It's scary enough to go through a major health scare but the billing and claims side can be downright terrifying even if you have Medicare and a Medicare supplement. There can be many pages of detail with codes and descriptions that are foreign to most of us. Let's take a look at how Medicare supplement claims are processed in conjunction with Medicare itself so that we go into the paperwork tornado with a safety rope.
First, it's important to understand how Medicare itself deals with providers and secondly, how Medigap supplements coordinate with Medicare itself. The first point depends on the status of the particular provider (doctor or hospital) in question. If the provider participates with Medicare, the claims process can be pretty smooth and coordinated. The term for this is that a provider accepts "assignment" which essentially means that the provider is in Medicare's network. This has two major impacts. First, it affects the rates that the provider will charge for a given diagnostic code since accepting assignment also means accepting Medicare's schedule of reimbursements (or up to 15% higher if a provider chooses). The other big impact is on the claims side. The claims process is generally automated for providers that accept assignment or "Medicare providers". Let's see how this works since most providers do accept Medicare.
When you use medical services at these providers, you generally do not have to pay up front although more and more providers are requiring a Medicare member's potential cost sharing up front depending on the plan. If you have an F Medigap plan which has very little out of pocket for covered benefits, this probably is not the case. The provider will submit the claim directly to Medicare and is generally tied into their system. If the member has a Medicare supplement attached, Medicare will forward the processed claim to the Medigap carrier to process accordingly (based on deductible, copays, and co-insurance for a given Medigap plan).
The carrier will then look to Medicare to determine eligibility. This is a very important concept to understand. Many people think that Medigap plans will offer "additional" benefits to traditional Medicare, meaning, it will pay for things that Medicare will not pay for. We have to be careful here. For a given medical procedure, if Medicare deems that it is not covered, the Medicare supplement plan will also not pay. The supplement looks to Medicare to determine what is eligible and then pays accordingly. Medicare will pay part of a covered benefit and the supplement will pay all or part of the remaining claim. You will then get an Explanation of Benefits or an EOB showing what the total amount was, what Medicare and supplement paid, and your responsibility if any for that particular claim. This is fairly straight-forward and simple (as far as medical claims go). What if your provider does not accept Medicare assignment or if your provider billed you first?
Keep in mind that if a provider does not participate in Medicare's network or accepts assignment, a claims form may need to be submitted. If you paid up front, Medicare typically would reimburse you accordingly. A non-assignment provider might request the excess amount up front (up to 15% higher than what Medicare allows). These providers may file a claim on your behalf to Medicare in these situations. Ideally, use providers that accept assignment as the claims processing is extremely streamlined and your out-of-pocket expenses should be much lower depending on the Medigap plan that you have. Some Medicare supplement plans such as the F plan, cover excess and this is a big reason to consider the F plan.