Medicare Part B 101 Manual: Introduction
Medicare Program for Part B Providers
Table of Contents
- Introduction
- Medicare Administrative Contractors
- Medicare Contracting Reform
- Providers Responsible for Knowing Guidelines
- Medicare Part A
- Medicare Part A Deductible and Coinsurance
- Medicare Part B Deductible and Coinsurance
- Benefits Covered Under Part B
- Beneficiary Medicare Card
Introduction
Title XVIII of the Social Security Act, commonly referred to as Medicare, is a voluntary hospital and medical insurance program funded by the federal government.
The 1972 Social Security Amendments also extended coverage to individuals under age 65 who require hemodialysis or renal transplantation and who are currently insured (or entitled to monthly Social Security benefits), and to the spouse and dependent children of such entitled individuals when they also have chronic renal disease.
Medicare eligibility is determined by the SSA. The people enrolled (referred to as beneficiaries) are issued an identification card showing their Medicare coverage (Part A, Part B, or both) and the effective date of coverage. The identification cards are normally sent to the beneficiary three months prior to the effective date of coverage.
The Part A portion of the Medicare Program deals with hospital care and Part B deals with medical care. Coverage for Medicare Part A and Part B does not have to have the same effective date.
National Government Services is responsible for the administration of the Medicare Part A (hospital insurance) contract for the states of Connecticut, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Wisconsin; home health and hospice contract for the states of Alaska, Arizona, California, Connecticut, Hawaii, Idaho, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the U.S. Territories of American Samoa, Guam, Northern Mariana Islands, Puerto Rico and U.S. Virgin Islands; FQHC contract in forty-four states, District of Columbia and five U.S. territories; Medicare Part B (medical insurance) contract for the states of Connecticut, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Wisconsin.
NGS is not responsible for:
- Beneficiary eligibility status
- Effective dates of coverage
- Issuance of Medicare Beneficiary Identifier cards (ID cards)
- Assignment of Medicare Beneficiary Identifier
Questions about the above items should be directed to a local SSA office.
Note: Medicare Part B services rendered to the UMWA, Railroad Retirees and Black Lung beneficiaries are not processed by NGS.
Medicare Administrative Contractors
Since Medicare’s inception in 1966, private health care insurers known as Part A FI and Part B carriers have processed medical claims for Medicare beneficiaries. Section 911 of the Medicare Prescription Drug Improvement, and MMA of 2003 mandated that the Secretary of Health & Human Services replace Part A FIs and Part B carriers MACs. Contracting reform was intended to improve Medicare’s administrative services to beneficiaries and health care providers through the use of new contracting tools including competition and performance incentives.
Today, CMS selects MACs in accordance with the Federal Acquisition Regulation. As required under the MMA, CMS established MACs as multi-state, regional contractors responsible for administering both Medicare Part A and Medicare Part B claims. The transition from the Part A FIs and Part B carriers to MACs began in 2006, and the last FI and carrier contracts ended in September 2013.
CMS relies on a network of MACs to process Medicare claims and MACs serve as the primary operational contact between the Medicare Fee-for-Service program, and approximately 1.1 million health care providers enrolled in the program. MACs enroll health care providers in the Medicare Program and educate providers on Medicare billing requirements, in addition to answering provider and beneficiary inquiries.
Collectively, every year, the MACs process an estimated 12 billing Medicare fee-for-service claims, compromised of approximately 210 million Part A claims, 1 million Part B claims and have paid out approximately $367 billion in Medicare FFS benefits.
With the application of performance-based evaluation criteria in the selection of MACs, Medicare claims administration costs have decreased. In recent years, MACs have proposed innovative and cost-effective solutions to Medicare claims processing business operations. Through the implementation of Medicare Contracting Reform mandated under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, CMS has established a premier health plan that allows for comprehensive, quality care and world-class beneficiary and provider service.
Medicare Contracting Reform
MMA Section 911 required CMS to implement Medicare Contracting Reform by October 2011. Medicare Contracting Reform was expected to bring standard contracting principles to Medicare, such as competition and performance incentives that the government has long applied to other federal programs under the FAR.
CMS replaced claims payment contractors (FIs and carriers) with new contract entities called MACs. CMS believes implementation of the MACs will mean better service to providers and beneficiaries.
CMS has awarded twelve A/B MAC contracts. A/B MACs process Medicare Part A and Medicare Part B claims for a defined geographical area or “jurisdiction”, servicing institutional providers, physicians, practitioners, and suppliers.
