Health Insurance Calculations Regarding Medicare

Medicare is a government health insurance program available to anybody aged 65 and older. A group of disabled individuals in their 20s and 30s. End-of-life, renal illness patients submit Charges and Charges That Are Eligible: Submitted Charges refer to the amount that the provider typically charges for the service and submits to the insurance company. Amount Covered: As indicated in your insurance contract, this is the maximum amount for payment that the insurance company will consider.

When it comes to reimbursement, the CMS says that, on average, Medicare covers around 80% of all payments. Health care professionals are not all paid the same. After paying your deductible, you are responsible for a portion of the cost of a covered health care service. In this example, your health insurance plan pays $100 for an office visit, and your coinsurance is 20%. As long as you’ve already paid your $100 deductible, you’ll be on the hook for just $20 of the remaining $100.

The gap between the actual price and the allowable charge is the highest amount that a network provider can charge a client who has a health care plan that utilizes the network. However, different insurance carriers may define some terms differently.

1. Submitted charge $75
2. Medicare allowed amount (MPFS) $60
3. Nurse practitioner allowed amount (100% of MPFS)

   1. 2 x 100%= $2
4. Medicare payment (80 percent of the allowed amount)

   1. 2 x 80%= $1.6
5. Coinsurance amount (20% allowed amount)

   1. 2 x 20%= $0.4
6. Provider write-off

Submitted charge – Medicare allowed amount (MPFS)

$75 – $60= $15

1. Submitted charge $75
2. Medicare allowed amount (MPFS) $60
3. Nurse practitioner allowed amount

   1. 2 x 85%= $1.7
4. Medicare payment (80% of the allowed amount)

   1. 2 x 80%= $1.6
5. Coinsurance amount

   1. Nurse practitioner allowed amount – Medicare payment
   2. $1.7- $1.6= $0.1
6. Provider write-off

   1. Submitted charge – Nurse practitioner allowed amount
   2. $75 – $1.7= $73.3