How are Medicare Reimbursement Rates Calculated?


Posted January 25, 2023 by cmspicer

You can amend your Medicare status and consequently the Medicare Reimbursement Rates by informing your contractor of your contractual status for the upcoming calendar year, but only up until November of the previous year.

 
The national average charge of Medicare Reimbursement Rates is calculated by multiplying the final relative value unit (RVU) for each code, which is determined by the Centers for Medicare and Medicaid Services (CMS), by the annual conversion factor (a monetary value). Based on the location of the provider, rates are modified according to geographic indices. Other payers may use a greater or lower conversion factor when using these comparable values than Medicare.

How to calculate medicare part B fees:-

When estimating the overall payment they will receive for Medicare Part B services, providers must take into consideration a variety of factors.
● Standard 20% Co-Pay, Non-Participating Status, and Limiting Charge
● Rates for Facilities & Other Locations
● Adaptations for geography
● Reduced Payments for Several Procedures (MPPR)

The patient is responsible for a 20% co-payment for all Part B services. The co-payment amount is not withheld by MPFS. Medicare's real payment is thus 20% less than what is indicated in the fee schedule. The beneficiary's 20% co-payment must be collected using "reasonable" efforts, according to the law.

What are the facility and non-facility rates?

The MPFS comprises charges for both facilities and non-facilities. Because the practitioner is responsible for covering overhead and equipment costs when services are provided in their own offices, the Medicare charge (also known as the non-facility rate) is typically higher. Because a facility has overhead and equipment expenditures, audiologists are paid less when services are provided there. The MPFS does not pay hospital outpatient departments, so skilled nursing institutions are the most frequent appropriate environment where facility rates concerning audiology services would apply.

A provision in the Medicare Act allows therapy services, such as speech-language pathology treatments, to be provided at non-facility rates in all settings (including facilities). This is because these services are eligible for non-facility rates regardless of the setting. The facility fee for audiology services applied to all institutional settings, CMS stated in response to ASHA's request for clarity on the subject from the CMS.
By notifying your contractor of your contractual status for the upcoming calendar year, you can update your Medicare status and subsequently the Medicare Reimbursement Rates, but only up until November of the year prior.

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Last Updated January 25, 2023