In addition to their Medicare Part A and Part B claim responsibilities, there are four A/B MACs that process home health and hospice claims. These four areas do not coincide with the jurisdictional areas covered by these four A/B MACs.
There are also four designated geographical jurisdictions for DME MACs that process Medicare DMEPOS claims.
Providers Responsible for Knowing Guidelines
A provider is responsible to know the rules and regulations that apply to all services billed to the Medicare Program. According to the CMS IOM Publication 100-02, Medicare Benefit Policy Manual, “In general, the physician should have known a policy or rule if:
- The policy or rule is in the federal regulations,
- NGS provided general notice to the Medicare community concerning the policy or rule, or
- NGS gave written notice of a policy or rule to a particular physician.
The provider is responsible to know the rules and regulations that are made available through publications from the MAC which include, but are not limited to, the Medicare Monthly Review (MMR), information published on the NGS Medicare Part B website, mailings sent periodically to all or individual providers and information relayed through Email Updates.
The NGS MMR is available electronically on our website. The MMR provides the most current changes to the Medicare regulations and policies.
Medicare Part A
Medicare Part A is hospital insurance only. Services reimbursed under Part A are:
- Inpatient room and board
- SNF room and board
- HHA services
- Hospice care
If a patient is admitted to a hospital, Medicare provides coverage for a semi-private room, meals, regular nursing services, operating and recovery room costs, intensive care, drugs, laboratory tests, X-rays and other medically necessary services and supplies.
Covered services in a SNF include a semi-private room, meals, regular nursing services, rehabilitation services, drugs, medical supplies and appliances.
Medicare Part A is partially financed by the Social Security payroll tax (FICA) and is premium-free when certain qualifications are met. If a beneficiary does not meet the qualifications for premium-free Part A benefits, the coverage may be purchased at a monthly premium which may change each year.
Medicare Part A Deductible and Coinsurance
Part A Hospital Inpatient Deductible and Coinsurance
Beneficiary or private insurance will pay:
- $1,632 (2024) deductible for each benefit period ($1,600 in 2023)
- Days 1–60: $0 (2024) copayment for each benefit period ($0 in 2023)
- Days 61–90: $408 (2024) copayment per day of each benefit period ($400 in 2023)
- Days 91 and beyond: $816 (2024) copayment ($800 in 2023) per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs
SNF Stay
- Days 1–20: $0 for each benefit period
- Days 21–100: $204 (2024) copayment per day of each benefit period ($200 in 2023)
- Days 101 and beyond: all costs
Home Health Care
- $0 for home health care services
- 20% of the Medicare-approved amount for durable medical equipment
Hospice Care
- $0 for hospice care
- You may need to pay a copayment of no more than $5 for each prescription drug and other similar products for pain relief and symptom control while you're at home. In the rare case your drug isn’t covered by the hospice benefit, your hospice provider should contact your Medicare drug plan to see if it's covered under Part D
- You may need to pay 5% of the Medicare-approved amount for inpatient respite care
- Medicare doesn't cover room and board when you get hospice care in your home or another facility where you live (like a nursing home)
Medicare Part A Benefit Period
Medicare hospital and SNF benefits are paid on the basis of benefit periods. A benefit period is a way of measuring a beneficiary’s use of services under Medicare Part A. A benefit period begins the first day a beneficiary receives inpatient hospital care. It ends when a beneficiary has been out of a hospital or other facility that provides skilled nursing or rehabilitation services for 60 consecutive days. It also ends if the beneficiary remains in a facility (other than a hospital) that primarily provides skilled nursing or rehabilitation services but does not receive any skilled care for 60 consecutive days.
If a beneficiary enters a hospital again after 60 days, a new benefit period begins, as well as a new deductible. During each new benefit period, Part A hospital and SNF benefits are renewed except for any lifetime reserve days or psychiatric hospital benefits used.
There is no limit to the number of benefit periods a beneficiary can have for hospital or SNF care.
Hospice Benefits
When a Medicare beneficiary chooses hospice care, he or she gives up the right to standard Medicare benefits only for treatment of the terminal illness. If the patient, who must have Part A in order to use the Medicare hospice benefit, also has Medicare Part B, he or she can use all appropriate Medicare Part A and Part B benefits for the treatment of health problems unrelated to the terminal illness. When standard benefits are used, the patient is responsible for Medicare’s deductible and coinsurance amounts.
Special benefit periods apply to hospice care. Effective 8/5/1997, the hospice benefit period has two 90-day benefit periods, followed by an unlimited number of 60-day periods.
