Society of Certified Senior Advisors: How to Reduce Your Medicare Bills

Seniors with original Medicare need to ask two questions before receiving healthcare that could save them a lot of money.

Eight in 10 Americans are more worried about running out of money than dying, according to a recent study. Yet many older adults aren’t aware of two Medicare provisions that could have a big impact on how much they pay for healthcare.

New Out-of-Network Bill Protection

In January, patients with individual or employer-sponsored health plans using an in-network emergency facility finally got federal protection from out-of-network billing. The No Surprises Act prevents out-of-network providers from billing patients for ancillary care, including care provided by an anesthesiologist or assistant surgeon. It also prevents surprise billing for air ambulance services, although ground ambulance service is exempt.

“This new law will make sure that you won't get a bill that looks any different than the one you would have gotten if you were using an in-network provider,” says Jack Hoadley, research professor emeritus at Georgetown University’s McCourt School of Public Policy.

Now, even people who get routine care at in-network facilities cannot be billed out-of-network rates by providers who were involved in their care without their knowledge. For example, someone at an ambulatory surgical center cannot be billed more than the in-network rate by someone who put them to sleep or read their X-rays. If you suspect you are being billed incorrectly, read this article or call the No Surprises Helpdesk at 800-985-3059.

Paying Off Medical Debt

Hospital costs can add up in spite of our best efforts. If you get hit with a big bill, there are steps you can take to minimize the impact. First, check to make sure all the charges are accurate. Second, try to negotiate the bill with the hospital. See this article for more tips on reducing medical debt.

New Law Bars Medical Debt on Credit Score

Changes are coming that will soon lessen the impact of medical debt on credit scores. Two-thirds of such debts are the result of a one-time or short-term acute medical need. Together, the changes will wipe out more than $60 billion of medical collection debt from existing reports at Equifax, Experian and TransUnion, the three major credit reporting agencies.

As of July 1, 2022, all medical debt that has been paid will not be included in credit reports.
People will have 12 months, increased from six, to settle their medical bills before the unpaid debt will show up on credit reports.
As of the first half of 2023, medical collection debt less than $500 will not appear on credit reports.

Medicare Assignment

Once you have opted for original Medicare, you may think that all doctors who accept it are created equal as far as how much you will pay for their services. After all, only 3% of doctors don’t take Medicare at all. But you’d be mistaken. There are doctors who accept Medicare, and then there are doctors who accept Medicare assignment. What’s the difference?

A doctor who accepts Medicare assignment has agreed to take the government-approved amount as payment for covered services provided to his or her Medicare patients. This doctor sends the bill to Medicare, which then pays 80% of the cost that it has determined is appropriate. The patient is responsible for paying the remaining 20% or the patient’s Medicare supplement will cover the 20%.

A doctor who does not accept Medicare assignment but still accepts Medicare can charge the patient up to an additional 15% over the Medicare-approved amount for services provided. The patient owes the additional charge.

The lowdown: Ask every doctor if he or she accepts Medicare assignment, and only go to those who do for the lowest cost.

Outpatient (Under Observation) vs. Inpatient (Admitted)

You may be surprised to learn that you can spend the night in the hospital and yet be considered an outpatient. Of course it is not that simple. The types of procedures and tests you undergo can overlap between inpatient and outpatient status.

Outpatient status applies when you’re getting tests and services (even for urgent care) and the doctor has not written an order to admit you to the hospital. If you are “under observation” then you are an outpatient.

Inpatient status starts when your doctor writes a formal order to admit you to the hospital.

Why should you care which status you are? Money.

As an inpatient, you are covered under Medicare Part A, where you pay a deductible of $1,556 in 2022 for the first 60 days of covered care.

As an outpatient, you are covered under Medicare Part B, where you will pay your annual deductible (if you haven’t already) plus a copayment or coinsurance for every covered service and 20% coinsurance for doctor services.

The difference can be substantial, especially if you go on to enter a skilled nursing facility (which includes rehab) within 30 days of discharge. If you have had a “qualifying stay” of at least three consecutive midnights, then Medicare will cover the cost. Your time as an outpatient, even if you were in the same hospital for the same problem, does not count. If you did not have a qualifying stay, nursing facility daily coinsurance through Medicare runs $194.50 per day in 2022.

The lowdown: Ask your doctor to which status you are assigned and consider how that will affect costs. Your doctor must formally request inpatient status. Head to medicare.gov for more information on how cost is affected between inpatient and outpatient status.