Medical billing is an intricate process that can make anyone edgy with varying insurance payer guidelines and ever-evolving billing and coding requirements. Medicare and Medicaid are the two biggest insurance coverage programs administered by the US federal and state governments, respectively.
Medicare has over 65 million, while Medicaid has over 72 million beneficiaries. Thus, as a provider, you don’t want to miss out on this opportunity and bill them for a healthier revenue cycle.
This guide is all you need to crack Medicare and Medicaid billing requirements. We will also discuss their differences and share how you can enroll in both programs.
So, without further ado, let’s get started!
What Is Medicare?
It is a national health insurance coverage program administered by the US federal government for people aged 65 or older, individuals under 65 with certain disabilities, and patients with end-stage renal disease (ESRD). It encompasses the following:
- Medicare Part A – Hospital Insurance
- Medicare Part B – Medical Insurance
- Medicare Part C – Medicare Advantage (MA)
- Medicare Part D – Prescription Drug Benefit
How Does Medicare Billing Work?
Here’s how the Medicare billing works:
- The Medicare Administrative Contractor (MAC) processes the claims providers submit to Medicare.
- The MAC adjudicates each submitted claim, which typically takes around 30 days.
- You must follow the same guidelines as third-party private insurance companies for Medicare billing for Part A and Part B.
- You must enter all the information the superbill contains in your Medicare billing claim, including the patient information, Place of Service (PoS) codes, diagnosis codes, procedure codes, and NPI numbers.
- You may encounter some challenges if you choose to go with a manual Medicare billing workflow. For example, Part B requires you to submit a CMS-1500 form, while Part A requires a CMS-1450 form (also called UB-04).
- Besides, Part C and Part D of Medicare billing are more complex because Part C is a private insurance coverage partly covered by the federal government. Thus, the billing specialists are not allowed to submit a claim to Medicare for rendered care services for patients with Medicare Part C.
- Moreover, only licensed physicians are eligible to bill for Medicare Part D. In case the physician is not licensed, then the billing specialist should bill either the patient’s secondary payer or the patient directly.
- Medicare reimburses the physician directly for provided services if it is a Part A claim. Contrarily, Part B claims often depend on coinsurance. For example, Medicare reimburses 80% of the claim amount for rendered services, while 20% of the payment responsibility falls on the patient as a copayment.
- For Part A and Part B Medicare billing, you should also know that there may be annual and monthly premiums, coinsurance rates, and copays depending upon the service or procedure type. CMS has fixed these rates, but they may vary depending on the procedure and patient category.
How to Become a Medicare Provider?
If you want to bill Medicare as a provider, you need to register in their system through a simple process known as provider credentialing. However, before that, let’s first figure out whether you need to enroll as an ‘institutional provider’ or a simple ‘provider’.
| Institutional Provider | Provider |
|---|---|
| You may register as an institutional provider if you want to register the critical care facility, hospital, home health agency, skilled nursing facility (SNF), hospice, or other similar healthcare facility. | If you want to register as a practitioner and get reimbursements for your rendered care services from Medicare, then you should register as a provider. |
Once you are sure about the type of enrollment that is needed, follow these steps:
- The first step involves applying for an NPI number via the National Plan and Provider Enumeration System (NPPES). It will serve as an identity for you or your healthcare facility for Medicare billing transactions. However, you can skip this step if you already have an NPI number.
- Next comes submitting an enrollment application. You can visit the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) website. Simply create an account and apply via the portal.
- You must pay a registration fee if enrolling as an institutional provider. You can refer to the PECOS Medicare Fee Payment schedule to determine the fee amount. Contrarily, if you register as a regular provider, you don’t have to pay any fee.
- Just like Medicare billing, MAC processes all the provider credentialing forms. Thus, if you want an update on your application status or have any queries, follow through with them.
- If you have applied as an institutional provider, MAC will seek approval from CMS Location and State Agency.
- MAC will perform the final processing if your application is approved by these groups and inform you about the result. Besides, note that these groups may require surveys or site visits for evaluation.
What Is Medicaid?
It is a statewide health insurance coverage program administered by different US state governments. It offers insurance to pregnant women, children, and low-income adults.
How Does Medicaid Billing Work?
In this section, we will discuss the Medicaid billing workflow:
- In comparison to Medicare billing, Medicaid billing has a higher difficulty level. The reason is that Medicaid guidelines vary from state to state. For instance, the billing requirements in California may be different from the payer guidelines in Alaska.
- As a result, the format of claim forms for Medicaid billing also varies, and it is optimal for you to understand your state’s program guidelines properly to ensure compliance and speedy reimbursements.
