things that help decide these limits. Let’s look at each one that helps Medicare figure out the DME frequencies:

Assessing Patient Needs and Equipment Usage

Medicare sets frequency limits for DME by closely analyzing patient needs and equipment usage. This process involves reviewing medical records and claims data to understand how often equipment requires replacement for different conditions. Medicare examines factors like expected equipment life spans, how deterioration occurs with use, and the level of support needed by patients over time.

By gathering data on real-world equipment use, Medicare can establish reasonable limits on replacement frequency. This makes sure patients get the DME they need, without getting too much and wasting it.

Conducting Cost-Effectiveness Analysis

Medicare carefully checks how much things cost to keep the program running with financial stability. These analyses give Medicare a comprehensive understanding of the costs of providing and replacing Durable Medical Equipment (DME) versus the benefits this equipment provides to patients.

The analyses look at factors like how much it costs to buy and take care of equipment over time and how much better it makes people’s health. They also consider if less expensive alternatives could provide similar benefits.

By weighing all these factors, Medicare looks at all these things to make sure it saves money while still helping patients with their health needs.

Engaging with Key Stakeholders

Medicare recognizes the importance of a collaborative approach when setting DME frequency limits. Therefore, Medicare engages with different stakeholders to make sure the rules are easy to follow, make sense for health care, and fit what everyone needs.

To do this, Medicare talks with doctors, medical equipment makers, and patient advocacy groups. Doctors and nurses know a lot about taking care of patients. They understand what is needed for medical equipment to help people feel better. Manufacturers, on the other hand, contribute their expertise on the latest advancements in DME technology, ensuring that the limits are compatible with the available products and innovations.

Crucially, Medicare also seeks input from patient advocacy groups, ensuring that the patient’s perspective is at the forefront of the decision-making process. These groups share important stories about what patients go through. They help create rules that focus on keeping patients happy and healthy.

By encouraging this collaborative atmosphere, Medicare may strike a balance between cost-effectiveness and patient care, ensuring that frequency limits are neither overly strict nor unnecessarily lenient.

Adherence to Regulatory Standards

The Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for administering the Medicare program, works closely with various regulatory bodies, including the Food and Drug Administration (FDA), to ensure that the DME frequency limits are aligned with the latest medical practices, technological advancements, and safety protocols.

By staying up-to-date with regulatory standards, Medicare can make informed choices when setting or revising the frequency limits for different types of DME. This process looks at scientific facts, clinical studies, and expert advice to figure out how often DME should be replaced or restocked.

Following the rules helps Medicare stay legal and makes sure that the equipment given to people is safe and good quality. Following the rules helps keep everyone safe, makes sure Medicare spends money wisely on the right medical equipment, and leads to better health for the people who need it.

Also, by keeping the DME frequency limits up to date with new rules, Medicare shows it cares about giving people the best and newest medical technology and treatment choices. This active way helps patients on Medicare get the best care and support for their health needs, making them feel better and live happier lives.

Why Medicare DME frequency limits matter?

Medicare Durable Medical Equipment (DME) limits help keep healthcare affordable. Here’s why they matter:

Cost Control

Limits stop waste so Medicare can use funds well. Without them, a patient could get multiple wheelchairs in a short time when not needed. Limits let Medicare spend wisely.

Prevents Budget Overruns

Medicare could run out of money fast if no limits existed. For example, if folks got unlimited replacements of expensive items, Medicare funds would dry up quick. Less would be on hand when truly needed.

Prevents Overuse

Limits prevent folks from overusing medical gear. This way, only needed, required items get provided. It avoids waste. Limits and management keep use of resources proper.

Prevents Excess Requests

With no limits, some may ask for new oxygen machines more than required. This can lead to waste and higher costs. For instance, if a patient asks monthly but only needs yearly. Too many requests can limit resources.

Standardizes Care

Limits give all patients the same care. This makes treatment fair and steady. It highlights the importance of evenly sharing resources.

Prevents Unequal Care

With no standard care, some patients may get more equipment based on their provider. For example, one area may get new walkers yearly while another gets them every 5 years. This can cause unfair differences.

Reduces Fraud

Clear limits make fraud and abuse less likely. Defining necessity helps Medicare spot and stop fraudulent billing easier. Limits and compliance keep the system working properly.

Prevents False Billing

Without fraud oversight, providers could falsely bill Medicare multiple times for the same item. For instance, billing for many oxygen machines with no patient need causes big financial losses.

While Alaska and parts of California still pay more than other states, they’ll also see smaller decreases. Big cities like Chicago, Miami, and Houston, which typically have higher payment rates, will also face Medicare cuts in 2025 of more than 16%. 

Before we jump on the table for details by state, let us quickly share some factors affecting Medicare payment for mental health therapy in 2025. 

Factors Influencing the Medicare Reimbursement Rates for MHT in 2025

Medicare reimbursement rates for mental health therapy services in 2025 are shaped by a variety of factors, from legislative actions to economic conditions. 

Here are the key elements influencing these rates:

1. Conversion Factor Adjustments
2. Legislative Actions
3. Economic Factors
4. Medicare Advantage (MA) Plans
5. Quality Payment Program (QPP)
6. Inflationary Pressures
7. Other factors

Let’s have a quick look at these factors now.

1. Conversion Factor Adjustments

The conversion factor, a key component in Medicare’s payment system, has decreased by 2.83% for 2025, down to $32.3465. This marks the fifth consecutive year of reductions. The decrease is due to the expiration of a temporary adjustment and a 0% baseline update, which does not account for inflation in practice costs.

2. Legislative Actions

Congress plays an important role in determining Medicare’s payment rates. If lawmakers fail to intervene, providers, including mental health therapists, may face further payment cuts. Legislative action helps stabilize and increase reimbursement rates for mental health services.

3. Economic Factors

The Medicare Economic Index (MEI) predicts a 3.5% increase in the cost of providing services in 2025. However, due to budget neutrality rules, this increase does not result in higher reimbursement rates, leading to a financial strain for providers.

4. Medicare Advantage (MA) Plans

Medicare Advantage plans are seeing an average reimbursement increase of 3.7% for 2025. In contrast, traditional fee-for-service Medicare is experiencing cuts. This difference underscores a growing trend toward shifting reimbursements from traditional Medicare to MA plans.

5. Quality Payment Program (QPP)

The QPP continues to shape reimbursements by rewarding physicians who meet performance metrics. Those involved in Advanced Alternative Payment Models (APMs) may see higher payments compared to providers under the standard fee-for-service model. This shows a shift toward value-based care in 2025. 

6. Inflationary Pressures

The absence of an inflation adjustment within the current reimbursement framework puts pressure on healthcare providers. Consequently, as costs rise, many mental health therapy practices face financial challenges in delivering care.

7. Other Factors (Not Entirely Applicable in 2025)

Geographic reimbursement variations, impact of fee schedule area, differences in CPT codes can affect reimbursements. But mental health therapy reimbursement rates will drop in 2025 mainly because of new laws, economic challenges, and the reasons mentioned earlier.

Medicare Reimbursement Rates for Mental Health Therapy by State and Areas in 2025

The table outlines the reimbursement rates for CPT Code 90791 (Mental Health Therapy) across various states and counties in the US. It shows the percentage change in reimbursement rates for 2024 and 2025.

But first, let us share the key observations across states:

• The national reimbursement rate for CPT Code 90791 drops from $195.46 in 2024 to $166.91 in 2025, showing a -14.63% decrease.
• This national decline is consistent across most states, with the exception of a few where local factors might affect reimbursement.
• While most states see a similar decline, some regions, such as Alaska and certain counties in California, experience slightly higher reimbursements for mental health therapy relative to the national rate but still face similar percentage declines.
• Major urban areas like Chicago, Miami, and Houston tend to have higher rates, but also see large reductions in reimbursement rates, often surpassing 16% in decline.

Jump on the table below for more details by state:

Mental health therapy payment rates are dropping across the US from 2024 to 2025. This could be happening because of budget cuts, new healthcare rules, or rising costs of mental health care. While some areas still pay more than others, payments are going down almost everywhere in the country.

