Can someone please explain the charges on my Medicare Summary Notice?

I admit I should already know how to interpret the charges on my Medicare Summary Notice that I get each quarter, when one comes to me in the postal mail.

I'm talking about those categories listed on the form that get into what the provider charges, how much Medicare approves, how much Medicare pays, etc.

I have never really paid much attention to them before, really only looking at the "Maximum you may be billed" box, often "$0.00" or some reasonably small charge, and my secondary insurance has always taken care of any non-zero figure that was occasionally there.

But yes, I had always noticed that the charges on the form for provider charges, Medicare approved, and Medicare paid have never seemed to make sense to me, but I had always been letting it go in the past since it didn't seem to affect me directly.

But when I received my most recent MSN, I decided to "break the code" of it, as it were, and finally try to understand what the numbers on the form really mean.

So here, from my most recent MSN, is the relevant portion of the categories and charges I have mentioned:

Medicare Summary Notice

Service..........Service.........Amount......Medicare......Amount.....Maximun
provided.......approved?.....provider.....approved......Medicare...you may
&........................................charged......amount.........paid...........be billed
Billing
Code

Patient..............YES.........$150.00......$127.05.........$99.61.......$25.41
office
visit,
30-39 min.
(99214-25)

all of which is followed by codes A and B, which are explained under the above listing of charges as:

A: The approved amount is based on a special payment method.

B: After your deductible and coinsurance were applied, the amount Medicare paid was reduced due to Federal, State and local rules.

which, for me, didn't exactly explain a whole lot.

So when I actually began to examine these figures, what immediately struck me was the fact that they didn't seem to "add up."

Some specific concerns I had with the above figures:

1. Why does my provider (my uro) charge $150 for the office visit when he knows (at least I assume he does) that Medicare approves only $127.05 and then pays only $99.61?

2. Why does Medicare approve $127.05 but pays only $99.61?

3. How does Medicare decide that my responsibility is $25.41?

I'm afraid my search for a Medicare-charges-and-payments-for-dummies style website has proved unsuccessful, while other explanatory websites have seemed too technical, and consulting the Medicare website itself for explanation has only retrieved attempts-to-clarify of enormous complexity, at least for me with my limited knowledge of accounting practices.

But I did find this, something Microsoft Bing AI replied to me when I asked it to "explain Medicare charge and payment procedures":

"The difference between the Medicare-approved amount and the Medicare-paid amount may be due to deductibles, copayments, or other factors."

Which seems to be saying, in other words, that there are what one might call "shadow charges" and "shadow payments" that we don't see listed on the MSN coming into play, and affecting the few figures that we do see.

Well, if that is the case, then I will just stop trying to decipher the numbers I see on my MSN, and simply go back to my past practice, of just worrying about how much I may be billed, which my secondary insurance has always covered anyway.

OTOH, if any of you have more understanding of the reporting mysteries of the MSN than I do, and would care to add an explanatory comment or two below, or if you know of a website that explains Medicare charges/payments in easy-to-understand mode, please do cite the website, or share with us your knowledge of the numerical mysteries of the MSN.

It would be nice to know what it is really trying to report!

JNF -

Thank you! Just reading your post has already clarified a lot of questions I had about this!

Often just getting a few points explained about something sort of opens the door to understanding much of the rest of it.

That's happening for me now!

Thanks!

Please note that $25.41 is 20% of $127.05, but $99.61 is not 80% of $127.05. So it looks like Medicare under-payed the urologist by $2.03. Why? The information you provided doesn’t explain the difference, but is not something you should be concerned about. Based on the approved amount you were billed the appropriate amount and, I assume, your supplement insurance paid the amount.

Medicare has different billing administrative plans for providers and has a bonus/defecit system to either reward providers with better outcomes and utilizations and defecit those that underperform. Whether this could be the reason for the $2.03 difference, I can’t tell from what you have provided. Personally, I don’t nitpick the amount Medicare pays the provider, I focus on my responsibility and the expected payment from my insurance company to make sure I am not overcharged. Any discrepancy between Medicare and the provider is not my concern.

JNF - Likewise, I don’t really care much about the pennies. I could send you a Medicare EOB and a BCBS EOB for the same event where the numbers do not agree for the allowed amount which you would think should match at a minimum.

As discussed previously, I am in MN and it is one of the few screwy states when it comes to Medicare Supplements. We typically do not have much in the way of lettered plans. I did get the equivalent of the old F plan where both deductibles were covered. The premium math was simple, $240/12 mos = $20/mo which is exactly what it cost for the benefit so one can see that the insurance companies expect everyone to use up that deductible.

There are some N plans here and high deductible F plans depending on insurance company. There is also community pricing which makes the rates the same for everyone regardless of age thus hard to compare to the next state. I do know that the northern states are more expensive than the southern states as a general rule.

Sorry to not be clear, a $20/mo incremental increase to cover the $240 deductible or a wash with or without that coverage option at the time. It is slightly higher for entire plan…

Here you go…
BCBS = $274/mo in 2023
WellCare = $7.50/mo in 2023

For identical coverage, all supplement plans are pretty close in price so no real advantage to switching supplement providers if that can even be done easily here. BCBS is largest and most expensive by maybe $10/mo?

Our supplement includes all deductibles which only older people qualify for. As I mentioned, current plans are about $20/mo less for not covering the $240 deductible next year. My wife and I have never paid a medical bill on these “Medigap Basic Plans” with all riders and we both have cancer, etc.

Community pricing means that you pay the same monthly amount for the same coverage if you are 90 vs. 70. There are other benefits I suppose like free health club membership (most places in metro area) and some coverage for preventive items but those may be common.

