Assume the patient has already met his or her deductible and that the physician is a Medicare participating (PAR) provider. The physician’s standard fee for the services provider is $120.00. Medicare’s PAR fee is $60.00. How much reimbursement will the physician receive from Medicare?

For a Medicare participating (PAR) provider, reimbursement is based on the Medicare-approved amount, not the provider's standard fee. The provider agrees to accept this amount as payment in full. After the annual deductible is met, Medicare Part B generally pays 80% of the approved amount for covered services. The remaining 20% is the patient's coinsurance responsibility. In this scenario, the Medicare-approved amount is $60.00. Therefore, Medicare's reimbursement to the physician is calculated as 80% of $60.00, which equals $48.00.

A. $120.00: This is the physician's standard charge. A PAR provider cannot bill for this amount and must accept the lower Medicare-approved fee.
B. $60.00: This is the total Medicare-approved amount, which is the sum of Medicare's payment (80%) and the patient's coinsurance (20%).
D. $96.00: This figure is 80% of the physician's standard fee ($120.00), which is an incorrect basis for calculating Medicare's payment.

1. American Health Information Management Association (AHIMA). (2020). Health Information Management: Concepts, Principles, and Practice (6th ed.). In Chapter 10, "Healthcare Reimbursement," the text explains that under the Medicare Physician Fee Schedule (MPFS), participating physicians are paid 80 percent of the MPFS amount, with the beneficiary responsible for the remaining 20 percent coinsurance after the deductible has been met.

2. Centers for Medicare & Medicaid Services (CMS). (2023). Medicare & You 2024. U.S. Department of Health & Human Services. On page 50, under the "Part B Coinsurance" section, it states, "You pay 20% of the Medicare-approved amount for most doctor services... This is called 'coinsurance.'" This confirms the 80/20 payment split after the deductible.

3. Sayles, N. B., & Trawick, M. A. (2021). Health Information Management Technology: An Applied Approach (6th ed.). American Health Information Management Association (AHIMA). Chapter 16, "Healthcare Reimbursement Methodologies," details that participating providers (PAR) accept assignment, meaning they accept the Medicare-approved amount as full payment. The payment structure is consistently described as an 80/20 split between Medicare and the beneficiary for most Part B services.