Traditional Medicare Physician Balance Billing and Private Contracting

Background

About 95 percent of physicians and other clinicians across the country who take MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). (and about 99 percent of physicians do) are MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). participating providers, which means that they agree to accept MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). ’s payment rate as full payment for all the services they provide to MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). beneficiaries. This practice is known as accepting assignment.

The other 5 percent nonparticipating providers are allowed to “balance-bill” MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). patients—that is, to bill them up to 15 percent more than the amount MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). pays non-participating providers. By law, the amount physicians and other clinicians can balance-bill cannot be more than 15 percent of MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). ’s payment amount for nonparticipating providers (which is 95 percent of the payment amount for participating providers). The MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). beneficiary is responsible for paying the balance-bill amount, in addition to any deductibleThe amount that individuals must pay for services covered under an insurance plan before the insurer pays benefits. Not all out-of-pocket spending counts toward the deductible. and standard coinsuranceA form of health care cost sharing in which a percentage of covered expenses must be paid by the insured. In contrast, a copayment is a specific dollar amount that must be paid for a specific service. amounts that apply. MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). does not restrict billing for non- MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). -covered services, such as cosmetic surgery.

The Centers for MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). & MedicaidA joint federal/state program that provides health care and LTSS. However, to qualify for Medicaid LTSS, people must have extremely low assets and income, or they have to “spend down” most of their assets. Services has the authority to sanction any physician who knowingly, willfully, and repeatedly charges in excess of the balance-billing limits.

For MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). -covered services, physicians and other practitioners are not permitted to bill beneficiaries more than the allowed amounts described above unless they completely opt out of MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). and have private contracts with MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). beneficiaries. Less than 1 percent of doctors do so. Physicians who opt out forgo all payment from MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). for at least two years. Under a private contract, the beneficiary agrees to pay all of the physician’s charges for contract services. Physicians who enter into private contracts must do so for all MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). beneficiaries they treat and for all covered services; they may not pick and choose the patients or services for which they will bill MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). . When these physicians refer beneficiaries for outside services, such as lab tests, specialists, or hospital stays, MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). pays for these services. These restrictions reduce the chance of fraudulent billing and prevent doctors from choosing patients based on the severity of their illness.

TRADITIONAL PHYSICIAN BALANCE BILLING AND PRIVATE CONTRACTING: Policy

TRADITIONAL PHYSICIAN BALANCE BILLING AND PRIVATE CONTRACTING: Policy

Balance billing

The Centers for MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). & MedicaidA joint federal/state program that provides health care and LTSS. However, to qualify for Medicaid LTSS, people must have extremely low assets and income, or they have to “spend down” most of their assets. Services should closely monitor and vigorously enforce balance-billing limits.

Private contracting

Congress should not expand private contracting for physician services.

Physicians who privately contract with beneficiaries for MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). -covered services should continue to provide patients with complete information on:

  • the physician’s status as a provider who does not accept MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). payment;
  • the lack of MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). coverage for services provided under the contract, the availability of MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). payment if the services were provided by a physician who accepts MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). payment;
  • the lack of balance-billing limits on charges for those services; and
  • the cost of the service, the non-applicability of supplemental coverage for contracted services.