Medicare’s New Documentation Rules Impact Practices

Medicare’s New Documentation Rules Impact Practices
AAOSNow – April 2019 
by Margaret M. Maley

Surgeons instructing billing staff to bill “insurance only” is a scenario that is all too common in orthopaedic practices. In effect, the practice is waiving the patient’s copay, coinsurance, and deductible amounts and accepting whatever amount the insurance company will pay.

In most circumstances, this puts the surgeon and the practice in jeopardy. Medicare pays providers the lesser of the reasonable costs or the customary charges for services furnished to Medicare beneficiaries. So, if a practice charges less than Medicare routinely pays, Medicare reduces the payment to the practice’s customary charge for the service. From Medicare’s perspective, routinely waiving coinsurances without regard to financial need lowers the practice’s standard charge. For example, if 20 percent coinsurance on a $100 charge is waived, Medicare reduces that charge to $80 rather than the normal $100. Medicare can come back and lower the practice’s charge, thus reducing payment.

In addition to reducing the Medicare payment based on the practice’s customary charge, Medicare still deducts the patient’s copay and deductible from the payment to the practice. However, Medicare does allow discounts or write-offs under certain circumstances:

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