Have you ever had a serious medical procedure and asked what it would cost you out-of-pocket only to be told by the provider that they have no idea and you’ll “just have to wait for the bill”?
In virtually no other industry is this kind of opaque pricing acceptable. Imagine taking your car in for a repair and being told you won’t know what it costs until the job is done. Yet, in healthcare, we’ve come to accept this uncertainty as normal.
The complex web of doctors, hospitals, and insurance companies often makes it nearly impossible to know in advance what a procedure will cost. Worse still, after the bill arrives, it can be difficult to determine whether the charges are accurate or even owed by you.
This problem is especially concerning for seniors on Medicare, who may unknowingly pay more out of pocket than they should. Sometimes this is caused by simple accounting mistakes, other times due to providers billing individuals for services they know Medicare already paid for.
Before diving deeper, it’s important to understand how Medicare works when it comes to paying medical providers. Medicare sets a standardized fee schedule for every covered service or procedure. These approved amounts are typically much lower than what providers charge private insurers or uninsured patients.
Providers who choose to accept Medicare patients must agree to accept these Medicare-approved amounts as payment in full. Medicare then pays 80% of the approved amount directly to the provider, while the remaining 20% is either paid by your supplemental insurance plan or out of your own pocket, depending on the coverage you have, and the procedure performed.
However, if you’re not careful, you can end up being charged more than what you legally owe. For example, some providers may improperly bill you for the full amount they charge, rather than the Medicare-approved amount, and then try to collect on the difference. This is known as balance billing and is illegal for participating Medicare providers, but it still happens.
In other cases, providers may mistakenly or deliberately “upcode” their billing to a more expensive service than was actually provided or unbundle procedures to increase the total cost. If unnoticed, you could be held responsible for part of these inflated charges.
So, how can you protect yourself from overpaying?
First, always ask whether your provider accepts Medicare assignment before receiving treatment. This ensures they are bound by Medicare’s pricing and billing rules. If there’s a chance a service might not be covered, your provider must give you an Advance Beneficiary Notice (ABN) in writing before performing the procedure. This gives you the chance to decide whether to proceed and accept financial responsibility.
Second, regularly review your Medicare Summary Notice (MSN). This quarterly report outlines all the services you have received, how much was billed, what Medicare approved and paid, and what portion you or your supplement may owe. If you only saw Medicare-participating providers, you should never be billed more than what appears on this statement.
If you receive a bill that exceeds what’s listed on your MSN, contact the provider to dispute it. If the issue isn’t resolved, report the discrepancy to Medicare at 1-800-MEDICARE.
Navigating the Medicare billing process can be overwhelming, but staying informed and proactive makes a significant difference. Understanding how Medicare payments work, knowing your rights, and regularly reviewing your bills can protect you from unnecessary or even fraudulent charges.
In a system where transparency is often lacking, being your own advocate is not just wise; it’s essential. By asking the right questions and keeping a close eye on your paperwork, you can make sure you’re paying only what you truly owe, and not one penny more.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)