The benefit periods may be used consecutively or at intervals. Regardless of whether they are used one right after the other or at different times, the patient must be certified as terminally ill at the beginning of each period.
A patient has the right to cancel hospice care at any time by signing a written statement called a revocation statement. The form can be obtained from the hospice. Canceling hospice care will return the patient to standard Medicare coverage. If the patient wishes, he or she can re-elect the hospice benefit. If a patient cancels during one of the benefit periods, any days left in that period are lost. For example, if a patient cancels at the end of 60 days in the first 90-day period, the remaining 30 days are forfeited. The patient is, however, still eligible for the second 90-day period, and the 60-day periods. There is no limit to the number of 60-day periods as long as the patient meets the requirements for the hospice benefit.
Besides having the right to discontinue hospice care at any time, patients also may change hospice programs (providers) once each benefit period.
How Does Hospice Care Work?
Medicare coverage for hospice care is available only if:
- The patient is eligible for Medicare Part A;
- The patient’s doctor and the hospice medical director certify that the patient is terminally ill with a life expectance of six months or less;
- The patient signs a statement choosing hospice care instead of standard Medicare benefits for the terminal illness; and
- The patient receives care from a Medicare-approved hospice program.
The focus is on care, not cure. Emphasis is on helping the person make the most of each remaining day of their life by providing comfort and relief from pain.
How Is Care Provided?
A hospice uses a team of people to deliver care. The team usually consists of family, nurse, physician, social worker, dietitian and clergy, all working together to plan and coordinate care. Speech pathologists, physical therapists, occupational therapists and other trained caregivers are available as needed.
While a family member or other caregiver attends to the patient on a daily basis, members of the team make regular home visits. In addition, a nurse and physician are on call 24 hours a day, seven days a week to provide advice over the telephone and to make visits whenever necessary.
What Is Not Covered?
All services required for treatment of the terminal illness must be provided by or through the hospice. When a Medicare beneficiary chooses hospice care, Medicare will not pay for:
- treatment for the terminal illness which is not for symptom management and pain control;
- care provided by another hospice that was not arranged by the patient’s hospice; and
- care from or by another provider which care the hospice is required to furnish.
Professional services of an attending physician that are reasonable and necessary for the treatment and management of a hospice patient’s terminal illness are not considered as hospice service.
Services may be billed to Medicare Part B by the attending physician, provided they are not furnished by the physician under a payment arrangement with the hospice.
Effective for dates of service on or after 4/1/2002, the following guidelines must be adhered to when submitting a Part B Medicare claim:
- The attestation statement “Attending physician not employed or paid under agreement by the patient’s hospice provider” (stated in Item 19 or the electronic field equivalent) has been replaced by the GV modifier.
- The GW modifier should be used when billing for services not related to a hospice patient’s terminal illness. This modifier is attached to the service performed.
- When another physician covers for the designated attending physician under the reciprocal or fee-for-time compensation arrangements billing instructions. In such instances, the attending physician bills using the GV modifier in conjunction with either Q5 or Q6 modifier.
Medicare Part B Deductible and Coinsurance
Beneficiary Responsibility:
- $240 per year (2024). After your deductible is met, you typically pay 20 percent of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy and DME. ($226 for 2023)
Medicare Part B is medical insurance coverage. It is optional and is offered to all Part A beneficiaries when they become entitled to Part A. Beneficiaries may elect not to participate in Part B when they become eligible for Part A; however, these individuals are still considered “Medicare eligible,” meaning eligible for coverage by the program. Most individuals do elect to enroll in Part B at the same time as Part A.
The federal government pays 75 percent of the program costs; the additional 25 percent is financed through monthly premiums paid by the beneficiary. The premium is usually deducted from the beneficiary’s social security check (enrollee’s choice). The Part B monthly premium is influenced by the beneficiary’s income and can range from $174.70 to $594.00 per month in 2024.
To enroll in Medicare Part B, the individual must file an application with the SSA during the initial enrollment period. This is a seven-month period that starts three months prior to the month the beneficiary first meets the Medicare requirements. If the beneficiary does not sign up for Medicare during the first three months of the initial enrollment period, there will be a delay in starting the Part B coverage (one to three months delay after enrollment).
If the individual does not enroll for Medicare Part B at any time during the initial enrollment period, he or she cannot enroll until the next general enrollment period. A general enrollment period is held each year from January 1‒March 31. Coverage begins the following July 1.
