Medicare reimbursement rates are the rates paid to medical professionals for performing a certain procedure. For example, those who go to the doctor for a regular checkup, and are on Medicare, will be covered for a certain amount under the policy. That is the payment the healthcare provider can expect. While the system is relatively straightforward and simple, there is also some controversy associated with reimbursement rates, and some medical professionals feel that the rates fail to meet their expenses.
All healthcare professionals have the opportunity to decide whether or not they want to participate in the Medicare program. Even those who do not officially list themselves as Medicare providers may be able to see patients and submit claims for them. If this happens, the amount of reimbursement that professional receives will be somewhat less than those a participating doctor receives. Therefore, those who decide to opt out of the system normally will not see Medicare patients at all.
In the past, the Medicare reimbursement rate was dependent on a complex formula that included the cost of living in the local area. A healthcare professional in a rural state with a lower cost of living and, it is assumed, lower expenditures, would not be paid the same amount as one in a metropolitan area, even if the family practice was similar. That led to many rural professionals protesting the reimbursement, saying that no matter where they lived, they still had significant expenses, including student loans, that were on par with their big city counterparts. Further, the U.S. government realized its policy was discouraging professionals from setting up practices in under-served areas. As a result, there is now a more uniform payment distribution.
Other things may affect the rates as well. The amount a hospital gets will generally be more than a doctor's office. This is because the expenses of a hospital to perform the same procedure are generally greater than for a doctor in private practice with the same capability.
Those healthcare providers who will accept Medicare patients have no choice but to accept Medicare reimbursement for any procedure they offer. They cannot pick and choose. Further, they cannot charge the patient additional co-pays to make up for what a private insurance carrier might be willing to pay for the same procedure. While these may be considered disadvantages, the benefit comes in having access to a greater number of patients. Many of these patients will require increasing numbers of visits to the medical professional as they age, thus providing a steady stream of income.