Making Sense of the Medicare Deductible in 2018
Every Medicare beneficiary has an annual deductible that must be met prior to Medicare making payment for services. The deductible amount for 2018 is $183.
What Does this Mean?
This means that a beneficiary must receive $183 worth of services before Medicare will make payment to a provider. This service doesn’t necessarily need to be physical therapy visits, but rather a visit with their primary care doctor, a trip to urgent care, and even a surgery will all most certainly use up the $183 deductible.
However, you cannot think of the deductible in a chronological manner. It ultimately boils down to the order in which claims process. Let’s use an example:
Ms. Mary Doe goes to her primary care doctor on January 4 th for low back pain. He recommends that she starts physical therapy.
Ms. Mary then starts therapy on January 6 th for her low back pain. Ms. Mary informs the front desk that she has already been seen by her PCP this calendar year and that should use up her annual Medicare deductible.
Logically, this is correct. However, it may not play out that way. Let’s say her PCP has a billing company that does not submit on a daily basis and holds claims for weeks at a time, but her physical therapist office uses StrataPT and they submit claims on a daily basis. The physical therapy claim would be sent out prior to the PCP claim and while the PT visit was actually after the PCP office visit, it would process ahead of the PCP claim and would go towards her annual deductible. So key take away – you cannot simply look at the date of service in which services were rendered in order to determine if a deductible has been met, it is ultimately dependent on which claims process first.
So Who is Responsible for the Medicare Deductible?
- If the patient does not have a secondary policy, not only are they responsible for 20% of the Medicare fee schedule throughout the entire year, but they are also responsible for the entire $183 Medicare deductible.
- If the patient has a secondary policy, there are several ways that it can play out:
a.) Some secondary policies will not cover the Medicare deductible and the patient is therefore responsible for the entire $183 Medicare deductible.
b.) Some secondary policies will cover the Medicare deductible in full. After Medicare processes the claim indicating the services went to the Medicare deductible, the claim is then forwarded onto the secondary, whom then covers that $183 leaving no responsibility to the patient.
So what should you be doing to proactively ensure you are reimbursed for the deductible? We encourage all of our clients to remind their Medicare patients of the annual deductible. During the month of December, post a sign within your office so that patients that will continue treatment into the new year are aware of the deductible and not caught off guard.
If you know that your patient’s secondary insurance is not going to cover the Medicare deductible, we encourage our clients to collect the $183 upfront. It is much easier to refund this money if another provider’s claims process first than it is to collect this from a patient who “thinks” they have already paid it to another provider. However, it is important to note that if a patient refuses or cannot pay this upfront, you cannot deny treatment for lack of prepayment. You will need to wait until Medicare processes the claim and then invoice the patient accordingly. It is also vital if you collect from a patient and then determine that the deductible was used towards another provider’s visit,
that you refund the patient promptly.
Some practices like to hold claims to allow other providers to submit claims ahead of their own and to use up the deductible. While we understand the logic, we also feel that time is money and disruption of your revenue cycle (especially if you treat in a heavy Medicare population) is not always the best answer.
Let’s face it, it’s not just Medicare that has an annual deductible. Commercial payers are the ones with the extremely high deductibles. Rather than holding claims and disrupting your revenue cycle, we encourage our clients to ensure that the patients are aware of their responsibility.
Providing and explaining benefits to your patients is an incredibly important value-added service. Many times, patients are not aware of their benefits and by being upfront and discussing finances prior to treatment, it builds a rapport backed on trust and understanding. If you are not currently checking benefits, we encourage you to do so.
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If you do not have the resources to do this in-house or your current billing company does not offer this service, let’s talk.