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As a healthcare worker, you work really hard to help patients get the care they need. So getting paid for that care should be easy. But when claims aren’t filed on time, that’s exactly what happens. Denials pile up, revenue drops, and you’re left with a mountain of paperwork and rejection letters.

The good news? Filing claims on time doesn’t have to be a struggle! Insurance companies give you anywhere from 30 to 180 days to submit claims after the date of service. Some let you have up to a year or even longer. That’s plenty of wiggle room.

This article will be your timely filing roadmap. Let’s go over the basic filing limits for major insurance plans. You’ll find out how to avoid mistakes that slow down your claims. We’ll give you great tips to help you meet all your deadlines, every single time!

Stay with us, and you won’t miss any more cutoffs! Your reimbursements will go through easily. Your days of denial and deferred revenue will be over. Imagine this—you can use that saved time and money for what really counts: your patients.

First, let’s discuss what timely filing is in healthcare.

What is Timely Filing in Healthcare?

Timely filing refers to the specific timeframe within which healthcare providers must submit claims to insurance companies for the services they’ve provided. It’s essentially a deadline for filing claims. If providers fail to submit their claims within this predefined timely filing limit, the insurance companies will deny the claims, and the providers won’t get paid for the care they’ve given to patients covered by that insurance plan.

Additionally, the timely filing term also applies to the timeframe providers have to submit appeals for any denied claims. Some insurance companies set the same timely filing limits for both initial claims and appeals for denied claims.

How to Easily Find Timely Filing Limits?

Don’t stress about locating timely filing limits for insurance claims. We’ve got you covered with a valuable guide that clearly outlines the timely filing limits for various insurance providers. Save time and effort by referring to our comprehensive resource.

Timely Filing Limits of Different Insurance Companies

The table below shows the timely filing limits for different healthcare insurance companies in the USA. These include Aetna, Ambetter, AvMed, Anthem, Beacon Health, Caresource, Champus, Cigna, Fidelis New York, GEHA, Humana, Kaiser Permanente, Magellan, McLaren Health Plan, Medicare, Medicaid, and United Healthcare.

*Keep in mind that these time frames can vary based on the state where the insurer operates. Many payers offer consistent time limits for denied claims, but we recommend checking their official websites for the most up-to-date information on denied claim filing deadlines.

Timely Filing Limit for BCBS (Blue Cross Blue Shield) in Different States

Explore the timely claim filing limits for BCBS in different states with our user-friendly guide. Plan ahead and make sure that claims are sent in on time so that reimbursements proceed smoothly.

The Importance of Timely Filing Limits for Healthcare Providers

It’s really important for healthcare providers in the United States to submit insurance claims on time. Filing on time might feel monotonous, but it can really help improve your medical practice’s bottom line. Here’s why it’s so important:

Speedy Reimbursement

The sooner you submit a claim, the sooner you’ll receive reimbursement. This improves cash flow, allowing you to cover overhead and pay employees and vendors on schedule. Fast reimbursements also let you spend more time taking care of patients instead of worrying about chasing payments.

Higher Acceptance Rates

Insurance companies are much more likely to pay claims if you submit them on time. After the deadline passes, they may outright deny the claim or reimburse at a lower rate. Submitting on time avoids these issues.

Fewer Hassles

Submitting late can lead to lengthy appeals and other headaches. You’ll waste time resubmitting forms and records. It gets really annoying for both the doctors and the patients. Filing on time stops these issues from happening.

Compliance

Insurance contracts require filing within a certain window, often 90-180 days from the date of service. If you file too late, it breaks this agreement. This might hurt your relationship with payers or could even cause audits later on.

More Revenue

Filing on time means you get paid more and earn more money for your practice. It helps money keep coming in and makes things easier to manage. This lets you concentrate on giving great care. Setting reminders, automating payments, and following good habits can help you meet your filing deadlines every time.

Smart Ways to File Insurance Claims on Time and Avoid Denials

When insurance claims get denied, it can really stress out healthcare workers. It makes them frustrated, slows down payments, and can even cost money. If you use some smart tips, you can make filing claims easier, send them in on time, and reduce the chances of getting denied. Let’s jump into some great tips that can help you save time and money!

Get to Know Payer Guidelines Really Well

First, you need to know the rules and deadlines for each payer really well. These can be really different depending on where you live and which insurance company you choose. Keep track of these rules and any special cases or extra time they might give you. It’s really important to know the road rules so you can avoid problems later on.

Automate and Streamline the Submission Process

Filing claims by hand can lead to mistakes and take longer than it should. Use technology to make things easier! Automate everything you can, like coding, patient treatment claim submission, and following up. Use billing software that finds errors, makes clear claims, and sends them out electronically. Make clear deadlines for your team and help everyone stick to the rules all the time.

Prioritize Accuracy and Completeness

A small mistake or missing detail can mess up a claim. Teach the staff well about how to code and write down what they do so everyone understands the services provided. Make sure to have a strong quality check with different steps before you hit submit. Transmit supporting documentation electronically to expedite processing.

Talk to Payers Early and Often

Talk to insurance companies right from the start. If problems come up, you can easily find ways to fix them fast. Be responsive to any inquiries or requests for more information from payers.

Verify Patient Details Upfront

Wrong or outdated patient insurance information is a big reason why claims get denied. Confirm the patient’s plan enrollment, coverage details, and filing requirements before rendering services. Update records proactively to reflect any changes.

Persistently Follow Up on Denials

Denials happen, but don’t just accept them at face value. Look at why denials happen, figure out the main reasons, and make sure you have a clear way to appeal and send things back in. Keep checking in to lower that denial rate!

Get Paid Fast with BellMedEx Claim Filing Services

Are you having a hard time with claims getting denied and waiting a long time for your money back? Outsource your claim filing to BellMedEx and get paid faster. Our skilled billing team makes sure your claims are sent in correctly and on time, so you get paid back as fast as possible. Plus, BellMedEx provides full revenue cycle management, coding, auditing and legal services to address any issues. Join forces with BellMedEx today and stop wasting time waiting for payments.

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In value-based care, providers are paid based on how well they help patients stay healthy and improve their outcomes, rather than just how many services they provide.

This change is happening because people want healthcare to be more efficient and affordable, while also focusing on the health of the patients.

The government programs like Medicare (which helps people over 65 and those with long-term disabilities) and Medicaid, as well as private insurance companies, are all encouraging providers to use new payment models. These include systems like Accountable Care Organizations (ACOs), where providers work together to improve care and save money, or “bundled payments,” where a group of services is paid for at once.

Value-based care is important for healthcare providers, including doctors, hospitals, and clinics. They need to understand these new payment models to stay financially stable while also giving the best care to their patients.

In this blog, we will explore what value-based care is, how it works, and how it can help providers deliver better care while managing costs.

Understanding Value-Based Care Model in Healthcare

Value-based care is a way of providing healthcare that focuses on giving patients the best care for their health, while also keeping costs down.

Unlike the old system called fee-for-service, where doctors and hospitals get paid for each service they provide, value-based care rewards healthcare providers for achieving better health outcomes and improving patient experiences.

In value-based care, “value” means what matters most to patients – getting the right treatment, staying healthy, and having a good experience with their healthcare. This system focuses on high-quality care, better patient results, and teamwork between doctors and other healthcare providers. It aims to prevent health problems and manage ongoing conditions in a way that reduces the need for unnecessary tests or hospital visits.

Advantages of Value-Based Care

Better Health: It helps improve patients’ overall health by focusing on the right care. Lower Costs: By reducing unnecessary treatments, tests, and hospital visits, value-based care helps lower the costs of healthcare for everyone. Happier Patients: Because the system cares about patient needs and satisfaction, patients tend to be more happy with their care. Better Coordination: Doctors and other healthcare providers work together to make sure patients get the best care without any gaps or confusion.

Disadvantages of Value-Based Care

Expensive Changes: Moving from the old system to value-based care can be costly for hospitals and doctors, as they need to invest in new technology and training. Financial Risks: Doctors may face penalties if their patients don’t do well or if they don’t meet certain care goals. Out-of-Pocket Costs: Patients might have to pay more if they see doctors or hospitals that are not part of their insurance network. More Work for Providers: Doctors and hospitals need to track more data and report their results, which can add extra work and cost.