Premiums for both Part A and Part B are generally higher if a beneficiary waits to enroll during a general enrollment period. The Part B premium goes up ten percent for each 12 months after the beneficiary was first eligible. This is not the case for all individuals. People who continue to work after attaining age 65 and who are covered under an employer group health plan do not have to enroll in Medicare Part B. When they retire or are no longer covered under a group health plan, there is a special enrollment period. Their Part B premium would be the basic premium in effect at the time they enroll.
Covered Services
Medicare Part B covers services performed by enrolled physicians and other practitioners. See Medicare Provider Specialties for specialty codes and descriptions.
What Services Are Not Covered Under Medicare Part B?
The following services are statutorily excluded from Medicare Part B coverage:
- Custodial care
- Routine eye exams and eyeglasses
- Routine hearing exams and hearing aids
- Routine dental care
- Cosmetic surgery (unless due to accidental injury or to improve functions of a malformed part of the body)
- Immunizations (except for pneumococcal pneumonia, influenza virus, COVID-19 and hepatitis B for certain at-risk beneficiaries)
- Chiropractic care except for manual manipulation of the spine to correct subluxation demonstrated by X-ray or physical examination
- Orthopedic shoes or other supportive devices for the feet, and routine foot care (with certain exceptions)
This is not an all-inclusive list. See MLN® Booklet: Items & Services Not Covered under Medicare for more information.
Exclusions from Coverage
Medicare will exclude from coverage under both Part A and Part B the following:
- Unreasonable and unnecessary services
- Services paid for directly or indirectly by federal, state or local governments
- Services provided by the Veterans Administration
- Services provided by the military Medicare Program
- Services rendered outside the United States
- Services rendered as a result of war or an act of war
- Services unrelated to treatment of illness, injury or the functioning of a malformed body part, e.g., personal comfort items
- Services rendered by relatives or immediate members of a patient’s household
- Services covered under state no-fault automobile insurance, employee group plans or Workers’ Compensation
- Services rendered by any provider found guilty of abusing the Medicare Program
Benefits Covered Under Part B
Medical Expenses
Medically necessary doctor’s services, inpatient and outpatient approved medical and surgical services and speech therapy, diagnostic tests, durable medical equipment, and other services. Medicare pays 80 percent of approved amount after the annual deductible.
Clinical Laboratory Services
Medicare covers 100 percent of allowed services.
Home Health Care
- Medicare covers 100 percent of allowed services
- Medicare covers 80 percent for allowed DME
Other Medical Services
Medicare covers 80 percent for allowed services for the diagnosis or treatment of illness or injury.
After the deductible is met each year, beneficiaries, typically pay 20 percent of the Medicare approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and DME.
Beneficiary Medicare Card
Medicare Beneficiary Identifier (MBI)
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) required CMS to remove SSNs from all Medicare cards. CMS replaced the SSN-based HICN with a new, randomly generated MBI. This step was taken to protect people with Medicare from fraudulent use of SSNs, which can lead to identity theft and illegal use of Medicare benefits.
The MBI format is 11 characters long, containing numbers and uppercase letters, and is unique to each person with Medicare. The MBI’s characters are “nonintelligent” so they don’t have any hidden or special meaning. The MBI uses numbers 0-9 and all uppercase letters except for S, L, O, I, B and Z. These letters have been avoided to reduce confusion when differentiating some letters and numbers (for example, between “O” and “0.” Review Understanding the Medicare Beneficiary Identifier (MBI) Format for complete instructions.
Here’s an example: 1EG4-TE5-MK73
- Characters 2, 5, 8 and 9 will always be a letter
- Characters 1, 4, 7, 10 and 11 will always be a number
- Characters 3 and 6 will be a letter or a number
The MBI hyphens on the card are for illustration purposes: do not include the hyphens or spaces on transactions.
How to Obtain the MBI
Here are three ways you and your office staff can get MBIs:
- Ask your Medicare patients for their new Medicare card when they come for care
- If they’ve received a new card, but don’t have it with them at the time of service, remind them they can use Medicare.gov to get their new Medicare number
- Use the MAC secure MBI look-up tool
- MBI’s were returned on the Remittance Advice for claims submitted with a valid HICN from October 2018 through December 2019
As part of your normal process to verify your patient’s insurance coverage. Medicare Advantage and Prescription Drug plans will continue to assign and use their own identifiers on their health insurance cards. Ask your Medicare patients for their new card at the point of service. New cards will not be issued if they do not have a valid address. Encourage your Medicare patients to correct their address in Medicare’s records by calling Social Security or going online to their My Social Security online account.
Revised 10/14/2024