Medicare Billing: A Guide for Providers
Medicare is the largest single payer most practices bill, and it has its own enrollment, claim rules, and deadlines. Getting them right protects a large share of your revenue. Here is a practical overview of how Medicare billing works for providers.
The parts of Medicare that matter for billing
- Part A covers inpatient hospital, skilled nursing, and hospice, billed by facilities.
- Part B covers physician and outpatient services. This is what most practices bill, on the CMS-1500 or the electronic 837P.
- Part C (Medicare Advantage) is Medicare coverage administered by commercial plans, each with its own rules and authorization requirements.
- Part D covers prescription drugs.
Step one: enrollment through PECOS
Before you can bill Medicare, each provider must be enrolled through PECOS (the Medicare enrollment system) using the appropriate CMS-855 application. Claims for dates of service before your effective date are denied, and providers must revalidate their enrollment every five years (three for DMEPOS). We handle enrollment as part of provider credentialing.
Who processes your claims: the MAC
Medicare does not process claims directly. It contracts with regional Medicare Administrative Contractors (MACs) that process Part A and Part B claims for their area, publish local coverage determinations (LCDs), and handle appeals. Knowing your MAC’s policies is part of billing Medicare cleanly.
How Medicare pays: the fee schedule and assignment
Part B services are paid under the Medicare Physician Fee Schedule (MPFS). When a provider accepts assignment, they agree to accept the Medicare-approved amount as payment in full: Medicare pays 80% and the patient (or a secondary payer) is responsible for the 20% coinsurance after the deductible.
Deadlines and documents you cannot skip
- Timely filing. Medicare claims must be filed within 12 months of the date of service. Miss it and the claim is a permanent write-off.
- ABN (Advance Beneficiary Notice). When a service may not be covered, a signed ABN lets you bill the patient if Medicare denies it. Without it, you may have to write the charge off.
- Medicare Secondary Payer (MSP). When another payer is primary (for example, active-employment group coverage), Medicare must be billed second, in the correct order.
Common Medicare denials
The frequent ones are medical-necessity denials against an LCD, missing or invalid ABN, services billed before the enrollment effective date, MSP order errors, and bundling edits. Most are preventable with correct enrollment, eligibility checks, and coding. Our guide to common denial codes covers the CARCs you will see, and a free revenue analysis can measure your Medicare denial rate.
FAQs
How do I bill Medicare as a provider?
First enroll each provider through PECOS. Then submit Part B claims (CMS-1500 or the 837P) to your regional MAC, coded to the documentation and within the 12-month timely-filing limit. Medicare pays 80% of the approved amount when you accept assignment, and the patient or a secondary payer covers the rest.
What is a MAC in Medicare billing?
A MAC is a Medicare Administrative Contractor, the regional company Medicare contracts with to process claims, publish local coverage determinations, and handle appeals for its area.
What is the Medicare timely filing limit?
Twelve months from the date of service. A claim filed after that window is denied for timely filing and generally cannot be appealed.
What is an ABN?
An Advance Beneficiary Notice is a form a patient signs when a Medicare service may not be covered. It lets the practice bill the patient if Medicare denies the claim. Without a valid ABN, the charge often has to be written off.