Value Based Care vs Fee-for-Service Care

Fee-for-service is about paying for each action or service, while value-based care is about paying for good outcomes and helping patients get better in the most efficient way.

Example of Fee-for-Service

Imagine you go to the doctor because you have a sore throat. The doctor charges you for each visit, test, or medicine you get. If you need to come back for more visits or tests, the doctor gets paid each time. The doctor is paid based on the number of things they do for you, not whether those things actually help you feel better.

Example of Value-Based Care

Now, in a value-based care system, the doctor is paid based on how well they help you get better, not just how many things they do for you. So, if the doctor helps you recover quickly, with fewer visits and tests, they get paid a fair amount. The goal is for doctors to give you the best care that helps you feel better without unnecessary treatments or costs.

What are Medicare Value-Based Programs?

Medicare Value-Based Programs are special programs from the Centers for Medicare & Medicaid Services (CMS) that help improve the quality of patient care. These programs focus on giving better care, improving patient health, and reducing costs. Instead of paying healthcare providers based on how many services they give (called “fee-for-service”), these programs pay based on the quality of care and the results for patients.

Some of these programs include:

• End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
• Hospital Value-Based Purchasing Program (VBP)
• Hospital Readmission Reduction Program (HRRP)
• Value Modifier Program (VM), also called Physician Value-Based Modifier (PVBM)
• Hospital Acquired Conditions Reduction Program (HAC)
• Skilled Nursing Facility Value-Based Purchasing Program (SNFVBP)
• Home Health Value-Based Purchasing Program (HHVBP)

Let’s explore each program in detail:

1). End-Stage Renal Disease Quality Incentive Program (ESRD QIP)

The ESRD Quality Incentive Program (ESRD QIP) started on January 1, 2012. It is the first program that requires dialysis centers to earn money based on how well they care for patients with kidney failure (also called end-stage renal disease or ESRD).

This program encourages dialysis centers to improve their care by linking part of their payment to how well they perform on certain tasks.

Example: A dialysis center works on making sure they use better methods to avoid infections. If they reduce infections, they improve patient safety and get all of their Medicare payment.

How it works?

Performance Measures: Dialysis centers are scored based on how well they prevent infections, how happy patients are, and how well they report their data.

Payment Adjustments: If the center does not do well, they may lose up to 2% of their Medicare payments.

Transparency: The scores of each dialysis center are made public, and they must show their scores for everyone to see.

2). Hospital Value-Based Purchasing (VBP) Program

The Hospital Value-Based Purchasing (VBP) program started in the early 2010s. This program rewards hospitals for providing better care and improving the patient experience.

Hospitals can earn more money by improving their care quality and patient satisfaction.

Example: A hospital improves its treatment of serious infections like sepsis by using better methods. They also train staff to be more patient-friendly. As a result, patients are happier, and there are fewer deaths. The hospital earns back the money that was withheld and may get extra rewards.

How it works?

Scoring Metrics: Hospitals are judged based on how well they prevent deaths, how safe they are, how they use resources, and how happy patients are (measured by surveys like HCAHPS).

Payment Adjustments: Medicare holds back 2% of the payment, and hospitals can get this money back by doing well compared to other hospitals or their past performance.

3). Hospital Readmissions Reduction Program (HRRP)

The Hospital Readmissions Reduction Program (HRRP) started in 2010. This program focuses on reducing the number of patients who have to go back to the hospital soon after they leave. It looks at conditions like heart failure, pneumonia, and lung diseases (COPD).

If a patient needs to return to the hospital quickly, it can show that the hospital didn’t do enough to help them get better after they left. This program helps hospitals improve care to avoid these unnecessary readmissions.

Example: A hospital helps heart failure patients avoid going back to the hospital by checking if they take their medicine properly, offering follow-up calls, and giving access to online doctor visits. This leads to fewer readmissions and better patient care.

How it works?

Targeted Conditions: The program watches for readmissions related to conditions like heart failure and pneumonia, checking if patients need to return to the hospital within 30 days.

Payment Reductions: Hospitals with too many readmissions could lose up to 3% of their Medicare payments.

4). Hospital Acquired Conditions (HAC) Reduction Program

The Hospital Acquired Conditions (HAC) Reduction Program is a Medicare program that encourages hospitals to reduce infections or injuries that patients might get while staying in the hospital. These are called hospital-acquired conditions (HACs) because they happen during a hospital stay, not before.

Example: A hospital creates a rule to stop infections caused by medical tubes (called catheters). They make sure the staff follows strict guidelines for cleaning and using catheters. This reduces infections, keeps patients safer, and helps the hospital avoid losing money.

How it works?

Measures: Hospitals are judged on how well they prevent infections and injuries, such as bloodstream infections from tubes (called CLABSI), infections from surgeries, and bed sores (also known as pressure ulcers).

Payment Adjustments: Hospitals that score poorly on these measures may have their Medicare payments reduced. Hospitals in the lowest-performing group get less money.

5). Skilled Nursing Facility Value-Based Purchasing (SNFVBP)

The Skilled Nursing Facility Value-Based Purchasing (SNFVBP) program rewards nursing homes or skilled nursing facilities (SNFs) that work to improve patient care and reduce hospital readmissions. A skilled nursing facility is a place where people go to receive more care than they would at home but don’t need to stay in a hospital.

Example: To keep patients from going back to the hospital, a nursing facility sets up a program that includes reviewing patients’ medications and providing physical therapy. This reduces how often patients are readmitted to the hospital, and the nursing facility earns a bonus for their good work.

How it works?

Scoring Metrics: The facilities are scored based on how many of their patients have to go back to the hospital and how much they improve patient care.

Incentives: Skilled nursing facilities that perform well can earn some of the 2% of their Medicare payments that are held back until they prove they are providing good care.

6). Home Health Value-Based Purchasing (HHVBP)

The Home Health Value-Based Purchasing (HHVBP) program was started to improve the quality and efficiency of home health care, which is care provided at a patient’s home instead of a hospital. The program helps encourage home health agencies to provide better care for patients while reducing costs.

Example: A home health agency adds virtual physical therapy sessions (using video calls) along with in-person visits. This helps patients improve their movement and reduces the need for hospital visits. As a result, the agency gets higher payment because of their good performance.

How it works?

Performance Metrics: Home health agencies are evaluated on how well they help patients improve their ability to move, how quickly they start care, and how often their patients end up in the hospital.

Payment Adjustments: Agencies can either earn more money or lose some payments based on how well they perform. Payments can be increased or decreased by up to 7% depending on their scores.

7). Value Modifier (VM) Program to MIPS

The Value Modifier (VM) Program was replaced by MIPS (Merit-based Incentive Payment System) under the Quality Payment Program starting on January 1, 2019. This program adjusts how much Medicare pays healthcare providers based on their performance in four key areas: quality, cost, improvement activities, and technology use.

In simple terms, the better a healthcare provider does in these areas, the more they can earn. Providers who score well can get extra payments from Medicare, while those with lower scores may receive less.

Example: A medical group starts using electronic health records (EHR) to better organize and share patient information between doctors. This improves the quality of care and communication. As a result, they score high on MIPS, especially for interoperability (how well their systems share information with other providers) and quality. They then earn positive payment adjustments.

How it works?

Scoring Categories: MIPS scores healthcare providers based on four categories:

Quality: How well the provider cares for patients (e.g., reducing infections, improving recovery times).

Cost: How efficiently the provider uses resources, meaning they can provide care without overspending.

Improvement Activities: Actions taken by the provider to improve patient care, such as offering better patient education or using new treatments.

Promoting Interoperability: How well the provider uses technology, like electronic health records (EHR), to share patient information with other doctors or hospitals. This makes sure all providers involved in a patient’s care are on the same page.

Incentives: Providers receive payment adjustments based on their overall score. A high score means they may get additional payment, while a lower score can result in a reduction of their payments.

What are Value-Based Payment Models in Healthcare?

The healthcare system has been transitioning from traditional fee-for-service models, which reward the quantity of services delivered, to value-based payment models that prioritize quality, efficiency, and patient outcomes.

