Question

A non-participating physician provides services to a Medicare patient who has total charges of $100 (before Medicare’s limiting charge is applied). The physician does not accept assignment, charges the maximum allowable, and submits the claim to Medicare. Assume Medicare’s approved schedule for these services is $80. What is the maximum amount the physician is allowed to charge the patient? What is the Medicare portion of the physician payment (which Medicare sends to the patient)? What is the patient’s portion of the payment to the physician (net of the reimbursement from Medicare in the previous question)? Would the physician have been better off by accepting assignment on this case? Why or why not?

Why is the unreimbursed cost of Medicare most often not included as an element of community benefit?

Answer 1

total charge	$        100
Medicare approved schedule	$          80
a) What is the maximum amount the physician is allowed to charge the patient?
NOTE: The maximum allowed charge for an unaccepted assignment is 115% of 95% of the Medicare approved schedule
maximum amount the physician is allowed to charge the patient = 1.15*0.95*$80
	$    87.40
b) What is the Medicare portion of the physician payment (which Medicare sends to the patient)?
NOTE: Medicare portion is 80% of the 95% of the approved schedule
Medicare portion of the physician payment = 0.80*0.95*$80
	$    60.80
c) What is the patient’s portion of the payment to the physician (net of the reimbursement from Medicare in the previous question)?
NOTE: the patient's portion is 20% of the 95% of the approved schedule
patient’s portion of the payment to the physician=0.2*0.95*$80
	$    15.20
the physician can collect additional fee above the fee schedule of $87.40-$60.80-$15.20 from the patient
	$    11.40
so the total amount paid by the patient will become = 15.20+11.40
	$    26.60
but, if we see patient's portion, net of the reimbursement from Medicare in the previous question, it will be $15.20
d)Would the physician have been better off by accepting assignment on this case? Why or why not?
No, the physician would not been better off accepting assignment on this case, as in that case he would have received a maximum of (0.95*$80 = $76) $76 as only 95% of the approved schedule would have been received, but by not accepting assignment, he received $87.40.
e)
Medicare patient treatment does not fit into the community service definition. As in most cases, Medicare is not the distinguishing factor for not for profit health organizations. Medicare’s unreimbursed cost arise majorly from operational inefficiency and not because underpayment. Hence, it cannot be included under community benefit. Apart from that, the lack of intent to serve the elderly and benefit the community by subsidized programs is another factor.