The Effect of Medicare on Hospitals & Providers

Medicare is a federally managed insurance plan provided under the Social Security Administration and is provided to many individuals that are retired or disabled.

Quality of Care

• The quality of care provided by hospitals and providers may decrease as a result of being encouraged to pursue less expensive treatment options, even if it is not the best option, in order to decrease the likelihood of having a claim rejected by Medicare.

Reimbursement Rates

• Many physicians choose not to accept Medicare or limit the amount of Medicare patients due to low reimbursement rates compared to private insurance companies.

Paperwork

• Excessive amounts of regulations and paperwork must be complied with and completed in order to ensure payment from Medicare for services and also to avoid repayments. This is a major deterrent for private practices, since the administrative cost to handle Medicare claims is not affordable for some providers.

Audits

• Medicare audits are common and attorney fees and other legal costs for defending against fraud claims is very expensive.

Staff

• Additional staff must be hired in order to help ensure compliance with Medicare regulations. Accountants, attorneys and additional billing staff are frequently required.