These models encourage better care coordination, reduce healthcare costs, and improve patient experiences.

For healthcare providers, understanding how these models work, their advantages, and their challenges is critical to success.

1⃣ Accountable Care Organizations (ACOs)

Accountable Care Organizations (ACOs) are groups of healthcare providers—including doctors, hospitals, and other health professionals—who work together to give coordinated care to a specific group of patients. These organizations come together voluntarily to make sure patients, especially those with long-term or chronic conditions, receive the best care possible.

Example: Imagine a person with diabetes. An ACO might have a primary care doctor, a specialist, and a hospital working together to monitor the patient’s blood sugar, offer advice on diet, and prevent complications that could lead to hospitalization. By coordinating care and avoiding unnecessary tests or hospital visits, the ACO reduces costs. If the ACO saves money while keeping the patient’s care quality high, it can keep a portion of those savings.

The main goal of ACOs is to provide the right care at the right time. This reduces unnecessary treatments or mistakes in patient care, and ensures that patients, especially those with chronic diseases, are looked after in a coordinated way.

How It Works?

Healthcare providers in an ACO work together to improve the overall health of their patients.

If the ACO can provide high-quality care while lowering costs, it can share in the savings with Medicare or other insurers (private health insurance companies).

There are different types of ACO models, including:

➜ Medicare Shared Savings Program (MSSP): This model allows ACOs to share savings based on their performance. There are different tracks, where some ACOs share only the savings, while others share both savings and risks (if costs go over a set amount).

➜ ACO REACH Model: This model focuses on fairness and health equity. ACOs in this model can create plans to reduce health care gaps for disadvantaged groups, and share financial risks with insurers.

➜ Vermont All-Payer Model: In this model, all insurers, including Medicare, Medicaid, and private insurance, work together to coordinate payments for patients across the entire state.

Advantages of ACOs

ACOs focus on preventing illness and managing chronic diseases, like diabetes or heart disease, to avoid costly treatments later.

ACOs aim to align financial rewards with better patient outcomes. This means that if the ACO keeps patients healthy and reduces costs, they can earn part of the savings.

ACOs promote teamwork between doctors, specialists, hospitals, and other healthcare providers to improve patient care and avoid unnecessary treatments.

Disadvantages of ACOs

Setting up an ACO requires a significant investment in data systems and care coordination to track patient care and outcomes. Smaller practices may find it difficult to afford these upfront costs.

In some ACO models, especially those that share losses (downside risk), healthcare providers can face financial challenges if they don’t meet cost-saving targets. This can be especially hard for smaller practices.

2⃣ Capitation Payment Model

The Capitation Payment Model is a payment system in healthcare where providers (like doctors or hospitals) receive a set amount of money per patient for a specific period of time, no matter how many services the patient needs.

Example: Let’s say a Health Maintenance Organization (HMO) pays a primary care doctor $500 every year for each patient they manage. This payment is fixed, so if the patient only needs $300 worth of services in that year, the doctor keeps the remaining $200. But if the patient needs more expensive care, like $700 worth of services, the doctor is responsible for covering the extra $200 cost.

In this model, the payment is based on how much healthcare the provider expects the patient to need over time. The goal is to encourage providers to keep patients healthy and manage their care costs efficiently.

How It Works?

Payments Based on Healthcare Needs: Payments are calculated based on what healthcare services a provider expects to deliver to a specific group of patients.

Primary Capitation: In this case, primary care doctors get paid directly to manage their patients’ overall health, from checkups to treatment.

Secondary Capitation: This covers payments for specialists, labs, and other services that go beyond primary care.

Advantages of Capitation for Providers

Since the doctor or healthcare provider gets a fixed amount of money, it simplifies billing. There’s no need to track every individual service for each patient.

Providers are encouraged to offer care in a way that reduces unnecessary services and costs. They’re incentivized to make sure patients stay healthy without wasting resources.

Since the doctor gets the same payment whether the patient needs a lot of care or not, there’s an incentive to focus on preventive care—like regular check-ups and lifestyle advice—to avoid expensive treatments in the future.

Disadvantages of Capitation for Providers

Since the provider gets a fixed amount, they might try to avoid offering too much care to stay within their budget. This could lead to under-delivery of care, where some patients don’t get all the services they actually need.

Patients may face limitations in what services are covered under the capitation agreement. If a service isn’t included in the agreement, they may not have access to it unless they pay extra.

Patients who have serious health problems (high-risk patients) can use up more of the budget, potentially putting a strain on the provider’s resources and affecting care for other patients.

3⃣ Bundled Payments

Bundled payments are a type of payment system where healthcare providers receive one fixed payment that covers all services related to a specific treatment or condition. Instead of paying separately for each service, everything needed for a patient’s treatment is combined into one price.

Example: For a hip replacement surgery, a bundled payment might cover everything from the surgery itself, to the hospital stay, physical therapy, and follow-up visits. If the total cost of all these services is lower than the bundled payment amount, the provider gets to keep the savings. However, if the cost goes over the payment, the provider is responsible for covering the extra cost.

This system encourages healthcare providers to work together to deliver efficient, high-quality care for the entire treatment process, whether it’s a surgery or managing a chronic condition.

How It Works?

There are different models for bundled payments:

Model 1: Covers just the hospital stay during the treatment (e.g., surgery).

Model 2: Includes the hospital stay as well as post-acute care (care after discharge, like physical therapy) for up to 90 days after the patient leaves the hospital.

Model 3: Focuses on post-acute care services after a hospital stay, like physical therapy or rehabilitation.

Model 4: Provides a single, upfront payment that covers all inpatient services, including everything a patient needs during their hospital stay.

Advantages of Bundled Payments

Bundled payments encourage providers from different specialties (like surgeons, physical therapists, and hospitals) to work together, ensuring the patient receives continuous care throughout their treatment.

Providers are motivated to offer more efficient care and focus on improving quality since they are rewarded for reducing unnecessary treatments and costs.

By encouraging providers to reduce unnecessary services and complications, bundled payments can lower overall healthcare costs for both patients and insurers.

Disadvantages of Bundled Payments

To manage bundled payments effectively, providers must have good infrastructure in place to track services and manage care. This can be difficult and costly to set up.

If the total cost of care exceeds the bundled payment amount, the provider must absorb the extra cost, which can be risky for them financially.

In cases where patients have complications or require additional, unexpected care, bundled payments might not provide enough flexibility. Providers might be less willing to offer extra care if it’s not covered by the payment.

4⃣ Patient-Centered Medical Homes (PCMH)

Patient-Centered Medical Homes (PCMHs) are healthcare models where the focus is on providing comprehensive care that centers around the patient’s needs. This care is delivered by a primary care team that includes not only doctors, but also specialists like dietitians, social workers, and nurses. The team works together to provide coordinated, continuous care to improve patient health.

Example: For a patient with high blood pressure (hypertension), a PCMH would involve a team of healthcare professionals, such as a primary care doctor, a dietitian, and a social worker. They would work together to help the patient take their medication properly, make healthy lifestyle changes (like improving diet and exercise), and have regular follow-up visits. This teamwork helps prevent serious health problems, improves the patient’s health, and reduces the need for hospital visits.

PCMHs aim to focus on prevention, managing chronic diseases like diabetes or hypertension, and making sure all the patient’s healthcare needs are met through coordinated care.

How It Works?

Providers who adopt PCMH standards are rewarded with incentives like financial rewards or bonuses. These rewards are given for meeting specific goals related to the quality of care and patient satisfaction.

Payment models for PCMHs can include:

• Care management fees (for the time and effort spent managing a patient’s care)
• Shared savings (providers share in the savings if they reduce costs while maintaining or improving care quality)
• Performance bonuses (extra payments for meeting quality care targets)

Advantages of PCMHs

Since the care is patient-centered and coordinated by a team, it often leads to better health outcomes and happier patients.

By focusing on prevention and managing chronic conditions, PCMHs can reduce the need for hospitalizations and emergency room visits.

Patients get to know their healthcare team well, building trust and better communication, which can improve overall care.

Disadvantages of PCMHs

Setting up a PCMH requires investing in technology (like electronic health records) and staff training to make sure the team works efficiently together.

