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11.3 Part B, Medical Insurance (Physicians, Surgeons, and Outpatient)

Medicare Part B is an optional form of coverage offered to individuals when they become eligible for Part A. Enrollment in Part B requires payment of a monthly premium. After the annual deductible is satisfied, Part B generally pays 80% of covered expenses, while the insured is responsible for the remaining 20% coinsurance. There is no maximum out-of-pocket limit under Part B.

Part B Benefits​

Medical Expenses: Medicare Part B provides coverage for physician and surgeon services, including both inpatient and outpatient care, as well as medically necessary outpatient medical and surgical services and supplies. Additional covered services include physical, occupational, and speech therapy, diagnostic testing, certain durable medical equipment, and medically necessary ambulance or transportation services. Part B also covers kidney dialysis treatments when medically required.

Preventive Care: Medicare Part B covers a one-time “Welcome to Medicare” preventive visit, as well as annual wellness visits. It also includes coverage for vaccinations and preventive screenings for cancer and other health conditions.

Laboratory Services: Medicare Part B covers outpatient laboratory services, including blood tests, biopsies, urinalysis, and other diagnostic testing.

Home Health Care: Medicare Part B covers medically necessary skilled care, including home health aide services and certain medical supplies, for individuals who are homebound and receiving care in their residence, even without a prior qualifying hospitalization.

Mental Health Care: Medicare Part B covers outpatient mental health services when provided by a healthcare provider who accepts Medicare assignment. If services are delivered in a hospital outpatient clinic or department, the insured may be responsible for an additional copayment or coinsurance.

Outpatient Hospital (Emergency Room/Urgent Care) Treatment: Medicare Part B covers reasonable and medically necessary services provided on an emergency or urgent basis for the diagnosis and treatment of illness or injury.

Blood: The cost of the first three pints of blood per year is not covered under either Medicare Part A or Part B. After this requirement is met, Part A covers inpatient blood transfusions, while Part B covers outpatient blood transfusions for the remainder of the year.

Medicare Part B Exclusions​

Medicare Part B does not cover the following:

  • Prescription drugs, unless administered in an outpatient medical setting
  • Healthcare services received outside the United States
  • Routine dental care, including dentures
  • Routine foot care
  • Long-term care, including custodial or private nursing care in any setting
  • Routine hearing and vision exams
  • Acupuncture services
  • Cosmetic (elective) surgery

Medicare Claim Terminology​

Appeal: If a beneficiary disagrees with Medicare’s determination regarding the amount payable on a claim, they have the right to file an appeal of that decision.

Assignment: Under assignment, Medicare pays the claim directly to the healthcare provider. Providers who accept Medicare assignment agree to accept the Medicare-approved amount as full payment, aside from any applicable patient coinsurance or deductible.

Certification of Providers: Healthcare providers, including hospitals, must be licensed by the state and certified by Medicare in order to participate in the program. Medicare will not reimburse for services provided by any provider that is not properly certified.

Claim: A request for payment submitted to Medicare or another health insurer for items or services that the patient believes are covered under their policy.

Durable Medical Equipment: Medical equipment, such as a walker, wheelchair, or hospital bed, that is prescribed by a physician for use in the patient’s home.

Excess Charge: If a healthcare provider charges more than the Medicare-approved amount, the difference between the provider’s charge and the approved amount is referred to as an excess charge.

Limiting Charge: Under Original Medicare, the maximum amount that physicians or other healthcare providers who do not accept assignment are permitted to charge for a covered service.

Medicare-Approved Amount: Under Original Medicare, this is the maximum amount that a doctor or supplier who accepts assignment agrees to be paid for a covered service. This amount may be lower than the provider’s standard charge. Medicare pays a portion of the approved amount, and the beneficiary is responsible for the remaining balance.

Medicare Summary Notice (MSN): A statement issued after a claim for Part A or Part B services is processed under Original Medicare. It details the services billed, the Medicare-approved amount, the portion paid by Medicare, and the amount the beneficiary is responsible for paying.

Nonparticipating Provider: A healthcare provider who does not accept Medicare assignment, meaning they are not required to accept the Medicare-approved amount as full payment for services.

Participating Provider: A healthcare provider who agrees to accept Medicare assignment and charges no more than the Medicare-approved amount for covered services.

Quiz​

1. What percentage of covered expenses does Medicare Part B typically pay after the deductible is met?

A. 50%

B. 70%

C. 80%

D. 100%

Correct Answer: C

Rationale: After the annual deductible is satisfied, Medicare Part B pays 80% of covered expenses, while the beneficiary is responsible for the remaining 20% coinsurance.

2. Which of the following services is covered under Medicare Part B?

A. Routine dental care

B. Cosmetic surgery

C. Outpatient physician services

D. Long-term custodial care

Correct Answer: C

Rationale: Medicare Part B covers physician and outpatient services, including medically necessary care. Routine dental care, cosmetic surgery, and custodial care are excluded.

3. What is meant by “assignment” in Medicare?

A. The patient pays the provider directly

B. Medicare pays the provider directly

C. The provider bills a private insurer

D. The patient receives a lump sum payment

Correct Answer: B

Rationale: Under assignment, Medicare pays the provider directly, and the provider agrees to accept the Medicare-approved amount as full payment, aside from any patient cost-sharing.

4. Which of the following is NOT covered under Medicare Part B?

A. Laboratory tests

B. Preventive screenings

C. Routine vision exams

D. Ambulance services

Correct Answer: C

Rationale: Medicare Part B excludes routine hearing and vision exams, while laboratory services, preventive care, and ambulance services are covered when medically necessary.

5. What is an excess charge in Medicare?

A. The deductible amount owed by the patient

B. The coinsurance portion paid by Medicare

C. The difference between a provider’s charge and the Medicare-approved amount

D. The monthly premium for Part B

Correct Answer: C

Rationale: An excess charge occurs when a provider charges more than the Medicare-approved amount. The difference between the two amounts is the excess charge.