There is also a N plan for <$200/mo and a F High Deductible plan for much less so a few ways to get supplement costs down. If you look at a Medicare cost map, the northern states are much higher than southern states and tend to have more of the special rules and regulation of Medcare plan.

In our case, there is something nice about not paying or fighting about medical claims after 40-50 years of private insurance hassles, if you can afford it…

Post Edited (Mumbo) : 12/5/2023 7:20:44 AM (GMT-8)

The state by state supplement comparisons are difficult to make as MN is in some top ten lists and many it is not. Wisconsin is cheaper as well as most of the surrounding states. MN was one of only a few states to vote for Michael Dukakis and the only state to not vote for Ronald Reagan so you might get a feeling for Minnesota government thinking here.

The minimum coverage of Medicare supplement plans is the same but states are free to augment plan requirements in many ways, generally to make the cost higher, not lower. I have little idea of what they have done in MN other than community rating but I have seen reference to diabetic equipment and supplies, routine cancer screening, reconstructive surgery, and immunizations that may be different. I am sure there is a detailed reason for why cost is high but it is the MN way of life unless you are poor.

I agree that Plan N is better for most people and a Plan F High Deductible could make a lot of sense also since it is really cheap if you have any savings to cover the deductible. I actually see all supplements dying off with current emphasis on Advantage Plans. The politics will be too easy and continue to push health cost liability on consumers for health care, just like before Medicare. The well off will always be able to get good coverage and/or not care about the expenses but for the average person, cost liability will continue to go up.

Like I said, I don’t know the particulars of the MN plans but the cost of medical 30 miles away in WI is the same as here since they have the same providers. MN must being doing something that causes rates to be higher for the 20%. Could be just the difficulty working here or could be some requirements they place on insurance companies that could be benefits or penalties.

I am hopeful things get better but the incentive to not get a supplement plan is large and they may just die off due to no demand. That will persuade congress if only 1000 people have those plans. Or national health care emerges, who knows.

TJ123 said...
It makes me wonder how many specialists (surgeons, radiologists or otherwise) who deal with disease that primarily impacts the older population decline the Medicare business and if it is a growing trend?

Interesting question. I live in SW Florida. Because of the demographics of this area (old), almost all docs here accept Medicare; you don't even need to check. When I lived in Northern Virginia, near a young demographic of the DC area, we had to actually check to make sure a doc took Medicare. So it may depend on where you live.

Jim

Jim,

In Florida you have about 56,000 docs and in 2023 694 or 1.1% opted out of Medicare. West Virginia is the least with 0.2% and Alaska the highest with 3.1%.

Docs can be in one of three categories; Participating, Non-participating and Opt Out. Participating are fully in and accept the Medicare reimbursement schedule and all the administrative requirements. Non-participating agree to see Medicare patients and get 95% of the usual reimbursement. Additionally, they can charge up to an additional 15% of the Medicare amount and can choose this on a case by case basis. The patient pays this additional amount. This group is less than 2% of the docs accepting Medicare.

Opt Out docs sign an Affadavit with CMS to opt out of Medicare entirely. They can treat Medicare patients but must enter into a contract for treatment with the patient. The patient must pay whatever is charged and neither the doc nor patient may file for a Medicare reimbursement. The initial Opt out period is two years and then is automatically renewed every two years unless the doc files with CMS to participate in Medicare. Again, just 1.1% of the more than one million docs in the US opt out of Medicare.

JNF. I've never discussed my surgeon's policy not to accept Medicare business with him. I assume he might have had some bad experiences somewhere along the line with Medicare and decided to not join up or to opt out. I have spoken to other physicians about their experiences with government reimbursed healthcare (ie. Medicaid) and those I've spoken to had many complaints. (ie. low reimbursements, delayed payments, those getting services for free or at low cost are the first to sue them if something goes wrong, etc...). Some seemed to be very legitimate concerns. I got the impression that so many people are on some sort of government subsidized program that many doctors feel compelled to accept them as patients to maintain financially solvent practices. In some of the larger states I've heard it can be as high as a third or more of their entire populations. That's a lot of people.

With regard to age range for RALP's. At the various forums that discuss Pca (other than HW), I've noted quite a few men over 65 and in the Medicare age group who opted for RALP's, as opposed to radiation treatments. The number could be larger than what you might assume. At the VA, I've been told that many of the RALP patients are over 65.

Since my surgeon was one of the best around, I'm sure he had lots of potential customers and was able to pick and choose who to accept as patients. Several very famous prominent men whose names you would probably recognize were his patients.

Thanks TJ. Regarding government reimbursed healthcare, many people are on various programs and all are different. about 65 million are on Medicare, about 90 million are on Medicaid, and about 18 million veterans, many of which may be able to use the VA system. While Medicare and VA are National plans, Medicaid is administered by the states so there are 50 different plans and can have significant variation.

As we see, 99% of docs take Medicare. However only 70% take Medicaid. Financially it is a drain for most to take Medicaid as the reimbursements are at least 30% less than Medicare reimbursement for the same service. And by contrast, Medicare reimbursement are about one-half of the reimbursement from commercial insurance like employer group insurance. So for a $100 procedure from group insurance, the doc would receive about $50 from Medicare and $30 from Medicaid. So huge differences financially. I have heard of some docs providing free care for Medicaid people as the reimbursement often doesn’t even cover the billing costs.

Even many large institutions limit Medicaid and some don’t take it at all. Mayo Clinic only accepts Minnesota Medicaid and Cleveland Clinic only accepts one plan in Ohio. Of course VA is limited to eligible veterans and has some means testing for eligibility.

And when you look at the docs that opt out of Medicare, most are in practices that aren’t for the geriatric crowd, like pediatricians, cosmetic surgeons, obstetricians, and about 40% of psychiatrists.