Success depends on the patient being actively involved in their care. If patients don’t follow through on recommended treatments or lifestyle changes, the model may not be as effective.

Maintaining PCMH standards requires a lot of paperwork and documentation, which can be time-consuming for providers.

5⃣ Shared Savings and Risk Model

The Shared Savings and Risk Model encourages healthcare providers to lower costs while maintaining or improving the quality of care. This model involves two parts: shared savings and shared risk.

Shared savings means that if a provider (like a hospital or doctor) reduces healthcare costs below a certain benchmark (a target or standard), they get to keep a portion of the savings.

Shared risk means that if costs go over the benchmark, the provider must pay back some of the extra costs.

Example: Imagine a hospital that reduces readmissions (when patients have to return to the hospital soon after discharge) by providing follow-up calls and telehealth monitoring after the patient leaves. If these efforts help keep costs lower than expected, the hospital gets to keep part of the savings.

However, if the hospital’s efforts fail and readmissions rise, causing costs to go over the benchmark, the hospital would have to pay part of those extra expenses back in a shared risk model.

How It Works?

➜ A benchmark is set, which is a target for how much a provider should spend and the quality of care they should deliver.

➜ Providers who meet the quality targets and keep costs below the benchmark can share in the savings (they get part of the money saved).

➜ In downside-risk models, if the provider’s costs go over the benchmark, they must repay a portion of the extra costs.

Advantages of Shared Savings and Risk Models

Providers are motivated to lower costs and improve care quality because they can earn a share of the savings.

Providers have the freedom to manage the health of a population in a way that works best for their patients, while still focusing on cost savings and quality.

If the system performs well and lowers costs without sacrificing quality, providers can earn significant financial rewards.

Disadvantages of Shared Savings and Risk Models

In downside-risk models, if a provider doesn’t meet the benchmarks or exceeds the cost targets, they face financial penalties, which can be a challenge for underperforming organizations.

To track and monitor performance accurately, providers need sophisticated data systems to manage costs, quality, and patient care efficiently.

Conclusion

Value-based payment models are changing how healthcare is provided and paid for. Instead of paying for each service separately, these models focus on giving better care and getting good results for patients. This helps save money and rewards doctors and hospitals for doing a good job.

However, these models can be challenging because they come with financial risks and need big changes in how healthcare is managed.

Doctors and hospitals that understand and adjust to these changes can succeed and provide better care for their patients.

However, securing Medicare coverage for insulin and related supplies, like needles and syringes, can be difficult for healthcare providers.

Medicare covers insulin and related supplies under specific conditions that healthcare providers must understand. These complexities can lead to confusion and unexpected patient costs if not handled correctly.

If you’re unsure whether Medicare covers insulin needles, you’re in the right place. In this blog, we will clarify whether Medicare covers insulin needles.

Medicare Insurance Plans

Before determining whether Medicare covers insulin needles, healthcare providers must understand the insurance plans offered by Medicare.

Medicare, the federal health insurance program primarily for individuals aged 65 or older, is divided into different parts, each covering various healthcare services:

• Medicare Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
• Medicare Part B (Medical Insurance): Covers outpatient care, doctor services, and certain preventive services.
• Medicare Part C (Medicare Advantage Plans): Offered by private companies approved by Medicare, these plans include Part A, Part B, and sometimes Part D.
• Medicare Part D (Prescription Drug Coverage): Helps cover the cost of prescription drugs.

Coverage becomes more nuanced when it comes to insulin and related supplies, like insulin needles. Providers need to understand the specifics of both Part B and Part D for proper coverage. Many providers remain confused about whether insulin needles are covered, so it’s crucial to understand how Medicare addresses this.

Does Medicare Cover Insulin Needles?

Yes, Medicare covers insulin, but it depends on how you administer it.

Let’s break this down:

➜ Medicare Part B covers insulin if you use an insulin pump, which is considered durable medical equipment. However, it does not cover insulin pens or supplies like syringes, needles, alcohol swabs, or gauze.

➜ Medicare Part D covers insulin that is not used with a traditional insulin pump, along with certain medical supplies needed to inject insulin, such as syringes and needles. The cost for a one-month supply of each covered insulin product is capped at $352.

➜ Medicare Part D covers insulin needles, Medicare Part B does not. However, if you have a Medicare supplement insurance plan that covers your Part B coinsurance, it may help pay for insulin under Part B.

When covering insulin and related supplies, understanding the distinctions between Part B and Part D is crucial for providers.

Now, let’s explore these differences in more detail:

When a Patient Has a Medicare Part B Plan

Medicare Part B is a component of Medicare that covers medical services and supplies necessary for treating or managing health conditions.

Medicare Part B covers a variety of services and supplies, such as:

• Blood glucose testing supplies (e.g., blood glucose monitors, test strips, and lancets)
• Certain preventive services, including diabetes self-management training and nutritional therapy
• Durable medical equipment, such as insulin pumps
• Therapeutic shoes or inserts

However, Medicare Part B does not cover the following diabetes-related supplies:

• Insulin pens
• Syringes
• Needles
• Gauze
• Alcohol swabs

So, to answer your question: Medicare does not cover insulin needles under Part B.

It’s important to remember that Medicare Part B covers insulin when administered via an insulin pump that qualifies as durable medical equipment (DME). This coverage can be a significant benefit for patients who need continuous insulin infusion through a pump, as both the pump and the insulin used in it may be covered.

However, while Part B covers the insulin and the pump, it generally does not cover needles or syringes for manual insulin administration.

Under the Part B plan, patients are responsible for paying 20% of the cost in 2024, while Medicare covers the remaining 80%. These costs are in addition to other out-of-pocket payments for Part B, including the monthly premium, yearly deductible, and copayments.

When the Patient Has a Medicare Part D Plan

Medicare Part D is the prescription drug plan that covers medications and certain medical supplies needed to administer them.

Patients need a Part D plan for insulin and related supplies, such as needles and syringes. Here’s what Part D covers:

• Insulin that isn’t used with an insulin pump
• Medical supplies used to inject insulin, like syringes and needles

Part D plans also cover a one-month supply of each covered insulin product, with a capped cost of $35.

Medicare Part D, which provides prescription drug coverage, typically includes the cost of insulin and the supplies needed to inject it—such as needles, syringes, alcohol swabs, and gauze. This is especially important for patients who self-administer insulin, as it ensures they have access to both the medication and the necessary tools to use it effectively.

When your patient has a standalone Part D plan or a Medicare Advantage plan that includes drug coverage, you must verify that their specific plan covers these supplies. Each Part D plan has a formulary—a list of covered drugs and supplies—which can vary by plan.

As a provider, it’s essential to confirm the coverage beforehand to avoid surprises at the pharmacy, where patients may otherwise face unexpected out-of-pocket costs.

Before proceeding with billing and claim submission, make sure that the pharmacy providing these drugs and supplies is in-network.

The Medicare Pricing Plan for Diabetes

As a healthcare provider, you must be aware of the costs of insulin that Medicare charges. Below is the breakdown of three plans for Medicare insulin costs.

FAQs

1). Are pen needles covered by Medicare?

Yes, Medicare covers pen needles. Providers are reimbursed for the pen needles under the Medicare Part D plan. Pen needles are used by providers to treat asthma attacks and severe allergic reactions. Pen needles from various brands covered by Medicare include:

• Auvi-Q
• EpiPen
• EpiPen 2-Pak
• EPIsnap
• Adyphren
• EpinephrineSnap-V
• Bronchial Mist Refill
• Adyphren II, Adyphren Amp II
• Adyphren Amp

2). What insulin is covered by Medicare?

Medicare covers insulin used with a disposable or non-traditional insulin pump, not an insulin pump itself. Medical supplies used to inject insulin include syringes, gauze, and alcohol swabs.

3). What insulin is covered by Medicare Part B?

Medicare Part B covers insulin used with an insulin pump, as part of the durable medical equipment benefit. Remember, Part B does not cover insulin pens or insulin-related supplies like syringes.

4). What insulin is covered by Medicare Part D?

