Medicare Billing Basics: A Provider's Complete Guide
Medicare billing has its own rules, forms, codes, and compliance requirements. This comprehensive guide covers everything providers need to bill Medicare correctly and get paid.
Medicare Parts A, B, C, and D: What Each Covers
| Part | Coverage | Who Bills? |
|---|---|---|
| Part A | Inpatient hospital, skilled nursing facility, hospice, home health | Institutional providers |
| Part B | Outpatient physician services, preventive care, DME, labs | Physicians, outpatient facilities, labs |
| Part C (Medicare Advantage) | All Part A + B benefits via private insurer | Bill the MA plan, not traditional Medicare |
| Part D | Prescription drugs | Pharmacies |
Claim Forms: CMS-1500 vs UB-04
- CMS-1500 (Professional): Used by physicians and non-institutional providers. Filed electronically as an 837P transaction.
- UB-04 (Institutional): Used by hospitals, SNFs, and outpatient hospital departments. Filed electronically as an 837I transaction.
Medicare Enrollment: Participating vs Non-Participating
| Status | Reimbursement | Can Balance Bill? |
|---|---|---|
| Participating (PAR) | 100% of Medicare fee schedule | No — must accept assignment |
| Non-Participating (Non-PAR) | 95% of Medicare fee schedule | Yes — up to 115% of fee schedule |
| Opt-Out Provider | No Medicare reimbursement | Yes — private contract required |
Key Medicare Billing Rules
Timely Filing
Medicare requires claims to be filed within 1 calendar year (12 months) of the date of service. There are limited exceptions for retroactive eligibility and administrative errors.
Assignment
Participating providers must accept assignment on all Medicare claims, meaning they accept the Medicare-allowed amount as payment in full (minus deductible and coinsurance).
Advance Beneficiary Notice (ABN)
When you believe Medicare may not cover a service, you must give the beneficiary an ABN BEFORE the service. Without an ABN, if Medicare denies the service, you must write it off.
NCCI Edits
The National Correct Coding Initiative (NCCI) defines procedure code pairs that cannot be billed together without an appropriate modifier. NCCI edits apply to all Medicare Part B claims.
Medicare-Specific Denial Codes to Know
- CO-4 — Modifier inconsistency (common with Medicare due to strict NCCI rules)
- CO-16 + N codes — Missing information; review accompanying RARC codes
- CO-29 — Timely filing expired (Medicare's 12-month window)
- CO-50 — Medical necessity denial; ABN considerations apply
- MA01 — Medicare appeal rights notice; appeal within 120 days
Key Takeaway
Medicare billing compliance is not optional. Every staff member who touches a Medicare claim should understand assignment, ABN requirements, timely filing, and NCCI edits. Investing in ongoing training is far less expensive than a Medicare audit.
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