What is Medicare Part B?
In general, your Medicare insurance is divided into three parts; Part A, Part B and Part D. The simplest descriptions of Medicare refer to Part A as inpatient hospital coverage and Medicare Part B as outpatient coverage. While technically correct, the details are where many Medicare beneficiaries get caught misunderstanding their coverage, resulting in surprise billings that could have been avoided. Our recent article on Part A covered what to look out for and expect from that portion of coverage. We hope to do the same with Medicare Part B in this article so that our readers are forewarned and forearmed.
To understand Medicare it may be best to first look at the contracts between healthcare providers and the Center for Medicare and Medicaid Services (CMS) which is that portion of the Department of Health and Human Services (HHS) that manages Medicare.
All insurance organisations have negotiated rates for medical services. Medicare has negotiated medical services down to between 15% and 18% of non-negotiated prices. That means that if there were a medical procedure that would cost $1,000 before negotiation, the Medicare-participating doctor has agreed to accept Medicare’s rate of between $150 and $180 for that service. More on this later in our next article on the difference between Participating and Nonparticipating providers.
Medicare Part B covers outpatient services, doctor services, lab work, home health care and Wellness care. In everything it covers, Part B will either pay 80% or 100% of the approved negotiated rate after the annual deductible is paid. The exception to this is Wellness service which is covered 100% and does not require the deductible to be paid.