Medicare Part D (also called the Drug Coverage Plan) covers insulin used with injectables like syringes or pens. However, it does not cover insulin used with a disposable or non-traditional insulin pump.

Final Thoughts

Medicare Part D typically covers the supplies needed to inject insulin, including needles, syringes, alcohol swabs, and gauze. However, Part B can come into play when insulin is administered through an insulin pump.

In conclusion, we can say that Medicare covers the Insulin needles but only under its Part D plan.

So, to successfully reimburse the treatments given to your patient with diabetes, confirm that they have a Medicare Part D Plan.

As a healthcare provider, do you feel the pinch of not getting your full Medicare reimbursement rates?

The Centers for Medicare & Medicaid Services (CMS) sets fixed reimbursement rates as per the Physician Fee Schedule, but providers often fall short.

Even though rates are set by the Physician Fee Schedule, with updates like the recent 2.93% increase to the 2024 Conversion Factor, simply being enrolled isn’t enough to guarantee full payment.

But worry not. We understand this financial stress.

Therefore…

In this blog, we’ll break down reasons for lower Medicare payments and give actionable steps to increase Medicare reimbursement rates.

You worked hard—now get fully paid!

What Is Medicare Reimbursement?

“Medicare Reimbursement” is the payment sent from the federal Medicare program to doctors, clinics, hospitals and other healthcare providers to compensate them for the medical care and services provided to patients enrolled in Medicare. It helps cover some of the costs incurred by providers for treating Medicare beneficiaries.

Medicare provides healthcare coverage to patients 65 years of age or above and patients with particular disabilities, even if they are below the age limit. The federal health insurance program covers expenses for the patients who receive care services from healthcare providers.

For example, a healthcare practitioner provides care services to Medicare beneficiaries in a private practice and submits claims to insurance providers (Medicare) for the services provided. Medicare will review these claims and pay the healthcare provider according to a particular reimbursement rate. Medicare’s payments to healthcare providers are called Medicare reimbursements.

This amount can be affected by various factors, including medical specialty, economic trends, legislative budgets, geographic location, performance of practice and quality of care, and physician’s fee schedule. However, Medicare reimbursement rates are predetermined, but these factors can cause providers to receive less payment than the allowed amount.

Medicare Physician Fee Schedule

Medicare Physician fee schedule is a table showing reimbursement rates updated annually by the Centre of Medicare and Medicaid Services (CMS) based on input from healthcare providers, medical societies, and other stakeholders. This schedule ensures fair compensation by standardizing payments across medical specialties and geographic locations.

The fee schedule evaluates the value of care services, the location of providers, and the costs of operating healthcare practice and determines how much Medicare will reimburse healthcare providers.

For each year, CMS proposes changes for the following year’s schedule—now for the year 2025. Healthcare providers can submit their feedback on the proposal in a specific allowed comment period. After closing the comment period, CMS reviews their feedback and decides on a new physician fee schedule. Then, the updated fee schedule will be released in November, 2024 and take effect from January 1, 2025.

Staying updated on the Physician fee schedule allows providers to align their charge amount for healthcare services and get maximum reimbursement from Medicare.

Effective Strategies to Increase Medicare Reimbursement Rates

Here, we guide you on how to increase Medicare reimbursement rates, though they are fixed. Applying these proven strategies can help healthcare enterprises boost their revenue by getting the maximum reimbursement from Medicare.

1). Reducing Medical Coding Errors

One of the most effective strategies for improving Medicare reimbursement rates is reducing medical coding errors. Inaccurate coding can lead to significant financial losses for healthcare providers, affecting their reimbursement rates from Medicare.

Why Accurate Coding Matters?

To maximize reimbursement, accurate medical coding is essential. Here’s why:

Correct Codes Ensure Appropriate Payment ➜ Providers must use precise codes for procedures and diagnoses to get the payment they deserve.

Avoid Revenue Loss ➜ Mistakes in coding can result in lower payments or delayed Medicare reimbursements, which can hurt the provider’s cash flow.

Common Coding Mistakes to Avoid

Here are some common mistakes made by medical coders that can reduce reimbursement, along with tips on how to avoid them:

Failure to Code to the Highest Level of Specificity

Coders sometimes fail to select the most specific codes for a patient’s diagnosis or procedure. This may happen due to lack of knowledge or familiarity with certain codes.

Why It Matters: If a code doesn’t fully capture the patient’s condition, Medicare may reimburse at a lower level, assuming the treatment was less complex.

Solution: Coders should ensure they’re well-versed in CPT and ICD-10 codes and are thorough in reviewing the patient’s records to select the most accurate code.

Inaccurate or Missing Modifiers

Modifiers provide additional details about a procedure or service, influencing the reimbursement amount. Incorrect or missing modifiers can lead to underpayment.

Example: If a patient receives care twice on the same day, coders must use Modifier-76 (Repeat procedure by the same physician). Without it, Medicare may only pay for the first service.

Solution: Ensure the correct use of modifiers to reflect the services provided fully. Consult AMA guidelines for accurate modifier application.

How Coding Mistakes Lead to Lower Reimbursement

To put it simply, when medical coders don’t capture the full scope of services provided, Medicare pays less. Let’s look at an example:

Scenario: A Medicare patient visits a clinic with severe back pain. The provider offers a comprehensive set of services: diagnosis, x-ray, chiropractic treatment, and a follow-up care plan.

What Happens: If coders only use codes for a routine check-up, Medicare will reimburse based on that lower level of service, leaving the provider underpaid for the care actually given.

Solution: Coders must accurately document and code all services rendered, ensuring they reflect the full extent of care provided.

Best Practices for Reducing Coding Errors

Here are some best practices for coders to avoid mistakes and help providers increase reimbursement:

Ongoing Education: Regular training on the latest CPT and ICD-10 codes is vital.

Detailed Review: Always double-check patient records for the most specific and accurate codes.

Modifier Accuracy: Make sure modifiers are used correctly to capture all aspects of a procedure or service.

Audit Regularly: Conduct regular audits of coding practices to identify and address errors before they affect reimbursement.

2). Leveraging Merit-Based Incentive Payment System (MIPS)

However, the Medicare reimbursement rates are fixed, but providers can get maximum reimbursement in the shape of additional earnings by meeting performance standards in quality care and improving healthcare activities at practice. In this way, they can easily maximize their revenue by leveraging MIPS.

In addition, the merit-based incentive payment system (MIPS) is another component for practices to consider when increasing their earnings. Medicare uses this program to adjust payments using composite performance scores. Through the MIPS program, eligible practitioners may receive a bonus amount, a payment penalty, or no payment adjustment.

Medicare considers four performance categories for counting the final MIPS score. This score determines the payment adjustment applied to Medicare Part B claims. The categories are:

Quality

Eligible clinicians must report on six quality measures, including one outcome measure. But, they must select one high-priority measure if an outcome measure is not available. For this purpose, AAPM&R (The American Academy of Physical Medicine and Rehabilitation) has created a quality measure guide to help them with the most applicable measures.

Improvement Activities

Eligible practices must attest to completing four activities at least 90 days each. However, those who live in small or rural areas have to complete only two. The AAPM&R created an improvement guide to help members explore activities that are most applicable to the specialty.

Promoting Interoperability

Promoting Interoperability is the MIPS performance category that promotes patient engagement and electronic exchange of information using certified electronic health record technology (CEHRT). The performance category is worth 25% of your MIPS Final Score for 2024.

Cost

The cost category determines a practice’s performance and covers 30% of the final MIPS score. It replaces the Medicare Value Modifier Program for eligible clinicians.

Medicare Spending Per Beneficiary (MSPB) and Total Per Capita Cost (TPCC) measure the cost category. MSPB evaluates Medicare costs prior to, during, and after the hospital stay of patients, and TPCC evaluates Medicare Part A and Part B costs associated with any beneficiary over a year.

Who is not eligible for MIPS?

There are three types of healthcare providers who are excluded from MIPS eligibility:

• Providers who enroll in Medicare for the first time during a performance year are not eligible for MIPS until the next performance year.
• Providers participating in an APM, as defined by MACRA, are not eligible for MIPS.
• Clinicians who bill less than $90,000 in Medicare beneficiaries in a particular period OR provide care for less than 200 Medicare patients a year are excluded from MIPS.