- As a general rule, you should create a Medicaid claim like you would for Medicare or any other private payer. That is, the claim should have complete patient information, diagnosis and procedure codes, PoS codes, and charges of the performed procedures.
- Besides, Medicaid covers too many medical procedures with fewer exceptions than Medicare.
- However, note that Medicaid should be the last payer you should turn to for reimbursements. If a patient has another insurance plan, we recommend you submit a claim to that payer before turning to Medicaid.
- Since every state has different Medicaid programs, it is impossible to discuss the process in detail without describing each state’s program. Thus, we would conclude the Medicaid billing workflow here.
How to Become a Medicaid Provider?
If you want to bill Medicaid as a provider, you must enroll in their system, but the steps may vary as per the state. However, below is a general workflow that you may need to follow to become a certified Medicaid provider:
- In each state, the Medicaid program has defined provider qualifications. Make sure you meet the criteria, which may include certifications, qualifications, and licenses.
- Stay current on the specific healthcare services covered by your state’s Medicaid program.
- Obtain the necessary documentation to apply for credentialing, including the Tax Identification Number (TIN), NPI number, and other state-specific requirements, and submit the Medicaid provider enrollment application.
- Medicaid will then review your application and conduct the necessary verification before deciding to include you on its panel.
- In case of a positive result, you may be required to sign an agreement with them to adhere to the Medicaid billing guidelines and expectations.
Key Differences Between Medicare and Medicaid
The table below discusses the key differences between Medicare and Medicaid:
| Medicare | Medicaid |
|---|---|
| It is a national program administered by the federal government. | It is a statewide program administered by different state governments. |
| It covers health insurance for people aged 65 or older, individuals under 65 with certain disabilities, and patients diagnosed with ESRD. | It covers health insurance for pregnant women, children, and low-income adults. |
| It is the largest payer covering inpatient hospital services for individuals with ESRD and older people in the US. | It is the largest insurance payer covering long-term care services, mental health services, and childbirths in the US. |
| Part A covers hospice, SNFs, home health, and inpatient care. Part B covers outpatient visits, provider and other healthcare provider services, durable medical equipment, and various preventive care services. Part C includes all services covered under Parts A and B and some additional services and benefits against an extra fee. Part D covers the cost of prescribed drugs. | Some Medicaid programs pay for care services directly, while others employ third-party insurance companies for coverage. All states must cover some healthcare services through their Medicaid program, such as provider encounters, mental health services, maternity and prenatal care, outpatient and inpatient services, and preventive care. Besides these services, states may choose to cover other services, such as dental care, vision and eyeglasses, physical therapy, home and community-based services, and prosthetic devices. |
Medicare and Medicaid Billing Guidelines
If you want to ensure timely reimbursements and a reduced denial rate, you should comply with the following Medicare and Medicaid billing guidelines:
Ensure Medical Necessity
Medicare and Medicaid only reimburse physicians for services or procedures that are appropriate and medically necessary to treat a patient’s condition. Thus, you must ensure complete and adequate documentation justifying the necessity of the provided services for a speedy payment collection.
Accurate Coding
The next guideline is the use of accurate Medicare and Medicaid billing codes. There are hundreds of diagnosis and procedure codes, with slight variations. Thus, you need to review each code to ensure accurate code usage. Besides, the coding systems are frequently updated, and you must remain current with the changes to ensure compliance with the standards.
Appropriate Modifier Usage
Modifiers help you supply additional information related to the performed procedures to the payer, ensuring specificality. They enable you to report unique circumstances, bilateral procedures, and multiple procedures that may affect reimbursements. Therefore, we recommend you use appropriate modifiers where applicable to improve your chances of higher reimbursements.
Timely Claim Submission
Both insurance bodies have specific claim filing deadlines, and you must submit claims within this timeframe to avoid payment delays and denials. Thus, you should review the Medicare and Medicaid billing requirements to avoid making mistakes. Remember that the Medicaid billing guidelines may vary depending on your state.
Bundling and Unbundling of Services
Medicare and Medicaid billing have strict requirements when it comes to unbundling (separating) and bundling (combining) services. Not following these guidelines may have serious repercussions, leading to heavy financial penalties and legal lawsuits tarnishing your reputation in the industry.
Bottom Line
Medicare and Medicaid are government-assisted health insurance programs for US citizens. However, they are uniquely different in terms of patient eligibility and coverage. Interestingly, the Medicare and Medicaid billing guidelines for healthcare providers are the same.
You must follow Medicare and Medicaid’s medical billing workflow functions and enroll with these federal and state-administered programs to secure quick reimbursements.
However, if you still have trouble following through with the distinct billing requirements of various payers, you can outsource the medical billing services to professionals like MediBill MD.