3). Improving Reimbursement Through Detailed Documentation

Using poor quality, unclear, incomplete documentation, or missing documents that providers submit to Medicare can cause rejected or denied claims, which leads to less or no reimbursement. Healthcare providers must comply with detailed documentation to build a strong foundation for claims and consider all the billable aspects to get full payment on time. Experts at Medicare thoroughly review all the documents related to claims. Therefore, a slight mistake can cause providers to face losses.

Here are a few points discussed that clearly highlight the importance of effective documentation in maximizing Medicare reimbursement.

• Detailed and accurate documentation results in correct coding and fewer rejections or denials. It leads to better coding, which improves the chance of being reimbursed appropriately by Medicare for services provided. 
• Thorough documentation helps coders to understand it better and apply appropriate codes. In this way, documentation can play a major role in maximizing reimbursement and the practice’s overall revenue growth. 
• Document procedures should be as accurate and detailed as possible because reimbursement can be affected by even the smallest missing detail.

A properly documented medical record can facilitate practices with effective revenue cycle processes, boost payment, reduce hassles in claim processing, and ensure appropriate reimbursements. Healthcare practices are required to improve their documentation skills to get full benefits from care services provided in the shape of maximum reimbursements; here are steps to follow on how they can improve:

Standardization: They should focus on clear and concise communication while using industry standards and documenting procedures that are easily understood by readers of the medical records. 

Regular Review: Providers should follow a simple process by reviewing previous records and encounters and aligning them with current EMRs.

Peer Support: Peer-to-peer documentation support can increase standardization and productivity as clinicians can understand the ins and outs of documentation quite well. 

Continued Education: The clinician should never stop the learning process. Adhering to ideas for improvement helps them keep up to date and increase documentation compliance. 

4). Regular Auditing and Compliance Checks

One of the most important strategies to maximize Medicare reimbursement is regular auditing and staying informed and up-to-date with the latest rules and regulations and CMS requirements. Medicare and Medicaid are constantly evolving and adopting new changes with current and updated trends. Therefore, healthcare providers must stay updated on any changes that may affect reimbursement rates.

Staying updated with these complex programs might be challenging for providers as these regulations vary by state. However, healthcare providers can stay informed by regularly reviewing Medicare reimbursement guidelines and ensuring that they are submitting accurate claims and receiving full reimbursement for the services they provide to Medicare patients.

Furthermore, healthcare providers should be aware of external audit outcomes to reduce the risks of rejected and denied claims that may lead to low reimbursement. Providers should perform internal audits by their in-house teams or outsource third-party auditors to demonstrate compliance with risk adjustment regulations to reduce the risk of penalties and fines.

5). Using a Claim Management Software

Effective claim management is a crucial factor for optimizing Medicare reimbursement. Sometimes, healthcare providers take the burden and fail to manage a high volume of claims, and it becomes challenging for them to submit these claims to Medicare. Also, it becomes a headache for them to keep track of records and ensure that each claim is processed properly and correctly.

By using claim management software effectively, healthcare practices can streamline the process of claim submitting and identify errors quickly to avoid any unpleasant result, i.e., rejection or denial of claims. This will ultimately improve the revenue of practices by getting properly reimbursed.

6). Outsourcing Billing Services

After following all the procedures, if providers fail to maximize their Medicare reimbursement rates, the ultimate solution is hiring a third-party medical billing company to do all of the work on their behalf. One of the reliable billing companies in the US is BellMedEx, providing billing services and supporting providers in optimizing their reimbursement rates.

The experts and professionals at the billing company can lessen the burden from providers’ shoulders by providing them with result-oriented services, for example, medical coding, compliance management, and claim management, which can prove extremely helpful in maximizing Medicare reimbursement rates.

After outsourcing the third-party billing services, the experienced staff at the company can ensure accuracy and alignment with CMS guidelines and requirements. We suggest this is one of the easiest ways to maximize reimbursement and grow healthcare practice’s revenue.

What’s Next for Medicare Reimbursement? My Take on the Future

When it comes to Medicare reimbursement, there’s a lot on the horizon for healthcare providers. The landscape is definitely shifting, and those who stay ahead of the curve will be the ones who can really capitalize on these changes.

In my opinion, the future of Medicare reimbursement is all about adapting to new trends, especially as CMS (Centers for Medicare & Medicaid Services) continues to refine its approach.

So, what can providers expect in the coming years? Let’s break it down.

Focus on Quality Over Quantity

One major trend I see coming is the shift from the volume of services provided to the quality of care delivered. CMS seems to be heading in this direction with its value-based payment model, and I honestly think it’s a good thing for both patients and providers.

Instead of rewarding providers for simply seeing more patients or performing more procedures, they’ll be incentivized based on how well they actually take care of those patients.

What does this mean for reimbursement rates?

Well, providers who deliver better care can expect higher reimbursement. It’s that simple. A quality reporting program like MIPS (Merit-based Incentive Payment System) is a prime example of how CMS is linking reimbursement to performance metrics. The better your practice does in terms of patient outcomes and quality, the more you’ll get paid.

And it’s not just about seeing patients faster or getting through more appointments. Care coordination and patient engagement are going to become even more important. If you’re collaborating with other providers, sharing information, and really involving patients in their own healthcare decisions, you’re going to see better outcomes—and better reimbursement as a result.

Embracing Technology

Another big factor that’s shaping the future of Medicare reimbursement is the adoption of new healthcare technologies.

I honestly believe that practices already using things like EHRs (Electronic Health Records), telehealth, and remote patient monitoring are going to have a serious edge moving forward.

CMS is pushing for the adoption of these technologies because they know how much potential they have to improve care and efficiency. Think about it: telehealth has become a game-changer, especially with how it helps providers see more patients remotely and manage care more effectively. Plus, remote patient monitoring means you can keep an eye on your patients’ health without them having to come into the office all the time.

The way I see it, practices that embrace these tools now will be better positioned to meet the evolving standards set by CMS and, in turn, secure higher reimbursement rates in the future. It’s all about staying ahead of the technology curve.

As the sun rises and sets, so does the journey through health’s trials.

I mean, as we age, we really do face healthcare challenges along the way.

And when intense care is needed, a skilled nursing facility (SNF) is usually the best choice. However, you have options — a short stay to recover or a permanent move from the SNF to a nursing home.

Therefore, knowing the daily rates for each guides smart decisions.

Medicare pays SNFs different daily rates compared to nursing homes. Rates change every year, with important updates in 2024. The Centers for Medicare & Medicaid Services (CMS) say there will be a 4% increase in daily rates for skilled nursing facilities (SNF) in 2024. This means about $1.4 billion more will be spent.

These SNF costs are projected to climb up to 4.1% in 2025, thus raising the possibility of further price escalations.

So it is important for SNF staff to know about rate changes to bill correctly.

Skilled Nursing Care Rates By Location

The price of skilled nursing care can change a lot based on where you are. This difference in rates allows Medicare beneficiaries to move to another area or state to find more affordable care while living in a nursing facility or nursing home. Picking a place with cheaper prices can help seniors make their benefits last longer.

Skilled Nursing Facility Rates By State

The costs of skilled nursing facilities change based on where they are located. So, some states have SNFs that charge a lot, while other states have SNFs that charge less. The table below shows the average monthly costs of nursing homes.

What Are The States With The Most Affordable Nursing Home Care?

Here is a list of top 10 states with the most affordable nursing home care.

Nursing Home Costs in the U.S. Cities

How Can You Differentiate Between A Skilled Nursing Facility And A Nursing Home?

“Skilled nursing facility” and “nursing home” are words that people often use the same way, but they actually mean different types of care places with important differences. The main differences are in how long you stay, the care you get, the services available, and how you pay.

Duration of Stay:

Skilled Nursing Facilities (SNFs) are meant for short visits. They help people who are recovering from all illness, injury, or surgery. These facilities give short-term medical help and rehabilitation services. They assist patients in getting back their independence so they can go home or move to a long-term care facility if necessary.

In contrast, Nursing Homes are places for long-term care. They help people who need support with daily activities because of long-term health issues or aging problems.

Level of Care:

SNFs provide more medical care and supervision than nursing homes. They have trained healthcare workers, like registered nurses, practical nurses, physical therapists, occupational therapists, and speech therapists. These experts work as a team to give complete medical care, rehabilitation help, and skilled nursing services that are designed for each patient’s unique needs.

Nursing homes, on the other hand, mainly offer basic medical care and help with daily activities like bathing, dressing, eating, and moving around. Nursing homes usually have licensed nurses, but they do not have as many different types of medical specialists as skilled nursing facilities (SNFs).

Services Provided:

Along with skilled nursing care, SNFs provide various services to help patients recover and rehabilitate. These services can include care after surgery, taking care of wounds, managing pain, giving medicine through IV, physical therapy, help with daily activities, and speech therapy. SNFs also offer 24-hour emergency services and special equipment to help with recovery.

Nursing homes, in contrast, provide long-term care for people who need help with daily activities, taking medicine, and basic health care. They might provide fun activities, help for social needs, and transportation services to improve the lives of residents.

Payment Methods:

Medicare usually pays for SNFs for a short time if the patient meets specific requirements, like being admitted from a hospital within a certain period. Nursing home care, on the other hand, is often paid for through a combination of private funds, long-term care insurance, and Medicaid (for those who qualify based on income and asset levels).

Some places may provide both skilled nursing and long-term care services, making it hard to tell the difference between SNFs and nursing homes. However, understanding the differences between these two types of care facilities can help people and their families choose the best care option for their needs and situations.

Medicare Coverage For Skilled Nursing Care Facilities

Medicare coverage for skilled nursing care facilities is based on two main things: where the facility is located and how long you stay there. Additionally, patients need to follow specific rules from Medicare to qualify for coverage.

For example, Medicare Part A pays for up to 100 days of care in a shared room during each benefit period. This is for when a skilled nursing facility meets Medicare’s requirements. A benefit period starts when you enter a hospital or skilled nursing facility and ends when you have been out of the facility for 60 days in a row.

To qualify, you must have a qualifying hospital stay of at least 3 days before going to the skilled nursing facility. You must also need daily skilled care like intravenous medications or physical therapy. In addition, a doctor must confirm that you need skilled care within 30 days after you are admitted. You can get coverage for a maximum of 100 days each time you use your benefit period.

Requirements for Medicare Coverage of Skilled Nursing Facilities

1⃣ The patient needs to stay in the hospital for at least three days to get important medical care. This stay is for situations that need skilled nursing care afterwards.

2⃣ A doctor must give a prescription that shows the patient needs daily skilled nursing care or therapy. This care should be done by, or with help from, qualified professionals or technical staff, making sure that the services follow Medicare standards.

3⃣ The skilled nursing facility (SNF) needs to be approved by Medicare. This certification shows that the facility follows important health and safety rules set by the government.

4⃣ The patient must be transferred to a participating skilled nursing facility within 30 days of being discharged from the hospital. This requirement is crucial for maintaining eligibility for coverage.

5⃣ The patient must be enrolled in Medicare Part A, which covers inpatient hospital stays and certain skilled nursing facility services.

6⃣ The services provided in the skilled nursing facility must be deemed medically necessary and appropriate for the patient’s condition, as determined by their healthcare provider.

7⃣ Patients might need to have regular assessments to make sure they still qualify for skilled nursing services. This includes progress evaluations by healthcare professionals.

8⃣ Medicare usually pays for skilled nursing care for up to 100 days in each benefit period. The first 20 days are fully covered, but for the next 80 days, there is a copayment required. In 2024, the coinsurance is about $204 each day.

9⃣ The patient needs skilled nursing care every day. This care can include things like taking care of wounds, giving medicine through an IV, or helping with rehabilitation.

The need for skilled nursing must be clearly justified based on the patient’s medical condition and treatment plan, ensuring that the care provided aligns with their health needs.

What is a Benefit Period in Skilled Nursing Facility?

A benefit period refers to the way Medicare measures your use of hospital and skilled nursing facility (SNF) services. It determines how much coverage you will receive from Medicare Part A for inpatient care. 

Each benefit period begins the day you are admitted as an inpatient to a hospital or SNF. The benefit period ends when you have not received inpatient care in either a hospital or SNF for 60 consecutive days. At that point, if you need to be admitted again, a new benefit period will begin.

During each benefit period, Medicare Part A provides coverage for your inpatient care according to certain limits:

• For hospital care, Medicare Part A covers up to 90 days. You pay a deductible for days 1-60 and a coinsurance amount for days 61-90. 
• For SNF care, Medicare Part A covers up to 100 days. You pay nothing for the first 20 days. For days 21-100, you pay a daily coinsurance amount.

For example, let’s say you are admitted to the hospital for 5 days due to pneumonia. This starts your benefit period. Two months later, you fall and break your hip, requiring another hospital stay of 4 days. This is still the same benefit period because less than 60 days passed between your hospital stays.

After your hip heals, you transfer to a SNF for rehabilitation for 30 days. Those SNF days also apply to the same benefit period. In total for this benefit period so far, you have used 9 hospital days and 30 SNF days. If you need more inpatient care, your coverage will depend on how many benefit days you have left.

Skilled Nursing Care Billing Tips

Skilled nursing facilities can use these important billing tips to help prepare and submit claims for Medicare beneficiaries accurately and correctly:

Understand Utilization Days: It is important to know that the last day of care—this could be the day you leave the hospital, the day of death, or the first day of a leave of absence (LOA)—is not counted as a utilization day for billing. This means facilities should not charge for these days.

Discharge Policy: If a patient covered by Medicare leaves but comes back before midnight on the same day, Medicare does not count this as a discharge. So, billing should reflect the patient’s continuous stay, because it impacts the total days used.

Accurate HIPPS Rate Coding: Make sure that the HIPPS rate code matches exactly with the assessment that was submitted and accepted by the state where the skilled nursing facility is located. Any mistakes can cause claims to be denied or payments to be delayed.

Clear Documentation: Keep clear and correct records of all services given. This includes daily notes, care plans, and any changes in a patient’s condition. Good documentation helps show why services billed to Medicare are needed.

Ongoing Training for Staff: Provide regular training for your billing staff to ensure they know the latest Medicare rules, coding updates, and compliance needs. This active method can greatly lower mistakes and improve the accuracy of claim submissions.

Claim Submission: Submit claims on time to prevent delays in getting your money back. Learn the specific deadlines for submitting documents as required by Medicare to follow the rules.

Keep Updated on Policy Changes: Check for updates from Medicare and other important organizations about changes in policies, billing rules, and payment rates. Being informed will help your facility adjust and follow the rules.

Consolidated Billing In Skilled Nursing Facilities

Under consolidated billing, Medicare requires Skilled Nursing Facilities (SNFs) to submit a single consolidated bill for most Medicare Part A services provided to patients during their covered stay. This applies regardless of whether the services are provided directly by the SNF or by an outside entity. The services included in the consolidated bill are:

• Nursing care
• Therapy services (physical, occupational, speech-language)
• Medical supplies
• Certain physician services

However, some services are billed separately under Medicare Part B coverage. These include:

• Certain dialysis services
• Certain types of chemotherapy and radiotherapy
• Services provided by outside suppliers with specialized Medicare certification (e.g., ambulance services)

It is important for SNFs to know which services go in the consolidated bill and which ones should be billed separately. If you don’t do this, your claims might be denied. For instance, if a skilled nursing facility includes ambulance service costs in the main bill by mistake, the claim might be rejected. This is because ambulance services need to be billed separately under Part B.

SNFs need to make sure they bill correctly to prevent problems with getting paid by Medicare. It is very important to understand the rules for consolidated billing. This helps to follow the law and keep things running smoothly.

Factors that Affect the Cost of Skilled Nursing Care

There are several factors that determine how much a patient should pay for skilled nursing care. These factors include:

• The state and region where the facility is located
• Whether the facility is a luxury senior living community
• The choice between a private room and a semi-private room
• The length of the patient’s stay
• The type of care required by the patient
• The patient’s insurance benefits